Rachel Reeves yesterday vowed to slap VAT on private schools within weeks if Labour win the election.
The Shadow Chancellor said the contentious measure would be in her first Budget, which could come as soon as September.
Ms Reeves yesterday said the Budget would not be held for at least ten weeks to allow time for the Office for Budget Responsibility to draw up a new economic forecast.
Labour sources expect Ms Reeves to publish a three-year spending review at the same time.
Labour has promised an ‘immediate injection of cash’ for key public services, but the Shadow Chancellor will be forced to choose between hiking taxes further or squeezing spending in other areas.
Rachel Reeves (pictured) yesterday vowed to slap VAT on private schools within weeks if Labour win the election
The decision to press ahead with the punitive raid on private schools will dismay parents struggling to pay school fees.
The Shadow Chancellor told The Times CEO Summit the tax hike would not be ‘retrospective’, meaning it is unlikely to be introduced before the start of the January term at the earliest.
Labour declined to say exactly when it would be introduced, but raising fees in the middle of the school year would be hugely disruptive, which suggests that the most likely date will be September 2025.
The party has claimed the policy will raise £1.5 billion a year to pay for the recruitment of 6,500 specialist teachers in state schools and mental health support in every school.
Ms Reeves said she was committed to the plan because ‘the children who are struggling most are in state schools – young people are not getting the chance to fulfil their potential’.
Shadow education spokesman Bridget Phillipson yesterday insisted all private schools can ‘cut their cloth’ to avoid passing on the cost of Labour’s planned tax rise.
She said state schools have had to make ‘some pretty tough choices in recent years’ which independent schools could learn from.
In an interview with the Mail, Ms Phillipson also ruled out making any fresh exemptions for special schools – despite a backlash.
Labour plans to charge private schools 20 per cent VAT and scrap the 80 per cent relief they receive on business rates.
Shadow education spokesman Bridget Phillipson (pictured) yesterday insisted all private schools can ‘cut their cloth’ to avoid passing on the cost of Labour’s planned tax rise
The party has promised that children with an Education, Health and Care Plan (EHCP) –who have the most severe needs and often have their fees paid by local councils if they cannot be taught in the state sector – would be exempt from the tax increase.
But experts have warned this could penalise around 100,000 special needs children currently being taught in privately run special schools.
Ms Phillipson told the Mail: ‘Schools are under no requirement to pass on additional costs to parents – in fact, they’ve been whacking up their fees year-on-year, way beyond inflation and in many cases have priced middle-class parents out of the market.’
She added: ‘I think the private schools themselves should reflect around their behaviour in recent years, but also consider how they can absorb any additional cost.
‘They do have choices to make and state schools have had to make some pretty tough choices in recent years.
‘And maybe private schools can take some lessons from state schools in how to manage their budget and cut their cloth.’
She ruled out creating a carve-out for special schools, but conceded that the system for processing EHCPs needs to be improved.
Ms Phillipson said there would be no exemption for special schools, but acknowledged the need to ‘speed up’ the EHCP process.
Her comments came after Sir Keir Starmer was accused of ‘not caring’ about children with special educational needs earlier this week by a headteacher of a school which caters for dyslexic children.
Michelle Catterson, head of Moon Hall School in Reigate, warned the Labour leader on LBC radio that many of her pupils without EHCPs would be forced into the state sector.