Report backing Labour’s private school VAT policy written by minister’s close friend

Labour’s plan to impose VAT on private school fees has come under scrutiny after it emerged that a key report justifying the policy was authored by a close friend of a government minister.

Matthew Pennycook, a minister in the Department for Levelling Up, Housing and Communities, was reported to have been the best man at the wedding of Luke Sibieta, who wrote the Institute for Fiscal Studies (IFS) paper backing Labour’s VAT proposal.

The report, which found that Labour’s VAT policy would have a minimal impact on state schools and could raise up to £1.5 billion for the Treasury, has been frequently cited by Sir Keir Starmer and other ministers to defend the measure. The VAT on private school fees, along with an end to business rates relief for private schools, is expected to come into effect in January 2025.

Mr Sibieta, a research fellow at the IFS with nearly 20 years of experience, suggested that the policy would likely force around 20,000 to 40,000 pupils, or 3% to 7% of the private school population, into the state sector. His report also projected a net gain of between £1.3 billion and £1.5 billion for public finances due to the removal of tax exemptions.

However, critics have questioned the close personal relationship between Mr Sibieta and Mr Pennycook, whose department will be involved in implementing the tax policy. Mr Pennycook and Mr Sibieta reportedly used to live together, and Mr Pennycook served as best man at Mr Sibieta’s wedding, raising concerns over potential conflicts of interest.