What would Labour’s VAT policy for private schools mean?  

Welcome to Tuesday’s Early Edition from i.

As part of its plan to break the “class ceiling”, Labour has pledged to end tax breaks for private schools, adding VAT at 20% to their fees for the first time. The policy was first trailed earlier this year, but now the party has admitted it will introduce the measure straight away, instead of phasing it in over several years, if it wins at the next general election. The “Robin Hood” style policy could raise £1.7bn to invest in state schools, the party says, and redistribute wealth more evenly across British schools. Private schools, and the families who rely on them have previously spoken out about the move. Now as an election looms closer, Labour is expected to ramp up its policy and tackle the issue head on. What effect will it have? We’ll take a look, after the headlines.

Today’s news, and why it matters

 Women and gay people who flee discrimination in their home countries should not automatically be granted refugee status, Suella Braverman is expected to say today. The Home Secretary will also suggest that all asylum seekers crossing the Channel should be barred from refugee status as they travel through safe countries, despite Afghans fleeing the Taliban and Syrians fleeing civil war making up a large number of those in small boats.

Cancelling the northern leg of HS2 would be a “hugely anti-levelling up step” which would worsen the UK’s existing inequalities, the minister who originally signed off on the project has warned Rishi Sunak. Justine Greening, who as Transport Secretary gave the go-ahead for the rail line in 2012, criticised the Prime Minister’s lack of ambition and said “chopping and changing” on major long-term policy decisions risked knocking investor confidence in the UK.

The ambition of an anti-Tory “progressive alliance” is at risk from bitter divisions between Labour and the Liberal Democrats in a key upcoming by-election, the parties have been warned. In Mid-Bedfordshire, the former constituency of Nadine Dorries, both main opposition parties are fighting to take the seat off the Conservatives.

Amid a diplomatic row between Canada and India over the killing of a Canadian Sikh in British Columbia, a Scottish Sikh councillor has called for support as he revealed the concerns of activists in the UK. Gurpreet Johal, a lawyer and councillor in West Durbartonshire, said his friend Avtar Singh Khanda, a Sikh activist, died in June after becoming the target of a media campaign against him in India.

Russell Brand attempted to press on with his career as a fringe video content creator, less than an hour after the Met Police confirmed it had opened an investigation into allegations of “non-recent sexual offences”. In a live stream on YouTube and the streaming platform Rumble, Mr Brand claimed: “I now, in particular, have a new experience on the way the media and the state can cooperate and corroborate one another’s stories.

Three questions over Labour’s VAT rules on private schools:

Would Labour get the policy through? As i’s Poppy Wood reports, if Labour win a sizeable majority at the next general election, as polls currently predict, Sir Keir would have little obstacle in passing the legislation through both houses of parliament. With the election expected to take place by January 2025 at the latest, the charge could be imposed in 2025. But it is not clear if Labour would seek to bring in the charge part-way through an academic year. Several schools have told i they have drawn up contingency plans for a “worst-case scenario” under which VAT comes into force from September 2024. Read the full story here.

Will charging VAT raise the money Labour predicts? In July a report by the Institute for Fiscal Studies estimated that up to 40,000 privately-educated students could be forced to switch to the state sector if the policy was enacted, which would mean bringing in about £300m less than Labour hopes for each year. However it also said if the VAT reform caused a drop in demand for private schooling, it would not hit additional tax revenue because parents who had earmarked money for school fees would spend it on other goods and services. Luke Sibieta, an education research fellow at the Institute for Fiscal Studies, told i it was also questionable how much of a difference the funds would make to the state sector. “Let’s say [the policy] raises them more than £1bn,” said Mr Sibieta. “That’s about 2 per cent of the total schools budget, which is around £58bn. So it will probably help them do a few things, but it might not help them solve the bigger problems. Whether that that’s worth it or not, I don’t know. It’s very much ‘watch this space.’” Read the full story here.

What do private schools say? The independent sector has previously warned of widespread school closures if the VAT plans take effect, with smaller private schools set to bear the brunt of the policy rather than household names such as Eton and Harrow. This has been countered in the past. Dr Jake Anders, an economist and deputy director of UCL’s Centre for Education Policy and Equalising Opportunities told the Guardian in May: “it seems unlikely that private schools would just stand by and watch pupils leave and not do something about their price. Ultimately, they set the price.” But today private school teachers warn that they will be forced to quit the Teachers’ Pension Scheme (TPS) if the policy goes ahead. One headteacher at a private secondary school in London told i: “We’ve started contingency planning and we’re already starting to look at the future of the Teachers’ Pension Scheme. If Labour hits us with VAT next autumn and the employer contribution goes up for the TPS, those two things loaded up together would present quite a big financial shock to us. We’d have to go down the route of a private pension scheme.” Read the full story here.

 Around the world

 Ukraine claims to have killed 34 Russian officers, including the commander of the Black Sea Fleet, in a Storm Shadow missile attack on the fleet’s headquarters in Crimean capital, Sevastopol, last Friday. Admiral Viktor Sokolov is one of Russia’s most senior naval officers and has not been seen in public since the strike. Moscow has not commented on the claim but said one serviceman was “missing”.

A radical far-left group that has targeted tourist buses carrying British visitors, luxury restaurants and five-star hotels, is plotting more protests against holidaymakers who they claim are invading Spain. Marina Gispert, a spokeswoman for Arran, said activists wanted to demonstrate against the tide of tourists that they believe lead to precarious jobs in tourism for Spaniards and send local housing prices soaring.

British drivers could be forced to shell out an extra £3,000 to £5,000 on electric cars thanks to Brexit trade barriers, meaning new tariffs and rules that will slow manufacturing. Carmakers say that Brussels and Westminster urgently need to renegotiate their trade deal before January, when “rules of origin” come into force, potentially adding 10 per cent to the cost of new cars, while also threatening Britain’s automotive industry.

Chances of India’s Moon lander waking up after a freezing cold lunar night are “dimming with each passing hour”, space scientists have told the BBC. The Indian Space Research Organisation had said it hoped the batteries would recharge and the modules would reawaken when the lunar Sun rose around 22 September.

A Ukrainian couple found love during bombardment as they searched for nine missing cats. Konstantin Alokhin and Natalya Zolotarenko met in Kharkiv when her cats went missing during the early days of the conflict, writes Sian Norris.

 Watch out for…

 Ed Davey, who gives his keynote speech at the Lib Dem conference in Bournemouth this afternoon. 

 Thoughts for the day

 Rishi Sunak is learning that moving the polls is just as hard as dealing with climate change. Many voters have evidently viewed the PM’s statement through a partisan lens, writes John Curtice.

Abandoning HS2 shows just how hollow the Tories’ ‘levelling up’ promises were. It would be a financial, social and geopolitical catastrophe were it to be compromised at this point, says Simon Kelner.

‘Urban foraging’ has let me swap supermarket produce for free fruit from A-roads and parks. Picking food that would otherwise rot is a victimless crime, argues Nell Frizzell.

 Culture Break

 Doon Mackichan: ‘I’ve often been asked to “pop my top off” in auditions’. The pioneering comedian talks about her new book ‘My Lady Parts’, the woeful treatment of working mothers on TV sets, and dealing with a litany of sexual harassment.

 The Big Read

 NHS psychiatric wards are video monitoring children and adults 24 hours a day, sparking privacy fears. A new campaign has launched to halt the spread of Oxevision, a system which enables staff to see video images inside patients’ bedrooms, reports Patrick Strudwick.

Sport

 Tony Jacklin: ‘Luke Donald is the first Ryder Cup captain to call me. Here’s what I told him’. In an exclusive interview with i’s Kevin Garside, Europe’s former Ryder Cup captain reveals what advice he had for his successor on the phone.

Something to brighten your day

 I invented a machine that could cure depression with a zap to the brain – rather than taking pills. Cambridge scientist, Dr Camilla Nord, hopes in the future depression can be cured with an arsenal of therapies including electromagnetic pulses.