Labour will 'quickly' push through £150 million VAT change for private schools

New Scottish Secretary Ian Murray hinted the policy would be included in the UK government’s autumn budget.

He told the Daily Record: “The Chancellor has made that commitment. It will be pushed through quickly, but it will have to go through a fiscal event.” The Scotsman revealed earlier this month that the Scottish Council of Independent Schools (SCIS) had written to Bridget Phillipson, who has now been appointed education secretary in Sir Keir Starmer’s government, asking for a meeting to discuss the sector’s concerns about the VAT change.

They fear the consequences for Scotland have not been fully considered, including lower incomes north of the bordered compared to parts of England.

The move would add the standard VAT rate of 20 per cent to fees, raising around £150 million for Scotland’s budget.

However, the sector has warned it will disrupt the education of thousands of youngsters who could be forced out of school due to a resulting rise in costs, swamping the under-pressure state sector.

A pre-election poll for The Scotsman showed more than half of Scots supported Labour's plans to impose VAT on private school fees, with just 16 per cent opposing the policy.

Mr Murray denied it would further burden state schools.

“The issue about pressure on the state sector is actually the discussion about why we are doing this in the first place, because we need to raise the resources to lift the state sector,” he told the Record.

“Investment in the state sector is what this policy is all about, so it’s a slightly contradictory argument in that sense.”

He added: “I fully understand the concerns of parents who are right on the edge of that affordability, but this is a policy that’s coming in. It’s the right policy to have and if it’s invested in state education, which is what we want it to be, then it will improve our state education system.”

The money will be used to help hire 6,500 teachers in England, but Mr Murray said the UK Government can only “send a cheque” to Holyrood.

“What we are saying to the Scottish Government is you must spend that money in the education sector to resolve some of these issues and make the state sector as best as it can possibly be,” he said.

“We need to make the case, and the public needs to put the pressure on as well, that this money that comes through the Barnett Formula of that kind of spending has to be spent where it should be.

“It’s difficult to make the argument that you want to close the VAT exemption to raise money for education, and then for the Scottish Government to just put it into a black hole to fill a deficit that they may have somewhere else. It’s got to be spent on children’s education.”

A Scottish Government spokesperson said: “The First Minister has made it clear that he supports efforts to remove the VAT exemption on independent schools.

“We hope that the UK Government will hold a budget as soon as is practicable to deliver clarity as to whether there will be any increase in Barnett consequentials from spending decisions in England, as none have yet been notified to the Scottish Government.

“If a net increase in consequentials from schools spending is forthcoming we would seek to make that available to improve education outcomes in Scotland.”

SCIS chief executive Lorraine Davidson said: “VAT on school fees will disrupt the education of children and place an added burden on the state sector which will have to cope with more pupils, many of whom have additional support needs.

"We are seeking early talks with Labour to minimise the impact on all children and to discuss how independent and state schools can build on their partnership work for the benefit of all children.

"We have written to the Scottish Government seeking urgent clarity on how they plan to exempt children with complex needs, whose places are funded by local councils, from having VAT added to their fees.

"There is a system for doing this in England but no direct equivalent in Scotland.”