Northern Ireland Fair Rates Campaign
Response to 2007 Executive Review of Domestic Rating Reform
The Northern Ireland Fair Rates Campaign is responding to this consultation having regard to the input we have received from the many public meetings we organised, the canvassing in shopping centres, the press articles, letters to newspaper editors, discussions with all shades of our politicians and the details obtained from those who signed our petition against the Single Capital Value (SCV) system.
This new system is not fair or equitable – just as the rent based rates system was unfair to some, so applying simply the SCV is also unfair.
We have at no time had any indication from the Department of Finance how the charge has been considered against the householders ability to pay or how have ‘’asset rich - income poor’’ been protected from what must become a Pensioners Savings Tax until they too reach the point where they are forced into a ‘’benefit’’ situation. Lyons in his report gives some recognition of this in advocating the Savings limit for pensioner relief be set at £50,000.
It is important to recognise that the Rate Charge could be a hybrid – for example a property tax and also a service charge. There needs to be a balance struck between these if fairness is to be achieved between those in expensive homes using minimal levels of services and those in smaller less expensive houses who may be consuming significantly greater levels of services. Add to this the need to assess the occupant’s ability to pay these charges
We feel that this review should look at alternative systems in depth including a service charge model, local income tax, sales tax and land tax. It is possible that an equitable system may include a package of complementary measures that will be progressively implemented over a number of years. We realise that legislation may be required to permit some of these to be fully implemented.
Although we have the support of a wide breadth of the community, we do not have the resources to analyse these different systems, however, we have previously provided detailed information to the Programme for Government Committee on the problems of the single capital value system. The Department should refer to the report of these proceedings for the comments and contributions we made at that time.
This submission re-emphasises key points and principles from our earlier submission, however as we have considered the detailed work that has been done in England by the Lyons Inquiry into Local Government Finances we believe there are significant aspects which will now modify certain aspects of our submission to this Review.
Presently throughout the rest of the UK the highest council tax bill is never more than three times the lowest. This ensures those in the lowest band pay a proportion of their tax as a service charge for services used and a proportion for the capital value of their home, but the mechanism exists to ensure that those in financial hardship receive assistance with their council tax. Similarly the higher band homeowner pays towards services used and property value.
We feel that the three times cost ratio used may be difficult to achieve in NI and would accept that recognition of low capital value and low income households would probably dictate a cost ratio of five times the lowest band being paid by the top band. This, however, must not be a mechanism used to increase revenue.
An eight-band model may enable an equitable distribution of charges in N.Ireland similar to the English Council Tax system.
We believe from our public consultations that the other priorities of our earlier submission remain valid, they are
The reduction of the maximum Cap to £300k, a figure reflective of the economic circumstances of householders in NI. This would compare with £320,000 in England.
A 25% single person’s discount and second adult rebate must be included as this exists in the rest of the UK
Relief should be applicable to students and not landlords
Automatic relief for pensioners, not dependant on means testing
Relief for disabled persons should not be based on their homes being modified
The Fair Rates Campaign opposes double taxation in the form of the proposed new water charges. Householders here have always paid for their water through their rates, if water charges are to be included in the annual rates bill then it must be clear how much of the total is a water charge
As we have stated previously all measures must be generational i.e. be in place for a significant period of time to promote stability and certainty amongst property owners.
The department each year must set aside a significant amount of revenue for rebates to include pensioners and other mentioned groups.
We believe that there is limited public knowledge of the actual finance regime and a poor understanding of the cost of public services in Northern Ireland. Accountability should also be an outcome of this Review and the department should ensure that sufficient information flows to the public to show how the finances work and how the conclusions that follow from the Review were reached.
Then there must be clarity in the make up of the rates bill to show where it comes from and where it will be spent. There was much talk that the SCV would be transparent. It may be, however it has caused many people to dispute the valuation of their homes and there are a large proportion that did not dispute because their homes were undervalued. Of those who did dispute there are still sizeable percentages that have not had a resolution. Equally important to homeowners is having knowledge of why they are paying that amount of rates and where it is going.
The system should show who drives or makes the decisions, indicating any flexibility that the councils will have to vary the budgeting throughout the year.
We are greatly perturbed by the central pressure to spend on infrastructure using National Loan Fund money and PFI schemes yet without clear local involvement in the justification of the service need or formulation of suitable options. Infrastructure spending needs to be a mix of local and central strategic objectives and the local consultation on such schemes would demonstrate why the rates should be required to service the long term loans and 30 year (and more) commitments to PFI projects.
The Lyons Review shows that where cities (councils) are given more freedom and resources they responded by being more proactive, entrepreneurial and raised the economic prosperity of the area. All of these latter issues cause us to call for an early implementation of the Review of Public Administration, as this will enable a new certainty of roles to be defined for the householder and allow the many efficiencies of scale to significantly reduce the Rate Charge.
In conclusion we feel that the issues that we have identified may require you to test aspects of our submission and we would offer ourselves to assist in any way that we can with this Review.
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‘Revenue Neutral’ Rating System Raises £43 million Additional
Campaign Tells Rate-Payers Cancel Direct Debits
house prices rising by a third
house price hits £200,000
rise again in 2006
Telegraph Viewpoint: Rates rocket explodes in our pockets
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Belfast rate jumps 20%
increase in Belfast rates bills
to know why your rates will be going through the roof ? Read
information on Transitional Assembly recommendations see News
For more news
property value rises, so do rates and water charges – with each revaluation
(next due in 2010).
get an approximate estimate of what will happen then, use this Rates
Calculator link (remember to add inflation – the Rates Department
seem to think that it's 6% this year!)
to the Northern Ireland Fair Rates Campaign website
Rates Campaign was launched in September 2006 by a group of homeowners who
were incensed at the unfair rate increases planned from April 2007.
Due to the Government’s rate reform, based on a single capital value
system, (without bands or capping or the single income 25% discount, as applied
in the rest of the U.K.) large sections of Northern Ireland’s homeowners,
find themselves faced with increases of up to 400% in their rates bills.
rate bills of £3,000, £4,000, £5,000 and £6,000 may
be commonplace for many householders come April 2007 and by 2010 these bills
may be the norm.
organisers decided to take action to raise awareness among our own local politicians
of the plight of the vulnerable in our society and some Belfast MLAs are belatedly
realising the hardship that will be imposed on many pensioners, low earners
and single parent families by this draconian tax, disguised as a rate reform.
on all the people of Northern Ireland to join us in our fight to restore a
fair and balanced system of calculating domestic rates, based on the
householder’s ability to pay.
must impress on the Government that, in its current format, the rates reform:
- Is unfair as we in
Northern Ireland are being treated differently to those in the rest of the
UK. For example the Prime Minister's council tax bill is
£1,300. Bills in Northern Ireland are as much as £14,000.
- It discriminates against
single income households and single pensioners. A 25% discount which is the
right of every 'single income' household through the rest of the U.K. is
being denied the same 'single income' households in Northern Ireland. (The
council taxes in England, Scotland and Wales are all based on the premise
that each home receives 2 adult incomes, so homes where there is only 1 adult
income or single occupancy immediately qualify for a 25% discount in their
council tax bill).
- Is conditional in its
relief schemes for vulnerable groups.
- Is a system which cannot
and should not be used in a climate of spiralling house prices. Householders’
pensions and salaries cannot rise at the same rate, although it is assumed
through capital valuation that this is the case.
- It does not acknowledge
that those homeowners currently occupying houses which have risen excessively
in value are at present paying rates well in excess of the N.I. 2006 average
and the UK Council Tax maximum (£2,800).
We are now extending
the campaign to all of Northern Ireland’s 700,000 homeowners. We would
impress on those whose rates bill attracted only a slight increase, remained
the same, or indeed were reduced – don't be fooled by this temporary
concession, as house prices throughout Northern Ireland are continuing to
rise and if the current percentage increases are maintained, you will, by
2010, be guaranteed a well above average hike in your domestic rates bill.
Add to this the proposed
water and sewage charges and you will realise that the Northern Ireland
Fair Rates Campaign really has set out to represent all our citizens by challenging
the unfair rate charges levied against us by unaccountable direct rule ministers.
you find this website helpful and that you can help us succeed in our campaign.
and Lands Agency
House Price Reports for Northern Ireland
Won't Pay Campaign
Isitfair Council Tax Campaign
you need to know...
Is your home
now valued at
10 or even 20 times your salary or pension?
Would any mortgage
company say that you could now afford to buy your own home at its current
You are not alone –
it's a ridiculous state of affairs – yet this unaccountable Direct Rule
Labour Government (which specialises in raising taxes – particularly
stealth taxes) is prepared to use Northern Ireland as an experiment and cripple
its ratepayers with a rates tax based solely on a discrete capital valuation
So what happens?
The Valuation and Lands
Agency set a market value on your property and then send you a bill based
on a figure which is assuming that you can somehow now afford to buy your
own home at its current market value – the problem is that real salaries
and real pensions have obviously not increased in relation to Northern Ireland
What is happening
in the rest of the UK?
The suggestion that this
system could be implemented in Scotland (the Burt Report) was
immediately thrown out by the Scottish Assembly. The publication of the
Review of Council Taxes (the Lyons Report) in England has
been repeatedly postphoned, as it is widely reported that to suggest this
system for the mainland would result in Labour losing not only Council Elections,
but also the next General Election.
What is our future?
For the vast majority
of people who need somewhere to live, the spiralling value of their homes
is an asset on paper only, and not sitting in a bank account waiting to pay
the spiralling rates, water, and utility bills.
the Valuation and Lands Agency now intends to revalue every property in Northern
Ireland every 5 years (the next one is due to take place formally in 2010,
but information is already being gathered on a daily basis, using tactics
such as spy-in-the-sky photographs and analysis of house sales across the
bills (and water charges) after each revaluation will reflect
the dramatic increases in property values, and everyone's rates bills, water
bills (and rents) in Northern Ireland will increase equally dramatically.
annual revaluations are being considered. The impact of these may be that
people cannot budget for dramatic rates increases each year, and as such could
be forced into selling or moving, possibly on an annual basis.
can you do to stop this?
A devolved Northern Ireland
Assembly, which is accountable, is the only way to stop this –
the most divisive and unfair local tax system in the whole of the United Kingdom
will be forced on the people of Northern Ireland otherwise.
Our political representatives
are the only people who can have the power to change this draconian and punitive
legislation which 'New Labour' have forced upon us.
It's time to make a stand
– contact your MP and MLAs,
ask them what they are planning to do, examine their election manifestos and
if they are up to the task – get out there and vote!