Starmer accused of using private school VAT raid to ‘house illegal migrants'

Telegraph

2 days ago

Sir Keir Starmer has been accused of using private school VAT cash to 'house illegal migrants' after he suggested the policy would fund Labour's house-building targets.
The Prime Minister wrote on X, formerly Twitter, yesterday that the decision to levy 20pc VAT on private school fees had allowed the Government to make the 'largest investment in a generation' to affordable housing.
Laura Trott, the shadow education secretary, accused Sir Keir of taxing children's education to build homes which would be 'given away' to migrants.
Labour has long-maintained that its controversial VAT raid, which has already seen dozens of schools close as a result, would be used to improve state schools.
But this week it was forced to abandon its manifesto promise to hire 6,500 new state school teachers.
Yesterday, the Prime Minister tweeted how the 'tough choice' on VAT had paid off.
In the budget last year, my government made the tough but fair decision to apply VAT to private schools.
The Tories opposed it.
Reform opposed it.
Today, because of that choice, we have announced the largest investment in affordable housing in a generation.
— Keir Starmer (@Keir_Starmer) June 11, 2025
Ms Trott described the post as 'madness.' She told The Telegraph: 'Labour needs to come clean with the public. Not only have they broken their promise to hire 6,500 more teachers but now they are taxing British children's education to build homes that will be given away to illegal migrants.
'The sums don't add up. It's children, parents and teachers in the state sector who'll pay the price for Labour's ideological agenda.'
The Treasury hopes to raise £1.5bn from its VAT raid this year, rising to £1.7bn by 2029-30.
In December, Chancellor Rachel Reeves told reporters 'every single penny' of the £1.5bn it hoped to raise from the private school VAT raid would be ring-fenced for state education.
In an interview with ITV, Ms Reeves was asked: 'Will all of that money be ring-fenced for state schools?'
She replied: 'Yes, every single penny of that money will go into our state schools to ensure that every child gets the best start in life.'
Kemi Badenoch, the Conservative leader, said her party had opposed the VAT raid because it was 'terrible policy'. She said: 'It has forced schools to shut, sending thousands of pupils into state schools that are now struggling for space, teachers and money you didn't account for. 'You said every single penny would go into state schools, but now it's housing?'
Questions have also been raised over whether the Government's forecasts are accurate. It was revealed last week that four times as many pupils left private schools last year than was predicted.
In the spending review, Labour said it would spend £4bn by 2029-30 on its Affordable Homes Programme. It also vowed to stop housing asylum seekers in hotels by 2029, raising suggestions these people would instead be moved into social housing.
Rachel Reeves said she was providing a 'cash uplift' of more than £4.5bn for schools between now and 2029.
However a large proportion of this is as a result of the decision to extend free school meals to 500,000 more children. When this figure is removed, the core budget for schools will rise by 0.4pc over the next three years.
Julie Robinson, chief executive of the Independent Schools Council, said: 'Throughout the debate on VAT, schools were promised that the money raised – if any – would go to state education. We have seen the rhetoric on this watered down to 'public services' and now the revelation that it will now pay for housing.
'We are in the worst-case scenario, one that we have warned about since the introduction of this policy: real damage has been done to independent education without any benefit to state schools, who are also facing further cuts. It is children who will lose out as a result.'
The Treasury was approached for comment.