Finance Bill

Nesil Caliskan Excerpts

Report stage
Monday 3rd March 2025 Commons Chamber

One example stood out to me: a family contacted me to say that they have other children in state schools, but one was not getting on well so they chose to put them into a private school. Only at that point did the private school contact the SEND department at the state school to find out whether any support had been put in place. It turns out that their child had completed a range of assessments, and had performed quite poorly—well below the acceptable levels for processing and comprehension—but even so, no additional support had been put in place apart from awarding extra time, because it was simply not possible.

[Nesil Caliskan (Barking) (Lab)]

Is that not precisely the point? Our state system does not have the capacity or the means to support children with special educational needs. The additional £1 billion investment, which in part will be raised by getting rid of the VAT exemption, will help deliver not only 6,500 new teachers but the additional support for special educational needs children in our state system.

[Daisy Cooper]

We disagree on this point. Fundamentally, Liberal Democrats have said that we should rise the tide for all children, not lower the tide for some. We had a very ambitious education agenda in last year’s general election manifesto. Some areas we had in common with the Labour party, and some not. Our very ambitious agenda for education included a ringfenced high needs budget. I have campaigned relentlessly on improving SEND provision for the past five or six years in this Chamber, in Westminster Hall debates and in various meetings. We do not think that this particular measure is needed to improve SEND funding. Other measures could be used. We have a difference of opinion about how to raise that money.

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[Sir Ashley Fox]

I am grateful for my hon. Friend’s intervention. Indeed, combined with the rise in the minimum wage and Labour’s Employment Rights Bill, the contents of this Finance Bill seem to deliberately set out to harm small businesses.

The Labour Government’s plan to introduce inheritance tax on farmers and family businesses is more evidence, if it were needed, that they do not understand how farms and small businesses work. Under this Government, a family farm with land, buildings and machinery worth £5 million will incur inheritance tax of £400,000 when it passes to the next generation. That same farm might produce a return of 1%, or £50,000, in an average year, so the Government are proposing to take all that family’s income for the next eight years. I have a question for the Minister: how does he expect that family to live in the meantime? Labour’s response to our farmers has been to sneer at our rural communities. The Treasury offered a Minister to farming representatives, who then spent that time telling them that there was not a problem. This is bad not just for farmers but for rural economies and our nation’s food security.

This Finance Bill increases taxes, spending and borrowing. It makes our public sector larger and the private sector smaller. It does exactly the opposite of what is required. If we want a prosperous society, we need to encourage enterprise. We need low and simple taxes that incentivise people to work hard, to invest and to grow their businesses. This Finance Bill does exactly the opposite, and that is why we will oppose it this evening.

[Nesil Caliskan]

I want to thank the Members who have spoken so far. I have great enthusiasm for the Finance Bill, and I thank the hon. Member for North West Norfolk (James Wild) for his contributions, alongside the Minister at the time, over the several days I sat through the Bill’s Committee stage. I speak in favour of the Finance Bill as a member of the Committee. I recognise that it is part of the Government’s mission to turn the page on what was a period of decline for the country.

There are several aspects of the Bill that I would like to focus on. To begin with, I see the Government’s proposals on non-dom status as a crucial part of our agenda to ensure that we are delivering a fair approach to taxation in this country. Closing the non-dom loophole, alongside extending the levy on oil and gas companies and ending the VAT exemption for private schools through this Bill, will raise the necessary income to deliver what the Government are trying to do: achieve a balanced budget that will stabilise and then grow the economy.

[Graham Stuart]

If it turns out that the energy profits levy, lugged up to even higher levels, leads to a lower tax take than there would have been if it were at a lower level, would the hon. Lady think that that was a mistake and urge her colleagues to change course?

[Nesil Caliskan]

Ministers have provided an assurance of their assessment, and they do not believe that will be the case. The Government are taking a rounded approach to energy that, alongside our commitments to GB Energy and to a transfer to more renewable energy, will allow there to be a more mission-led approach. I take the right hon. Member’s point, but the Government have provided assurances that there will be constant monitoring and that if changes are required they will deliver them.

[Daisy Cooper]

The hon. Member will be aware that there is a mechanism within the Government’s energy profits levy, which will kick in in 2030, to ensure that if energy prices start to go down, the levy will cease to work. So there is an intrinsic link between the money that the energy companies pay and energy prices. Does she agree, given that energy prices have now gone up for the third time in a row and all our constituents are struggling with energy prices, that it is right that the big oil and gas companies should pay their fair share, but that when energy prices come down, the levy will stop?

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[Nesil Caliskan]

I absolutely support the principle of being able to use a mechanism to intervene in a market that is not working, and I think the Government’s approach is right. There is an immediate issue with high pricing, certainly, but the truth is that the Government have to be able to take decisions for the long run. I am conscious that Madam Deputy Speaker might intervene and tell me to focus on the new clauses, but as I said earlier, a long-term approach to ensure that we have a just transition that sees energy stabilised for people across the country on a long-term basis is really important.

The Government’s approach to energy levies is the right one, our focus on maintaining particular clauses on VAT on private schools is important, and, as I have said, the proposals on non-dom status are crucial.

[Harriet Cross (Gordon and Buchan) (Con)]

The energy profits levy is expected to cause huge amounts of instability for North sea firms, driving away investment, driving down employment and driving businesses away from the North sea to invest abroad. Does that sound like stability, and if so, will it bring employment, economic growth and lower prices to the country, because it does not sound like the stability or investment environment that we are looking for?

[Nesil Caliskan]

The Government’s commitment on investment, whether through the wealth fund or the private sector combination of GB Energy, brings stability to the sector in the long term. The truth is there is an energy crisis that affects my constituents and people across the country. At this moment, efforts have to be taken to ensure that we do everything we can to bring down the prices people experience in their bills on a day-to-day-basis.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Will the hon. Member give way?

[Nesil Caliskan]

I will make some progress and conclude in a moment.

Politics is full of choices. The Government have to balance the books and take a decision to ensure that we close the black hole, so the choices they have made feel like the fairest ones. A long-term commitment to ensuring that we have stability in the energy markets, while ensuring that people who need help right now can benefit, is the correct approach.

I am happy to support the Government’s position on the Bill. It is a Bill that sets out the right choices, as I have said, and it is the first important step to ensure that the country is back on the road to recovery after a dark period, where people were impacted not just through an economic crash, but in their day-to-day living through a cost of living crisis.

[Mr Paul Kohler (Wimbledon) (LD)]

I will speak to new clauses 7 and 8. As the MP for Wimbledon, I am proud to represent a constituency with such a rich and diverse educational offering, including fantastic primary and secondary schools in both the independent and state sectors. But recent Government decisions, including the increases in employer NI contributions on all schools, the removal of business rates relief and the imposition of VAT on school fees at independent schools, are pushing many in the state and private sectors to the brink. The changes to independent schools have caused considerable concern in my constituency, as can be clearly seen by the over 1,000 signatures from my constituents on the petition being debated today in Westminster Hall.

It is my belief and that of my party, as Liberals, that education should not be taxed and individuals should be able to freely make choices about how their children are educated. The ambition should be to reach a point where the state offering for schools is so high that no parent feels particularly compelled to send their children to independent schools. However, these ideologically driven policies of taxing education are not the solution. They simply put further strain on the state sector while financially hitting those who make what they believe to be the best choice for their child. These policies are a piece of red meat to show that the red flag is still fluttering on the Labour Benches.

Admittedly, the long-term impact that the changes will have on schools is still to be seen, but the early signs are not good. This academic year we have already seen a drop of 10,000 pupils at independent schools—three times higher than the Government estimated. Many believe that the change will not be a one-off event, but the start of a longer period, with more pupils expected to leave independent schools in the coming years, making any financial gains to improve the state sector illusory.

It is important to note that the cost per pupil is likely larger than the national average due to the sheer number of students in the independent sector who have special educational needs. The Independent Schools Council estimates that over 130,000 pupils in independent schools have special educational needs, with 90,000 of them receiving special educational needs and disabilities support with no education, health and care plan.

Independent schools in my constituency, such as the Hall school, Wimbledon high school and Donhead prep school, to name but three, do a huge amount to support children with special educational needs, and many parents choose to send their children there for that reason alone. I have spoken to many parents who have made tough financial sacrifices to send their children to those schools. They speak of the barriers to their children receiving the support they need in the state sector, including long waiting lists to receive an EHCP. The changes are already forcing many to reconsider their decision because they simply no longer can afford to use the private sector to relieve pressure on the state system.

As is well documented, there are huge issues around the provision of SEND support in state schools, with many children waiting years for support and many schools not being able to provide the support they would like to due to budgetary restraints. At a time when the Government and local councils are already struggling to support schools with the money they need for SEND support, avoiding further strain on state schools is vital—these decisions do the opposite.

Turning to new clause 8, I draw the House to my entry in the Register of Members’ Financial Interests. I will speak about the impact the Bill will have on the wine industry, the night-time economy and hospitality in general. Under the current wine easement, 85% of all wine sold in the UK is subject to the same rate of duty. With the alcohol duty now set to be linked to the volume of alcohol in each bottle of wine, that will be replaced by 30—yes, 30—different rates of duty. While I understand the Government’s broader intentions, the new regime is simply not workable in the context of wine. It fails to account for the fundamental difference between wine and other more manufactured drinks.

The alcohol by volume of wine cannot be predicted with precision before or during the wine-making process. The alcohol content is stable only at the point when the wine goes into the bottle. The ABV varies between different years and vats. Until bottling, we do not know the ABV of a particular bottle. It therefore creates huge uncertainty about price and profit margins for the industry if there are different rates of duty depending on the specific ABV, down to a gradation of 0.1%. That is particularly important with low-cost wines. This regime is utterly impractical for wine producers and merchants.

Hal Wilson, co-founder of Cambridge Wine Merchants, told me:

“In my business this feels like death by a thousand cuts, or even two thousand cuts. We sell over 2,000 different wines each year and from February will need to know the precise ABV of each and every one before being able to calculate their full cost. For each 0.1% ABV difference there is a different amount of tax to be paid.”

I wrote to the Minister about the matter and received a long and detailed response, for which I am grateful. He made the point that His Majesty’s Revenue and Customs will change its practice and accept the ABV on the label of the bottle to the nearest 0.5%, but that is current practice; it is not in the legislation as I understand it. It is still far too complex and much of my criticism still holds.

Secondly, the letter fundamentally misunderstands why people drink wine. Wine is consumed primarily for the taste, not the strength. The ABV affects the taste profile. Compare a light Beaujolais with a robust Rioja—it is all about taste, not whether it is stronger so one can get more drunk. That is not how people consume wine.

Turning briefly to hospitality and the night-time economy, the industry faces an existential crisis owing to the cost of living crisis, rising energy prices, inflation, labour shortages following Brexit, changes to commuting patterns and the more than doubling of business rates. The increase in alcohol duties will be yet another burden. Every incremental cost makes survival more difficult, as I know myself, and the Bill shows that the Government are still not taking the dangers seriously.