Tories have accused the Labour Party of “making it up as they go along”, after Sir Keir Starmer was forced into an embarrassing u-turn on tax breaks for private schools.
Labour dropped its plans to end the schools’ charitable status, leading to accusations Starmer and co can’t be trusted. Now the Conservative Party has issued an official response, via the Chief Secretary to the Treasury, John Glen MP.
The statement accuses Starmer of being “only interested in short term policies designed to grab headlines, without any regard for the consequences.” Glen, however, claims the “Conservatives are taking immediate action to provide relief” and will “take the long-term decisions for a brighter future for our children.”
It comes after the Labour U-turned on pledges to strip Private schools of charitable status. The party now says, should it get into government, the fee-paying schools would retain some of their tax breaks.
Labour says it remains committed to its policy for England of charging 20% VAT on fees and ending the business rates relief from which independent schools benefit. But the party said it no longer needs to strip the schools of their charitable status to achieve this, meaning some of the current perks will remain.
Being able to claim gift aid on donations and not paying tax on annual profits, which must be reinvested in education, are among the tax breaks that the status confers. Party sources pointed out that they only ever intended to remove the VAT and business rates perks, saying charitable status was used more as shorthand for the policy.
A Labour spokesman said: “Our policy remains. We will remove the unfair tax breaks that private schools benefit from, to fund desperately needed teachers and mental health counselling in every secondary school.
“This doesn’t require removing charitable status, however driving high and rising standards for every child against the backdrop of a broken economy requires political choices. Labour isn’t afraid to make them.”
Julie Robinson, chief executive of the Independent Schools Council, remained critical of the policy. She said: “If Labour takes away the tax relief associated with charitable status for independent schools, the policy would create a two-tier system within the charity sector, setting a worrying precedent that any charity seen as not reflecting the political ideology of the day could be subject to additional taxes.
“We would love to work with Labour to build more effective ways to achieve our shared goal of improving education for all young people.”
Labour’s policy costings only ever took into account charging VAT on school fees and ending the business rates exemption, rather than the other tax breaks. But shadow education secretary Bridget Phillipson had spoken of “scrapping charitable tax status for private schools to fund the most ambitious state school improvement plan in a generation”.
The Tories were accusing Labour of having U-turned.
Chief Secretary to the Treasury John Glen said: “Labour has been forced to u-turn on one of their major policies – this time admitting that their schools tax hike just doesn’t work. They are just making it up as they go long.
“Keir Starmer is clearly only interested in short-term policies designed to grab headlines, without any regard for the consequences – and inevitably has flip-flopped on them.
“In contrast the Conservatives are taking immediate action to provide relief and take the long-term decisions for a brighter future for our children.”
