Non-Domestic Rating (Multipliers and Private Schools) Bill

Melanie Ward Excerpts

Report stage
Wednesday 15th January 2025 Commons Chamber

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

I, too, served on the Public Bill Committee and would like to put on record my thanks to all the witnesses who attended and gave evidence.

The Bill shines a light on how politics is about choices. At the general election, we promised a Labour Government that would make different choices: choices rooted in fairness and a commitment to levelling the playing field. Today, the Bill is a powerful example of how we are going to deliver on that promise. This is a Bill about the politics of equity. It is about ensuring that everyone—from small business owners to schoolchildren in Wolverhampton North East—has a fairer chance to succeed. For too long, the scales have been tipped in favour of the largest corporations, online giants and private schools, while businesses and state schools have been left to shoulder an unfair burden. The Bill changes that. We are delivering a permanent reduction in business rates for the hard-working small businesses that are the backbone of Wolverhampton North East. My constituency does not include a city centre, but it does contain plenty of brilliant small businesses: fantastic cafés, restaurants, beauty and hair salons, a micropub, larger pub chains and family-run shops. These businesses are the heart of our community.

For years, high streets have been forced to compete unfairly with massive online retailers and retail parks, but the Bill will ensure that the largest online retailers, supermarket chains and distribution warehouses finally pay a fairer share. Small businesses in Wolverhampton and Willenhall will now see permanent lower business rates, freeing up resources to invest in their workforce, improve security and grow. As Paul Gerrard of the Co-op has pointed out, this reform will strengthen the viability of small shops, ensuring that they can continue to provide jobs, beef up security, and uphold their community-centred values. The Association of Convenience Stores has said that these changes will save small stores money that can be used directly to hire more staff, install new CCTV, and invest in the future.

The Bill is, however, not just about businesses; it is about fairness in education. Private school fees have risen by about 55% in real terms over the last 20 years, while state schools’ funding has largely flatlined. State schools and academies are paying business rates right now while private schools enjoy business rates tax breaks, and that is simply unfair. This is the reality. Almost 50% of private school students achieved top GCSE grades this summer, compared with just 20% in state schools. Sports facilities in state schools are crumbling, with fixtures cancelled owing to a lack of minibuses or drivers. Private schools have more swimming pools than all the state schools, further education colleges and higher education institutions put together. Just 35% of children from low-income families can swim 25 metres unaided, compared with 82% from affluent families.

The Bill removes those unfair tax breaks for private schools and reinvests every single penny directly in state schools. That funding will recruit more specialist teachers, provide breakfast clubs in primary schools, and give schools the resources that they need to unlock every child’s potential regardless of their family’s wealth. This is the politics of equity in action. I will continue to support strong, vibrant high streets, brilliant schools, and a fairer future for all.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

Conservative Members do not like to be reminded of the fact that six months ago our Labour Government inherited a £22 billion black hole from their 14 years of Tory rule—[Interruption]—as they are demonstrating now. It is, however, a fact. With that inheritance from the Tories, our new Government are taking much-needed action such as that on which we are voting today. In particular, they are taking action to end tax breaks for private schools across the UK, and it is the education side of this Bill on which I will now focus.

Many of us are here today partly because of the inspiration, teaching and support that an incredible teacher gave to us. I want to pay tribute to one of my teachers at Hermitage academy, which is a state school. Mrs McKeirnan was my modern studies teacher, and a fine job she did too. I fondly remember writing essays about the reasons for Labour’s election win in 1997; they obviously had an impact. However, while we had skilful and energetic teachers like Mrs McKeirnan, what was less satisfactory was that the school roof often leaked when it rained, and sometimes the windows blew in during the winter. That continued until the election of Labour in both Westminster and Holyrood saw my old school being rebuilt.

We can compare that with the situation today in my constituency, where Balwearie high school in Kirkcaldy needs a new building. The funding has not been available during the last 18 years of SNP government and 14 years of Tory rule. My point is that much of our country’s public sector infrastructure is not fit for purpose after years of Tory neglect. To turn that around, we obviously need to raise revenue, and that is exactly what the measures that we are voting on today will do.

Ending tax breaks for private schools is crucial to the record budget settlement for the Scottish Government—the largest settlement since devolution, with an additional £1.5 billion to spend in this financial year and an additional £3.4 billion for next year. For too many in my constituency, the SNP’s record of educational failure has let the party down. Nicola Sturgeon once said:

“Judge me on my educational record”,

and she promised that her Government would close the attainment gap by 2026. Last year, the attainment gap in Scotland widened, and the PISA report showed that reading, maths and science are in long-term decline. Now that the SNP Government have the funding, it is up to them to clear up the mess in education that they have created, which fails young people in my constituency.

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[Melanie Ward]

All parents work hard to support their families, and all parents want the very best for their children. Hon. Members would do well to remember that.

The additional £1.8 billion a year, which will be raised by ending tax breaks for private schools, allows us to increase per-pupil funding in real terms and helps to deliver the record budget settlement of an extra £4.9 billion for the Scottish Government. I find it strange that the Conservative party, which in the last Parliament promised to level up the country, should be so opposed to measures that will do exactly that. Indeed, the Leader of the Opposition said that her first act as Prime Minister—I am not sure how many Conservative Members actually believe that the day will ever come—would be to restore tax breaks for private schools. She is obviously not here to defend that statement, but in recent months I have heard little from the Conservatives about what they would cut to pay for that policy. Would they make teachers redundant? Would they cancel breakfast clubs? Would they cut mental health support and careers advice?

At the last election, I was proud to stand on a manifesto that promised to break down the barriers to opportunity. As a state-educated MP, I am also proud to deliver this speech in a Parliament in which 63% of its Members were educated at state comprehensives, with 85% of my party’s MPs being state educated. Indeed, only 4% of children in Scotland attend private schools—even fewer than the 7% in England.

The needs of our students are greater than ever. Young people in Scotland face an annual marking saga, decreasing teacher numbers and a deepening mental health crisis—something that I have raised in relation to my own constituency. It is more crucial than ever that we intervene now to prevent those crises from deepening, and that is what these revenue-raising measures will help to fund. I am glad that this Labour Government have introduced protections for SEND children and military families, but it is necessary for private schools to contribute towards improving educational standards across our country. Let us not forget that they have raised their fees by 75% in real terms since 2000.

I know that parents in my Cowdenbeath and Kirkcaldy constituency want to see their children benefit from the kind of education that their ingenuity, creativity and innate talent deserves. They will be crucial to our future society and economy, and to the kind of country that we want to be. We must make the most of their potential.

In this matter, I take inspiration from Jennie Lee, who attended Beath high school in my constituency and went on to set up the Open University. Her picture hangs in my office. She knew the value of ensuring that high-quality education was available to all, no matter their background and where they lived. If we are to provide that, it has to be paid for, and that is why these measures are so important.

[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.

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[David Simmonds]

I agree that it is terrible, but sadly it is typical of the consequences introduced into the system by the actions of the Government.

[Melanie Ward]

Does the hon. Gentleman agree that state schools should not have to go with a begging bowl to private schools to ask to borrow their facilities? They should be properly funded in their own right.

[David Simmonds]

Having served as a governor in three different state schools during my local government career, I know that many state schools have facilities that they are very happy to share—some have swimming pools, some have libraries, some have adult education facilities. The sharing of facilities among schools of all kinds is normal, but the Bill introduces additional pressure that will take away access to those facilities. Isolated communities in particular, which benefit most from that access, risk losing it.

The basic fact that schools will end up net worse off demonstrates that, contrary to what has been said, this policy fails the basic test of equity and efficiency. It harms some people in our country, with no corresponding benefit to anybody else. Let me address the argument proposed by a number of Members that the consequences are marginal. We heard a lot of evidence from different people. The hon. Member for Erewash (Adam Thompson) referred to an academic who has built a career writing tracts attacking the private education sector. That is not somebody I consider to be an expert. I will take the word of mums and dads, the Independent Schools Council, institutions that represent people across our country and the House of Commons Library over the word of a single left-wing academic.

The hon. Member for Wolverhampton North East (Mrs Brackenridge) said, “It’s not fair because schools in the state sector pay business rates.” She may not be aware that there is already an 80% mandatory business rate relief for voluntary aided, foundation and academy schools, and 100% of all state school business rates liability is paid for by central Government anyway, so no school budget is burdened by the cost of business rates, whereas the consequence of the Bill will be that every independent school is burdened by those costs.

Many of us in this Chamber will see the added value that independent education brings. Many of those experts whose opinion we value have spoken profoundly about the fact that so much of our special educational needs provision is in the private sector. I made reference in Committee to Gesher school in my constituency. I defy any Labour Member visiting Gesher to come away saying, “That is a private business that deserves to be taxed.” Such institutions have emerged—in many cases over a long time—to cater to very specific and profound special educational needs and disabilities, and they are looking aghast at the consequences of the Bill.

There are a number of reasons for that, some of which are technical. The Government’s solution is to introduce the “wholly or mainly” provision. Schools that wholly or mainly provide places for children with an education, health and care plan—by which the Government mean 50% or more—will be exempt from the provisions. The problem with that policy is that many children who have well-established, diagnosed special educational needs and disabilities do not have an education, health and care plan.

Indeed, beneath statementing, which was the term at the time, the previous Labour Government introduced a number of tiers: school action and school action plus. Children with moderate to severe special educational needs and disabilities could fall into those categories and be supported in a mainstream setting. The statementing and education, health and care plan process was only ever intended to make provision for children with the most significant and severe needs. That is already the case across the state sector. We know from the evidence of many parents up and down the land that they found provision in local independent schools, and at their own cost, for children who had not qualified or had not yet achieved an education, health and care plan. It is very clear that the Government’s solution underestimates, and falls well short of accounting for, the number of children with special educational needs and disabilities. This is a Government whose Secretary of State for Education stood at the Dispatch Box last week and talked about how much they believe in inclusion. Well, their actions in support of this Bill say otherwise.

The Bill also fails to address the needs of parents who wish to secure a place for their child at a school that has a special character. This is particularly important in rural areas, but it is an issue across the country. We all know that there are schools that have the ability to provide specialist training or coaching in a sport that a child excels in and wishes to pursue, and there are schools that have a faith or cultural identity that is incredibly important to the family.

By requiring all those types of school to pay these significantly hiked taxes, this Government are bearing down on choice in the education sector and pushing up costs for mums and dads. These are not wealthy families, but ordinary people in this country who are seeking to do the best for their child and who, in some cases, are willing to take on the responsibility of paying for their child’s education even if they could still pursue the opportunity of an education, health and care plan for them through the state system. They choose to do the right thing by their child, and this Government will be penalising them.

The amendments we have tabled seek to address the shortcomings I have described as best we can. We will also support some of the amendments tabled by other parties where they clearly fulfil our shared objectives, but as the speeches and other contributions to this debate by Conservative Members have shown, there could have been so many more amendments seeking to get this Bill right.

In conclusion, all of the hereditaments that are covered by this Bill are important to our economy and to growth, and in many cases they are vital to our communities. Since the Chancellor’s Budget, growth has flatlined, inflation has revived, borrowing costs are rising and employment opportunities are diminishing. It is not too late for this Government to choose a different path, and we invite them to do so this afternoon.