Labour has U-turned on its plans to remove the charitable status of private schools.
Shadow chancellor Rachel Reeves announced in 2021 that her party was ideologically opposed to fee-charging schools avoiding tax by operating as charities.
However, it has now emerged that, while Labour still plans to force independent schools to pay VAT, it will no longer remove their charitable status.
Labour is claiming that politicians talking about the charitable status was only ever a shorthand for changing the taxes schools paid.
A party spokesperson said: “Our policy remains. We will remove the unfair tax breaks that private schools benefit from, to fund desperately needed teachers and mental health counselling in every secondary school.
“This doesn’t require removing charitable status, however, driving high and rising standards for every child against the backdrop of a broken economy requires political choices. Labour isn’t afraid to make them.”
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Sky News understands that the change was made to Labour policy as removing the charitable status of schools would require complex legal procedures, while applying VAT is a fairly simple process.
Labour’s plan to put VAT – equivalent to 20% – on school fees has sparked outrage from some in the Conservative Party who believe it will prevent parents from sending their offspring to schools which charge tens of thousands of pounds a year to educate them.
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Speaking in 2021, Ms Reeves said: “Right now, private schools enjoy charitable status which makes them exempt from both business rates and from VAT at a cost to the taxpayer of £1.7bn every year.
“But… here’s the truth: Private schools are not charities.
“And so we will end that exemption and put that money straight into our state schools.
It will continue to charge business rates and VAT, raising up to £1.5bn. This will fund 6,500 new teachers, mental health support workers and early speech and language training.
However, it will no longer be removing charitable status.
Asked why, the source did not say – saying they “didn’t want to get into the weeds of charitable status” and declined to say when the decision was made.
There’s a clear political logic though. This allows the measure to be done in a finance bill – i.e. quickly. Removing charitable status from schools is a highly complex affair.
The independent school sector says they started seeing the rhetoric change on this policy almost a year ago, after the November budget, when it was raised by Jeremy Hunt.
The sector is worried at the remaining uncertainties – will private schools be able to claim gift aid, tax exemptions on annual profits, for example.
“This is the worst of all worlds for schools. They must keep their charitable obligations without the benefits. This is a lot of stick, not a lot of carrot,” said one source.
Charitable status qualifies schools for an 80% relief on business rates.
Julie Robinson, chief executive of the Independent Schools Council, remained critical of the policy.
She said: “If Labour takes away the tax relief associated with charitable status for independent schools, the policy would create a two-tier system within the charity sector, setting a worrying precedent that any charity seen as not reflecting the political ideology of the day could be subject to additional taxes.
“We would love to work with Labour to build more effective ways to achieve our shared goal of improving education for all young people.”
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Labour’s policy costings only ever took into account charging VAT on school fees and ending the business rates exemption, rather than the other tax breaks.
But shadow education secretary Bridget Phillipson had spoken of “scrapping charitable tax status for private schools to fund the most ambitious state school improvement plan in a generation”.
It is “shameful” that black boys growing up in London are “far more likely” to die than white boys, Metropolitan Police chief Sir Mark Rowley has told Sky News.
Sir Mark, who came out of retirement to become head of the UK’s largest police force in 2022, said: “We can’t pretend otherwise that we’ve got a history between policing and black communities where policing has got a lot wrong.
“And we get a lot more right today, but we do still make mistakes. That’s not in doubt. I’m being as relentless in that as it can be.”
He said the “vast majority” of the force are “good people”.
However, he added: “But that legacy, combined with the tragedy that some of this crime falls most heavily in black communities, that creates a real problem because the legacy creates concern.”
Sir Mark, who also leads the UK’s counter-terrorism policing, said it is “not right” that black boys growing up in London “are far more likely to be dead by the time they’re 18” than white boys.
“That’s, I think, shameful for the city,” he admitted.
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Baroness Casey was commissioned in 2021 to look into the Met Police after serving police officer Wayne Couzens abducted, raped and murdered Sarah Everard.
She pinned the primary blame for the Met’s culture on its past leadership and found that stop and search and the use of force against black people was excessive.
At the time, Sir Mark, who had been commissioner for six months when the report was published, said he would not use the labels of institutionally racist, institutionally misogynistic and institutionally homophobic, which Casey insisted the Met deserved.
However, London Mayor Sadiq Khan, who helped hire Sir Mark – and could fire him – made it clear the commissioner agreed with Baroness Casey’s verdict.
After the report was released, Sir Mark said “institutional” was political language so he was not going to use it, but he accepted “we have racists, misogynists…systematic failings, management failings, cultural failings”.
A few months after the report, Sir Mark launched a two-year £366m plan to overhaul the Met, including increased emphasis on neighbourhood policing to rebuild public trust and plans to recruit 500 more community support officers and an extra 565 people to work with teams investigating domestic violence, sexual offences and child sexual abuse and exploitation.
Watch the full interview on Sunday Morning with Trevor Phillips from 8.30am on Sunday.
Labour’s largest union donor, Unite, has voted to suspend Deputy Prime Minister Angela Rayner over her role in the Birmingham bin strike row.
Members of the trade union, one of the UK’s largest, also “overwhelmingly” voted to “re-examine its relationship” with Labour over the issue.
They said Ms Rayner, who is also housing, communities and local government secretary, Birmingham Council’s leader, John Cotton, and other Labour councillors had been suspended for “bringing the union into disrepute”.
There was confusion over Ms Rayner’s membership of Unite, with her office having said she was no longer a member and resigned months ago and therefore could not be suspended.
But Unite said she was registered as a member. Parliament’s latest register of interests had her down as a member in May.
The union said an emergency motion was put to members at its policy conference in Brighton on Friday.
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Unite is one of the Labour Party’s largest union donors, donating £414,610 in the first quarter of 2025 – the highest amount in that period by a union, company or individual.
The union condemned Birmingham’s Labour council and the government for “attacking the bin workers”.
Mountains of rubbish have been piling up in the city since January after workers first went on strike over changes to their pay, with all-out strike action starting in March. An agreement has still not been made.
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Ms Rayner and the councillors had their membership suspended for “effectively firing and rehiring the workers, who are striking over pay cuts of up to £8,000”, the union added.
‘Missing in action’
General secretary Sharon Graham told Sky News on Saturday morning: “Angela Rayner, who has the power to solve this dispute, has been missing in action, has not been involved, is refusing to come to the table.”
She had earlier said: “Unite is crystal clear, it will call out bad employers regardless of the colour of their rosette.
“Angela Rayner has had every opportunity to intervene and resolve this dispute but has instead backed a rogue council that has peddled lies and smeared its workers fighting huge pay cuts.
“The disgraceful actions of the government and a so-called Labour council, is essentially fire and rehire and makes a joke of the Employment Relations Act promises.
“People up and down the country are asking whose side is the Labour government on and coming up with the answer not workers.”
Image: Piles of rubbish built up around Birmingham because of the strike over pay
Sir Keir Starmer’s spokesman said the government’s “priority is and always has been the residents of Birmingham”.
He said the decision by Unite workers to go on strike had “caused disruption” to the city.
“We’ve worked to clean up streets and remain in close contact with the council […] as we support its recovery,” he added.
A total of 800 Unite delegates voted on the motion.
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