Regional Rate

Oral Answers to Questions — Finance and Personnel – in the Northern Ireland Assembly at 3:30 pm on 15th January 2001.

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Photo of Seamus Close Seamus Close Alliance 3:30 pm, 15th January 2001

3. asked the Minister of Finance and Personnel to detail what representations he has had from district councils on the issue of the regional rate.

(AQO 545/00)

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

Prior to the suspension of devolution in February 2000 I received letters from Ards and Fermanagh District Councils about the then proposed increases in the regional rates for 2000-01. Since devolution was restored at the end of May 2000 I have received further correspondence from both councils, in addition to letters from Coleraine and Newry and Mourne District Councils about the regional rate increases agreed for 2001-02. Fermanagh District Council has also proposed the separation of the regional and district rates.

Photo of Seamus Close Seamus Close Alliance

I thank the Minister for his reply and take this opportunity of wishing him a happy and prosperous New Year — something that many traders in Northern Ireland will not have, unfortunately.

Will he comment on the recent report by the Small Business Federation, ‘Barriers to Survival and Growth in UK Small Firms’, which demonstrated that among small traders there was over 90% dissatisfaction with the level of business rates? Will he agree with me that if he continues to go down the path of imposing a further 8% increase in the regional rate in this year and in the following two years, he will achieve 100% dissatisfaction among small traders?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

First, for small businesses it is the increase in the regional rate for non-domestic properties that is relevant. The projection is 6·6% for next year, and in the indicative budget figures we produced in December for the further two years the projection is 5·5%. We will not be in a position to settle the final figures for next year for a few weeks yet, when we will have the aggregate net annual valuation total for Northern Ireland. I have indicated previously that if the figures show that we can raise a similar amount of money with a lower increase then the Executive will want to give positive consideration to that.

The Executive do recognise the important contribution of small businesses and, along with the various Departments, will want to support small businesses. That in turn means that the Executive, and their various Departments, need the money that rates revenue provides.

As regards the concerns expressed about current rate levels and whether or not the distribution is equitable, that is precisely why the revaluation for non-domestic properties is taking place. The aim is not to try and raise more money from the rates; it is about trying to make sure that there is an equitable distribution of the rates burden. The revaluation will apply to the non-domestic sector.

Also, the Executive are bringing forward, as part of the Programme for Government, a more fundamental review of rating policy.

Photo of Jim Shannon Jim Shannon DUP

Does the Minister agree that the majority of local councillors has been very much against the 8% regional rate increase? Is the Minister aware that party representatives from those councils that he mentioned — including some of his own colleagues in the SDLP and those from the Ulster Unionist Party — voiced clearly and loudly their complete opposition alongside the DUP and the other parties who voiced their opposition in the Assembly? Does he therefore feel that his proposals are truly representative of the business life and of the people of the Province?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

The recommendations relating to rate increases for next year, which have now been approved by the Assembly, are there as a result of our spending plans. If we had spending plans, that involved spending less money on fewer services, then, in turn, we could afford to go for a lower rate increase.

We recognise the strong concern that people feel, whether they are domestic ratepayers or non-domestic ratepayers. That is one of the reasons why we want to pursue the review of rating policy. That will be aimed at looking at the fairness of the rates burden not just in the non-domestic sector but in the domestic sector as well. We recognise that the rating system as it stands is not entirely popular and that, from many perspectives, it is not particularly satisfactory, but it is the one means of raising additional revenues beyond the one that the Treasury allocates us. We are trying to improve the fairness and the sense of the rating system. I hope that all Members of the House will support the Executive in their efforts to that end.