Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord de Clifford Excerpts

2nd reading
Wednesday 29th January 2025 Lords Chamber

[Lord de Clifford (CB)]

My Lords, I join other noble Lords in sending my condolences to the noble Lord, Lord Khan of Burnley, and his family for their recent loss of a senior member of their family.

I express my interest in the non-domestic rates Bill. I wish the House to note my interest in the matter as a non-domestic rates payer for five properties as part of the veterinary business I manage. My knowledge of non-domestic rates is not as extensive as it could be, and certainly not as extensive as that of my noble friend Lord Lytton.

Non-domestic rates reform has been a topic of discussion for many years for businesses. High street retailers, pubs and hospitality venues have been part of my early morning walk, listening to business news while I walk my dog, for many years. Businesses complain about the financial burdens this tax puts on them. I welcomed the Treasury report Transforming Business Rates in October 2024 and the call for evidence from stakeholders by the end of March. Therefore, I feel that this Bill is the start of a transition on business rates reform, and it is certainly not the solution.

I commend the general direction of the Bill in providing a possibly clearer and more certain system for how non-domestic rates are calculated for businesses, as the current rate is confusing, complex and not guaranteed. Two multipliers are included for retail, hospitality and leisure businesses. They are lower than the standard multiplier and possibly apply to two bands of rateable values of up to £500,000, which is welcome. My reservation is that the maximum reduction of 20 pence or 0.2—however it is expressed—will give savings to the RHL sector, but there is no indication from the Government as to the possible level of the lower multipliers that will be announced in the Budget in the autumn.

I agree with the noble Baroness, Lady Scott, the noble Lord, Lord Fox, and my noble friend Lord Lytton that it is difficult at this point to estimate and predict whether these businesses will make a saving in the coming years. Can the Minister say whether an assessment has been made of how much lower the standard multipliers would have to be to ensure that small businesses end up paying less or similar amounts of business rates than they currently pay, including the current reliefs that have been in place since the pandemic? I am aware of one leisure business that is already looking forward to 2026-27 with no indication of any relief expected. It is budgeting for a substantial increase in its non-domestic rates bill of thousands of pounds. As a result, it is looking into how to it can absorb those costs.

I welcome the addition of the higher multiplier for properties with rateable values of over £500,000, which is around 1% of the properties charged business rates. What proportion of the 1% are high street shops? These large shops are vital to our city centres, high streets and shopping centres as they attract great numbers to those locations. If this additional cost burden is too great for these large shops, it could have the opposite effect from the one the Government desire of trying to keep the high street alive.

I thank the Minister’s team for the briefing on the Bill last week and the confirmation that it is intentionally meant to be fiscally neutral, with the only additional funding coming from the removal of rate relief for charitable private schools. I have a concern about the removal of the relief. As expressed in the other place, although relief is being given to schools in which over 50% of their young people have an education, health and care plan, some schools that are charities and educate people with special educational needs do not have EHC plans in place for some of their students. If a school has a large number of these pupils, it may not qualify for relief. Those schools will see a significant cost added to their ever-increasing cost burden.

For families that send a child to these schools, this will add a financial burden. They already face certain challenges and need the extra support of these schools to ensure that the child is educated and can fulfil their potential in life, both at home and in the workplace. Has any further evidence been ascertained on the number of schools that provide education to SEN pupils but would not be eligible for the relief that will be removed?

I listened with interest to noble Lords’ many comments and contributions to this debate and to the issues raised. I look forward to contributing further at the next stage.