Finance Bill (Third sitting)

Paul Kohler Excerpts

Committee stage
Thursday 30th January 2025 Public Bill Committees

[Mr Paul Kohler (Wimbledon) (LD)]

It is a pleasure to serve under your chairship, Ms Vaz. May I draw Members’ attention to my entry in the Register of Members’ Financial Interests? I own a bar called Cellar Door—though not the same cellar door as the ones the hon. Member for North West Norfolk just referred to.

I want to speak about wine and the hospitality and night-time economy in general. Under the current regime of the wine easement, 85% of all wine sold in the UK is subject to the same rate of duty. That is now to be replaced by 30 different rates. That fails to take account of fundamental differences between wine and other manufactured alcoholic 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 different vats. Until bottling, we do not know the ABV of a particular bottle of wine. 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% ABV. This is particularly important with low-cost wines. The point is that this regime is utterly impractical for wine producers and wine 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 this and got a long and detailed response, for which I am grateful. He made the point that HMRC will change its practices 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, and 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 for the taste, not the strength. An ABV goes through the taste profile. Compare a light Beaujolais with a robust Rioja. It is all about taste, not about whether it is stronger so one can get more drunk. That is not how people consume wine.

The hospitality and the night-time economy industry is facing an existential crisis owing to rising energy prices, recent inflation, labour shortages following Brexit, changes to commuting patterns and the more than doubling of business rates. Now, alcohol duties are to be another burden. It is death by a thousand cuts. Every incremental cost makes survival more difficult. That is why we are asking for a review after six months to see the effect on the wine industry, hospitality industry, night-time economy and other industries.

[James Murray]

I will attempt to address the points raised by the Opposition parties. Let me make it clear that clause 63 makes changes to the alcohol duty rates from 1 February 2025. Alcohol duty rates for products qualifying for draft relief will be cut by 1.7% to take a penny of duty off an average-strength pint, while rates of all other products will increase by the retail price index.

Public Finances: Borrowing Costs

Paul Kohler Excerpts

Thursday 9th January 2025 Commons Chamber

[Mr Paul Kohler (Wimbledon) (LD)]

I completely sympathise with the Chief Secretary about the incredible brass neck of the official Opposition. He talks about kick-starting growth, but can he give us any evidence that growth has been kick-started? Does he not realise that the only way to kick-start growth in the near future is to re-engage with Europe?

[Darren Jones]

The hon. Gentleman will know that this Government’s approach to stimulating growth in the economy is about stability, investment and reform—the political and economic stability the Chancellor has brought to this country; the investment from private sector partners, as well as from the state, where appropriate; and the reform of policy areas such as the planning system, or the financial services reform that the Chancellor set out in her Mansion House speech. He is also right, of course, that we need to improve our trading relationship with countries around the world, which is why the Chancellor is going to China today, and why we have begun negotiations with our friends in the European Union on how we can improve our relationship on a whole host of issues, including trade, energy, defence and security.

Independent Schools: VAT and Business Rates Exemptions

Paul Kohler Excerpts

Tuesday 8th October 2024 Westminster Hall

[Mr Paul Kohler (Wimbledon) (LD)]

It is a pleasure to speak under your chairmanship, Dame Caroline.

As the MP for Wimbledon, I am proud to represent a constituency with such a rich and diverse education offering, including fantastic primary and secondary schools in both the independent and state sectors. I am deeply concerned about the impact that the removal of the VAT exemption will have on many of these schools. Private school enrolments have already dropped in expectation of the tax hike, and there is growing concern that the numbers leaving the private sector and entering the state system will be much higher than the Government estimate.

As the right hon. Member for Islington South and Finsbury (Emily Thornberry) made clear when she said it did not matter if imposing VAT resulted in state school class sizes increasing, this decision is ideological, not practical—levelling down, not up, with red meat to show that the red flag is still flying, or at least fluttering. It will be rushed through in just three months’ time, in the middle of the academic year, giving institutions with no tax expertise little time to register for VAT, let alone assess and adapt.

Labour can only do this because the UK left the EU. Who said there were no Brexit dividends? Not for the first time, my party is in harmony with Brussels, and believes that education should not be taxed. We are a party that believes in giving individuals agency and supporting them in making choices about their and their families’ lives.

For many, such decisions are made because they know their child would not receive the support they need within the state sector. Independent schools in my constituency, such as the Hall school, Willington and the Study, to name but three, do a huge amount to support children with special educational needs. I have spoken to many parents who have made tough financial sacrifices in order to send their children to these schools. They speak of the barriers to their children receiving the support they need, including long waiting lists to receive an EHCP. According to the Independent Schools Council, 90,000 children are receiving SEND support without an EHCP.

In short, this Government should be aiming to improve all schools, regardless of their status, and they should be pursuing policies based on evidence, not dogma.

[Dame Caroline Dinenage (in the Chair)]

I thank all Members for their forbearance and efficiency this morning. We have managed to get through everybody. I also thank the Front-Bench spokespeople for forgoing a little bit of their summing up time. I call Sarah Olney for the Liberal Democrats.