Domestic Rates Reform

Acccording to the Minister of Finance, David Hanson, reform of the domestic rating system in Northern Ireland was long over due. The reasons he gave for introducing the single capital value system are as follows:

  • “…The current rating system, based on rental values, is inequitable and out of date”…
  • “…Achieving a fairer system remains our key objective and is why we are proceeding with the reforms…”
  • “…I believe that these changes are essential to establish a fairer basis for raising local revenues…”
  •     A system based on individual assessment would result in a fairer distribution of the rate burden in Northern Ireland. (One of the conclusions reached by the Government – page 7 section 2 paragraph 18, ‘the Background’ to the public consultation document)

    The first three quotations are taken directly from David Hanson’s 'Foreword' of 27th July 2006, to the public consultation on the Rates (Amendment) (Northern Ireland) Order 2006.

    We suppose that if one says the word “fairer” often enough, they are inclined to believe their own rhetoric!

If the reasons for changing the method of calculating the domestic rates in Northern Ireland from rental to single capital value are as stated above, then they have failed miserably.

The new system is anything but fair; the distribution of the rate burden will fall more than ever before with the vulnerable old people on pensions and low earners on fixed incomes and the single income households being offered little or no relief unless the Assembly reconvenes.

Page 7, Section 2, Paragraph 18 – ‘Background’ to the public consultation explains

“The new individual capital value system would have a more positive impact in terms of reducing social deprivation than a banded approach. Thus it would be more consistent with the Government’s wider policy objective of targeting social need.”

If as the Minister implies this new single capital value system (without banding or capping) is such a mighty weapon for targeting social need, why has the Government not introduced it in Great Britain?

Could it be that the Government (especially Mr Blair) knows quite well that this is an unjust and unfair system and that the people of Northern Ireland are being used as guinea pigs to test it, just like the Scottish people were used as a test centre for the poll tax, all those years ago?

We would refer you to the Consultation Responses published by the Rating Policy Division on the Department of Finance and Personnel’s website.There you will find among all the other responses our Campaign’s submission to the consultation document, in which we have made detailed replies to all the questions asked.

Although a quite detailed and in-depth argument is put forward by the campaign organisers in respect of each question posed in the consultation document, we must not lose sight of the four main underlying flaws that we have detected in the Order.

a) It is grossly unfair.

b) It discriminates between the age groups.

c) It is conditional in its relief schemes for vulnerable groups.

d) It is a system which cannot and should not be used in a climate of spiralling house prices as homeowners’ pensions and salaries cannot rise at the same rate, although it is assumed through capital valuation that this is the case.

e) It does not acknowledge that those homeowners currently occupying 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 of the opinion that the direct rule ministers who drafted the detail of this draconian raft of legislation, do not care about the citizens of Northern Ireland. In the provisions of this Rates Order, they repeatedly refuse to treat us as equal to the people of England and Wales. They are not accountable to the people of Northern Ireland and believe they can ride rough shod over us to bring in these unfair and unjust laws. Should they try to impose this system in England, Scotland or Wales they would be hounded out of office come the next general election, or perhaps before.

Note: Capital value is also being proposed as the basis for water charges and as such is equally unfair. To see an illustration of estimated water and sewerage bills please click here

Rating Policy website | Water Reform website