Later today MPs will debate a petition titled: “Don’t apply VAT to independent school fees, or remove business rates relief” after it was signed by 114,946 people. Bridget is apparently too busy to show up and a Treasury minister will be sent instead…
Labour has relied heavily on the widely-cited “independent” Institute for Fiscal Studies report into private school VAT which predicts that “the change in private school attendance levels will be small” because they haven’t changed much in the last ten years which leads “to surer increases in tax revenues and less need for additional public spending on state schools” – all thanks to tax receipts of “£1.3–1.5 billion per year in the medium to long run” because only 40,000 children will switch to the state system. As Guido revealed the report’s author Luke Sibieta was a Labour minister’s best man…
In private email correspondence with co-conspirators Sibieta has been much less confident on his report than he has been in public. Sibieta admits: “just looking at changes in attendance and average fees over time is not a particularly insightful way to make conclusions about the elasticity.” This is despite the key finding of the report being: “The share of pupils in private schools has been constant at about 6–7% for at least the last 20 years despite a 20% real-terms increase in average private school fees since 2010 and a 55% rise since 2003.” Which bit of the document is particularly insightful then?
Sibieta is also at pains to stress to concerned co-conspirators the IFS report’s “estimates are not a prediction.” The document is full of caveats – none of which make it to the think tank’s press releases on the topic. Maybe that’s why the Treasury and DfE decided to take its predictions as gospel…
The government’s response to the petition has restated that it “expects fees to rise by 10%” – already wrong as the average fee increase has been shown to be 14% so far. MPs debating with school tax supporters may find it useful to know its architect is far from confident on the matter…
Sarah Pochin at Reform Scotland’s manifesto launch event: “I really wanted to come on in a Reform tartan burka, but apparently I wasn’t allowed… One day let’s do one of these events not live-streamed. We’ll do all the naughty stuff…”