There’s a long-held myth about private schools: if you take away their special tax exemptions — they have charitable status, and parents aren’t charged VAT on fees — vast numbers of children will flood into the state sector, and this will actually end up costing the Government money.
The idea got another airing recently in reaction to a Labour policy which would remove private school tax breaks. The Daily Mail, for example, has claimed this would cost the Government £400m, as parents could no longer afford fees, meaning more state schools would have to be built. (And, by the way, schools would stop offering concessions to some pupils).
This makes a new finding from the Institute for Fiscal Studies all the more interesting. It has claimed that removing the tax breaks on private schools would only push three to seven per cent into the state system. Which, even taking into account the money this would cost — some £100m to £300m — would save the taxpayer £1.3bn to £1.5bn overall. (Labour proposes spending this money on improving state schools).
What myth-makers had been missing is this — private schools are businesses. If they lose custom, they will do what they have done in the past, which is to lower their fees until the books are balanced, often by cutting costs elsewhere. Teacher to pupil ratios can be reduced, and buildings sold off. (If things get disastrous, private schools can ditch the fees altogether and apply to become state-funded academies, which would be good for the state too).
With the extra money it will save, we can afford to absorb pupils fleeing the system: on average, private school fees are two and a half times the cost to the state of a place at state school. There is also space in state schools at present. The birth rate is dropping fast, meaning the overall fall in pupil numbers would outstrip any private school departees. We need to fill those empty classrooms.
As for the idea that pushing private schools into raising fees would harm the middle classes — another argument we hear a great deal of — only the very top earners can afford school fees as they are (they now average £15,000 a year). If Labour’s initiatives will hurt any group, it’s the bottom tier of the top five per cent of earners. These are not your typical strivers.
What do the public think? Well, removing private school tax breaks turns out to be quite popular. Just 13 per cent of the public think things should be left as they are. All in all, politicians wanting to keep private schools as registered charities are fast running out of reasons to do so.
There is no justification for private schools’ tax breaks when their purpose is to keep privilege in the family
Of course, saving money is not the only reason to reform the tax status of private schools. A more important factor is surely that the British education system has long persisted with an enormous unfairness written in. There is really no justification for private schools to get tax breaks when their purpose is to keep privilege in the family. (The fact that Eton is a charitable institution, for example, mocks the idea of charity). Even the Right bemoans the fact that the top places in British society are occupied by private-school graduates.
Elite schools stand in the way of all sorts of initiatives to reduce social unfairness. Education is the best tool we have to address inequality — far better than quotas or admissions tweaks later on, when the disadvantage is baked in. It equips people with the ability to climb hierarchies alone. Making sure all primary schoolers get the same attention is much more effective, for example, than demanding universities admit a certain number of state schoolers — something the group now arguing on behalf of private schools tends to object to as ‘social engineering’. Complaints about the supremacy of Oxbridge graduates in British life is really a complaint about private schools. Few think Oxford and Cambridge should stop granting places on the basis of ability — it’s the fact that these universities admit a disproportionate number of private-school pupils that is the problem (something they have recently made efforts to address).
Inequalities mount up. Studies have long shown that if a group of children are given a big enough advantage at the start of their lives, others will never catch them.
