Two weeks ago a report into the Economic Impact and the Effect of VAT on Fees, by BiGGAR Economics, commissioned by the Scottish Council of Independent Schools, was published.

Imposing VAT on private schools has already cost the Scottish economy £60m & 900 jobs.

VAT on private school fees was pitched as a way to raise money for public services.

This new report from the Scottish Council of Independent Schools tells a different story.

Pupil numbers in the sector are already down 9%. Those pupils don't just disappear; they move into the state sector, which the government funds.

The projected net loss to public finances by 2038: £181 million. Am I missing something? This seems like it's massively backfired.

In the words of Lorraine Davidson, Chief Executive of SCIS, the report "exposes the harsh reality of the education tax. From next year, every taxpayer in Scotland will pay the price for a failed, sound-bite policy based on ideology, not innovation. In just over a decade, the unintended consequences will cost the public almost £200 million per year. It is time to have a grown-up debate and admit that VAT on fees is damaging Scottish education and the economy."

For the full report please see: Economic Impact Report » SCIS

In response to this, Peter Hogan, AFIS Chairman, says:

The Labour Party spent years shedding the notion that that were anti-business.

VAT was levied on fee-paying schools because the Government argues they are "businesses."

If any other sector of the business community shed 900 jobs while blowing £600m out of the economy, within 12 months, in Scotland alone, there would be uproar and urgent government attention. If they scaled-up the numbers to calculate the impact south of the border it would be classed as something of a crisis. The Business Secretary would be making a statement.  

If the collapsing business sector was also a new burden for the taxpayer, the Chancellor may be concerned. 

If the new cost burden was placed on already stretched state schools, the Education Secretary would be explaining how it would be funded. 

All of this is happening throughout the UK,  but there is silence from the Cabinet. 

The "business" of independent schooling in the UK provides jobs and export income as well as relieving the state of the burden of funding over half a million school places.  Now the jobs are fewer, the income is less and the state must pay more. 

The problem is of the government’s making. Can they really still call themselves a party for business if they cause businesses to fail so dramatically and care not for the consequences?