Autumn Budget 2025

Lord Mohammed of Tinsley Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Mohammed of Tinsley (LD)]

My Lords, I start by congratulating the right reverend Prelate the Bishop of Portsmouth on his excellent speech. I look forward to working alongside him on some of the social issues he raised. As we consider the Government’s Budget, I want to focus on education, an area that should form the backbone of our nation’s future prosperity, yet one that the Budget neglects. Let us begin with SEND provision.

Local authorities across the country will breathe a sigh of relief, albeit temporary, on hearing that from 2028-29, the full cost of SEND provision will be absorbed within central government budgets. The Liberal Democrats have long called for a national body for SEND, precisely to end the postcode lottery that forces parents to fight endlessly for support that should be guaranteed. What we see before us is not a plan; it is just an announcement without substance, clarity or the financial underpinning needed to make it real. The Government have identified no offsetting savings—none whatever—to cover the estimated £6 billion this shift will require. Will the Minister comment on this when he responds? Meanwhile, local authorities, as we heard earlier, are racking up an accumulated £14 billion in SEND-related deficits by 2029. Those deficits do not disappear just because Government have centralised SEND in Whitehall.

Turning to student finance, the Budget includes yet another stealth tax, the freezing of repayment and interest thresholds for plan 2 student loans from 2027. Graduates, many earning modest wages in an increasingly uncertain job market, will now be asked to pay more simply for having pursued a university education. This is not reform, it is a quiet raid on the incomes of young people who are already facing unaffordable rents, rising living costs and shrinking opportunities.

Then we come to the education budget itself. By 2028-29, it will fall by 0.1% in real terms. Schools are already in crisis. They are expected to fund breakfast clubs, free school meals and teacher pay awards—not with new investment but by carving out even thinner slices from their already overstretched budgets. To put that into perspective, an 0.1% cut amounts to a shortfall of around £70 million in real terms. That money simply vanishes before it reaches the classrooms. This is intolerable.

Where would the Liberal Democrats get the additional investment needed to fund the education sector properly? We would raise extra funds by implementing a time-limited tax on the big banks, levied on the massive windfalls that they are able to make only thanks to a technical glitch in the financial system. These windfall profits are due to inflation interest rates shooting up. Our measures would raise around £7 billion a year. We also know that increasing taxes is not a solution to a stagnant economy, which is why the Liberal Democrats have consistently called for a new UK-EU customs union raising over £25 billion a year.

As we heard earlier, new research by the US National Bureau of Economic Research has revealed that the previous Government’s Brexit deal is costing British taxpayers £90 billion each year in lost revenue. It is time for the Government to resolve this. Under our plans, we would increase core funding for schools and colleges above inflation year on year. Teachers’ pay and free school meals would be funded properly—and not at the expense of SEND pupils’ learning. SEND provision would be managed fairly and consistently through the national body, eliminating the postcode lottery and ending the chronic underfunding. Maintenance grants for further education and higher education would be expanded without saddling universities with damaging levies.