Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill)

Munira Wilson Excerpts

Consideration of Lords amendments
Tuesday 25th March 2025 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

[Munira Wilson (Twickenham) (LD)]

I, too, begin by putting on record my thanks to the noble Lords in the other place for all their work on the Bill, in particular those on the Liberal Democrat Benches: Baroness Pinnock, Lord Shipley and Lord Fox.

Business rates reform is long overdue and, while we welcome the proposal to permanently reduce business rates for retail, hospitality and leisure, in the meantime many businesses across my constituency, and indeed the country, are reeling as they see the impact of the reduction in rates relief in bills landing on their doormats. I have heard from a number of businesses just in the past few days. I am really concerned about pubs, restaurants and cafés in my constituency who are wondering how, with the national insurance rise and the reduction in rates relief, they will continue.

The Liberal Democrats would like to see a fundamental overhaul of the business rates system, not just the sticking-plaster solutions proposed in the Bill that tinker around the edges. As I said, lower business rates for retail, hospitality and leisure are a step in the right direction, but there are countless small businesses outside those sectors that need their tax burden reduced too, for example manufacturing businesses. We tabled amendments on Report to improve the Bill and to ensure it gave consideration to whether there should be provision for manufacturing facilities, which can be big and built on expensive land but sometimes produce relatively low-value goods. Lords amendment 4 sought to do the same, whereby manufacturing premises would also pay new lower business rates under the Bill. Without that, light engineering and printers, among other businesses in our town centres’ mixed economies, could be priced out.

A recent report by Barclays bank concluded that the words “made in Britain” were worth an additional £3.5 billion to UK exporters, so it is important that something is done to support the manufacturing sector. We have learnt the hard way in recent years, with the pandemic and wars, that we need to be much more self-sufficient as a country, yet there has been a big drop in confidence in the sector since autumn, with an increase in manufacturers’ costs and orders in general reported to be smaller in size. That comes on top of the additional Brexit red tape that those businesses have to contend with to export. Therefore, we support retaining this amendment in the Bill.

As I have said, we want fundamental reform of business rates so we can boost small businesses and our high streets. We tabled an amendment on Report to require a review of the impact of the Bill on businesses, high streets and economic growth, so we support retaining Lords amendment 13, which would require the Secretary of State to review the impact of the Bill on businesses whose rateable value is close to £500,000 and so will be caught by the new higher business rates.

Turning to our NHS, yet again we see the Government giving with one hand and taking with the other. As with national insurance contributions, so with the business rates changes: there are unintended but significant consequences for our health service. Lords amendment 1 sought to exclude hospitals and other healthcare settings from paying new higher business rates for properties with a rateable of £500,000 or more. Without the amendment, 290 local hospitals will be caught by the rates, an unacceptable new burden when the NHS is already struggling. As my noble Friend Baroness Pinnock pointed out in the other place, without the amendment the likes of Great Ormond Street hospital for children will have an additional burden of £600,000 per year on business rates alone, the John Radcliffe hospital in Oxford has a potential business rates increase from £3.4 million to £4.1 million, and the Hull Royal Infirmary could see its bill rising from £1.8 million to £2.1 million. Those are typical figures for hospitals across the country. I do not believe it is the Government’s intention to reduce hospitals’ abilities to drive down their waiting lists, yet that is exactly what the impact of these changes and the consequent higher charges will be, so we support the amendment.

The Bill also levies a tax on education by removing the business rates exemption for private schools that are charities, a measure that will be compounded by the Government’s move to levy VAT on private school fees and the increase to employers’ national insurance contributions. As I have said many times since the general election—and indeed before—the Liberal Democrats are opposed, in principle, to the taxation of education, as it is a public good. We strongly support and champion parents’ right to choose, on which both those tax measures are an assault.

[Mark Sewards]

Does the hon. Lady not accept that this Government won an election on the basis of a promise that we would introduce VAT on private school fees, so it is incumbent on us to deliver that manifesto pledge?

[Munira Wilson]

I am very grateful for that intervention, because I gently remind the hon. Gentleman that his party won the election with less than 34% of the vote. I cannot remember what the turnout was, but—

[Luke Taylor (Sutton and Cheam) (LD)]

60%.

[Munira Wilson]

My hon. Friend tells me it was 60%. I cannot do the maths quickly enough—clearly, I need to do maths to 18—

[Luke Taylor]

One in five voters—one in seven adults.

[Munira Wilson]

There we go—basically, not many voters voted for Labour’s manifesto. I will happily let the hon. Gentleman continue to plough that furrow, because I have had that argument made to me before—for instance, in the petitions debate on VAT on private school fees just last week.

[Mark Sewards]

I am incredibly grateful to the hon. Lady for giving way again. The simple fact is that we have the electoral system we have, and it is incumbent on whomever wins a majority to deliver their manifesto pledges to govern the country. She may take issue with the electoral system, but it is the one that we have, and we must deliver our manifesto pledges.

[Munira Wilson]

I respectfully say to the hon. Gentleman that a rise in employers’ national insurance contributions was not in his party’s manifesto, nor was a cut to the winter fuel allowance, nor was the farmers tax, yet these are all things Labour is implementing.

[Mark Sewards]

rose—

[Munira Wilson]

Unless the hon. Gentleman wants to make a different point from his party’s manifesto, which was not voted for by many people, I will not give way, although I will pick up on another point he made earlier.

Clause 5, which implements the removal of charitable rate relief for private schools, undermines the principle that I referred to: we should not be taxing education, and we should respect parents’ right to choose. The clause will undermine the ability of independent schools to undertake the brilliant partnership work that they do in our communities and with state schools. I have talked many times in this place of Lady Eleanor Holles and Hampton schools in my constituency, which have done amazing work with underprivileged communities in the Feltham area, such as with Reach academy, and helped to transform the life chances and outcomes for young people in that community. The measure will also limit those schools’ abilities to extend bursaries to children from more disadvantaged backgrounds.

[Suella Braverman]

The hon. Lady is absolutely right in what she is saying on private schools, and I agree with everything she has said on that point. Does she agree that as well as the damaging effects on children who go to private schools, this will affect children in state schools? In Hampshire, thousands of young pupils attend independent schools, but the state schools are running at nearly 100% capacity. This measure is going to push hundreds, if not thousands, of children into state schools, which are already full, thereby harming and undermining the education of all children. Is that not unforgivable?

[Munira Wilson]

I thank the right hon. Lady for her intervention. I am aware, from talking to colleagues, that there are real pressures on school places in different parts of the country. Clearly, that is where we will see a negative impact. In my own constituency and, indeed, across London, we are struggling with secondary school places, although rolls are falling in primary schools, which will feed into the secondary sector. These pressures of children leaving the private sector to go into the state sector are different in different parts of the country.

--- Later in debate ---

[Mark Sewards]

The hon. Member has been very generous with her time. On the points that she made about funds for state schools and about the other difficult decisions that this Government have had to make, does she not accept that when we came to power, we found an economy that had been absolutely ruined by the Conservative party? We found every Department in reserves and a £22 billion black hole that had to be filled, because we are the party of economic responsibility.

[Munira Wilson]

I thank the hon. Member for his intervention. Where we can make common cause is over the absolute mess in which the Conservatives left both our public services and our economy. I have no quibble in agreeing with him on that point. We Liberal Democrats set out a whole series of tax measures—actually we were the only party that was not afraid to put forward revenue-raising measures—but his Government are choosing not to accept any of them. They included taxing our big tech giants that are ruining the mental health of our children and young people—[Interruption.] Yes, in fact, they are planning to slash that tax altogether. We also suggested reversing the tax cuts that the Conservatives gave to the big banks, so that we can continue putting free school meals on the table for children, which, again, his Government are thinking of cutting. Then we suggested reforming capital gains tax—

[Madam Deputy Speaker (Caroline Nokes)]

Order. I remind the hon. Lady that we are in fact debating Lords amendment 1 and the Government motion to disagree.

[Munira Wilson]

I apologise, Madam Deputy Speaker. I was simply seeking to address the hon. Member’s point. I am coming in to land now.

Time and again we see Government policy at odds with their stated objectives. They want to tackle NHS waiting lists but then slap business rates on to large hospitals and put national insurance rises on to our GPs, hospices and social care providers. They claim to drive growth but then slap business rates on to much-needed manufacturing and put a cliff edge on small businesses in our town centres. They want to extend opportunity to all but then go after charitable independent schools that are serving their wider communities—not to mention punishing parents who dare to make that choice for their children.

Amid some good intentions, the Government have lost their way in parts of the Bill. I implore Ministers to genuinely consider the amendments before them in order to support our hospitals and allow businesses up and down our country to grow and flourish.

Question put, That this House disagrees with Lords amendment 1.