Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between Mark Sewards and Damian Hinds

Report stage
Wednesday 15th January 2025 Commons Chamber

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

I am grateful for this opportunity to speak in favour of this Bill, having been involved in its scrutiny at most of its stages. I join my hon. Friend the Member for Wolverhampton North East (Mrs Brackenridge) in thanking all the witnesses who came forward to give evidence to the Bill Committee. I thank them for the evidence they gave and for the useful insight from their respective sectors.

We on the Government Benches are clear that small businesses in the retail, hospitality and leisure sectors should pay lower business rates. The Bill establishes two new multipliers that are lower than the current standard business rates multiplier. In order to pay for these changes, we must ask larger businesses to contribute their fair share so that our smaller businesses can thrive. That is because we on this side of the House know that when we have tax cuts, we need to pay for them with revenue-raising measures—something the Opposition have not quite realised yet. This is a good mechanism that the Government are deploying to save our high streets, to incentivise local investment and to support entrepreneurship. As all Members will know, high streets are essential to local towns and should be given the support they need. I am pleased to say that the measures in the Bill will benefit smaller local businesses such as those on Queen Street, which sits in the centre of Leeds South West and Morley.

In Committee, we heard from Paul Gerrard, who is the board secretariat director at the Co-op. He told the Committee that these changes will help 92% of the Co-op’s retail properties, but he also estimates that they will help 98% of retail businesses because they will have a rateable value that allows them to benefit from these changes. That has to be welcomed. As for those that will pay more to make these changes possible, the higher multiplier will apply to properties with a value greater than or equal to £500,000, including large warehouses that are often used by online giants. They will pay their fair share, and we can start to level the playing field so that essential community high street businesses are on a level playing field with multinational corporations.

[Damian Hinds]

The hon. Gentleman is right to say that there is a challenge in making sure that things are fair, and we all support a level playing field between the online world and bricks-and-mortar businesses, including in our town centres. There is a thing called the digital services tax, which was conceived while we were in government. Will he say a word about the relative advantages and disadvantages of trying to go after online retailers with business rates changes, which will also affect all manner of other organisations, including bricks-and-mortar retailers, and doing it a different way through a more direct type of tax?

[Mr Sewards]

I return to the point I made earlier. We know that we have to support these smaller businesses—these bricks-an-mortar businesses, as the right hon. Gentleman calls them—and the only way we are going to pay for this is by finding the money from elsewhere. We have chosen to cut business rates for smaller businesses, and we are choosing to raise the revenue from the larger businesses and corporations that have been getting away without paying their fair share for far too long.

--- Later in debate ---

[Mr Sewards]

Yes, it would be helpful if the Minister could provide clarity. As someone who uses soft play—[Laughter.] Not personally, enjoyable though it is. I am sure that my sons Oscar and Arthur, who is six months old and not quite ready to take advantage of soft play, will also be keen to know, so perhaps the Minister could offer some clarity in his closing remarks.

Although amendments 1 to 6 are noble, this Bill is about the high street, and we know just how much our high streets have suffered. This does not mean, for one second, that we are backing down from the challenges facing manufacturing businesses, which amendments 1 to 6 aim to help with. The Budget announced over £3 billion to support the manufacturing sector, including £520 million for a life sciences innovative manufacturing fund, but the changes to business rates in this Bill are primarily about supporting our high streets.

As someone who was teaching on this date a year ago, I am particularly interested in clause 5, which removes the charitable relief enjoyed by some private schools. I welcome this, along with the Budget’s broader measures to remove tax breaks from private schools so that we can fund state education properly. A vote for amendment 10 would delay this funding for state schools by another year.

It is estimated that, of the 2,444 private schools in England, only 1,040 will be impacted by the change. The measure will raise around £70 million, which, when taken together with the other revenue-raising measures we have announced, will increase per pupil funding in real terms to benefit the 94% of students who attend state schools. We must give every child the chance to succeed in life, and that is exactly what this Bill and the other measures we have announced are doing.

[Damian Hinds]

It is worth reflecting that the education budget goes up every year. It does not go up because there has been a change to business rates, VAT or anything else, which is the logic we sometimes hear from Labour Members. If the revenue from those things is slightly smaller than expected, does that mean less money will go into education? Of course not.

We keep hearing about hiring 6,500 more teachers. Does the hon. Gentleman know how many more teachers were hired in the last Parliament?

[Mr Sewards]

I heard the right hon. Gentleman put that question to the Minister in last Monday’s Westminster Hall debate but, just to go back to his original point—I will come to the 6,500 new teachers—we are deliberately taking these decisions in order to increase the amount of money that state schools have to teach the 94% of students who enjoy state school education.

As a basic principle, all Members of this House can get behind the idea that it is a basic function of the state to provide a well-funded, excellent state school place for all students, whether or not parents choose to take advantage of it. That is exactly what we are doing with this Bill and the other measures we have announced.