Could a private school tax to pay for school meals work?

Jeremy Corbyn was in Scotland to address the Labour conferenc in Perth
Jeremy Corbyn was in Scotland to address the Labour conferenc in Perth
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It is not very often, especially under Jeremy Corbyn, that the Labour Party seizes the initiative and dominates the media and discussion with a bold policy.

That’s what happened today, though, after the Labour leader announced plans to tax private school fees at the same rate as VAT (20 per cent) in order to give every schoolchild a free meal.

The announcement caught Prime Minister Theresa May on the hop, with the Tory leader unable to reject the policy outright, and only making a general comment about Labour being a danger to education budgets.

It is not a new policy by any means, it has been raised by politicians and campaigners for years, and was even recently mooted by former Tory Education Secretary Michael Gove.

Some critics, even within Corbyn’s party, have raised concerns over the universalism that the policy represents, arguably benefiting wealthy parents as much as their poorer counterparts.

But exactly how would the policy work? And is it likely to happen in the UK or even in Scotland, where education is devolved?

The basics

The issue of private schooling has always been a thorny one for politicians, especially when it comes to the personal educational choices of individual MPs.

Diane Abbott, a key ally of Labour leader Jeremy Corbyn, has been criticised for sending her own son to a fee-paying school.

As it stands, private schools like Eton, or Fettes College in Scotland, are exempt from VAT and other taxes like business rates because they have charitable status.

This means that they meet the requirement of doing enough public good to merit not having to pay into the exchequer.

Defenders of the tax exempt status say that not only the mega-rich send their children to private school, and that the schools themselves need to be able to use their economy for bursaries and support for poorer children to be able to attend.

The tax breaks are believed to be worth as much as £700m for private schools in Britain.

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Others, like Mr Gove, say that the exemption is allowing an effective state-subsidy of privileged and wealthy families having access to a better level of education.

Mr Corbyn’s policy would increase the cost of fees that parents have to pay, which at some of the top schools can be as much as £30,000 a year.

“Poverty shouldn’t affect whether kids can eat”

Jeremy Corbyn noted earlier the high levels of food poverty in Britain, with the numbers of people using foodbanks higher year-on-year.

His Shadow Education Secretary Angela Rayner said that the Tory Government is denying children the basic right of a healthy lunch at school.

To head off the charge from the Conservatives that Labour present a danger to the economy with such policies (Theresa May said earlier that they would ‘bankrupt’ the country) Mr Corbyn announced that the policy was costed.

He cited House of Commons research that estimated that the cost range for the policy would be between £700m and £900m.

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In advance of the election of 2010, the Fabian Society calculated that applying VAT to private school fees could raise as much as £1.5bn, enough to pay for Mr Corbyn’s policy twice over at the lower end of the cost spectrum.

The policy is already the policy of the Liberal Democrats, and the landmark move to feed every primary school child at school, and has been backed by a teachers’ union and the Child Poverty Action Group.

Labour also believe that universal aspect of the policy, which would apply to everyone regardless of parental income, would remove some of the ‘stigma’ surrounding the pupils which currently qualify for free school meals.

The Scottish element

Education policy is currently devolved in Scotland, but the collection and setting of the rate of VAT wasn’t among the new financial powers given to the Scottish Parliament following the Scotland Bill.

52 schools in Scotland currently claim charitable status, with a regulator testing them on the same standard that is set for the thousands of other charities in the country.

The Scottish regulator has continued to insist that independent schools will need to periodically prove their worth.

The current system of continuing to allow most independent schools to continue to claim charitable status, even after rigorous testing, is not popular among voters.

A survey for the Times earlier this year found that 44 per cent of Scots believe that private schools should not be charities.

Seven per cent of Scots want independent schools banned altogether in the country.

The Scottish Green Party said at the time that private schools “entrench inequality” and that they were plainly not charities.

No matter how the policy goes down in the rest of the UK, with a heated debate within and outwith the Labour party sure to follow, it does seem to be a priority for the Scottish Government.

Asked about the policy, an SNP spokesperson said: “All bodies in Scotland applying for charitable status, and therefore an exemption on VAT, are required to have only charitable purposes and provide public benefit. It is the responsibility of the Scottish Charity Regulator to apply this public benefit test.”

With public opinion not keen on the charitable status for private schools, and Jeremy Corbyn’s agenda-setting announcement, it could find itself at the forefront of Scottish political debate before too long.