Debate contribution: Rates (Regional Rates) Order (Northern Ireland) 2024

Debate contribution by Dr Caoimhe Archibald on 12 March 2024.

MLA

Dr Caoimhe Archibald

Party at the time

Sinn Féin

Date

12 March 2024

Type

Debate contribution (made as a minister)

Business

Executive Committee Business

Heading

Rates (Regional Rates) Order (Northern Ireland) 2024

Assembly identifier

Official Report component 4266604

Read the official Assembly record

Text

Apologies.

I beg to move

Members will be aware that legislation to set the regional rate for businesses and households —.

I will speak briefly to the legislation.

Thank you. Members will be aware that legislation to set the regional rate for businesses and households is passed annually and that the procedure is usually part of the Budget process. Owing to timing issues, however, that has not been possible for the 2024-25 regional rates. Regional rates are therefore being considered separately to ensure that rate bills issue on time in April. The late issuing of bills, even by a short period, leads to a compressed time being available for rate collection and increased rate arrears. So far this year, Land and Property Services (LPS) has collected £1·5 billion in rates. The revenue raised from the regional rates provides around 5% of the Executive's resource budget, providing vital funding for hospitals, roads, schools and other essential public services. It also provides 75% of council income for local services. Taken together, the domestic and non-domestic regional rates — the amount from rates that goes to the Executive — are forecast to raise around £700 million in the forthcoming financial year. When it comes to the specific breakdown of rates bills, the regional rate represents just over half the typical bill, with the other half being made up of district rates. The Executive have no decision-making power over the level of the rate poundage, which local councils set. Councils set them in the context of their expenditure needs. There is a role for both the Executive and local councils, moving forward, in carefully managing the acceptability of a tax that is so vital to funding the needs of citizens. The legislation before the House today will fix two regional rates in the pound for 2024-25: one for domestic ratepayers and one for non-domestic ratepayers. Mindful of the pressures on household budgets and businesses, Executive colleagues and I have decided to keep the regional rate in line with inflation. Too great an increase runs the risk of less being collected and of eroding the tax base. It is also clear, however, that we need to increase the funding available to us to meet the acute pressures across public services. That is why we have agreed to a consumer prices index (CPI) inflationary uplift of 4% for domestic and non-domestic ratepayers. That means that owners of a domestic property with an average capital value within the rating system of £123,000 will pay 46p a week more on the regional rate element of their bill. For businesses with a rateable value of £50,000, it will mean an additional £10.73 a week on that element. Some may argue that the regional rate should be frozen in cash terms or reduced in order to alleviate the pressures of the current economic backdrop, which continue to affect businesses and households. Others have made public their view that rates should be higher. Failure to raise the regional rate at all would mean fewer resources for other areas that all Members care about: healthcare, education, roads and investment in other essential public services.

Our priority as an Executive is to ensure sustainable finances to deliver high-quality public services. Underpinning that must be a commitment to funding on the basis of need. Members will be aware that Treasury's position on the financial package is that the write-off of £559 million is conditional on raising income through local revenue and the production of a sustainability plan. My strong view and that of the Executive is that the £559 million of debt exists due to the underfunding of public services. However, starting our 2025-26 Budget in a deficit of that quantum would do inconceivable harm to our public services. Following positive engagement, the Chief Secretary to the Treasury has recognised the challenges of raising £113 million of revenue, given how close we are to the start of the financial year and the limited financial levers that are at our disposal. The Chief Secretary has agreed flexibility that that can be generated over 24 months instead of 12 months. Treasury has been clear that the enhanced time frame for the development of a sustainability plan and to generate the £113 million of locally raised income is contingent on the Executive delivering a balanced Budget in 2024-25. The Executive's recommendation to the Assembly should be seen as a clear demonstration that we recognise that we need to ensure that our finances are on a more sustainable footing in order to deliver high-quality public services. We are acutely aware of the huge pressures on our public services and, in setting the regional rate, the need to balance that with the pressures facing households and businesses. That is why the existing £350 million of rates support provided to households and businesses will continue for 2024-25. That will see the continuation of £240 million of rates support provided to 75% of non-domestic ratepayers. That includes the small business rate relief scheme, which supports 29,000 businesses. Over 4,400 manufacturing firms will continue to be supported by 70% off their rates through industrial derating. That relief is unique to this jurisdiction. In addition to the existing business rates support, I intend to reintroduce the Back in Business scheme. It will help to reduce the number of vacant retail units in our high streets, support new enterprises and attract businesses on to the high street and into our town centres. I also intend to reinstate the exemption from rates for rural ATMs to encourage and sustain access to cash in rural areas. Those measures will inject some stability and continuity into the rates system and help to address some immediate concerns that business trade bodies have raised with me since taking office. In recognition of the pressures on households and families, the £100 million of rates support, including reliefs and rebates tailored for those on low incomes or social security support, lone pensioners aged 70 or over and those who have adapted their homes to facilitate a disability will continue in the year ahead. We have support measures here that are not in place in England, Scotland and Wales. Likewise, they will have support measures that the Executive have not been able or have not chosen to introduce. With the constraints on finances at present, a key consideration for the Executive will be whether the cost of new rates support in future should be offset by reductions in the current suite of generous policies in the rating system. Some Members have suggested policy interventions in the rating system. It is important to make it clear that those could not have been implemented procedurally or legislatively for April 2024, given the timing of the Executive's return at the start of February. I am committed to continuing to develop the rating system to ensure that it is fair, equitable and progressive and is aligned with the Executive's economic vision. Expanding our tax base should be a priority, supporting businesses to grow and create jobs, building more houses to support communities and providing suitable homes for our citizens. Land and Property Services is already moving ahead with preparations for Reval2026. It builds on previous cross-party commitments to frequent revaluation cycles and ensuring that rates valuations for business are kept as up to date and as responsive as possible to changes in the rental market. That follows the completion of three non-domestic revaluations in eight years, which puts us ahead of England, Scotland and Wales in terms of revaluations for businesses and continues to guard against sudden and unexpected shifts in valuations. Members will be aware that a consultation on domestic and non-domestic rating reliefs concluded last month. Although the NIO consultation was focused on maximising revenue, and therefore was too binary in nature to inform any nuanced change, there were still over 1,400 responses. I want to take time to consider those responses.

They have been useful in providing us, an incoming Executive and Assembly, with a fresh evidence base to be supplemented through additional policy and options appraisal work and further engagement. That process will allow me to set an informed strategic direction for medium- and long-term changes in the system. I now move to the more technical matters covered in the order. The main purpose of the order is to give effect to the Executive decision for the regional rates for 2024-25. Article 1 sets out the title of the order and gives the operational date as the day after it is affirmed by the Assembly. Article 2 provides that the order will apply for the 2024-25 rating year through to 31 March 2025. Article 3 specifies 29·02p in the pound as the non-domestic regional poundage and 0·5042p in the pound as the domestic regional rate poundage. I look forward to hearing Members' comments, and I commend the order to the House.

1,479 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 09:43 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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