Those who go to private school will earn an average of £472,143 more by the age of 65. Photo: Getty
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£472,143: the value of a private education

Those who go to private school will earn an average of £472,143 more than state-educated pupils by the age of 65.

Private education: what a con. A new report from the Social Market Foundation finds that private education is worth an average of £57,653 to a person’s income later in life. Given that average annual fee for private day schools is £12,582, the temptation is to ask: why bother going private?

But hang on. The figure of £57,653 only takes into account the difference in earnings between private and state school pupils (discounting family background and social circumstances) between the ages of 26 and 42. For two people working to the age of 65, the benefit of private education would be worth £140,529 at a conservative estimate; and that’s before other benefits – higher pension plans; and the benefits of better paying jobs that they can they pass onto their children – are taken into account. That remains a good rate of return on the £85,000 it costs to send a child to an independent day school for seven years.

Most of the attention on the SMF’s report has focused on the value, or otherwise, of private education. But a more significant finding has been ignored.

In total, between the ages of 26 and 42, someone who attended an independent school will earn £193,700 more than someone who attended a state school. Strip away the benefits attributed to private education, and that still amounts to £136,047. Assume that the average benefits will continue to 65 (which amounts to a conservative estimate, as pay differentials increase later in life) and there is a £331,614 “dividend” for those attending private school that is attributable to family background and social circumstance.

Add it to the direct benefits of going to independent school, and those who go to private school will earn an average of £472,143 more than the state educated by the age of 65. This is what the New Statesman called the 7 per cent problem earlier this year.

Blaming it all on private schools is expedient, of course. But almost two-thirds of the earnings gap is down to wider advantages not related to what school you went to – wider social capital that is far more entrenched. The relationship between what parents and children earn is higher in Britain than anywhere else in the OECD. The reasons for this lack of social mobility go far deeper than where you went to school.

Tim Wigmore is a contributing writer to the New Statesman and the author of Second XI: Cricket In Its Outposts.

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Could Labour lose the Oldham by-election?

Sources warn defeat is not unthinkable but the party's ground campaign believe they will hold on. 

As shadow cabinet members argue in public over Labour's position on Syria and John McDonnell defends his Mao moment, it has been easy to forget that the party next week faces its first election test since Jeremy Corbyn became leader. On paper, Oldham West and Royton should be a straightforward win. Michael Meacher, whose death last month triggered the by-election, held the seat with a majority of 14,738 just seven months ago. The party opted for an early pre-Christmas poll, giving second-placed Ukip less time to gain momentum, and selected the respected Oldham council leader Jim McMahon as its candidate. 

But in recent weeks Labour sources have become ever more anxious. Shadow cabinet members returning from campaigning report that Corbyn has gone down "very badly" with voters, with his original comments on shoot-to-kill particularly toxic. Most MPs expect the party's majority to lie within the 1,000-2,000 range. But one insider told me that the party's majority would likely fall into the hundreds ("I'd be thrilled with 2,000") and warned that defeat was far from unthinkable. The fear is that low turnout and defections to Ukip could allow the Farageists to sneak a win. MPs are further troubled by the likelihood that the contest will take place on the same day as the Syria vote (Thursday), which will badly divide Labour. 

The party's ground campaign, however, "aren't in panic mode", I'm told, with data showing them on course to hold the seat with a sharply reduced majority. As Tim noted in his recent report from the seat, unlike Heywood and Middleton, where Ukip finished just 617 votes behind Labour in a 2014 by-election, Oldham has a significant Asian population (accounting for 26.5 per cent of the total), which is largely hostile to Ukip and likely to remain loyal to Labour. 

Expectations are now so low that a win alone will be celebrated. But expect Corbyn's opponents to point out that working class Ukip voters were among the groups the Labour leader was supposed to attract. They are likely to credit McMahon with the victory and argue that the party held the seat in spite of Corbyn, rather than because of him. Ukip have sought to turn the contest into a referendum on the Labour leader's patriotism but McMahon replied: "My grandfather served in the army, my father and my partner’s fathers were in the Territorial Army. I raised money to restore my local cenotaph. On 18 December I will be going with pride to London to collect my OBE from the Queen and bring it back to Oldham as a local boy done good. If they want to pick a fight on patriotism, bring it on."  "If we had any other candidate we'd have been in enormous trouble," one shadow minister concluded. 

Of Corbyn, who cancelled a visit to the seat today, one source said: "I don't think Jeremy himself spends any time thinking about it, he doesn't think that electoral outcomes at this stage touch him somehow."  

George Eaton is political editor of the New Statesman.