Matthew Lynn

Can private schools survive Labour’s tax grab?

  • From Spectator Life

The latest headmaster of Eton has been recruited from a major private equity firm to help drive the brand’s growth in China. The consortium of hedge funds that own Winchester has been involved in a bitter takeover battle with Rugby, centred mainly on the redevelopment value of its playing fields. Westminster has been acquired by Meta, the owner of Facebook and WhatsApp, to develop campuses in the Metaverse, Netflix has acquired Marlborough to use as a set for romcoms, while Elon Musk has taken control of Ampleforth, sacked most of the teachers and rebranded it as ‘W’ for reasons that no one can quite fathom.

Forcing schools to turn themselves into private companies will change the way they operate

This all may sound fanciful, but fast forward to 2027 or 2028, and that could well be a selection of headlines plucked from the business pages. The serious point, however, is this. Once the Labour party removes the charitable status of private schools, as seems inevitable, the whole sector will change dramatically and start operating far more like a normal industry. That may be better in some ways, and worse in others, but it will make all private schools very different from the institutions we are familiar with today.

Labour is committed to abolishing the charitable status of private schools and imposing VAT at 20 per cent on the fees they charge. Of course, it has promised that reform before and – much like abolishing the House of Lords – somehow never got around to it. Yet this time it looks more serious. The pledge has featured far more prominently in Labour’s campaigns than it ever has in  the past, and the money it would raise has been spent several times over by most of the shadow cabinet. (The estimated £1.6 billion it would rake in would be enough to save the NHS, rescue the welfare system and launch a green industrial strategy, with some change left over for foreign aid as well.)

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Matthew Lynn
Written by
Matthew Lynn
Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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