Non-Domestic Rating (Multipliers and Private Schools) Bill

Report

Clause 3: Application of multipliers

Amendment 1

1: Clause 3, page 3, line 26, after “hereditament” insert “other than a qualifying healthcare hereditament” Member’s explanatory statement This amendment, together with Baroness Pinnock’s amendments to page 3, line 37, page 4, line 6, and page 4, line 17, would have the effect of retaining the standard multiplier for hospitals, medical and dental schools, or any other healthcare setting to be determined by regulations.

My Lords, I remind the House of my relevant local government interests, in particular that I am a councillor in Kirklees. At the outset, I wish to express my thanks to the Minister and his officials for their time in discussions on the details of the Bill. I had assurances at those meetings that the measures in the Bill are not designed to increase business rates revenue, although that ignores the consequence of the Bill that, for RHL—retail, hospitality and leisure—businesses, Covid relief disappears, and the difference is partly funded by those businesses. Importantly, the Minister also confirmed that local government funding in totality would not be affected and that, “as far as is practicable”, no individual council would find itself worse off as a result.

What is unfortunate, though, is that the Government have been unable to share the basic assessment that must have taken place to provide the assurances given. Thus there is no clarity about the impact of these changes on individual properties—hence Amendment 1 and consequential Amendments 9, 10 and 17 in my name and that of my noble friend Lord Fox, which seek to understand the impact of the changes on the NHS.

The useful information shared by the Minister from the Valuation Office Agency shows that 290 NHS hospitals will be caught by the new £500,000 threshold. Given that the standard multiplier is currently 0.546, or 54.6 pence, in the pound and the Bill enables the multiplier to increase to 0.646, or 64.6 pence, in the pound, for these higher-band properties, this will cost those hospitals dearly.

I warned the Minister that his failure to provide examples would mean that I did the calculations. For example, the Great Ormond Street Hospital for Children has a rateable value of £5.9 million, and its business rates costs will rise from £3.2 million to £3.8 million, 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. Going further north to my own county of Yorkshire, 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 that it is the Government’s intention to reduce hospitals’ ability to drive down waiting lists, yet that will be the impact of these changes and the consequent higher charges.

My Lords, first, I declare my interest as a vice-president of the Local Government Association. The amendments in the name of the noble Baroness, Lady Pinnock, seek to retain the standard multiplier for healthcare hereditaments. They address the unintended consequences of the Bill, as we have heard very strongly from the noble Baroness.

As mentioned in Committee, I understand the desire for a reformed business rate system and, indeed, if such a system were proposed, I would be more inclined to support it. But despite the Government’s manifesto commitment to level the playing field between the high street and the online giants, the Bill does not deliver on that. I understand that this is only the first step in the Government’s plans, as I am sure the Minister will point out, but it is not a step in the right direction.

A number of sectors will be negatively affected by the changes proposed in the Bill, including anchor stores, which we will debate shortly. The Liberal Democrats are seeking to protect our hospitals and our health sector, as we have heard. The Government are doing the opposite by giving to the NHS with one hand and taking away with the other. I hope the Minister will look favourably on these amendments, but if the Liberal Democrats choose to divide on this issue, we will support them.

My Lords, these amendments seek to remove healthcare hereditaments, including medical and dental schools, from the higher multiplier.

Throughout the passage of the Bill, the Government have explained the importance of taking a sector-agnostic approach with regard to the application of the higher multiplier. This is the fairest approach to ensure that the Government can sustainably fund the lower multipliers. In Committee I set out that of the 16,780 properties at or above the £500,000 threshold, based on the current rating list, only 350 are in the health sub-sector. Of these, 290 are NHS hospitals and only 30 are doctors’ surgeries or health centres. These numbers are rounded to the nearest 10.

This Government fully support the healthcare sector. Our great National Health Service, which has delivered universal healthcare for nearly 80 years, is something the Government are extremely proud of. We recognise that the NHS needs support and reform to ensure that it can continue to deliver world-class healthcare to all for the next 80 years and beyond. The noble Baroness may feel that I do not appreciate her point, but I assure her that I do. This Government want to create an environment in which the healthcare sector can thrive. As I have set out, the impact on this sector is limited and where it does apply, much falls to the public sector.

The noble Baroness will be aware that phase 2 of the spending review is currently under way, following the fixing of the spending envelope at the Autumn Budget. As part of setting departmental budgets at the spending review, the Government will consider the full range of priorities and pressures facing departments. This includes considering any impact of the higher multiplier.

I am sure noble Lords appreciate that I cannot pre-empt the outcome of the spending review, but I reassure them that the impact of the higher multiplier on the public sector is an active consideration. The immunity of the Crown from business rates was removed 25 years ago and since then all of the public sector has been on the same footing as business. The Government are not going to reverse this position, which was intended to drive fairness between the public and private sectors and the most efficient use of property in the public sector. For these reasons, I cannot accept the noble Baroness’s amendment and I respectfully ask her to withdraw it.

My Lords, I thank the Minister for his response, which, I am afraid, was much as predicted. I really do not know how a Labour Minister can say that the Government are agnostic about our NHS. You can be agnostic in approach, but surely not about the NHS. The Minister said that they are taking an agnostic approach to the sector, but that includes agreeing that our NHS will be clobbered by even higher rates bills than it has now, while some private hospitals have the 80% charitable relief. That will not create the level playing field that he talked about.

On these Benches, we are determined to support our NHS to enable it to push down waiting lists. Given that the Minister was unable to give me any hope that there will be a change of heart, I beg leave to test the opinion of the House.

1|15:50|272|157|Division on Amendment 1|Amendment 1 agreed.||0|0

Amendment 2