Neil Shastri-Hurst: Labour’s tax raid on independent schools is costing all of us

Dr Neil Shastri-Hurst is MP for Solihull West and Shirley.

Yet again, the Labour Government’s ill-conceived policies have led to damaging unintended consequences.

As we have become accustomed to with this administration, proposals are being rushed through without due care and consideration. The catalogue of such decisions is starting to mount up. From winter fuel payments to the family farm tax. From the Employment Rights Bill to increasing national insurance contributions. This Government is going out of its way to hit those who have worked or are working the hardest.

Since coming to power, it has become increasingly self-evident that the Prime Minister and his team had failed to prepare properly for the task of governing. Whilst their focus had been on securing a victory at the ballot box, there is little evidence of any detailed policy preparation having taken place in advance.

However, when it came to the implementation of tax on private education, this was a policy entirely constructed upon pure ideology. For whilst the Government repeatedly spoke of lifting up educational standards, and bringing aspiration to all, this policy achieves the complete opposite.

When the Chancellor announced the introduction of 20 per cent VAT payments on independent school fees in the Budget last year, there was no consideration of the fact that it would result in costing the Government more than it would make in tax revenue. Nor did it take into consideration the fall in investment in facilities for school children at both independent and state schools; and the rise in inflation to 3 per cent.

This is a policy I have advocated against since its inception. Not only will this be the first Government in history to tax education, but their policy has also added to unemployment pressures, allowed for insurmountable pressure on the state school system, and now is a contributing factor to the steep rise of inflation in the UK. Today’s Government is rolling back on Tony Blair’s legacy of ‘education, education, education’.

The 13 per cent increase in independent school fees since January 2025 has meant that the Government’s ideologically targeted policy will now cost everyone living in the UK. Whilst Labour may have set out with the intention of punishing the 1%, to the contrary they have hit middle class families, children with SEND, and the everyday taxpayer.

As independent schools are forced to make cuts to balance their budgets, it is likely the extracurricular staff will bear the brunt.

As classics, sports, dance, music, and many more specialist teachers face job losses, it is highly unlikely many will find employment in the state education system. Some will be forced to leave the teaching profession.

Many will end up claiming unemployment, along with hundreds of thousands of others forced to do so by Labour’s economy strangling policies preventing growth and employment. All of this is occurring as the Department for Work and Pensions is under pressure from the Treasury to significantly cut its budget ahead of the Spending Review.

By adding pressures on Government spending – the increased demand on state schools to facilitate the influx of 20,000 – 40,000 new students, the increased cost of 6,500 new teachers through salaries and pension contributions, the increased unemployment rate amongst the teaching profession, and the increased cost of running a school due to rising inflation – this Labour Government has produced a perfect self-inflicted storm.

Currently, the UK boasts one of the strongest education outcomes amongst its pupils. Being rated number one in the Western world for reading, and with England significantly outperforming the international average in maths, was made possible by past Conservative Government policies. This progress is now being put at risk.

The Government believes it will mitigate the risk of unemployment amongst private school teaching staff through its promise to recruit 6,500 more teachers into the state sector.

However, the statistics for 2024/25 demonstrate it is falling some way short of that target, with primary schools only managing 88% of this recruitment goal. The situation is even worse for secondary schools, with just 62% of the target achieved. To compound the situation at the secondary school level, the Government’s recruitment targets were only reached in 5 of 17 subjects – with some subjects, such as computing and physics, only hitting around 30% of their requirements.

The failure to reach the Government’s own increased targets only exacerbates the excess number of current teacher vacancies. In 2023/24 we saw the worst teacher vacancy numbers in history; double pre-pandemic levels and six times the 2010/11 vacancy rate.

The Government’s move to introduce VAT on independent schools, alongside placing restrictions on academies through the Children’s Wellbeing and Schools Bill, is making recruitment at our educational institutions near impossible.

And the consequence?

A deficit of teachers – with more exiting the profession than joining.

A Government is never going to get every policy right, but they have a responsibility to admit when they have made mistakes and reverse those policy decisions.

This is why I will continue to call on the Government to stop this absurd policy, which will only continue to have a rippling effect of bad outcomes for everyone.