Labour plans to add 20% VAT to Private School fees.

So the Chinese political system is better?

Well at the moment, private healthcare isn't VATable either. So what next? VAT on private hospitals?

The reality is life is never completely fair. Will charging VAT on private schools make life fairer? That's assuming that the money raised is then reinvested into the education system. But as has been pointed out there are many ways to game the system and the reality is middle class parents will still find a way to gain an advantage. The rich won't care.

Will it lead to more social mobility? You can argue the toss both ways but the reality is the rich are continuing to accumulate wealth far faster than any other segment of society. I'd rather the govt went after the obscenely rich but good luck with that.

What do you think the median household income is in the UK?

So why does the outstanding state school where I teach get better GCSE and A levels results than most fee-paying schools?
If you check on Ofsted, there are a 100 inadequate Private secondary schools.

^^^ Tell me you don't understand the UK household income distribution without telling me you don't understand the UK household income distribution.... You said below 90k, even if you said 80k, this would put a household in the top 9% of earners. Nobody's saying that everyone thinks only top 1% aristocrats go to private school, but people DO have a massive misunderstanding of how much private school attendance is skewed to the top of the income distribution and what little proportion of attendance middle income households actually make up.

I'm not quite sure I've ever heard of meritocracy being used as an argument in FAVOUR of the government subsidizing private school education. Surely in a meritocracy you'd want funding directed to those who are the most worthy (either the smartest or the most in need - depending on your political philosophy), rather than to provide a tax break for households who generally are in the top decile of household incomes?

At YOUR school. It's literally a fact that private secondary schools perform better than state comprehensive schools in this country. Seems like you're just pulling statistics out of your behind..

I'm arguing against its entirety and length.

First things first, I'm not sure you actually understand what 'fiscal headroom' means given you misused it several times. The policy would almost certainly breech the governments fiscal rules straight away given the front-loaded cost nature of the policy, with any potential supply-side benefits occuring way beyond the OBR's fiscal forecast time horizon.

Correct me if I'm misinterpreting what your policy proposal entails, but it seems as if you're suggesting charging children £9.5k a year to go to school for 11yrs, with a 10.5% annual interest rate once they turn 21. If this is indeed what you're arguing then that's pretty insane, breeches so many moral issues, and there's no way any government would ever introduce that.

What I meant by meritocracy is that it starts from before you even have kids. If you make the choice (and it is a choice) to get pregnant at 16, fail your GCSEs etc. and find yourself living below the poverty line that is your own fault. Of course there are circumstances where this is not applicable but those are not the majority. Even if you've got an avergae job with an average salary and you find yourself sending your children to a comp school, they can still make the best of that. You're literally more likely to get into Oxbridge if you're below a certain tax bracket, of certain ethnic backgrounds etc. Private school is not the be-all end-all. All I'm saying is you have two choices to achieve the rewards that going to private school (supposedly) gives you:

Stop blaming those who have better for your own circumstances.
I'm not even going to bring up immigrant families or people not born in the country because that's a whole different conversation.

The assessment you've made is unfortunately incorrect and fails to take all the impact of all the policies combined into consideration.

I advocate for increasing per pupil funding by 50%, or £35 billion, for the fiscal years 23/24 funded by advancing the total anticipated sum of interest accumulated from the years 24/25.

In 24/25, there would be a £35 billion reduction in funding to offset the previous adjustment.

This would be followed by a subsidy a 100% subsidy going forward to fund, in practice, the elimination of council tax and the increasing of the income tax allowance from £12,570 to £20,000 (a estimated £35 billion for the council tax measure and £45 billion for income tax changes) - a estimated combined £270 per month saving.

This would result in a increase for the years 24/25 in debt as a percentage of GDP due to PSNB being higher than the rate of growth in the economy.

The rational behind the 10.5% fixed rate of interest is due to how the system would be structured.

The system would work by advancing the total horizon sum of interest generated over the 39 years, so £330,808 for £104,500 of capital.

Given the capital is small in comparison to the interest generated, this would lead to economic growth within the finance sector of the economy as the capital could be sold to offset debt accumulated within the financial services sector - loans for guarantees.

So in terms of an actual figure, the sum repayable per person, after 21 would be around £710 per month (given the capital will never be repaid by the individual person.

Although, the thinking behind the policy is that the boost to the financial services sector will increase economic growth to at least 2.5%, more than enough to radically increase the tax free allowance over a period of 5 years (combined with increase in salary) to offset the interest payable per month without leading to high levels of inflation.

So while I appreciate your thinking in terms of the 'moral' argument, looking forward to the fiscal years of 25/26 this policy would in fact increase economic growth thus leading to more funding in the state educational system. This is less about 'charging' a fee to attend public school and more about looking to generate vast amounts of interest which could be used to boost the financial services sector to lead to an economic boom over the years century.

This is before we take into account the £270 per month (average) savings from council tax and income threshold changes, therefore the short term cost would be £440 per month (after 21) but within 5 years, economic growth should radically pick up as more leavers take to generate interest to boost the spending power of the treasury and within 10 years, allow for radical increases to offset the £440 (net payment) to the point it is effectively wiped out by growth.

Therefore meaning if these policies weren't in place, the average loss per person would be higher than the sum payable over a 5-10 year period due to low levels of economic growth.

That's all well and good but the median household income of a family who sends their children to private school is well above £100k. We've lost that incentive to work hard and better ourselves as a society in this country. Not everything is the government's fault and maybe people should take accountability for getting pregnant at 16 and failing all their GCSEs.

You can never close all the loop holes. The basic inequality comes from the fact that some parents will just have more cash to spend on their children.

Thanks for re-writing that all again..... it wasn't necessary....

I understand that it was the entirety of the offsetting policies that was used to fund the changes, my point was that no politician with a brain would ever actually bring a policy like this forward. Not unless they were actively planning to sabotage their own career.

Just think about how average punters on the street will view this policy.... You're charging kids from the age of 11 massive deferred school fees with a crazy high interest rate (10.5% is well above the average interest rate on a commercial loan), with a large part of your argument resting on the assumption that this will be very beneficial for the financial sector and boost growth..... I can't honestly believe that you think an average parent would happily saddle their young children with financial contracts like these based on the hope that it boosts growth in the financial services sector. C'mon... seriously.....

Moreover, the assumptions around the boost to the financial sector and GDP growth this would cause seem way way too high. I seem to remember a UK Prime Minister recently making similar assumptions about how their policies would pay for themselves through boosting growth.... how is Liz Truss doing these days? If you think the OBR would raise their economic growth projections enough to make this policy financially viable, then you really don't understand the OBR's fiscal forecast model, nor how they model the dynamic effects of tax cuts. And given it's almost certain the OBR would take a much dimmer view on the growth impacts of this policy than what you're assuming, it would almost certainly mean the government would breach its own fiscal rules, as I said earlier.

Equally, I'm amazed you think that changing the education system this much, relying on these sort of growth assumptions and ignoring all the political economy aspects of the proposal.... is preferable to changing VAT on school fees?

What about kids who rely on private tutoring because they have poor quality teachers or special education needs or they as a student are just behind compared to the rest of the class in general?

If it wasn’t for my last minute tutoring for English, I would have failed the GCSE (the teachers were rubbish).

I understand your point but there is no major difference between private school and private tuition. The main difference is the entrenched inequality with the networks and facilities.

My view is that the basic connection is the availability of resources to aid the child to gain an unfair advantage. To me, private tuition should be banned as it can (and does) introduce unfairness in the system.

For example, there are two students: Molly and Abbie. Both go to the same state school with the same structural challenges at play. Molly’s parents work on the shop floor at Asda (long hours, low pay and poor working conditions) while Abbie’s parents work as a GP and Finance Manager at Deloitte.

To give Abbie an unfair advantage, her parents pay for private tuition to improve the gaps in her learnings but Molly’s parents sadly cannot afford it. Abbie then benefits from the additional support and secure high grades. She applies to Oxbridge and meets the contextual flags of ‘struggling’ state school and gets admitted while Molly goes not get a similar benefit.

From the above, one can see that it would be better to ban private tuition to reduce the impact of unfair advantage.

The premiership of Liz Truss was based entirely on the notion that targeted tax cuts would lead to a surge in economic growth, although, there was no approach concerning laying the foundations which could have led to higher tax revenues.

I am not advocating for unfunded tax cuts outside the fiscal headroom which currently exists.

If we work on the assumption that after 11 years the number of school leavers remains stable at around 230,000 per year, combining the horizon interest over 39 years, which would be advanced, means a capital of almost £24 billion per year and an advanced interest sum of nearly £80 billion per year, that would continue year on year allowing for £80 billion of spending and/or tax cuts and £24 billion of bonds per year issued (or loans through the UK infrastructure bank)

The 2023, the financial services sector produced £278 billion of economic output, or around 12% of the UK's of total output which contributed around £100 billion in tax revenue.

Between 2024 and 2035, interest would eventually meet the £80 billion a year target, although in the interim, taking together the £270 a month savings in year one, it would only be by year 11 that the full £710 a month in interest be due, therefore meaning the vast majority of people would be MUCH better off even due to the £270 a month in tax savings.

Over that 11 year period, providing income tax allowances were increased by just £2270 per year for 11 years, by year 11, that would entirely offset the remaining £440 a month leaving people in fact better off each and every year.

Let's say you're in year final year of school, that's £9,500 in fees, that's over £30k of interest brought forward from the 39 years and an average interest payment of just £65 a month (because the capital would be sold off as debt), meaning a average net of nearly £205 per month (nearly £2.5k a year) for someone 21 and over and with the increasing of allowances, that would remain stable, allowing for more and more tax cuts and spending increases.

Labour needed less than £28 billion to fund the next generation of 'green jobs', that £24 billion could fill the blackhole and indeed in combination with the growth in the financial sector and growth in the green economy, lead to increased growth rates not just over the 11 years until the policy is in full swing but thereafter too.

So, more money for our state system, paid for tax cuts and a large increase in investment spending in the jobs of the future without incurring ANY additional costs for anyone who leaves school.

I get the 'basic' assessment of what you're saying in terms of charging for going to school in order to 'pump' up the city, although that's in fact NOT what this policy is about.

It is an argument between at least £3000 a year better off each and every year, investing in our public services and boosting investment in the economy.

What's the point in applying a levy of 20% to private schools to raise nearly £2 billion a year with no material benefit to the vast majority in our society?

How about we adopt a new system which makes those at least £3000 a year better off without applying ANY VAT to private schooling and boost funding in the state system by 50% in the first year.

Do you get the rational behind the argument I am making?

Trust me, I understand the mechanics of the policy, you definitely don't need to repeat them for the fourth time, the first was enough to understand it.

I just really don't understand how you'd plan on selling this to the electorate. Sure, you can say that under XYZ assumptions, they'll be £x per year better off. But do you honestly think they would trust a politician saying this, given what this policy involves and which sectors the policies operates through?

You can explain the policy over and over again to the Nth degree, but voters are simply going to hear that you're charging children fees to go to school at very high interest rates to boost growth in the financial services sector. And any opposition to this policy (which I expect there would be plenty) would keep the debate at this level. Then they'll laugh in the face of any government who proposes a scheme like this.

So while I disagree with many of the assumptions made in your policy, even ignoring these debates, I think the policy would just be a non-starter for most the electorate.

As a side note (not a debating point), I noticed that the way in which you calculate the yearly capital accumulation and advanced interest sum assumes 100% labour force participation, which is obviously unrealistic. Really you'd have to adjust all these sums to take into account that 20% of the working-age population don't even work and don't look for work for various reasons (e.g. stay at home parent, looking after the sick, in further education, etc). Equally, how this policy would be impacted by periods of unemployment. I'd imagine it could go pretty pear-shaped if you had some sort of big recession with a large proportion losing jobs and therefore unable to service the debt on their education loans, especially given you haven't mentioned a minimum repayment threshold and you've sold off all these loans to external organizations.

A good response although if our current batch of leading politicians (mostly privately educated) are anything to go by, I am not fully convinced.

I don't think the teaching is necessarily the differentiating factor, more the status, cultural capital and connections that private education gives.

If our education system were truly meritocratic, we wouldn't be seeing 30% of Oxbridge students coming from 7% of private students.

Is this comment satire/ a joke or something?

Because if it's not then this is probably the dumbest comment ever made on TSR

I would disagree with the packaging of the policy.

While it could be structured, especially during implantation during the first year, as an additional tax hike of £65 for those who reach the age of 21, any concerns could quickly be swept away by drawing attention to the £1800 a year council tax cut, which even if you are unemployed or working part time, is an average saving of £85 per month before we get into changes in tax allowances which even in and of itself would benefit a worker on min wage who workers just 20 hours a week.

It could even be packaged as: "Our 'local services levy' saves council tax payers, on average, between £1,020 and £1,800 a year".

Or even: "We're increasing the income tax allowance from £12,570 to £20,000 , saving tax payers nearly £1,500 a year'.

This is not a policy which would require the government to say 'we're charging children for 11 years of their education £9,500 a year, payable at 21.

It instead would be: "We're changing the tax system so students who graduate university and/or enter the work place at 21 will be better off - government on your side".

In terms of concerns, any payments would be deducted by the employer or self assessment tax return for HMRC, thus mitigating any risk of the 20% of the country which is 'economically inactive' from having to pay a single penny more which in itself, does not substantially decrease the interest payable each year.

Sure, there could be an argument about fairness, given it would only impact those who turn 21 post the policy coming into practice, although how can you argue with £2,520 a year better off for those who turn 21 given how these changes would come into play this year?

"We have a fully funded plan to cut your taxes, increase public spending and invest 24 billion a year" - How will you pay for it? Our new property levy which will impact those who turn 21 but leave them still £2.5k a year better off.

"But you're still charging those who turn 21 more than those who entered the workplace prior to this policy?" No, we're cutting taxes so those who are 21 are £2.5k a year better off than last year without increasing long term debt.

This policy is about how the government goes about approaching new forms of investment and debt financing within the economy.

If the government is able to say, to financial investors, that we are able to secure loans against potentially 200k plus new people each year for £104,500, payable over 39 years, and we wish to give those loans to you providing we are advanced 39 years of interest, or £305,000 split over 39 years, who would say no given the interest advance each year would be more than enough to settle any 'bad loans' during deep recessions. That's over £20 billion a year (by year 11) of additional investment which will clearly lead to economic growth and produce high returns for the taxpayer.

This approach would lead to a radical change in the financial sector within our economy, a policy which has never been tried, or at least packaged, in a similar way before.

In time, the same policy could be adopted from years 0-21 (if students which to go to university), allowing for a fully funded childcare, lower class sizes throughout every stage of schooling, more funding in our education system, university tuition fees abolished and funded by the interest generated, free school meals for students throughout each stage of schooling and access to modern technology and still, everyone would be MUCH better off.

What assumptions do you disagree with?