The rich have ever been adept at re-routing funds intended for the poor towards their own interests. In the 19th century, the Endowed Schools Commission sequestrated charitable school foundations for middle-class use. Attempts this century by the Fleming Committee in 1944 and the Newsom Commission in 1968 to integrate the public schools were effectively rejected by the schools themselves.

The Newsom Commission’s suggestion that charitable status be made a conditional rather than an absolute privilege eventually found its way into the Labour party’s policy for the public schools, where it has remained for a quarter of a century. This stratagem was revived by Will Hutton of the Guardian and violently opposed by Melanie Phillips, his sister columnist from the Observer, at a Fabian conference this weekend. It made for a good medieval disputation on the dilemmas of Labour policy, with a fascinating gender-balanced autobiographical coda from each.

Will Hutton’s point was a politico-cultural one; the public schools entrenched the cultural hegemony of the Right in the Cabinet and the City, and his friends were all sending their children to them; Melanie’s complaint was that, because she had opted to pay fees, she had lost all her friends. It proved how nasty the Left was and blind towards the faults of state schools. It was one more reminder to Labour leader Tony Blair that the personal is the political.

It has always been assumed that there are only three policies for Labour on the public schools: abolish them, integrate them or ignore them. Abolition is out on human rights grounds and indifference is impossible in the Labour party. The HuttonNewsom integration plan, “fill them up with poor, bright youngsters through a boosted assisted places scheme,” would not be countenanced for one minute by any Labour (or Tory) chancellor and would be fiercely opposed by both the political Left and most of the public-school Right. There is also a geographical problem: most northern youngsters of humble origin would not wish to be seen dead in (the mostly southern) public schools. There is no quick-fix for getting at public-school privilege through charitable status, but a milder, more modest approach to integration might work and produce benefits in the longer term.

Such a strategy is perfectly respectable - to restore the independent sector to its historic place within a national education system. The appointment of the President of the Board of Education as charity commissioner for educational charities in 1870 was designed to work towards an integrated school service which the Right has always sought to divide. Direct grant schools in 1921, the removal of the education minister’s responsibility for educational charities in 1972, the creation of grant-maintained schools and the exemption of independent schools from the national curriculum in 1988 are all in this divisive Conservative tradition.

Paradoxically, however, the Conservatives have also increased the number of educational charities in a manner that has gone largely unnoticed. Ex-polytechnics, further education colleges, sixth-form colleges, GM schools have all become charities in the past few years. Moreover they have become exempt charities, a category awarded (uniquely among schools) in 1855 to Eton and Winchester. Exempt charities have the privilege of never having to account for their activities to the Charity Commission, a privilege not effectively enjoyed by taxpayer-supported charities which are bound by Treasury rules and regulated in detail by quangos. This new cohort of exempt charities helps open the door to a possible new Labour approach to independent schools. All schools should now become exempt charities and be made subject to a common regime of accountability and regulation. Fee charging, the nub of the issue to many reformers, would then become a second stage issue.

There is a specious argument, peddled by a former charity commissioner to a select committee 20 years ago, that the charity law is governed by a unique convention. “The government of the day has never interfered by legislation or otherwise to alter the sphere of charity in order to bring in institutions of which it approves or exclude those which it does not.” Margaret Thatcher changed all that and reminded Britain that parliamentary sovereignty covers every citizen and every institution. Oxford has been tamed, OXFAM harassed, trade unions beaten into the ground and even private companies made subject to real regulation and disclosure rule. So there is no case for independent schools being exempt from the sort of regulation to which almost every other corporate body in the realm, public or private, now has to conform.

Labour should now begin to consult on legislation which would place certain duties on charities which are schools. Convenient vehicles for such consultation are those associations of both heads and assistant teachers which cover all sectors and contain individuals who would be anxious to talk.

Initially such rules should involve disclosure. Accounts, top salary packages, statements of educational objectives, criteria for the selection and expulsion of students, staff recruitment, fees and scholarship policies, equal opportunity policies and their implementation in terms of both race and gender and quality assurance mechanisms would be a comparatively uncontroversial list to begin with, on top of the now conventional curriculum and exam league table data. None of this would threaten independence or the right to charge fees; but it would emphasise the need to look at schools in Britain as a whole and plan accordingly, it would be a useful exercise for all schools to undergo in terms of staff (and student) participation in the process; and it could generate interesting internal debates, particularly in the public schools, flushing out starkly different prevailing value systems.

Through secondary legislation, once a map of schooling as a whole emerges and as new principles of charity law develop, the minister could be empowered to make regulations covering duties to which all schools should have regard - in terms of community needs, protecting the environment, new areas of emphasis in the national curriculum (which would be applied to the independent schools) and the need to cooperate with other schools and share scarce community facilities.

Labour’s failures in the past have stemmed from an addiction to a local authority controlled “state-system”. Using amendments to charity law in a creative and unifying manner would be a new approach - a subsidiarity, rather than a command economy, model. It would put the responsibility on all schools for explaining to staff, students and society what they stand for and what sorts of place they are.

Each time the public school issue surfaces, a dialogue of the deaf occurs. ISIS, the public-school lobbying arm, insists that such schools represent a massive subsidy to the taxpayer, Labour says the opposite. The argument, however, is not really about money or education. It is about the accountability of these schools to the nation and their effect on its culture.

In many ways, the row over VAT on school fees has helped clarify the issue. If private schooling is a traded “service”, like other such services, it ought to be subject to VAT; if it is not and is in some sense a “public service”, it should be subject to regulation and disclosure. The independent schools cannot have it both ways.

Christopher Price is the former chair of the Commons Select Committee on Education and was until recently principal of Leeds Metropolitan University.