Economists deny Tory's claim that cutting private school tax breaks will lead to exodus

The Institute for Fiscal Studies has rejected Conservative Party warnings that cutting tax benefits would lead to large numbers of pupils entering the system public school

Labor would scrap an exemption which means VAT is not charged on private tuition fees (

Image: PA)

Labour would raise £1.5bn by scrapping tax breaks for private schools, economists have said.

The Institute for Fiscal Studies has debunked Tory, saying the move would lead to an exodus of students into the state system.

Keir Starmer has pledged to remove the tax advantages that fee-paying schools enjoy and use the money to improve normal schools instead.

But Rishi Sunak and his cabinet, full of privately trained conservatives, rejected the idea.

Private schools, including Eton College, are not currently required to charge VAT on fees. In England and Wales, they also get at least 80% off business rates.

IFS found that removing these tax breaks would have a limited effect on the number of people choosing private education.

Bridget Phillipson, from Labour, has pledged to raise standards in public schools (

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The think tank estimated that the changes would generate around £1.6 billion a year in additional tax revenue. With a small movement of pupils into the public sector, costing between £100-300million a year, this would result in a net gain to public finances of £1.3-1.5billion a year, a- he said.

Research, funded by the Nuffield Foundation, predicts there could be a 3% to 7% drop in private school attendance, which translates to around 20,000 to 40,000 students. He concluded: "In the short term, the effect could be extremely small because few parents might choose to withdraw their children from a school halfway through primary or secondary school. The effect could be greater at medium and long term."

In a speech last week, Mr Starmer said the money raised from the removal of tax benefits...