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

Debate contribution by Mr Paul Frew on 12 March 2024.

MLA

Mr Paul Frew

Party at the time

Democratic Unionist Party

Date

12 March 2024

Type

Debate contribution

Business

Executive Committee Business

Heading

Rates (Regional Rates) Order (Northern Ireland) 2024

Assembly identifier

Official Report component 4266662

Read the official Assembly record

Text

Certainly, I have been critical of the Opposition leader and the Opposition party's impact since we came back. However, today, it seems that the leader of the Opposition's words have shaken this place's very foundations, given the noise we heard. I take the opportunity to wish the Finance Minister all the best and a speedy recovery from her illness. Well done to the Minister for making it to the Floor of the Assembly to move the order. It is not easy when you are down in the dumps and suffering from sickness, so well done, Minister. The DUP supports the Rates Order, which limits the increase in rates in line with inflation, rather than providing the 15% increase sought by the UK Government. We do so not just because it is hard for our constituents to deal with an increase in the regional rate to that level in the context of a cost-of-lockdown crisis but because it would be wholly inappropriate for us to countenance an increase in revenue raising until such time as Northern Ireland, which is the first part of the UK to have been funded below need since the UK Government adopted the UK needs-based Holtham formula in 2012, is afforded the same protection as Wales to prevent funding below need. We are resolute and uncompromising in insisting that, given the extraordinary, dislocating and disruptive implications of being funded below need, it is imperative that, as the Barnett squeeze presses parts of the UK to need and thus the prospect and reality of funding slipping below need, we be afforded exactly the same protections as Wales has been granted in relation to that challenge. We welcome the fact that the deal proposed by the Treasury at Hillsborough takes an important step forward in acknowledging that, in order to be funded to need in line with the Holtham formula, Northern Ireland must be funded to £124 per head, rather than the £120 per head of the last two years. In order for Northern Ireland to be afforded the same protections as Wales in relation to need, Treasury must now increase our baseline funding to the same amount just above need, as it did in Wales when it intervened to prevent Welsh funding falling below need through the provision of, first, the uplift to slow down the impact of the Barnett squeeze and, secondly, the fiscal floor at the Holtham definition of need. There are two aspects to Holtham. If the people of Wales are worthy of being protected against their funding falling below need through the provision of an uplift and a fiscal floor, so are the people of Northern Ireland. The current Hillsborough proposals, updated in the letter of 13 February from the Chief Secretary to the Treasury to the Finance Minister, which we in the Committee have seen, deny Northern Ireland, first, the dignity of an uplift, which has been worth £1·17 billion to Wales between 2018 and 2024; and, secondly, the fiscal floor at need. The proposals instead offer a fiscal ceiling, and thus no uplift, and condemn us to being funded below the ceiling from 2026-27. When Treasury affords us the dignity of those two protections, only then should the Assembly consider going anywhere near increasing revenue. In doing so, it should be aware that Northern Ireland has the lowest taxable capacity in the UK, and that impacts on the definition of need. As the Fiscal Council noted about Northern Ireland:

"we estimate that adjusting for taxable capacity ... would increase the current NI relative need indicator from 124 to 127, in line with the [scale of the] increase previously estimated by the Holtham Commission".

Mindful of that, in a context in which we are not even properly funded to 124 from 2026-27, there can be no question of increased revenue raising until that matter is resolved. In looking at revenue raising from the point of departure of suggesting that Northern Ireland rates are below those of GB, Treasury should get its facts right and recognise that the Northern Ireland business rate multipliers are higher than those in GB. The business rate multiplier for England in the coming year is 54·6; for Wales, it is 56·2; and, for Scotland, it is 54·5. For Northern Ireland, where the business rate is set partly by the district business rate, the average rate is 58·9681. In the Mid and East Antrim Borough Council area — in my constituency — it sits at 67·2415. In the Derry City and Strabane District Council area, it is 66·7608. That is a full 12 or 13 points higher than it is in Chris Heaton-Harris or Rishi Sunak's constituencies. That means that Northern Ireland, with the lowest taxable capacity in the UK, is already more stretched in its taxable capacity with regard to the business rate than any other part of the UK, compounding greatly the need to ensure that we are funded to need before there can be any discussions or moves on revenue raising. Mindful of that, I ask the Minister what she is doing to hold the Treasury to the full Wales precedent, which is the provision of a fiscal floor to need and an uplift from 124.

869 words. Text as published by the Northern Ireland Assembly.

Assessment

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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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