The Liberal Democrats have opened a fresh dividing line with Labour by speaking out against the party’s policy of imposing VAT on private schools.
Sir Keir Starmer has suggested that the new levy on school fees will be one of his top priorities if he wins the next general election.
As i revealed this week, Labour intends to introduce the policy as soon as it takes power – raising the prospect that it would take effect as soon as next academic year.
But the Lib Dems said they opposed the policy, although they would support a review of charitable status among schools due to fears that some do little to help their local area.
A spokesman said: “The Liberal Democrats do not support ending the VAT exemption. We do think some private schools benefit from lower taxes due to charitable status even though they perform almost no charitable act on behalf of the community – so charitable status does need to be reviewed so that it only rewards schools that do real community work.”
The intervention opens a rare division between the two main Opposition parties ahead of next year’s general election.
In the event of a hung Parliament, Sir Keir is likely to seek support from the Lib Dems to operate a minority government. The third party has not yet said which policy concessions it would demand in return.
Neither party has openly said that they would seek to do a deal as part of a so-called “progressive alliance”. But both have ruled out entering any sort of agreement with the Conservatives or the Scottish National Party, suggesting that there would be no other option to form a stable government if Labour falls short of a majority.
Lib Dem demands would almost certainly include some sort of electoral reform, and more funding for health which has been at the centre of the party’s recent campaigning.
It is not yet clear whether it would request a veto over certain Labour policies – or whether Sir Keir would consider dropping the private schools VAT plan given how much he has talked about it since becoming leader.
In an interview with i on Friday Lib Dem deputy leader Daisy Cooper pointedly did not rule out a post-election pact with Labour.
The Liberal Democrats are currently seeking to win voters from the Conservatives in wealthy, liberal parts of the country such as suburban areas of South-East England.
Under the Coalition Government between 2010 and 2015, the party was a fervent supporter of educational reforms but did not push for a crackdown on the privileges available to private schools.
Labour’s reforms to the tax treatments of private schools are intended to fund a number of improvements to state education, including the recruitment of extra teachers and more mental health support for pupils.
They are one of the few tax increases that Sir Keir and Rachel Reeves, the shadow Chancellor, have approved as they push to appeal to middle-class voters.