Rachel Reeves promises state school cash boost as Labour ends tax breaks for private education

Exclusive:

Writing for the Mirror, the Chancellor said the change would allow the government to “fix some of the problems in our state schools, where 94% of this country’s children are educated”

Thousands of state schools will get a funding boost next year, Rachel Reeves has promised as Labour ends tax breaks enjoyed by private schools on New Year’s Day.

Writing for the Mirror, the Chancellor said the change would allow the government to “fix some of the problems in our state schools, where 94% of this country’s children are educated.”

“Children across the country held back, not because of a lack of talent, but a lack of opportunity. Not enough teachers in our schools, school buildings crumbling and declining standards,” she wrote.

“I know many of you are impatient for change – so am I. But, as we turn the page on 2024, I have never been more optimistic about our country’s future.”

The £1.5 billion raised by charging VAT on school fees will allow the Treasury to increase the core schools budget by £2.3 billion next year. And the amount raised is expected to rise to £1.7 billion by 2029-30.

Meanwhile, the government is committed to hiring 6,500 teachers to help improve standards in state schools, and improving the Special Educational Needs and Disabilities system.

Education Secretary Bridget Phillipson said: “High and rising standards cannot just be for families who can afford them, and we must build an education system where every child can achieve and thrive.

“Our ambitious Plan for Change sets out our clear mission to break the link between background and success and ending the VAT break enjoyed by private schools will provide much needed investment in our state schools, to help recruit and retain expert teachers.”

‘We are ending tax breaks enjoyed by private schools so we can fix problems in our state schools – where 94% of children are educated’

By RACHEL REEVES, Chancellor of the Exchequer

It’s time things are done differently.

For too long the economy hasn’t worked for Sunday Mirror readers. Prices in the shops out of control, the public finances in a mess and unfunded promises which left our public services crumbling.

Nowhere has that failure been more damaging than to our children’s life chances. Children across the country held back, not because of a lack of talent, but a lack of opportunity. Not enough teachers in our schools, school buildings crumbling and declining standards.

This government was elected with a mandate for change and 2025 marks a turning point. The Budget fixed the foundations of our economy – giving us a platform to deliver the change we promised.

That’s why, on New Year’s day, we are ending the VAT tax break enjoyed by private schools so that we can fix some of the problems in our state schools, where 94% of this country’s children are educated.

Giving children the best start in life is a key element of the Plan for Change set out by the Prime Minister. Ending this tax break will raise £1.5 billion next year, rising to £1.7 billion a year by the end of the decade.

That’s more money which can help us deliver our commitments to education and young people, where we’ve announced an increase in the core schools budget worth £2.3 billion next year.

And it will help us hire 6,500 new teachers, drive up standards and improve the Special Educational Needs and Disabilities System so that every child is given the backing to achieve and thrive.

We do so because we choose stability, investment and reform. Not chaos, austerity and decline.

We choose better schools, better hospitals and better living standards. And we’ve set out measurable milestones to judge us by.

Our Plan for Change is the start of our country’s journey towards a better future. A future where people have more money in their pockets.

At the Budget in October, I protected people’s payslips, with no rise in their income tax or employee national insurance.

I did what I could to keep costs down in the shops, with no rise in VAT. I gave a pay rise to 3 million workers next year by increasing the National Living Wage. And I kept prices down at the pumps by freezing fuel duty, saving Mirror readers £3 billion at the pump next year alone.

I know many of you are impatient for change – so am I.

But, as we turn the page on 2024, I have never been more optimistic about our country’s future.

The strength of our businesses, the creativity of our start-ups and the determination of the British people to rebuild a better country.

Shovels in the ground, cranes in the sky and homes being built.

Jobs of the future in the industrial heartlands, and future talent unleashed.

Wealth created, and wealth shared, in every part of the country.

A Britain that is better off. That’s the future we are building – that’s the future this Government will deliver.