Hi All,

This is a longer-than-usual update and is about a 10-minute read… but is very important.  As we build momentum and if we can get some help here ;-),  we’d like to communicate fortnightly or so, but more briefly.

Research

New research shows what parents and their supporters knew all along:  Adding an education tax onto independent school fees won’t be the attractive revenue-raiser that Labour shadow ministers said it was.  They ought to identify another source of money to fix state school problems without busting the public finances (which they say is the objective, not to harm private schools).

Labour shadow ministers regularly cite research by the Institute for Fiscal Studies (IFS) to defend their policy on school fee VAT.  The IFS estimate that school fee VAT would generate between £1.3-1.5 billion a year.   They also estimate that between 3-7% of students would leave independent schools, as parents and schools would simply bear the costs.  

Earlier this month, the independent think tank EDSK published research that shows us that adding VAT won’t be easy.  They point out the following challenges:

• Discriminating independent schools from other private education providers for VAT purposes, which could give rise to piles of legal challenges.
• Addressing Special Needs provision in independent schools.  Even Bridget Philipson acknowledged last week that special education needs provision is “chaotic” and will take time to “turn that around”.
• Determining the classification of childcare and welfare services, such as nursery care and school clubs that take place in independent schools.

EDSK also challenge the IFS’s argument that parents taking their children out of independent schools would have “zero effect on overall VAT revenues”.  They point out that parents may spend money on non-VATable areas, such as private tuition or paying down their mortgage.  Independent school parents know that all too well.

It gets worse.  On Monday, the Adam Smith Institute (another independent think tank) published research that undermines the economic arguments of the IFS paper.  

• The ASI makes a forceful case that the IFS paper, which even the IFS said was a “best judgment” based on “thin, old and sparse” evidence (the Economist reviewed it as a “guess”) cannot be treated with confidence.  
• They go on to identify several unintended consequences that hurt the public finances, and that have not been considered in the debate so far.  For example, they argue (as many of us will recognise) that if a family that’s been just-about-managing the fees moves to taxpayer-funded education, they are likely to reconsider the need to work so hard; every family that chooses to reduce their income and enjoy more leisure could cost the taxman tens of thousands of pounds.
• They figure that the VAT policy could raise no money at all if 10-15% of students leave for state school, while the policy could cost £1.46 billion if 25% of students leave.  This was the estimate of previous research by Baines Cutler.  A more recent survey of 1,000 parents by Ashbridge Partners found that “18 percent of parents would definitely move their children out of private schools and a further 21 per cent would probably do so.”
• They point to the harm to state schools and the risk that they can’t cope, plus even more intense competition for popular state schools. We know that grammar school heads fear that’s exactly what will happen.  They also argue that school closures could cost jobs and hurt communities.

The data backs what parents and supporters have said along:  School fee VAT will force kids out of their schools, and won’t help state schools.  We want politicians to understand that this tax won’t help, and could harm, the public finances.

We need your help now, please!

If you’re under the impression that Education Not Taxation is some well-funded, highly-disciplined lobbying group with an office and professional PR firm… well, we’re sorry to disappoint you.  There are four of us and we all have full-time jobs and families to look after.  Whatever is a couple of rungs below a “cottage industry”... that’s us!

Of course that’s a feature of what we’re all saying, none of us has much time or capacity for “extra work” of any kind.  However as we increasingly have the facts on our side, we would love your help to amplify our voices in the most effective ways.  

At the moment, our greatest needs include writing on social media, PR, drafting regular campaign communications (such as updates like this) and also analytical support.   If you can spare an hour or two each week, we’d love to hear from you – contact us here.  

Please also get in touch if you'd be willing to share your story.  Policymakers and the public have to understand the harms school fee VAT could cause and why many parents make the tough choice to send their child to an independent school.

We also urge you to spread the message in your schools and your communities.  Be a "school champion" and share our petition far and wide.  Write to your MP and candidates from other parties (you can find out how here).  Share your stories.  Parents in particular, consider joining our Facebook group.  You can find out more on the "How Can I Help" section of our website.

Thank you all for your support!  Keep an eye out for another update soon.

Tony Perry