HK parents face painful UK school-fee rises
Editorial | Mary Ma 8 Jul 2024
Parents - including many in Hong Kong- are the major losers following the UK election if they have children studying at private schools in the country.
Among the Labour government's controversial policy items is a plan to impose value added tax, now standing at 20 percent, on private school fees.
Although some schools have indicated they will not pass the entire increase on to parents, many families are expecting they will have to pay a lot more if they want to keep their children in private schools.
The imminent change, expected to be included in the king's speech, could be a challenge for private school operators since competition for students is also high in the sector. Some less competitive schools may be forced to close as a result of student loss.
Exactly how much more parents will have to pay depends on how efficient a school can absorb the cost surge.
According to whichschooladvisor.com, private schools are looking at raising fees by 10 to 15 percent following the VAT charge.
Private school fees increased about 4 percent every year between 2010 and 2019. The Labour policy to impose VAT on private school fees could force some parents - both local and overseas - to take their children out of private schools.
Parents already in the UK may opt to put their children into state schools, which would make competition more fierce for places at outstanding schools that are already very oversubscribed.
An immediate knock-on effect would be reflected in the rents and prices of houses near outstanding schools as school-home distance is often a major criterion for admission.
The Labour government believes the policy can raise 1.6 billion (HK$16 billion) which can be reinvested in public schools, without realizing that many parents in the UK are working middle-class, many of whom may find the new fees unaffordable.
It remains to be seen exactly how many will take their children out of private schools and put them into state schools.
Another challenge facing Starmer is his pledge to build 1.5 million new homes over five years - meaning building 300,000 new homes a year.
This is a very ambitious target, and may upset the housing market if so many were actually built. Could he be talking the talk rather than walking the walk on housing?
Although Labour won 60 percent of seats in the House of Commons, its vote share was under 35 percent - that's less than the votes won by former Labour leader Jeremy Corbyn.
Labour may have won more seats but Starmer cannot claim to have won more hearts.
The same is true for the Liberal Democrats, who gained substantially in the number of seats without much gain in vote share.
Nigel Farage's Reform UK bagged over 14 percent of the votes - more than the Liberal Democrats - but won only five seats. However, it came in second in more than 100 constituencies, undoubtedly making it a major winner in the election.
If the Conservatives' defeat was anticipated, the Scottish National Party's loss of 80 percent of its seats was stunning.
Of all the political parties, SNP was the biggest loser and the issue of Scottish independence will be set aside for now.
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