Chinese investors are capitalising on Labour’s controversial VAT policy on private school fees to accelerate their acquisition of British independent schools, with officials warning the Communist Party is orchestrating a strategic takeover of UK education institutions.
More than 30 private schools have now been purchased by Chinese investors, including centuries-old institutions such as Thetford Grammar School, founded in 1566, and Wisbech Grammar, established in 1379. The surge in acquisitions has prompted fears that Beijing is conducting “ideological warfare” by targeting young minds in Britain’s most prestigious educational establishments.
Julian Fisher, a former teacher at Harrow Beijing and co-founder of Venture Education, which specialises in Chinese education, told The Times that China recognises “with the changes to VAT, a lot more schools, likely to be slightly better schools, will become available.
The Labour government’s decision to impose 20 per cent VAT on private school fees from 1 January 2025, championed by Education Secretary Bridget Phillipson with ultimate fiscal responsibility lying with Chancellor Rachel Reeves, has created financial difficulties for many independent schools, making them attractive targets for foreign investment.
Playing the Long Game
A senior Government source described China’s strategy as “playing the long game,” comparing it to Britain’s historical approach in its imperial territories by seeking to influence young people. This is ideological warfare,” the source added, warning that children educated in Chinese-owned schools would grow up to be “helpful” to Xi Jinping and the Communist Party.
The takeover of British schools forms part of a broader pattern of Chinese investment in UK assets, with Chinese firms having spent an estimated £134 billion on British infrastructure, private schools, and FTSE 100 companies. The spending spree has accelerated dramatically since 2019, with almost half of the purchases occurring in the last two years.
Among the notable acquisitions, Thetford Grammar School was bought by China Financial Services Holdings (CFSH), whilst Wisbech Grammar was purchased by Access Education. Riddlesworth Hall Preparatory School in Norfolk, where Princess Diana was educated, was acquired by the Confucius International Education Group in 2015.
Strategic Threat Warnings
The Institute for the Study of War (ISW) has warned that Russia is “actively pursuing a global anti-Western alliance” with China, Iran, and North Korea, constituting “a growing threat to Western security.” The think tank notes that China is working to reshape the international order in its favour whilst “portraying itself as a defender of the international legal order.
China is actively opposing the expansion of Western-led multilateral institutions such as NATO and AUKUS, whilst promoting Sino-Russian-led organisations including the Shanghai Cooperation Organization (SCO) and BRICS. The ISW reports that Moscow and Beijing’s “willingness to deepen bilateral strategic ties” extends to posturing against the West in space.
The Communist regime has also reportedly been supplying the Houthis with aid in exchange for safe passage for Chinese ships through the Red Sea, further demonstrating its efforts to undermine Western interests globally.
VAT Policy Creates Perfect Storm
The Labour government’s VAT policy, which took effect on 1 January 2025, removes the historic exemption for education and boarding services at private schools. The policy is expected to raise £1.725 billion annually but has been criticised for potentially forcing thousands of pupils out of private education.
Government forecasts suggest that 37,000 pupils could leave the private sector, representing approximately 6 per cent of the current private school population. However, critics argue the actual numbers could be significantly higher, with some schools already reporting substantial drops in enrolment.
The timing has created what education consultants describe as a “perfect storm” for Chinese acquisitions. Schools facing financial pressure from the VAT changes, combined with declining pupil numbers and increased operational costs, are becoming increasingly vulnerable to takeover approaches.
Pattern of Control
Chinese investment in UK education extends beyond individual school purchases. Ray Education Group, which bought Adcote School for Girls near Shrewsbury and Myddelton College in Denbigh, Wales, in 2018, explicitly details plans on its website to use British schools to expand to other countries as part of President Xi Jinping’s Belt and Road strategy.
The company’s stated goal is to boost China’s global economic and political influence through education, using British schools as a springboard for international expansion. This aligns with Beijing’s broader strategy of using soft power to advance its geopolitical objectives.
Former Conservative Party leader Sir Iain Duncan Smith expressed alarm at the revelations, stating: “This evidence today shows how dangerously we are sailing towards Chinese control of key aspects of our business. Successive governments have been asleep on the watch.”
Universities Under Pressure
Chinese influence in British education is not limited to schools. UK-China Transparency (UKCT) published a report earlier this month describing “widespread concerns within the academic community about spying, intimidation, harassment, and self-censorship” at British universities.
The report, based on evidence from fifty academics in China Studies, paints a picture of a field in crisis. Professor Gregory Lee, professor emeritus at the University of St Andrews, called it “the most important report to have ever been produced on the issues of censorship and academic constraints surrounding China-focused and Chinese studies in the UK.
He warned: “By not taking action on such issues, we in the UK are complicit in the Chinese authorities’ efforts to have their own idyllic vision of China dominate the minds of students and non-students alike.
Historical Precedents
Several of the schools now under Chinese ownership have remarkable historical significance. Thetford Grammar School, which educated Thomas Paine, the author of “Rights of Man” and a founding father of American independence, is now controlled by a Hong Kong-based financial services company.
Chase Grammar School in Staffordshire, bought by Achieve Education in 2014, now has offices in Shanghai so Chinese parents can conduct all dealings with the school in their own language. The school has 220 British pupils and 120 from overseas, including 40 from China.
Tong Zhou, a director of Chase Grammar, acknowledged that demand from China was driving the investments: “Chinese are starting to invest because the demand in China is there,” she said, adding that the directors would consider buying more schools if opportunities arose.
Limited Government Response
Despite growing concerns about Chinese influence in education, the government’s response has been limited. The Conservative government eventually took action against Huawei, promising to remove all equipment from the Chinese firm from 5G networks by the end of 2027, but similar decisive action on education has not been forthcoming.
The Office for Students (OfS) recently issued guidance recommending the termination or substantial amendment of Confucius Institute arrangements and China Scholarship Council mechanisms at universities, but enforcement remains voluntary.
Meanwhile, the Labour government appears focused on implementing its VAT policy despite warnings about unintended consequences. The policy includes anti-forestalling provisions to capture pre-payments of fees made from 29 July 2024, demonstrating the government’s determination to maximise revenue regardless of the impact on schools’ financial stability.
Future Implications
Education experts warn that the combination of financial pressure from VAT changes and strategic Chinese investment could fundamentally alter the character of British private education. Schools that have maintained their independence for centuries are now vulnerable to foreign control at a time of heightened geopolitical tension.
The situation is particularly concerning given China’s explicit strategy of using education to advance its political objectives. As the ISW notes, “The PRC portrays itself as a defender of the international legal order, but in reality wishes to reshape it in its own favour.”
With more schools expected to face financial difficulties as the full impact of the VAT policy becomes apparent, Chinese investors are likely to find increasingly attractive acquisition targets. Unless the government takes decisive action, Britain risks losing control of institutions that have shaped its intellectual and political traditions for generations.
The irony is not lost on observers that schools which educated champions of liberty and democracy are now falling under the control of an authoritarian regime that suppresses both. As one education consultant noted privately: “Rachel Reeves has played an absolute blinder. Unfortunately, it’s not for the UK.”
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Image Credit (Shortened):
Chancellor Rachel Reeves and Defence Secretary John Healey at a roundtable with the Defence & Economic Growth Taskforce (28 May 2025, Downing Street) – by Simon Walker / HM Treasury, licensed under OGL v3.0, via Wikimedia Commons.
