Domestic and Non-domestic Regional Rate

Oral Answers to Questions — Finance and Personnel – in the Northern Ireland Assembly at 3:30 pm on 14th January 2002.

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Photo of Edwin Poots Edwin Poots DUP 3:30 pm, 14th January 2002

5. asked the Minister of Finance and Personnel to indicate the income derived for each percentage point above the rate of inflation added to the domestic and non-domestic regional rate.

(AQO 553/01)

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

With the Speaker’s permission I will take questions 2 and 5 together.

On 11 December 2001, the Assembly approved the Budget proposals for 2002-03, including increases by 7% and 3% in the domestic and non-domestic regional rates respectively. I have no plans to depart from those increases. Each percentage increase above the level of inflation in the domestic and non-domestic regional rates would raise an additional £1·1 million and £2·1 million respectively in revenue. A percentage increase in both rates would generate an extra £3·2 million.

Photo of Billy Bell Billy Bell UUP

I thank the Minister, and I wish to be associated with the remarks of welcome made to him by other Members. Does he agree that the rates levy is a highly inequitable tax, which hits hardest those who are least able to pay it? In the light of that, will he agree to examine other forms of local tax raising powers such as the local purchase taxes and income taxes that are levied in the United States of America? Will the Minister assess the potential of those taxes and, with the Assembly, approach the sovereign Parliament with a view to diversifying and making more equitable the tax regime?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

Members will be aware that a review of the rating system is under way. At present, the Executive are considering moving to wider consultation on the matter. Issues of local revenue raising, such as those mentioned by Mr Bell, might be considered within the context of that review. However, I must point out that, under the Northern Ireland Act 1998, the Assembly and the Executive do not have tax-raising powers. Those might be necessary if we were to move to the forms of revenue raising to which Mr Bell points. There have been debates, both inside and outside the Assembly, on whether the Assembly should acquire such powers. Whether it is desirable that we should have those powers is a matter that rests with the Assembly in the first instance.

Photo of Edwin Poots Edwin Poots DUP

Does the Minister recognise that the current means of raising revenue through rates is a very broad brush and hits those who are most vulnerable in society? By raising the rate by 7%, as opposed to 3%, the Minister is gaining only an additional £4·5 million for his overall Budget of around £6 billion. However, it hurts many older and working-class people, who must put up with a 2% or 3% rise in their income. Will the Minister not review the matter now, instead of imposing a foreign tax upon the people of Northern Ireland?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

The Member must understand that, having adopted the Budget only a month ago, we should not revisit it now. I accept the point that Mr Poots and Mr Bell made about the inequities that exist in the current rating system. That is one of the reasons for the current review.

Photo of Mrs Annie Courtney Mrs Annie Courtney Social Democratic and Labour Party

Will the Minister confirm that the review of the rating policy, which was agreed by the Executive last year, will consider the question of the regional rate and the most effective way of ensuring a fair system of paying for public services?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

The short and simple answer is "Yes". We must address that matter as widely as possible. It is to be hoped that we will proceed to the wider consultation on the question of the rateable base and the forms of local revenue raising of which we can avail ourselves.

Photo of Lord John Alderdice Lord John Alderdice Speaker

As Mrs Iris Robinson is not present in the Chamber, question 3 falls.