Backlash sparks Labour rethink on ‘devastating’ private school tax hikes

• Teachers have warned the proposals will result in extra strain on the state sector
• Labour will now exempt special needs schools from its plans to increase taxes 

Labour will now exempt special needs schools from its plans to increase taxes on private education, following a backlash.

Independent schools had warned that the party’s original, wide-ranging proposal would be ‘devastating’ to parents who have children with special educational needs, who would see fees soar.

Should Labour win the next General Election, it plans to levy VAT on private school fees, raising £1.6 billion, and make independent schools fully liable for business rates, raising another £104 million.

But a major survey of parents warned the move could see private schools lose a fifth of their pupils.

Head teachers have also warned that the proposals will result in extra strain on the state sector as parents will no longer be able to afford private education.

Shadow Education Secretary Bridget Phillipson and Labour leader Sir Keir Starmer

Earlier this year, Shadow Education Secretary Bridget Phillipson indicated that its policy might not apply to special education centres. She told MPs: ‘We do not anticipate that the proposals would cover specialist provision.’

Her comments prompted the heads of two leading independent special needs schools to write to her asking for clarity. Last week, a member of her team replied to say that he ‘understood’ the sector would be exempt.

However, the Independent Schools Council (ISC) warned that tens of thousands of pupils at schools which offer specialist teaching but are not classified as special needs schools may not be covered by this exemption.

Julie Robinson, chief executive of the ISC, said: ‘We are encouraged to see Labour considering the impact the plans could have on special needs children, but we are left with more questions than answers.

‘The exemptions they have hinted at would still leave tens of thousands of parents in the dark about their eligibility.

‘It would do nothing to mitigate the risk to schools that provide specialist support without the designation of a special school.’

Earlier this year, Ms Phillipson indicated that its policy might not apply to special education centres

Before Labour’s clarification, Jonathan Hetherington, head of More House School in Surrey, which provides support for children with dyslexia and other speech, language and communication issues and is run on a not-for-profit basis, was one of those who wrote to Ms Phillipson.

He said: ‘We are the largest SEND [special educational needs and disabilities] school in the country and the majority of our income comes from local authorities. Lots of parents who send their children to our school take out second mortgages to pay fees. They don’t see it as a luxury, they see it as an essential.

‘If specialist schools are not fully exempt from these plans, there is a real risk it disadvantages the most vulnerable in our society.’

Meanwhile, half of state-funded schools in England for children with special educational needs and disabilities are oversubscribed, according to research by the BBC.

A Labour spokesman said: ‘Our policy of removing VAT exemptions on private schools will not apply for children with a special educational need where their school place is allocated on the basis of an Education and Health Care Plan.’

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