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Rachel Reeves has been accused of misleading the electorate (Image: Getty)
Rachel Reeves has been accused of lying to the electorate over a major policy put forward by Labour at the general election.
The party proposed implimenting VAT on private school fees in order to raise money to spend on comprehensive schools.
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Now, it has been reported that billions of pounds raised from the tax will not be ringfenced to improve state schools.
The Telegraph reports that the Chancellor of the Exchequer told television broadcasters last weekend that “every single penny” of the ￡1.5 billion gained annually from applying 20% VAT to independent school fees would be hypothecated for state education.
However, it is now believed that the Treasury has made no plans to ringfence the funds.
This means that the cash could theoretically be spent on any of the Government's policies.
READ MORE: 'Economic crisis looms because Reeves cannot make the damn sums work' [OPINION]
Labour wants to tax private school fees so more can be spent on comprehensive schools (Image: Getty)
In an interview with ITV last weekend, Ms Reeves was asked: “Will all of that money be ringfenced for state schools?”
The Chancellor answered: “Yes, every single penny of that money will go into our state schools to ensure that every child gets the best start in life.”
The Education Secretary, Bridget Phillipson, said last week: “Ending the VAT break enjoyed by private schools will provide much needed investment in our state schools”.
Although, when The Telegraph asked about the above statements, a Treasury source told the newspaper: “The money is not directly hypothecated in the same way other taxes are.
"The physical pounds and pence are not directly ringfenced [for state schools].”
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A Treasury source has said: "The physical pounds and pence are not directly ringfenced" (Image: Getty)
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They added: “It’s not physically funnelled from ‘A’ to ‘B’ but in value terms the principal is still there.
"The Chancellor has been clear that value is going to be going directly towards the education priorities.”
YouGov reported in August 2024 that 49% of adults believed that private schools should not be allowed to be registered as charities at all and should lose their tax exemptions.
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14% thought that private schools should be allowed to remain as charities and keep tax exemptions.
An HM Treasury spokesperson said: “The total value of what is raised by the measure will support the government’s education priorities, as committed in the manifesto.
"It will raise around ￡1.8billion a year by 2029 to help deliver 6,500 new teachers and raise school standards.”