Non-Domestic Rating (Multipliers and Private Schools) Bill

Third Reading

15:27:00

Clause 7: Commencement

Amendment 1

Moved by

1: Clause 7, page 6, line 14, leave out subsection (2)

My Lords, I rise to speak to my three amendments for this Third Reading. My amendments are simple and seek to remove any reference to private schools following the removal of Clause 5. I hope very much that the Government will accept these amendments to ensure that we send a clean copy of the Bill to the other place. I am pleased that the two important principles we debated during the passage of the Bill were upheld by the House on Report: first, that the tax on education should be removed from the Bill; and, secondly, that we should not introduce a two-tier system for charities. I was glad to have the support of noble Lords across the House to remove Clause 5, and give particular thanks to the noble Lord, Lord Storey, who co-signed that amendment. This clause on its own will raise only £70 million for the Exchequer, but its impact cannot be ignored. It comes at a time when the Government have already hit independent schools with additional costs through their decision to introduce VAT on school fees in the middle of a school year and the increase in employer national insurance contributions. This suggested change would exclude independent schools from charitable business rates relief. Although it would raise minimal amounts for the Treasury, it would damage schools disproportionately. As previously discussed, the Bill would create a two-tier charity system, allowing the Government to treat charities differently and bringing politics into charity law. Our charities and charitable schools should not be subject to this, and I am very glad that noble Lords from across the House agreed. I beg to move.

15:30:00

My Lords, the noble Baronesses, Lady Barran and Lady Scott of Bybrook, have tabled three amendments consequential to the amendments passed on Report. As these simply refine those amendments that have already been passed, we do not oppose them.

Amendment 1 agreed.

Clause 8: Short title

Amendment 2

Moved by

2: Clause 8, page 6, line 17 leave out “and Private Schools”

Amendment 2 agreed.

In the title

Amendment 3

Moved by

3: Title, line 4, leave out from “England” to end of line 5

Amendment 3 agreed.

15:31:00

Motion

Moved by

That the Bill do now pass.

Through this Bill, the Government are delivering on the pledges set out in their manifesto. I thank all noble Lords who have dedicated so much of their time to scrutinising the Bill and have been diligently working with the Government to ensure that their desired outcomes align with the Government’s intentions. This has kick-started a long-overdue transformation of the business rate system, so that it can be fairer, protect the high street and support investment, and that it is a system fit for the 21st century. On top of this, the Government seek to secure additional funding to help deliver on commitments to education and young people by concentrating on the broader picture of the state sector, where most children are educated. While there have been amendments made to the Bill for the Commons to consider, the Government do not accept them. The Bill, as it entered the House, would deliver on the Government’s missions to rebuild Britain. The amended state of the Bill does not go far enough in the ambition to kick-start economic growth and eliminate barriers to opportunity. I extend particular thanks to the noble Baronesses, Lady Scott of Bybrook, Lady Barran and Lady Pinnock, the noble Lords, Lord Jamieson, Lord Thurlow, Lord Fox, Lord Moynihan, Lord Lexden, Lord Storey and Lord Shipley, and the noble Earl, Lord Lytton, for their considered approach to the Bill. I am grateful for the conversations we have had throughout the Bill’s time in this House. Their passion and expertise have been invaluable. Our discussions about the issues have been reflective of the strong feelings shared by many across the country. I thank noble Lords for their advocacy and participation. I also extend my gratitude to the Bill team—Zoe Hawthorne, Nick Cooper and Chloe Horn—for their technical expertise and handling of the Bill. In particular, I am grateful to my private office and my private secretary, Daisy Brittle. I beg to move.

My Lords, in concluding this Bill, I first thank my noble friends who have supported me, in particular, my noble friends Lady Scott of Bybrook and Lord Jamieson, in our work to protect high streets and independent schools. I also thank noble Lords from across the House, who have spoken in support of the many sectors that risk being negatively impacted by the Bill. In particular, I thank the noble Lord, Lord Fox, and the noble Baroness, Lady Pinnock, for their work on helping businesses up and down the high street. I thank the noble Lord, Lord Storey, for his support in protecting independent schools, and the noble Lord, Lord Thurlow, for his amendment that calls for the reform to the business rate system that the Government have failed to deliver through the Bill. I thank the Minister for the very constructive and positive way that he has engaged throughout the passage of the Bill. On these Benches, we are pleased that a number of issues, on which the House has been united, have allowed us to encourage the Government to make changes to the Bill. Anchor stores, manufacturing businesses and healthcare hereditaments will likely face increased business rates through these proposed changes, especially with regard to the higher multiplier. I hope the other place will consider the sensible amendments that retain the current standard multiplier for these crucial sectors. The amendment in the name of my noble friend Lord Jamieson is key in exploring the impact of the threshold of the higher multiplier. Its cliff-edge nature is particularly concerning, and despite the Government’s insistence that they want to focus on growth, this threshold will impact the decisions many businesses will take, and not in the direction that the Government seek. The noble Lord, Lord Thurlow, is right to call on the Government to consider when they will pursue a reform of the business rate system, in line with their manifesto commitment, to ensure that online giants pay their fair share of business rates. As the Government have not delivered such reform, they should indeed commit to publishing a review of when they will do so. As I said in relation to my amendments, I was pleased to see Clause 5 removed, given that it addresses directly the principle of taxing education and having a two-tier charity system. We on these Benches look forward very much to seeing the response in the other place to these very reasonable issues.

My Lords, I start by thanking the Minister and his civil servants in the Bill team for the very helpful discussions to aid detailed understanding of the Bill. The one issue that still irks me is that it was debated without an impact assessment. The convention now seems to be that this is the case, but I find it unacceptable that we have debated and agreed a Bill of this nature and with the implications that it has on many businesses. I believe it is unacceptable to do so without an impact assessment. However, we on these Benches are delighted that the 290 hospitals which were destined to have the higher-rate multiplier applied will be excluded from that penalty. We hope that the other place will agree with the sanity of this proposal. The Minister said that the aim of the Bill was to protect the high street. It is not clear that that will be achieved by the Bill, and only time will tell, but I am sure the Minister will be pleased to know that I will be keeping a watchful brief on this issue and questioning him at regular intervals if the high street is not benefiting from these elements of the Bill. Given that, I thank my noble friend Lord Fox, who did much of the work on the implications for business, and the ever knowledgeable and wise Elizabeth Plummer in our Whips’ Office, who was able to give me sound advice on the course of the Bill. With that, I thank the Minister and look forward to the consequences of the Bill.

For my part, I too add my thanks to the Minister for his willingness to engage at all times. As he now knows, business rates is a rather niche area of activity for your Lordships. I started my professional career just over 50 years ago in the Inland Revenue Valuation Office, so I have been tied to this problem for a long time. If I have come across as a bit of a business rates nerd, I apologise to the House. The Minister mentioned Mr Nick Cooper, whom I have known a long time through several Administrations, and I think it was he who was astute enough to observe that this might, given that my time here may be limited as a retained hereditary Peer, this might be the last occasion on which I would have to bore your Lordships on a matter to do with business rates. So there is something positive for your Lordships to look forward to. I thank the noble Baronesses, Lady Scott of Bybrook and Lady Pinnock, and the noble Lord, Lord Fox, and my colleague and noble friend Lord Thurlow, for their willingness to discuss matters of crucial importance. I take the point made by the noble Baroness, Lady Barran, that the manifesto said one thing and this is not what we were led to expect. However, for all the talk and all the policy-making, and for all the manifestos, you do not get to alter economic reality, nor do you get to alter markets very much. Therefore, I suspect that the process of partial attrition which has gone on in the business sector, particularly over issues to do with high streets, will continue, so long as the root and branch reform that is so badly needed and which successive Administrations have promised is not delivered. It is tough when you are dealing with something that is cheap to collect, but we must understand the consequences of lack of fairness and lack of balance, and what this means for business decisions made here and where moving an operation abroad is an alternative. Finally, I thank Jerry Schurder and Simon Green of Newmark surveyors, who have been an unfailing source of useful information on the background to current business rates. I am not a current practitioner, so I pay tribute to them and to others from the Rating Surveyors’ Association and the RICS, both of which I am a member of. With that, I wish this Bill well. I am certain that it will reappear. I am not complacent that this is the last word on the matter, but we have given it our best shot in what is a rather difficult and complicated area. I wish it well and share the views of other noble Lords in hoping that the other place has regard to the rationale behind our efforts.

My Lords, I thank noble Lords for their contributions.

Bill passed and returned to the Commons with amendments.