Non-Domestic Rating (Multipliers and Private Schools) Bill

Jim Shannon Excerpts

Consideration of Lords message
Monday 31st March 2025 Commons Chamber

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Here we go again. This is very similar to what we spoke about last week, so I will again put on record my thanks to the noble Lords for their work in pushing forward the amendments from the other place.

We welcome the business rates reform and look forward to a far more substantial overhaul of the system. However, we are deeply concerned about the proposals for hospitals. Lords amendment 1 sought to exclude hospitals and it is so disappointing that that was not accepted. In my area, in Dorset, both Poole and Royal Bournemouth hospitals would be caught by the £500,000 rateable value rule. Poole hospital has a rateable value of £2.1 million and Bournemouth’s is £3.3 million. World-famous hospitals, including Great Ormond Street, The Royal Marsden and England’s oldest hospital Barts, would all be caught up.

The Government have rightly been proud of the early delivery of extra NHS appointments, but keeping hospitals in the Bill risks real problems for local councils which might find themselves having to take difficult decisions to take the hit and not charge their hospitals the higher amount. To take away the discretion altogether, I ask Ministers please to remove the provisions from the Bill so that hospitals do not pay twice.

I share the concerns of the shadow Minister regarding the businesses that are on the cusp of the £500,000 threshold. The impact of flipping just over from the lower to the higher multiplier could be profound. So many businesses are already on the cusp, given the national insurance increases, the living wage and the impact of the Employment Rights Bill. The additional worry about tipping over into the higher threshold could see many fail to invest in their businesses for the future.

I will keep this brief, because we know where we are. We too do not agree with the taxation of education and we continue to support the Lords amendments to remove private schools from the legislation. The main reason that we feel that way is that we know that many parents of children who have additional needs choose the private sector because it is so difficult to get what they need in overcrowded schools that are falling apart at the seams. We therefore fundamentally disagree with the principle of taxing education.

The Government have made a good start on the Bill. We want to see a much more fundamental review of business rates. There is a long way to go, but we think that the amendments, if accepted, would demonstrate a Government who are listening. At a time when trust in the Government needs to be built, a Government who listen to sensible amendments would be most welcome.

[Jim Shannon (Strangford) (DUP)]

I thank the Government for bringing the Bill forward, but I have to put on record some of my concerns—the Minister will not be surprised. He knows that it is never meant in an aggressive way; I put things forward in this way because it is important that my constituents have a chance to express themselves through me in this Chamber.

First, I echo the concerns of the shadow Minister and the Liberal Democrats spokesperson in relation to hospitals and medical and dental schools. I have some concern over how that will trickle down, as it will inevitably, and put pressure on sectors where it does not need to be. The job of those three areas is to ensure that our hospitals can deliver the care and our medical and dental schools can produce the students with the expertise and knowledge to be the next generation of those who look after us.

My major concern, however, is about private schools. I know the point has been echoed many times, but I cannot let this occasion go without making my remarks, on which I have sought the direction of Madam Deputy Speaker and other parties. Members will be aware of the issue with private schools, and I have spoken about it on numerous times to put forward the argument for the faith schools in my constituency. Parents scrimp and save to ensure that their children can go to those schools and have the standard of education that they wish for them, and they have asked me to put that on record. The reason I persist in raising the issue is that I truly believe that some people of faith will be further disadvantaged when the Bill goes through. I know that that is not the Government’s intention, but it will be the reality, and for that reason I must put it on record.

Although the rating provisions will not apply in Northern Ireland per se, the disadvantage to our sector remains in the removal of the tax considerations, which will affect schools in Northern Ireland. That is where the issue is. For the mainland, the effect is quite clear, but schools in Northern Ireland will be affected as well. I wish to be clear that I oppose these provisions on behalf of faith-based schools on the mainland as well, because parents of children at those schools want the same as those who spoke to me.

I am a very proud member of the all-party parliamentary group for international freedom of religion or belief, and I believe that that extends to parents’ freedom to educate their child with a view to how their faith is worked into that education. Lords amendment 15 has been referred to by the shadow Minister and by the hon. Member for Mid Dorset and North Poole (Vikki Slade). For many parents, confidence that their faith will not be dismantled in the classroom is worth the financial burden of paying into their child’s education, but that is being denied by this legislation. I believe that they all deserve the opportunity to educate their child in a way that they wish, for which they will probably pay handsomely, but these proposals will adversely affect parents’ freedom to educate their child in their religious belief.

The option to home-school is one that parents may not have considered previously, yet may now feel is the only financial option available for them. Those parents may not feel qualified or equipped to deal with the skills that are vital to home-schooling, yet believe there to be no option as they simply cannot afford to pay the uplifted fees. That is the unfair burden that falls on the shoulders of those parents.

I firmly believe that the Government disagree with almost every Lords amendment because the Lords amendments interfere with the public revenue and affect the levy and the application of local revenues. The Commons does not offer any further reason, trusting that this reason may be deemed sufficient. Basically that means, “We need the money.” I have been a Member of this House for almost 15 years and an elected representative for some 40 years as a councillor and a member of the Assembly, and never, ever have I believed that money is the bottom line, and I do not believe that many right hon. and hon. Members believe that. We cannot take faith-based education out of the hands of a certain class of people to punish those high-class schools with swimming pools. Let me assure the House that Bangor Independent Christian school, with its Sunbeams nursery schools, has no pool. Regent House prep in my constituency has no swimming pool either. There are small primary schools that will have difficulty operating when these regulations come into force, and that is simply not right.

I know that the strength of the Labour Government means that this Bill will pass, but I am urging individual MPs across the House to consider who will be punished and to urge the Government to review this tax raid on education, even at this late hour. We believe in the right to live one’s faith, and we cannot tax that right out of reach. That is where this Bill has gone wrong, and has divorced itself from the reality of the people that I represent.

[Jim McMahon]

I think I addressed the majority of the points in my opening speech that have been raised subsequently, but I thank Members for their contributions. We have heard the Opposition’s concern that the multipliers do not deliver on the stated intention of the policy as announced in the Budget. We clearly do not agree with that position. At the Budget, the Government announced their intention to introduce two lower multipliers for qualifying retail, hospitality and leisure properties, to end the uncertainty of the annual retail, hospitality and leisure relief. Also, as I set out in my opening speech, the relief was a temporary stopgap measure. Of course, it has been extended year on year, but it does not provide the certainty that businesses require. It has created a cliff edge.

During our last session—I cannot remember when it was; it feels like it was yesterday—the hon. Member for Thirsk and Malton (Kevin Hollinrake) seemed to acknowledge that the cliff edge that was built in the previous system was providing uncertainty to businesses and their ability to plan ahead. He must surely welcome the fact that this new lower multiplier—this permanent relief—gives all businesses, whether they are retail, hospitality or leisure, the long-term security that they have been asking for and, importantly, in a way that is sustainable and self-financing through the business rates system.

Through the Bill, the Government are taking steps to address all the issues that have been outlined. The chosen approach is both appropriate and prudent, and the challenging fiscal environment that the Government face requires it. Any tax cut must be appropriately funded, under our commitment to sound financial management, so the Government intend to introduce a higher multiplier for all properties with a rateable value of £500,000 and above. It is important to say this to settle some of the arguments: that will affect less than 1% of properties in England. Less than 1% will pay more, but that will fund the lower multiplier, as we all recognise. That will help our town centres and our high streets, and it is what we need to do. This approach delivers on the policy set out in the Budget, and on our manifesto commitment to transform the business rates system to make it fairer and fit for the 21st century, and to protect the high street.