NEU calls for wealth tax and ‘progressive’ reforms to fund schools

The National Education Union (NEU) has partnered with Tax Justice UK to call for progressive tax reforms to be introduced by the chancellor which could provide greater funding for schools.

Ahead of the upcoming Comprehensive Spending Review, the NEU is backing three proposals from Tax Justice UK on how funding could be found through closing “unfair” loopholes and introducing “achievable, credible” tax reforms. 

The proposals include:

• A 2% wealth tax on assets over £10m, which could raise at least £24bn annually. This would affect just 0.03% of the population but would have a “significant impact” on funding for public services.
• Reform of Capital Gains Tax to equalise it with income tax, close loopholes, and eliminate inefficiencies. This reform could generate around £12bn per year, while also encouraging investment and economic growth.
• End and redirect fossil fuel subsidies to support climate action and invest in the retrofitting of schools. Ending subsidies for oil and gas companies could raise £2.2bn a year, money that could be reinvested in schools to improve safety, energy efficiency, and resilience to climate change.

According to the union, government funding decisions have resulted in 70% of maintained schools in England facing real-terms cuts since 2010/11. This includes 66% of maintained primary schools and 88% of maintained secondary schools.

The NEU is calling for education to be funded at 4.5% of GDP – roughly a £14.1bn real terms increase over three years. This would see a £6.4bn rise in the Schools Block, a £4.7bn increase in the High Needs Block, a £200m increase in Pupil Premium and a £2.8bn increase in capital funding.

Daniel Kebede, general secretary of the National Education Union, said: “Our schools are at breaking point, with cuts leading to fewer resources, larger class sizes, and the erosion of subjects that are crucial to a well-rounded education. The government must stop short-changing education.

“Now is the time for a wealth tax, and closing unfair loopholes to ensure the very richest pay their fair share. Instead of picking the pockets of our pupils, it’s time to tax profits and prioritise our children and our communities over corporate greed.” 

He added: “Investment in our public services benefits our whole community and helps to stimulate economic growth. The Chancellor has a clear choice to make at this Spending Review – tax wealth to invest in public services or continue on a trajectory of austerity 2.0.” 

Caitlin Boswell, head of Advocacy and Policy at Tax Justice UK said: “While schools around the country have grappled with cuts and too few resources to give children the education they deserve, the ultra-rich have kept getting richer at everyone else’s expense. 

“Taxing extreme wealth is a textbook example of how to raise revenue to invest in key services we all rely on, like education. The government has a decision to make, it either sides with billionaires and multi-millionaires, or it taxes their riches to make life better for the rest of us.”