The number of enquiries for loans to help pay private school fees has surged by a quarter, according to School Fee Plan.

The company, which assists parents by paying school fees upfront and allowing repayments in monthly instalments, has seen a significant rise in interest compared to the same period last year.

School Fee Plan, a subsidiary of Premium Credit, is used by 420 private schools across the UK, including Harrow School. The company charges a transaction fee of around 3.56%, which some schools cover on behalf of parents. Unlike advance fee schemes that offer discounts for lump sum payments, these monthly finance packages help parents manage their cash flow without reducing overall costs.

A spokesman for School Fee Plan explained that the company’s services are more popular among mid-range private schools. The number of parents taking loans with the firm has jumped 93% since 2022, driven by increased private school fees and concerns over Labour’s proposed tax policies.

The surge in demand comes after Labour reiterated its commitment to removing VAT tax exemptions for private schools, making them liable for a 20% VAT charge if the party wins the general election. Stewart Ward, education director at School Fee Plan, warned that this policy could significantly impact both parents and schools, prompting many to seek financial assistance.

“The key thing is at the moment, the traffic we’re seeing on our website, the conversations we’re having with potential new schools is up a reasonably high double digit on the previous year’s activity – probably 25 per cent,” said Mr Ward.

A survey conducted by The Telegraph earlier this year found that 95% of private school leaders expect to increase fees if Labour implements the VAT charge. This has raised concerns that many families could be priced out of private education, potentially leading to a shift of 40,000 pupils from private to state schools, according to the Institute for Fiscal Studies.

School Fee Plan has noted that interest in their services has been driven by several factors, including inflation, pressure on household incomes, and the potential VAT charge. The company supports over 10,000 pupils annually, including students at prestigious institutions such as Harrow, Dulwich College, and Reigate Grammar School.

In some schools, like the £19,000-a-year Wellingborough School in Northamptonshire, about half of the parents use the company’s funding services. Amidst uncertainty, many schools are encouraging parents to pay several years’ fees upfront through advance schemes to avoid potential tax hikes. However, this could lead to tax issues with HMRC, and Labour has hinted at clamping down on such practices.

Labour aims to use the estimated £1.7 billion from the VAT on school fees to recruit 6,500 new state school teachers. A Labour Party spokesperson said, “Labour will invest in delivering a brilliant state education for children in every state school by recruiting over 6,500 new teachers, funded by ending tax breaks for private schools.”

They added that independent schools, which have raised fees above inflation for well over a decade, do not have to pass Labour’s proposed changes onto parents.

Nigel Farage, leader of Reform UK, has expressed strong opposition to the idea of Shein, the Chinese-founded fast-fashion retailer, listing on the London Stock Exchange.

Farage criticised efforts by ministers, including Chancellor Jeremy Hunt, to attract the company to London, arguing that it would not help revive the market.

Farage emphasised that Shein’s potential £50 billion listing would not enhance London’s financial stature. The retailer has faced accusations of forced labour in its supply chain, which it denies. “Encouraging Shein to choose London would be a mistake,” Farage said, adding that it “won’t change the IPO crisis” in the City.

He continued, “They see an IPO for Shein and say, ‘Oh isn’t that marvellous because London needs it’. No, it doesn’t. It doesn’t at all. Saying no to Shein is not cutting off our nose to spite our face. It’s saying we think this is a very bad idea.”

Farage, the parliamentary candidate for Clacton, attributed the London Stock Exchange’s struggles to “excess regulation” and called for a “radical rethink of the financial market rules.” He argued that “We have not deregulated from EU rules at all.”

Shein has been preparing for a London listing after earlier plans to float in New York were thwarted by political opposition. Although founded in China, Shein is now headquartered in Singapore and is working on paperwork for a potential blockbuster listing, though this does not guarantee it will choose the UK market.

Both Conservative and Labour parties have indicated support for Shein listing in London. Labour MPs recently met with the retailer, affirming that “raising investment, productivity, and growth is one of Labour’s missions for government.” Jeremy Hunt also held talks with Shein’s executive chairman Donald Tang in January, in an effort to persuade the retailer to choose London.

Shein has rapidly grown to become one of the world’s largest fashion retailers, known for its ability to launch new products swiftly. However, concerns have been raised about how it can afford to charge such low prices, with some items selling for as little as £4. US Senator Marco Rubio stated in April that there was a “high probability these companies have facilitated the importation of goods made with forced labour.”

These concerns focus on Shein’s Chinese supplier base, particularly as much of China’s cotton comes from Xinjiang, where there are allegations of forced labour involving Uyghurs. Last week, Peter Hugh Smith, chief executive of CCLA Investment Management, warned that allowing Shein to list in London would risk the City becoming a “listing venue of last resort” for companies with questionable human rights records.

Smith added that government support for a Shein float “sends the signal that the UK is willing to overlook significant human rights concerns.”

A spokesperson for Shein responded, “Shein has a zero-tolerance policy for forced labour and we are committed to respecting human rights. We take visibility across our entire supply chain seriously and require our contract manufacturers to only source cotton from approved regions.”

Sir David Davis, former chairman of the Conservative Party, has sharply criticised the UK’s extradition treaty with the United States following the acquittal of British technology entrepreneur Mike Lynch.

Lynch was cleared of charges related to inflating the value of his company, Autonomy, in its sale to Hewlett-Packard (HP).

Davis stated that the acquittal is a “real clear demonstrator of how ridiculous” the extradition treaty is, suggesting that it has a “chilling effect” on British companies considering sales to American buyers. He warned, “Any sale to an American company is plainly seen by the American Department of Justice to fall under American rules and regulations no matter where in the world it is.”

The 2003 treaty, designed to streamline the extradition process for serious offenders, was used to extradite Lynch, 58, over alleged fraud in the 2011 sale of Autonomy to HP. Davis, a longstanding critic of the treaty, expressed concerns that British entrepreneurs could face biased legal battles in the US long after their business dealings.

After a three-month trial in San Francisco, Lynch was acquitted late Thursday night. Reflecting on the trial, Davis remarked, “I would be very cautious of any deal if I was a British tech entrepreneur because I would never know that five or ten years later I wasn’t going to be carted off to America to face a partisan case in a partisan court.”

Other notable cases under the treaty include the extradition of David Bermingham, part of the “NatWest Three” linked to the Enron scandal, who served 37 months in a US prison. Davis highlighted that most US federal cases, approximately 97%, are resolved through plea bargains, which could coerce individuals into guilty pleas.

Autonomy, founded by Lynch in 1996, specialised in analysing unstructured data from various sources. HP acquired the company for $11 billion in 2011, aiming to integrate its software capabilities into their product offerings. However, the deal soured, with HP accusing Lynch of financial manipulation to inflate Autonomy’s value. Lynch has consistently denied these accusations over the past 13 years.

Davis described the case as “daft,” elaborating, “You have a sale of a British company on a British stock exchange, bought by a European subsidiary of Hewlett-Packard. They suddenly decide they’ve been defrauded after they sacked the chief executive who bought it. It was ridiculous.”

Following the acquittal, Lynch and Davis have pledged to address what they see as flaws in the extradition treaty. Senior business leaders, including Sir John Rose and Lord Stevenson of Coddenham, have previously called for a halt to Lynch’s extradition, reflecting widespread concern within the business community.

Brent Hoberman, founder of Lastminute.com, celebrated the verdict on social media, stating, “Great news for UK tech! Many UK tech founders looked up to Mike and will be happy to see him cleared.”

Suranga Chandratillake, a partner at Balderton and former US CTO at Autonomy, added, “Mike Lynch is a remarkable technologist and entrepreneur. If this verdict means he’s back in the UK and free to start working on tech again, rather than worrying about legal briefs, I think that’s a great outcome for British technology and UK plc.”

This case is the latest fallout from HP’s acquisition of Autonomy. Sushovan Hussain, Autonomy’s former finance director, was sentenced to five years in the US for fraud in 2019. Additionally, Deloitte, Autonomy’s auditor, was fined £15 million in 2020 for misconduct.

In a 2022 UK civil trial, Mr Justice Hildyard found that Lynch had indeed defrauded HP but noted that the acquisition might have proceeded even with adjusted financial figures due to the strength of Autonomy’s technology and client base. Damages in this case are still pending.