Debate contribution: Rates (Regional Rates) Order (Northern Ireland) 2025

Debate contribution by Mr John O'Dowd on 10 March 2025.

MLA

Mr John O'Dowd

Party at the time

Sinn Féin

Date

10 March 2025

Type

Debate contribution (made as a minister)

Business

Executive Committee Business

Heading

Rates (Regional Rates) Order (Northern Ireland) 2025

Assembly identifier

Official Report component 4840908

Read the official Assembly record

Text

I beg to move

As Members will be aware, the order is made annually to set the regional rate. Members will also be aware from the written ministerial statement of 19 December 2024 of the regional rates levels on which the draft Budget was predicated. Those levels were agreed by the Executive in January to ensure that rates bills issue on time in April. Today's debate sees the Assembly undertaking its role in the annual process, debating the poundage agreed by the Executive and reflected in today's order. Before moving to the technical detail of the legislation, I will make a few points about the importance of the order. The regional rate provides a vital source of income to fund public services. As Members will know, it provides a supplement to allocation via what is known as the "block grant" and constitutes between 4% and 5% of our overall spending power in the Budget. The regional rate is expected to raise in the region of £730 million in the forthcoming financial year. That will raise revenue that is vital to helping to fund our health service, childcare, education, public transport, roads and other essential public services and investment. The rating system as a whole provides significant revenue for both the Executive and councils, with well over £1·6 billion now being collected in rates — regional and district and domestic and non-domestic. As well as the regional rate, the rates bill is made up of the district rates set independently by councils. Members will be aware that the Executive have no direct role in that decision-making process. This year, the Executive and councils had to undertake the rate-setting process in the difficult circumstances brought about by the Chancellor's autumn Budget at Westminster. The impact of specific decisions taken at that point on National Insurance contributions has led to well-documented concerns about increased costs for business, charities, the community and voluntary sector and central and local government. We are not alone in that, of course, with local authorities in England, Wales and Scotland increasing council tax by levels similar to the uplifts agreed by the Executive and our councils. Given the impact of the Chancellor's autumn Budget on businesses, the Executive took the deliberate step of agreeing that the regional rate increases for our local businesses should be 2% lower than those for households. The 5% and 3% increase for domestic and business rates respectively in today's order is an attempt to balance the clear need to raise money for vital public services while recognising ongoing challenges for businesses and households. I am also announcing today that separate legislation has been taken through by my Department to extend the small business rate relief scheme for 2025-26, thus continuing to provide about 30,000 ratepayers here, in a tax base of 75,000, with reductions of between 20% and 50% in their rates bills. That is just one element of the over a quarter of a billion pounds of support that is provided to businesses through the rating system. Later today, the Assembly will have the opportunity to affirm the extension of the Back in Business scheme and the rural automatic telling machines (ATMs) exemption, both of which were restored by my Department last year. Looking ahead, for stats on businesses in the rating system, my predecessor commissioned an Ulster University Economic Policy Centre study of the ongoing costs of doing business. In light of the autumn Budget and once that work is complete, my Department will review two support schemes in the business rates system: the small business rate relief scheme and the non-domestic vacant rating exclusions. Those two areas have been selected to reflect the priorities of business stakeholders, and I am happy to prioritise them. I stress that "review" does not mean "removal". For household bills, as I said, the domestic regional rate has previously increased at a similar level to the uplifts across England, Scotland and Wales; indeed, the increases in some local authorities in Britain are considerably higher, as all jurisdictions face the challenges posed by the autumn Budget. As an Executive coming into 2025-26, we continue to provide extensive support for businesses and households, including means-tested support for those on the lowest incomes. I move to practical matters. The legislation before the Assembly reflects the uplift for domestic and business rates respectively that underpin the Executive's draft Budget for 2025-26. If the Assembly approves the order, it will mean that a domestic property with an average capital value of £123,000 will pay 60p 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 £8·37 a week on that element. It will fix two regional rates in the pound for 2025-26: one for households and the other for business ratepayers. As I have said, the new rates have been set carefully to strike the right balance between generating income for vital public services and limiting increases as much as possible. The order; the extension of the small business rate relief scheme; continued industrial derating support worth over £70 million; the Back in Business scheme; and the retention of the relief for rural ATMs were all secured in the past year by my Department and the Executive. It represents our ongoing delivery, in less than 12 months, to strike that balance. Our work continues in this area as we progress our strategic road map for rating, which was outlined last year. We will continue that process as we move into year 2 of the strategic review of our rating system. A consultation is ongoing on making the domestic rating system more progressive, and reviews of the aforementioned business rates scheme will be coming up in the next weeks. How radical the improvement is will be a matter for the Executive as a whole to consider. For my part, I continue to progress policy to the point of Executive decision and build a progressive rates system based on the principles of fairness and equity, which aligns with and underpins the Executive's priority, stimulates our economy and supports the growth of our tax base by creating the conditions for businesses to thrive. I move on to what is covered in the order in more technical terms. 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 to the 2025-26 rating year through to 31 March 2026. Article 3 specifies 29·8p in the pound as the commercial regional poundage and 0·5294p in the pound as the domestic rate poundage. I look forward to hearing the comments that Members make in relation to the order, and I commend it to the Assembly.

1,133 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 12:02 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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