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

Mark Sewards Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Jim McMahon]

Clause 5 removes charitable rate relief from private schools. Under the current law, all charities are entitled to 80% charitable relief on any properties that they occupy and use wholly or mainly for charitable purposes. That rule is found in paragraph 2 of schedule 4ZA to the Local Government Finance Act 1988, and clause 5(2) amends it to exclude private schools from that rule. Proposed new sub-paragraph (3) removes from charitable relief hereditaments wholly or mainly used to carry on a private school. That will ensure that ancillary and support buildings, such as offices, will also lose their relief—for example, classrooms and sports fields wholly or mainly used for the purposes of a private school.

The policy to remove the eligibility of private schools that are charities from charitable rate relief is a tough but necessary decision that will secure additional funding to help to deliver the Government’s commitment to education and to young people.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

It is a pleasure to serve under your chairship, Dame Siobhain. Yesterday, we heard plenty of evidence from lots of witnesses, specifically about private schools. We also heard from Professor Francis Green, who stated that the measure would have a negligible impact on private schools. At the same time, as the Minister stated, it will raise much-needed funds to support the policies that we promised in the build-up to the general election. Does he agree that although this is a tough choice, since the Bill’s impact on private schools is relatively negligible, it is a necessary measure to raise the funds that we need to deliver our policies?

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

Mark Sewards Excerpts

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Q Thank you, Mr Gerrard, for coming to give evidence. I want to put on the record my support for the premise of supporting community shops and stores and providing somewhere for people to go to do their shopping, but you mentioned that the provisions in the Bill will make distribution more expensive. Should we not be more concerned that home delivery, which we know is very important to vulnerable customers, will be more expensive as a result of the Bill?

Paul Gerrard: I think I am right in saying that the Co-op has the biggest quick-commerce business in the country. People order through aggregators and their orders are delivered from our stores; that is something that we have within our business model. Clearly, there will be costs going on to some of the depots and distribution centres and, to keep this revenue neutral, that will bring extra costs. I think that is the price of revenue neutrality. In the round, the impact on small stores and local shops will outweigh the potential risk around home delivery. As I said, we have a home delivery business; I think our quick-commerce business is the biggest in the country for small, quick deliveries. You are right to flag the risk, but in balance we would say that it is a positive thing that we are supporting brick and mortar shops as much as we can.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

Q Thank you, Mr Gerrard, for your answers so far; they have been really insightful. We have Co-op shops in my constituency; the Co-op in New Farnley is virtually the only shop in that community. It was an absolute lifeline throughout the pandemic, and it is still a lifeline today, given that there are not other shops. We have had some questions about consistency. Obviously, the aim of the Bill is to provide consistency for businesses—especially those in retail, hospitality and leisure—by providing lower multipliers. You have said how beneficial it will be for about 92% of your properties. Can you talk more broadly about the potential benefits for other retailers?

Paul Gerrard: Certainly. I will make a couple of points. The last time I looked, about 95% of retail was microbusinesses with fewer than 10 employees. From the data I have seen, 98% of retail stores have a rateable value below £500,000. So this helps 92% of the Co-op but, from what I have seen, it helps 98% of the broader retail sector.

In my experience and the Co-op’s experience, high streets and precincts are not made by one business, but you often get one business beginning to drive vibrancy in that place. If one business can make it work, you attract custom and those customers might want to buy other things, so you will get a ripple effect from that. I think this will help communities, because it will make it much more viable for those small stores—either independent traders, or small stores of national businesses like the Co-op—to be in communities. I think the ripple effect will be significant. As I said before, there is a commercial thing there, but, as you alluded to, there is a hugely important social and community perspective as well.

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

Q Thank you, Mr Gerrard. I am the Member of Parliament for cities and towns such as Wolverhampton and Willenhall, and we have a number of Co-ops and similar stores. I hear today that the Bill brings a welcome certainty and that the majority of Co-op stores will benefit from it. Co-ops and similar stores are important local employers and have been for generations within the community. I wonder whether you could share your thoughts on the impact of that.

Paul Gerrard: As I said before, local stores, of which the Co-op is an example, play a hugely important social role. They are also economic and commercial entities. We employ 55,000 people. The vast majority of my colleagues are either in stores—as in your constituency—or in our funeral care homes or our legal services business, so they are customer facing. What the Bill does is make our business model of small shops more viable, which means that we can continue to employ people.

It also means that we can continue to behave in line with our co-operative values and principles. As I said before, we have always paid the real living wage, with rates set by the Living Wage Foundation, and we have always sought to have a different kind of product in store, in terms of its ethical roots. The Bill will help us to continue to do all those things. On 21 December we will have done it for 180 years. The Bill will play a role in helping us, as will other measures that the Government have taken.

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[Lewis Cocking]

Q Have you asked your members that question?

Edward Woodall: We talk to them all the time about such questions. Perhaps it is something we can address in our written evidence to the Committee.

[Mr Sewards]

Q I will be brief. We have heard a lot about the cost of measures in the Budget, including in the Bill. Do you accept that there is some positive benefit in providing certainty to business—certainty that has been missing for a while? The measures in the Bill are designed to provide certainty over a longer period, but the measures in the Budget were designed for that as well.

Edward Woodall: On the Bill, I think I have said on a number of occasions that we welcome the fact that it brings more structure and that the overall principle is about long-term support for retail, hospitality and leisure businesses, and the areas in which they trade. In terms of that principle, we very much welcome the Bill; overall, businesses welcome greater certainty about how they invest into the future, so I welcome that in the context of the Bill.

[The Chair]

That brings us to the end of the time allotted for this witness. I thank Mr Woodall for his evidence.

Examination of Witnesses

Helen Dickinson OBE and Tom Ironside gave evidence.

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

Mark Sewards Excerpts

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

Q My constituency of Wolverhampton North East does not have a city centre, but we have lots of cafés, brilliant restaurants, microbreweries and pub chains. What benefits will the Bill provide to those small businesses?

Kate Nicholls: If the deduction is applied to the maximum, it will result in a significant reduction in bills for all small hospitality businesses in suburban, neighbourhood and community locations such as your constituency, not just those subject to a cap and getting up to £100,000. Every single hospitality business in your constituency below £500,000—forgive me; I did not double-check, but I do not think you have any over that—will benefit from a permanent reduction in their business rates bills, which will help to redress the balance of their overall tax burden.

Sacha Lord: I would say that this really is a substantial lifeline for all those businesses. My concern is the period between April and when this legislation comes into force.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

Q I have a brief question for Kate Nicholls. You mentioned earlier that business rates always come up as a barrier to extra investment. Please can you talk more about that?

Kate Nicholls: I chair the Mayor of London’s tourism recovery taskforce, to get London tourism going, and as part of that we look at foreign direct investment and real estate coming in. More broadly, the top 20 restaurant, pub and hotel chains are all private-equity backed, and most of that is FDI. The subject of business rates always comes up. Every single time you talk about inward investment into the UK, into property-based businesses, and about whether they should come here or go to mainland Europe or America, business rates are an inhibiting factor.

[The Chair]

Order. I am told that I have to cut you off. Sorry about that. That brings us to the end of the allotted time for this set of witnesses, so we will do a changeover. I thank the witnesses from this panel, and we will move on to the next one.

Examination of Witnesses

David Woodgate, Don Beattie, Barnaby Lenon CBE and Simon Nathan gave evidence.

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[Deirdre Costigan]

Q I was specifically asking for a comparison with the state sector. Do you think that redundancies will have a similar impact, a worse impact, or less of an impact in the private sector than in the state sector?

David Woodgate: Inevitably, if pupil-teacher numbers change, that will have a negative impact.

[Mr Sewards]

Q I understand that the Minister wanted to move on from this, but on your comments about aspirational parents, the simple fact is that all state school parents are aspirational, and in many cases they will never be in a financial position to send their kids to private school. I wanted to give you an opportunity to clarify that. Secondly, given that over 1,000 private schools closed between 2010 and 2024 without much media attention, how many private schools do you estimate will close as a result of the Bill?

David Woodgate: On your second point, we estimate that somewhere between 200 and 250 of our 1,300 schools are vulnerable to closure. They may look at mergers or other options—some might academise, for instance—but that is the kind of figure that we are looking at. I take your point about aspirational parents. We have to ensure that this does not impact on the bursary funding that is available for people from more disadvantaged backgrounds to get a place at one of our schools if they wish to go there. We have to ensure that, as far as possible, given these threats to our income, the funds available for bursaries are maintained.

[Mrs Brackenridge]

Q Thank you for coming and sharing your views and experiences. Business rate relief is in the scope of the Bill. I am a former deputy headteacher who worked across state secondary schools. Private schools, I say, are businesses. I had to juggle reductions and constraints across the budget, with departments such as the science department struggling to ensure that children have the full, hands-on experience—

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[Michelle Welsh]

Q Can the Minister set out the scheme that the Government are proposing to ensure that schools that principally deliver education for pupils with special educational needs will not face any additional burdens?

Jim McMahon: That is entirely the point, although perhaps it did not come out in the evidence sessions. A lot of the debate can be quite polarised—whether you are for or against private schools and the rest of it. When I was on the other side of the table, I was clear that I wanted to pull away from that and say, “Well, let’s just have a conversation based on the evidence.” What the evidence says is that there has been provision to ensure that those schools that are mainly or wholly for pupils with special educational needs will not be affected by these measures at all. Why? It is because we recognise that, within the wider school ecosystem, that provision is important in many communities and that many local authorities will support it. That is being provided in the Bill.

In the end, though, I would say that we need to rebuild mainstream provision. We all have constituents at their wits’ end because, after 14 years, mainstream provision has been allowed to erode to such a point that, in some places, it barely exists. We need to rebuild it, and the investment through the autumn statement begins that rebuilding work. It will take time. There is no button to press that resets 14 years in six months, but in terms of a statement of intent, £1 billion through the local government finance settlement for SEND provision is the start of that rebuilding process.

[Mr Sewards]

Q Queen Street in Morley is a fantastic high street, but it has a number of empty shops. I tried to acquire one of them when I was setting up my constituency office, but I was told, “No, no, no—they are about to be occupied.” Six months later, they are still not occupied. I promise it is not just that they did not want me; other people have approached them and had no luck. Please can the Minister shed some light on how we might use multipliers to get these properties occupied?

Jim McMahon: I definitely cannot guarantee that the landlord did not have a view about the tenants in that situation, but I think we all know of examples in which businesses have been frustrated when they have tried to get hold of the landlord of prime retail properties on the high street, sometimes in fantastic historical buildings. When they eventually get a response—if they get one at all—it is like the one my hon. Friend got: it does not bear truth, as the building is still empty six months down the line.

There is a wider issue here about the powers that the community has to take over assets and turn them into something for the public interest, not just distant investor interest. Measures in the Bill will go a long way to ensure that, when those premises are occupied, the occupant gets the support they need to be sustainable in the long term.

[The Chair]

Order. I am afraid that brings us to the end of the sitting. I thank all the witnesses for their evidence and all the members of the Committee for their patience.

Ordered, That further consideration be now adjourned. —(Gen Kitchen.)

Planning Committees: Reform

Mark Sewards Excerpts

Monday 9th December 2024 Commons Chamber

[Matthew Pennycook]

I do not know what the hon. Gentleman’s definition of “panic” is, but these are proposals that we set out in the King’s Speech and said we would bring forward—that was in July. I am not sure how that constitutes panic, but he might give me a lesson in that.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

Some 47% of all the casework my office processed last week was regarding housing, or lack thereof. We absolutely must build 1.5 million new homes in this country if we are to solve the housing crisis and restore the dream of home ownership. I have certainly known councillors to oppose housing developments because they worry that the necessary infrastructure—the schools, roads, GP appointments and so on—will not come with it. What reassurances can my hon. Friend give that, either as part of these smaller reforms around committees or as part of the broader reforms we are bringing in, we will absolutely make sure that we build the necessary infrastructure alongside the necessary houses?

[Matthew Pennycook]

I thank my hon. Friend for that important question. To return to an earlier question, there are a small number of people out there who are out-and-out nimbys—as we might put it—who will resist development of any kind in their area. There is a much wider group of people in our communities across the country who want to see better, infrastructure-led development. That is something we are taking forward, not least through changes consulted on in the NPPF, but we know there is more work to do in this area. I would be more than happy to speak to my hon. Friend about what more we can do.