Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between Daisy Cooper and Damian Hinds

Report stage
Wednesday 15th January 2025 Commons Chamber

[Daisy Cooper]

The right hon. Gentleman is giving an impassioned speech about the case for an overhaul of the business rates system. Why did the previous Conservative Government never get around to doing that?

[Damian Hinds]

Well, I did refer at the start of my speech to the calls over the years for reform. I also said that there are problems with all taxes we levy on individuals or on business and that is why we end up with a blend. What I am talking about now is the fact that this Government are hiking up the total amount that will be taken in business rates, which will fall on major employers and then be felt in our unemployment rate. The Government are trying to do this thing of saying, “We are cutting stuff,” but they are not, because for all of the companies we have heard name-checked, reducing the relief will outweigh the effect of the multiplier. On top of that, we have a revaluation coming up in the near future. That is probably going to mean an increase in rateable values that will compound those higher multiples.

For all those reasons, new clause 2 is both important and a reasonable ask. It says that after a period of time, we should review the real-life effect of these changes and give the Government an opportunity to change course and get back to something that looks a bit like a growth agenda.

I turn briefly to the effect of these changes on independent schools. We have debated in the Chamber on a number of occasions the Government’s overall approach to independent schools. Let me say again that we object in principle to taxing education. It makes us almost unique in the world that we would do such a thing and it will be the first time in our national history that we have done so—it has never been done before by any Labour Government, or any other Government. The tax change we are debating today on rates is not the only tax change or transfer of money from independent schools to the Treasury. They were already facing a big increase—5%, I think—in employer contributions to the teachers’ pension scheme. Like all organisations—public sector, private sector, charitable and voluntary sector—they also have employer national insurance contributions to deal with. And then there is the enormous VAT change.

Specifically on this tax change, it is a fixed cost, as I mentioned at the start of my speech, at a time when there is all this uncertainty around the independent education sector and children will be moving. I will let Members into a secret: no one knows what the ultimate effect will be. We can line up as many experts as we like, but no one knows how many children will be moving, but we know it will be a non-trivial number greater than zero—there will be children moving out of that sector and there is a lot of uncertainty. It therefore seems to be a very unwise time to add, on top of all those other tax changes, a significant change to a fixed-cost tax. The amendments put forward by the official Opposition are therefore very well worth supporting; my hon. Friend the Member for South Northamptonshire (Sarah Bool) made that case very strongly.

On faith schools, we know that whatever the impact assessment says, people of faith, and particularly of smaller faiths, will be disproportionately impacted by this Government’s changes to education. We also know that children with SEND feature particularly prominently in the independent sector. Many of those schools have an awful lot of children who have special needs, but not necessarily—or not yet—an education, health and care plan. Special consideration should be given to both those types of schools: faith schools—if we wanted to narrow it down further, we could say smaller faiths charging low fees to parents—and those catering to children with special educational needs and disabilities.

On amendment 10, with all else that is going on in the independent sector, it is at the very least an exceptionally reasonable ask of the Government that we delay these changes by a year to give the sector a chance to be able to cope and plan.