Labour ramps up war on private schools with demand for watchdog to investigate fees

The Labour Party has opened a new front in its war on private schools, as it called for them to be investigated by the competition watchdog over fee rises.

Bridget Phillipson, the shadow education secretary, said that costs have risen faster than wages, which could be the result of market failure that requires intervention from the Competition and Markets Authority.

Average day fees have risen from £7,668 to £15,654 since 2005, while average boarding fees have doubled to £37,032, according to figures from the annual census by the Independent Schools Council.

Ms Phillipson has said it is “absolutely essential that private schools operate in accordance with the law and in an open and transparent manner”, as she backed a Corbyn-era Labour policy to remove their charitable tax status.

Introducing VAT on private school fees would result in an overnight increase for the parents of around seven per cent of children in the UK.

Attack on 'aspiration'

Ms Phillipson has written to Gillian Keegan, her counterpart in government, urging her to ask the CMA to undertake a review of the independent schools market “to ensure it is operating in accordance with regulations”.

An investigation in 2006 by the Office of Fair Trading found that 50 leading independent schools, including Eton and Harrow, broke competition law by sharing their plans for fee rises and driving up prices for parents.

During the pandemic, the competition watchdog warned that private schools may have been colluding over cuts to school fees.

Competition lawyers told The Telegraph that the watchdog would not investigate a potential breach of competition law without evidence of collusion.

However, the regulator could carry out a market study that considers whether competition is working efficiently in the interests of consumers.

Recent market reviews have included investigating whether the care homes market is working effectively and treating people fairly. The regulator launched an investigation into the UK road fuel market after a review found that the gap between the crude oil price and the wholesale price of petrol and diesel more than tripled from 10p to 35p in a year.

The demand for an investigation into private schools comes amid a row between Labour and the Government about private schools.

Labour claims that removing private schools’ tax breaks would bring in £1.7 billion to support the state sector.

However Rishi Sunak, the Prime Minister, has branded the policy an attack on “aspiration”.

Private schools have said Labour’s plan would backfire and end up reducing funding for state school pupils, because it would result in tens of thousands of pupils being priced out of the private sector.

They said it would also threaten the provision of free tutoring to state school pupils and other partnerships offered by many private schools, and lead to closures.

Julie Robinson, chief executive of the Independent Schools Council, said: “A gradual fee rise of 23 per cent over a decade is a very different prospect for parents‘ budgets than a sharp shock of 20 per cent overnight – particularly in a cost of living crisis.

"And means-tested bursaries have outpaced fee rises, having increased by 30 per cent over the past decade. This progress on increasing affordability for more families would only be damaged by Labour’s policy, forcing many striving, hard-working parents out of the sector.”

The CMA declined to comment.