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Non-domestic Rating Review

Oral Answers to Questions — Finance – in the Northern Ireland Assembly at 2:45 pm on 17th October 2016.

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Photo of Gordon Dunne Gordon Dunne DUP 2:45 pm, 17th October 2016

2. Mr Dunne asked the Minister of Finance how he plans to take forward the recent review of the non-domestic rating system. (AQO 475/16-21)

Photo of Pam Cameron Pam Cameron DUP

7. Mrs Cameron asked the Minister of Finance for an update on the review of the non-domestic rating system. (AQO 480/16-21)

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

With your permission, a Cheann Comhairle, I will answer questions 2 and 7 together.

I plan to take this work forward in ways that will stimulate economic activity, tackle dereliction and help our struggling high streets. These are my priorities in reforming the non-domestic rating system. The rating system is a distribution mechanism and it does not share the rates out as fairly as it could. I want to make changes so that those who clearly can pay do so and those who need help and assistance can get it. I also want to look at ways of widening the tax base. The Member will be very aware of why we need to bring in additional funds. I also want to widen the tax base to help ease the pain for those who are paying more than they can sustain. The Member will know from his experience in Bangor that, sometimes, businesses go out of business and many businesses blame that on the rates burden. It is about trying to get that balance right.

A major area of concern is the continued relevance and affordability of all the reliefs and exemptions we provide through the system. I refer to this as "spray and pray." I do not think it is directed enough, and I will be bringing forward proposals on how we can be more precise with our rate relief and rates assistance.

I have listened to the business community and councils on the subject. I plan to deliver a step change in responding to this important review. I intend making a statement to the Assembly in the week beginning 14 November setting out a series of options for reforming the system. These changes will need legislation. Therefore, the Member and the Assembly will have a full opportunity to consider and, indeed, shape the reforms, and I hope I can count on the Member's support when we get to that point.

Photo of Gordon Dunne Gordon Dunne DUP

I thank the Minister for his answer and the positive points he has made. I appreciate that he knows Bangor and the North Down constituency quite well, as I understand he ran there as a candidate some time ago. Will the Minister give us an assurance that he will do something — he already mentioned this, I suppose — to address the high level of retail vacancies in town centres in North Down, especially in Bangor, where we are trying to regenerate and rebuild?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

The Member will not remember this, but there was a Pickie Pool in Bangor, and I am old enough to have been swimming there in my youth, long before I stood with some fame in an election there, in, I believe,1997.

The commitment is this: we all know we need to really give a boost to town centres. I travelled to Bangor, and it was a little better than the last time I was there, as is the case with Newry, Dromore and sometimes parts of Belfast. We need a thriving high street and a thriving retail sector, so we have to take actions to support that. I have to tell the Member that I am supportive of the proposition made by our friends in the tourism, hospitality and independent retail sector. I gatecrashed a meeting of the Finance Committee last week when their representatives were presenting, and I am sympathetic to it. As we move forward, instead of having very broad reliefs, perhaps we could look at targeting support towards businesses that are in independent retail, tourism and hospitality.

Photo of Jo-Anne Dobson Jo-Anne Dobson UUP

Will the Minister acknowledge that the true extent of the damage caused by last year's flawed re-rating process may never be known? Given the extent of the errors made, as evidenced through the number of appeals, what guarantees will the Minister give small businesses that a situation like that will be avoided in the future?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I thank the Member for her question. I meet business people all the time who benefited from the redistribution of the rates burden. Of course there were losers, but there were also winners. Among those you might refer to as "losers" in this were the large supermarkets and some of the very profitable petrol stations-cum-supermarkets. I agree with that redistribution; it was the right thing to do. More than help and assistance, an enhanced partnership is needed between us and small business in the time ahead to try to produce the strong, vibrant high streets and town centres we want to see.

I meet many people who appeal their rates, and I certainly encourage anyone who feels they should appeal to do so. I would not accept and neither would my colleagues in Land and Property Services (LPS) that every time someone appeals it means there was an error.

Photo of Pam Cameron Pam Cameron DUP

I thank the Minister for his answers so far. I thank him, too, for sending us down memory lane with the Pickie Pool. I remember swimming in the shallow end some time ago.

Is there an intention to retain the small business rate relief programme?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I thank the Member for her question. We should reform it; it is too general. I am a supporter of the back in business relief, whereby if a building or premises has been empty for a year, we give rate relief to those who occupy it. We should look at what our friends at Ulster University and Oxford Economics refer to as geographical reliefs. Perhaps instead of saying everyone is eligible for a small business rate relief, we should look at how we could zero in and focus on geographical areas. That will take more research and may require some type of test case.

The bottom line is this: the rates can be a tough burden. We need to make sure we are not hindering business through the rates. We need them to contribute to the services we provide, but we could do a little more to get the balance better.

Photo of Raymond McCartney Raymond McCartney Sinn Féin 3:00 pm, 17th October 2016

Gabhaim buíochas leis an Aire as an fhreagra sin. Will the Minister provide an update on his plans to tax derelict land?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Go raibh maith agat a Chomhalta as an cheist sin I thank the Member for his question. At this stage, it is only a proposal, but some in my Department have been looking at the suggestion of a tax on derelict land. We want to get it right. The wonderful 16-acre Sirocco site in Belfast city centre has been empty since 2005, 2006 or 2007, yet we have managed to get no duty or tax on that land. If there had been an obligation on the banks or on the equity fund, Cerberus, that owned it, that would have spurred the rate of development. Therefore, if we could find a way to tax derelict land and derelict properties — an assessment by LPS, in conjunction with councils, has revealed that, at the last count, there are 1,700 derelict properties — that could be a way of making an extra contribution to the tax base. It will take a little research first, and I have asked our friends in Oxford Economics to do more research on the issue.

Photo of Richie McPhillips Richie McPhillips Social Democratic and Labour Party

Does the Minister plan to impose a punitive rates system on charity shops? Will he give a commitment not to impose any rates on charity shops, such as St Vincent de Paul, which provide an excellent service to some of the most deprived in our society?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Thank you for the question. Like the Member, I am a big fan of our charities, but we need to make sure that landlords are not dodging their rates obligation to pay 50% rates on an empty shop by putting in a charity. I know that the Member would not appreciate that either. We need to get the balance right. Charity shops help to bring people into our high streets or small towns, in particular, when times are tough, so we need to make sure that there are a certain number of charity shops. I think that the Member will agree that, when we meet retailers, they say that there has to be a balance. We cannot have our high streets just made up of charity shops.

I have engaged with the charity sector, and we may look at a way of saying that they make some contribution. It could be minimal, but, in England, Scotland and Wales, I believe, it is around 20% or perhaps even less than that. We should have an engagement. We need to make sure that we do not inhibit the great work that charities do; in fact, we want to encourage that work. There may be a way to do that in the time ahead. I have an open mind. I look forward to discussing with the Member and the Assembly the best way forward in that regard, but I have not made my mind up.

Photo of Trevor Lunn Trevor Lunn Alliance

In relation to the Minister's previous answer about derelict land, will he agree with me that there is a severe danger that the Maze/Long Kesh site might qualify under that description if something does not happen fairly soon?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I would love to get some rate-paying businesses, institutions or corporate bodies on that site, and I travel in hope in that regard.