Non-Domestic Rating (Multipliers and Private Schools) Bill

David Simmonds Excerpts

2nd reading
Monday 25th November 2024 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

Just a few weeks ago, my right hon. Friend the Leader of the Opposition highlighted a £2.4 billion black hole in the local government budget, arising from the recent Budget. Some £3.7 billion of extra spending was announced, with only £1.3 billion of funding to pay for it. And in this Bill we begin to see how this Government propose to fill that gap. First, they came for the pensioners; then they came for the farmers; then they came for the students; then they came for the employers; and now they are coming for our high streets, our pubs and our shops, with another whammy of tax rises.

Let us not pretend that this is an essential step. The choices that were made by the Chancellor and this Government in their Budget are driving up inflation and borrowing costs, with the Government borrowing a record amount last month. They are driving up employment costs and councils will be hit, just as they are hitting the rest of our economy.

I reflect that the Minister for Local Government and English Devolution, the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon), said in 2023:

“Pubs are the beating heart or the anchor of many communities, and the place where people can get together to tackle loneliness and isolation.”—[Official Report, 5 December 2023; Vol. 742, c. 238.]

Indeed, those are sentiments that many Labour Members have expressed in this Chamber and in Westminster Hall recently. But all those Members who came here to express their support and champion their local pub are about to vote for a Bill that, on average, will put up its taxes by more than £5,500 a year. All this from a Government who promised to replace business rates! Indeed, Rachel from accounts—I am sorry, Madam Deputy Speaker, I mean Rachel from complaints admin—went so far as to promise in 2021 to abolish them.

We all know from personal experience, whether in our own families or in our former lives in local government, the value of the diversity of our education system. We know about the increase in attainment brought about by the huge growth in the number of independent schools, in the form of academies, started under the last Labour Government and developed under the previous Government. But we continue to see this spiteful class war attack on schools, and this Bill continues Labour’s war on education.

Several Liberal Democrat Members have mentioned Britain’s former membership of the European Union, and of course this measure to become the only country in Europe to tax education would be illegal under EU law. The Bill still does not fully consider the needs of our special needs schools. Many have a mix of fully private and EHCP-funded pupils, and the balance will change over time. An example is the Gesher school in my constituency, which provides for a significant number of children on the autistic spectrum. One year nearly 100% may be privately funded, and the next year the vast majority will be EHCP-funded. The Bill simply does not usefully answer the question of how such settings will pay their taxes.

Several Members around the Chamber, including on the Labour Benches, have set out their serious concerns about the impact on small faith schools. The Government face ongoing legal challenges on the subject, which is incredibly important if our country is to have the diverse base of education that many Muslim communities in particular have struggled to find in the established mainstream state sector.

Labour Members have poured scorn on our education system, but I remind them of the transformation in state education standards over the past 14 years. Having been a local authority lead member for education for that whole time, I would be the last person to claim that everything in the state sector was perfect. However, we saw amazing progress on closing the disadvantage attainment gap in England under the previous Government, in the context of our progress in international league tables. When we left office, class sizes were stable at 26, which is less than the statutory limit that the previous Labour Government introduced.

As in any democracy, we must ask whether the harm that the policy does to some families and to some children’s education is outweighed by its benefits. We should reflect that if every single penny raised by these policies finds its way to state school budgets—although we already know that that will not happen, because they will also be funding the big increase in Ofsted bureaucracy that the Secretary of State set out for us a few short weeks ago—it will cover less than half the cost of a single teacher in each of those state schools, at a time when pupil rolls in England are falling. It is quite clear that the motivation for this policy is spite and class war, and that it has nothing whatever to do with standards in our schools.

If that were not enough, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) has set out the very serious concerns about this plan that we hear from across business and particularly from the retail sector and licensed trade, from the Association of Convenience Stores, which represents the small corner shops that enable our residents to access the goods they need at all hours of night and day, to the very biggest retailers such as Sainsbury’s, which have set out in detail the damage that this Budget and this Bill are already doing to workers’ pay and to the prospects for investment, for pay growth and for training and employment growth in this country.

In reflecting on what we can be proud of from the past 14 years, I draw the House’s particular attention to the fact that when the Conservatives left office there were 4 million more people in work in this country than when we took office; youth unemployment was half what it was when we took office; and the proportion of people in this country earning their own living had grown exponentially. My right hon. Friend the Member for East Hampshire (Damian Hinds) and my hon. Friend the Member for South Northamptonshire (Sarah Bool) have set out very clearly the importance of getting it right for our communities. We need to ask whether what is proposed today will generate the transformation. Under the last Conservative Government’s 14 years in office, we saw a 70% increase in school funding, with 77.9% per-pupil growth alone over the past few years, above inflation. It is clear that we have a decent and honourable record on investment in education.

Our retail sector is the largest part of our private sector employment, with nearly 5 million workers. It is clear that businesses in that sector, from the largest to the smallest, are looking at the impact that the Bill will have on their bottom line and are translating that into lower jobs, lower growth and less investment. They are warning this Government very clearly, as Opposition Members do.

I invite the Minister to intervene. Will he tell me whether he is willing to promise that small business rates relief will be maintained? So far, the Government have refused to answer that question, causing a huge degree of concern among small businesses of all kinds up and down our high streets. As the Government move to introduce higher multipliers on business rates, we have to ask whether that signifies that they will also move—as the Labour Government in Wales have done already—to introduce additional higher council tax bands for our residential properties?

It is very clear that as well as coming for the pensioners, coming for the students, coming for the farmers and coming for the employers, the Government are coming for every council tax payer and business rate payer in this country. That is not to fill a black hole, because as we know, the black hole does not exist—[Hon. Members: “Read the OBR report!”]

[Madam Deputy Speaker (Caroline Nokes)]

Order.

[David Simmonds]

Thank you very much, Madam Deputy Speaker. I will take the hint. I am sure that Government Members have read the views of the Office for Budget Responsibility as avidly as Opposition Members.

Politics, we know, is about choices. We are proud of the choices that we made, which have enhanced quality of life, wages and the economy in our country. We are deeply concerned about the impact that the Bill, and the wider Budget of which it is a part, will have on our national economy and the prospects of our people. We are concerned about the damage that it will do to the life chances of our children. We are concerned that it continues to leave a black hole in our local government finances. For those reasons, we recognise that this is not really a Budget; it is a bodge-it. That is why we will vote for our reasoned amendment tonight.

[The Minister for Local Government and English Devolution (Jim McMahon)]

I thank all hon. Members who have contributed to this enthusiastic and impassioned debate. Whether they were speaking from the Government or the Opposition Benches, their speeches were genuinely rooted in the communities that people live in and that we represent. In a way, it has brought out the best of Parliament, but we could not quite avoid the party politics and the rewriting of history from the Conservative party.

Shall we really take lessons on saving the high street from the Conservatives, who oversaw mass bank closures and the decimation of retail on the high street, with 6,000 pubs closing in local communities? They are now the farmers’ friends, but when they were in government they oversaw the closure of 7,000 agricultural businesses. Where were they when the energy market and labour supply challenges were decimating farmers? They were nowhere to be seen. Now, though, they come riding on the horse—[Interruption.] Would the shadow Minister like to intervene? Come in, please.

[David Simmonds]

Because he was here for it, as I was, the Minister will recall the last Government’s massive intervention in the energy market to keep our lights on in this country. Will he tell the House whether the Government will keep the small business rates relief? Will he answer that question?