Non-Domestic Rating (Multipliers and Private Schools) Bill)

Baroness Pinnock Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 26th March 2025 Lords Chamber

Moved by

[Baroness Pinnock]

At end insert “, and do propose Amendment 1B in lieu—

1B: Clause 1, page 2, line 6, at end insert—
“(1A) Regulations under sub-paragraph (1)(a) may specify that occupied hospitals, medical and dental schools, and any other healthcare settings as may be prescribed in the regulations are not subject to the higher multiplier.””

[Baroness Pinnock (LD)]

My Lords, as the Minister said, the higher rate or multiplier being introduced in this Bill is to apply to all properties with a rateable value of more than £500,000. This is a worthy attempt by the Government to have a fairer approach to business rates.

However, 290 hospitals are captured by this new banding. It means a considerable increase in their business rates—potentially, a 20% increase—for which government funding has not made provision, so hospitals will have less funding to drive down waiting lists, which is an aim that has all our support. I give just one example: University College Hospital here in London has a rateable value of nearly £12 million. With the new higher multiplier, its business rates will increase by over £1.2 million.

Amendment 1B, in lieu of Amendment 1, would provide the Government with the option, by regulations, to exclude hospitals from this higher banding. At this late stage, I urge the Minister to agree. None of us wants to see waiting lists not going down as fast as they could because of the Government’s reluctance to exclude hospitals—not from business rates, just from the higher multiplier.

I will speak very briefly to the other Motions. Motion B1 in the name of the noble Baroness, Lady Scott of Bybrook, is very important to the viability and vitality of our town and city centres. We on these Benches are minded to support the noble Baroness on this issue if she wishes to take it to a vote.

Motion N1 in the name of the noble Lord, Lord Thurlow, would provide the Government with a way forward to address cliff-edge issues when there are hard divides between different multiplier levels. This is of concern to businesses and, again, we will support the noble Lord if he intends to divide the House on this issue. I beg to move Motion A1.

[Baroness Scott of Bybrook (Con)]

My Lords, first, I declare my interest as a vice-president of the Local Government Association. This group of amendments addresses the ongoing issues with Clauses 1 to 4 that have been debated throughout the progress of the Bill. These clauses present two major problems. They do not reflect the Government’s previously stated ambition to reform the business rates system in order to protect the high street and ensure that online businesses pay their fair share. The higher multiplier will damage businesses on the high street and drive them out of town centres.

The Bill is an attempt by the Government to deliver on their manifesto commitment to reform the business rates system, but they have instead used a blunt instrument as a cut-off. That means that a number of businesses will be paying this higher multiplier, which they should not be doing. The Government will be hitting stores up and down the high street. Despite promises that reform will follow, the Bill leaves a number of important high street businesses paying higher rates, with no certainty at all as to when the situation will improve.

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[Lord Khan of Burnley (Lab)]

My Lords, I thank all noble Lords who took part in this short debate. We heard concerns that the measures in the Bill for new multipliers do not deliver on the stated intention of the policy as announced at the Budget. I do not agree with that. At the Budget, the Government announced their intention to introduce two lower multipliers for qualifying retail, hospitality and leisure properties and, in particular, to end the uncertainty of annual RHL relief. RHL is a temporary stopgap measure that has been extended year on year since the pandemic, and it does not provide the certainty that businesses require. The Government, through this Bill, are taking steps to address that. It was also announced at the Budget that the permanent tax cut for RHL businesses needs to be sustainably funded. This is an appropriate and prudent approach. The challenging fiscal environment that the Government face requires this, but it goes without saying that any tax cut must be funded as part of sound financial management. To do this, the Government intend to introduce a higher multiplier for the most valuable properties, those with a rateable value of £500,000 and above. The higher multiplier will affect less than 1% of properties in England. This delivers on the policy set out at the Budget by the Chancellor. Furthermore, it represents the Government’s first step to delivering on their manifesto commitment to transform the business rates system to one that is fairer, protects the high street and is fit for the 21st century.

I have explained to noble Lords here today while the amendments tabled in lieu are not necessary. For these reasons and the other reasons I have already set out, I respectfully ask noble Lords not to press their Motions containing Amendments 1B, 2B, 7B, 8B, 13B and 14B.

[Baroness Pinnock (LD)]

I thank the Minister for his response, which gave me no hope that the Government are considering relieving hospitals of the higher multiplier. We agree with him that retail, hospitality and leisure businesses should benefit from the lower multiplier in the Bill, but it should not be at the expense of the NHS. There are other ways of doing it, and I am appalled that the Minister has not sought to find alternative sources of income. So because we on these Benches wish to make sure that our hospitals do not lose a penny more in business rates to the Government, I beg leave to test the opinion of the House.

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Motion G1 (as an amendment to Motion G)

[Baroness Pinnock]

Moved by

At end insert “, and do propose Amendment 7B in lieu—

7B: Clause 1, page 2, line 6, at end insert—
“(1A) Regulations under sub-paragraph (1)(a) may specify that unoccupied hospitals, medical and dental schools, and any other healthcare settings as may be prescribed in the regulations are not subject to the higher multiplier.””

[Baroness Pinnock (LD)]

My Lord, this is a consequential amendment on Motion A1. Presumably, that one has passed.

Motion G1 agreed (as an amendment to Motion G).

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[Lord Thurlow (CB)]

I want simply to add to these very moving and persuasive comments. It seems to me the most terrible act of self-harm to tax the schools again and again. It is not just VAT and the non-domestic rates but national insurance increases on staff and employees, and, in recent years, a compulsory increase to pension provision outside any private arrangements the schools may make. Those are four separate recent taxes. When is this bleeding going to stop?

[Baroness Pinnock (LD)]

My Lords, we on these Benches believe that there is a principle at stake of not regarding independent schools as charities. Education is not a profit-making business, although independent schools have to cover their costs—which, as I have sadly heard, Fulneck School has failed to do. We will support the noble Baroness, Lady Barran, if she wishes to test the opinion of the House.

[Lord Khan of Burnley (Lab)]

My Lords, I thank all noble Lords for their important contributions in this debate. The noble Baroness, Lady Barran, has stated her firm belief that no education should be taxed. She has also reminded this House of her view, shared by the noble Lord, Lord Mackinlay, that the Government are creating a two-tier charity system. The measure delivered through this Bill is a tough but necessary choice to ensure that the Government can deliver on their commitments and break down barriers to opportunity for all. Tough choices are difficult—the Government know this—but they are also necessary. This Government will take these tough decisions because of the financial climate out there.