UK Labour Party's private school VAT hike threatens the future of the country's Islamic schools

As Britain watched on with bated breath during this historic General Election, there was one conspicuously spotlighted demographic for whom Labour’s win was met with rightful trepidation.

British Muslims, 6.5% of the population in England and Wales, have a long and checkered history with the Labour Party, made only more fraught following recent geopolitical and domestic events.

Labour’s reluctance to court the disaffected Muslim vote, and their reticence on Muslim concerns throughout campaigning, was felt abjectly by the diverse group of communities that make up this segment of the electorate.

Overwhelmingly from ethnic minority and economically deprived backgrounds – a fact which exemplifies this electoral neglect – historically, Muslims had forged a kind of political home in a begrudging Labour party, that waned rapidly in recent months following domestic responses to the war on Gaza.

While much of Britain was keen to see what ‘anyone but the Conservatives’ had to offer the country, Muslims had expressed a jaded sense of anticipation for what the incumbent government would do for them.

Labour’s flagship policy in education is, adverse to its stated aim, already proving to disadvantage less-privileged Muslim communities.

'Unfair tax break'

In a move welcomed by much of the British public, Labour will make all private school fees subject to VAT from January 2025, declaring the erstwhile exemption of a service used predominately by the rich an ‘unfair tax break’. 

Designed to ensure those families at the top of the economic food chain are giving back to the country, and in particular an education sector beset with funding-related issues, the policy is projected to raise £1.6 billion a year in extra tax revenue, a net gain that would allow for more than 2% increase in state school funding.

Ostensibly, Labour's planned VAT inclusion makes economic and social sense. The hidden cost of this to a small subset of the sector, however, could be catastrophic.

Private, British Islamic schools would catch the sharp end of this blanket policy approach, with devastating consequences to the sector at large.

The average school fees charged by the 2,500 private schools in the UK – educating 6% of the British population – is £15,200 a year, with more exclusive schools such as Eton, Harrow and Winchester College charging closer to £50,000 a year.

Compare this to the minuscule private Islamic school sector, consisting of approximately 155 community schools across the country, the majority of which charge fees a fraction of the £10,000 a year bottom average within the wider sector, and which faces possible near-extinction due to these tax changes.

Islamic independent schools in the UK are entirely community-led and based – a tradition that carries through from the first Islamic schools established in the UK, Islamia Primary in North-West London and Al-Furqan in Birmingham, in response to local needs.

They are a true anomaly within the broader independent school sector, both because of the economic make-up of the communities they serve, and the aims and objectives of their institutions.

Labour's cultural blindness

With 50% of families in the UK living in poverty, Muslims are the most impoverished faith group in the UK.

Islamic school fees are a reflection of that economic reality – these schools are responding to the local circumstances of their communities, charging just enough to subsist, and often paying a minimum wage to a dedicated team of teachers and staff giving back to these communities as a result.

Islamic schools provide a safe haven for Muslim families, and their children, who are otherwise living under the spectre of the institutional footprint of Prevent – one that is most prevalent within schooling itself. They provide Muslim children with the relative luxury of expressing their faith identity without fear of stigma or recrimination.

With Islamophobic and racist riots erupting across the country in these past few days, this is a lifeline for many Muslim families.

These schools do not typically provide children with the kind of resources or social capital that characterise other independent schools, and that will guarantee them the level of wealth which makes it socially or morally incumbent upon them to ‘give back’ – Islamic schools are simply not designed with this outcome in mind.

They therefore make negligible material contributions to the savings projected by the government, and their communities do not fit within a Robin Hood narrative that makes it ethically or economically imperative to subject them to the same financial penalties.

It is simply poor policy-making for Labour to include Muslim schools in this sweeping approach, particularly when a 20% increase would mean many of the families that utilise these schools — at their own expense and disburdening the taxpayer as a result — would no longer be able to provide their children with the stability of remaining in their schools.

It is a policy which catches these families at both ends and which is likely to cripple this small but integral part of the education sector.

Labours lack of recognition of this small but crucial industry signals a continued apathy towards Muslim communities and a cultural blindness in their approach.

VAT decision a major blow to faith schools

Islamic schools and communities have expressed their concerns regarding Labour’s policy.

Shuayb Patel, Headteacher of Barnet Hill Academy, a single-form entry school in North West London said of the change, “Our school community is comprised of hard-working families, many of whom are making sacrifices so their children can attend a school with a positive and affirmative faith environment.

"A 20% increase in fees — against the current economic climate — could see many families struggle to maintain that. It poses a threat to the future viability of the school and the sector at large.”

Barnet Hill Academy is a beacon within the local community, in the past hosting food banks, charity drives, and volunteering within the local community.

Nigar Shah, a parent whose children attend local Islamic schools said, “As parents, we’ve had to work very hard to send our children to these schools, and in recent years with the growing cost of living crisis, it has become even tougher.

"Since the announcement of the additional VAT to be paid on school fees, we feel it’s going to make it difficult for a lot of parents including ourselves to sustain this level of education and environment for our children," Nigar continues. 

"From time to time you hear ministers talk about how should be able to afford this extra 20%, but I doubt they are in touch with the reality of what hardships people are facing in their daily lives.”

While Muslim contribution to the country is a perennial topic of public interest, we should be unequivocally urging the government to support these small institutions that make a truly irreplaceable contribution to the fabric of public life, from their own pockets.

As Labour continues to show inaction and ignore the Muslim voice, it is unclear if this is an unintended consequence of a policy that is otherwise commendable, or another instance in a long line of negligent and hostile policy decisions impacting Muslims.

One thing is for sure, we can only hope they will see policy and economic sense before it’s too late for the children and families involved. 

Mariya bint Rehan is a writer and illustrator from London, with a background in Policy and Research and Development in the voluntary sector. She has written and illustrated a children’s book titled The Best Dua which is available internationally

Follow her on X: @ummkhadijah13