Treat private schools like any other business – John McDonnell

Labour wants a “fully comprehensive education system” and private schools should be treated “like any other business”, John McDonnell has said.

The shadow chancellor said his party is committed to addressing what it sees as inequality within the education system, and this includes reforms to fee-paying schools.

His comments come as a leaked document suggests that Labour is planning to scrap discounted business rates for private schools and charge VAT on fees if it were to come to power.

Private school heads have accused Labour of seeking to destroy private education, warning such moves would “rip apart the fabric of education” in the UK.

They argue that their schools play a “vital role” and any move to undermine them and change their charitable status would set a “dangerous precedent with wide-ranging implications”.

Speaking in Glasgow, Mr McDonnell told the PA news agency: “In the last election we said we would address what we believe is the inequality within our education system, and one of those inequalities is the way in which private schools do not pay VAT and on business rates there needs to be reforms as well.

“Let’s make it absolutely clear, we want private schools to be treated like any other businesses, because that is what they are.

“Our objective is to have a fully comprehensive education system, and to enable that to happen the manifesto we developed in the last election, and the one we are developing now, is the establishment of national education service.

“So just like the NHS, education will be free at the point of need, from the cradle to the grave. I think this will be one of the defining issues a Jeremy Corbyn government will be remembered for.

“In that way we need to address the issue of the role of private schools.”

Proposals to introduce VAT on school fees and axe discounted business rates could bring in £1.64 billion a year, according to the Daily Telegraph, which has seen a shadow Treasury memo.

The plans drawn up by Mr McDonnell’s team are part of Labour’s “preparing for government” strategy in anticipation of an early election, according to the newspaper.

Labour proposed in its 2017 manifesto that it would introduce free school meals for all primary students, funded by removing the VAT exemption from private school fees.

Ending the historic business rates exemption that independent schools have been able to claim as charities appears to be taking the proposal further.

Mike Buchanan, executive director of the Headmasters’ and Headmistresses’ Conference (HMC) which represents leading private schools, said: “The Labour campaign to effectively destroy independent schools is not only a fundamental attack on parental choice, but it would rip apart the fabric of education in this country.

“It is based on wrong assumptions and dodgy maths and will inevitably damage state schools.

“Independent schools have played a vital role in the education system for generations and they are acknowledged around the world as beacons of excellence.

“Any attempt to abolish these schools will not only prove disruptive, divisive and difficult, but ultimately would harm rather than help state-funded schools.”

The implications of the state “unilaterally altering the definition of what a charitable endowment is would set a dangerous precedent with wide-ranging implications”, he added.

“Would the general public be comfortable with an education system that offers no alternative to Government-run schools? Will universities welcome state control of admissions and being told to admit by quota not ability?”

Mr Buchanan said Labour’s plans are “likely to cost billions more than the estimated £3.5 billion already being saved by the education of children outside the state sector”.

Julie Robinson, chief executive of the Independent Schools Council (ISC), said: “A punitive tax measure such as VAT on fees would ultimately hurt the country’s education system, particularly state schools.

“As well as making independent school education an unaffordable choice for many families, smaller schools would certainly close, resulting in a sudden increase in the numbers of young people needing places at state schools – swelling class sizes and piling pressure on already-stretched budgets.”

Labour said it does not comment on leaks.

But one source said: “Private schools help hoard wealth, power and opportunity for the few.

“We’re proud that at the last election we said we’d tax private schools and pay for free school meals for all primary school kids.”

Under current rules, private schools have charitable status which means that they get tax breaks, but there have been concerns in some quarters over this policy in recent years, with some demanding that fee-paying schools no longer have this status.

In comparison, state schools are liable for business rates, which are effectively paid for by the taxpayer.

Academies – which are not under local council control – typically have charitable status and are therefore eligible for discounted rates, with the rest paid for out of their state funding.

Council-run schools have their business rates funded by the local authority.