The end of prep school is nigh. We will miss them when they’re gone

This is a hit-em-where-it-hurts piece of socialist policy that would create chaos

The last weekend of the Christmas break doesn’t feel like the holidays for most headteachers. In just a couple of days the drawbridges will be lowered and those diverse rays of sunshine will pour back into school.

These last few hours are a time of intense preparation. There are catch-up calls with teachers; the head of maths has Covid (who can step up and fill in?). Some teachers will use the quiet of Sunday morning to do a walk-round of the school. Yes, the leak in the ceiling of the design tech room has been fixed, but why has no one mended the bust handle on the boys’ loos? The phone buzzes with emails from parents. Smith has broken his leg skiing; Clegg’s announced over Christmas that she’s a fish and will come to school wearing fins.

And spare a thought for those in the independent sector, those heads looking ahead to a year that could threaten the very existence of their school. A year that could see parents reluctantly removing their children, a year in which those precarious sums don’t add up to such an extent that the establishment has to close.

Well, it might not happen this year, but if Labour win the general election they damn well mean to make it happen – if not this year, then next, or the year after that. Or in the words of Rachel Reeves, the shadow chancellor:

“In my first budget as Chancellor of the Exchequer, I will end the tax loophole which exempts private schools from paying VAT and business rates.”

Labour presents the issue as a “loophole”, like a form of legal tax avoidance. The gist being that this avoidance is pretty close to evasion and is thus morally wrong.

The independent sector, you see, has been getting away with it for years. All those rich fee-paying parents, sending their offspring to luxurious institutions, dripping with 3D printers and recording studios for up-and-coming indie bands and canteens bulging with rocket salads and balsamic vinegar; why are they dodging taxes, not paying their fair share, not contributing much-needed funds to a Treasury on its knees?

“I don’t see why you shouldn’t pay VAT on sending your child to a private school, in the same way you pay VAT if you take your family out for a meal at the weekend,” says Reeves.

It’s a class war, electioneering fist-pumping, rallying cry to squeeze a little more juice from the bloated rich. Except that many of those headteachers and many of those parents are scratching their heads. They look at their schools, their teachers, their pupils and their fellow mums and dads and find the characterisation distinctly odd, the policy weirdly contrived, the revenue argument (an extra £1.7billion for the state sector) baffling.

The implicit marketing of this policy is that schools like Eton, Winchester or Harrow are the target. And that these are elitist institutions, with their ancient buildings, state-of-the-art facilities and quirky traditions, which turn out future bankers, Tory frontbenchers, and charge big fees to rich people.

Well, tiresome though the VAT change may be to administer, and though such schools may lose some pupils, these celebrated names will survive. They are already oversubscribed; they could even increase the fees for rich overseas parents to fund places for their traditional British demographic. And if there’s a way of getting around an imminent VAT attack by paying a lump sum up-front, then no problem. Many parents planning on sending their kids to our grandest institutions do indeed have the odd £250,000 in capital in the bank. It’s just that the institution will become even more elitist and less disposed towards a policy of working with the state sector.

The real victims of Labour’s VAT hike will be the small private prep school that serves a rural parish where the state offering is either full, or poor, or both.

There is a feeling among Labour activists that parents and schools are crying wolf at this policy. That they’ve moaned in the past about existential threats but it’s all hot air; people find the money, parents keep paying, the schools survive. But with a 20 per cent increase in fees many parents will look at their incomes, at how squeezed they are already with energy bills and the cost of living, and reluctantly withdraw their kids from that school.

The plan could also land a future Labour government in serious difficulty, as it would only take a relatively small number of parents to withdraw from the private sector to see potential revenue from the VAT levy decrease and, as they place their kids (by law) into the state sector, state expenditure forced to increase.

And what of the principle of taxing education? Why would university fees be exempt? This is a hit-’em-where-it-hurts piece of Socialist policy that would create chaos – from schools and parents to accountants, government departments and ministerial advisers – and one in which nobody wins.

But, cheer up all you heads, I don’t think it will ever happen. Furthermore, if the Tories can conceive of some actual properly Conservative policies the nation could be denied such threats. For example (pay attention Tory manifesto writers), a sensible and bold policy would be for the Government to create more tax breaks for private schools, encourage more people to spend their hard-earned money on doing the best for their kids and, in doing so, at no cost whatsoever to the Treasury, ease the burden on the state sector.