The
Committee consisted of the following
Members:
Chairman:
Mr.
Christopher
Chope
†
Brown,
Mr. Nicholas
(Newcastle upon Tyne, East and Wallsend)
(Lab)
†
Cooper,
Rosie
(West Lancashire)
(Lab)
†
Dodds,
Mr. Nigel
(Belfast, North)
(DUP)
†
Durkan,
Mark
(Foyle)
(SDLP)
†
Foster,
Mr. Michael
(Worcester)
(Lab)
†
Fraser,
Mr. Christopher
(South-West Norfolk)
(Con)
†
Gilroy,
Linda
(Plymouth, Sutton)
(Lab/Co-op)
†
Hanson,
Mr. David
(Minister of State, Northern Ireland
Office)†
Hermon,
Lady
(North Down)
(UUP)
†
Holloway,
Mr. Adam
(Gravesham)
(Con)
†
Kaufman,
Sir Gerald
(Manchester, Gorton)
(Lab)
†
Kidney,
Mr. David
(Stafford)
(Lab)
†
McCarthy-Fry,
Sarah
(Portsmouth, North)
(Lab/Co-op)
†
Neill,
Robert
(Bromley and Chislehurst)
(Con)
†
Raynsford,
Mr. Nick
(Greenwich and Woolwich)
(Lab)
†
Reid,
Mr. Alan
(Argyll and Bute)
(LD)
†
Robertson,
Mr. Laurence
(Tewkesbury)
(Con)
†
Rosindell,
Andrew
(Romford)
(Con)
†
Waltho,
Lynda
(Stourbridge)
(Lab)
†
Watson,
Mr. Tom
(West Bromwich, East)
(Lab)
†
Wright,
David
(Telford)
(Lab)
Glenn
McKee, Committee
Clerk
†
attended the Committee
Second
Standing Committee on Delegated
Legislation
Wednesday
25 October
2006
[Mr.
Christopher Chope in the
Chair]
Draft Rates (Amendment) (Northern Ireland) Order 2006
2.30
pm
The
Minister of State, Northern Ireland Office (Mr. David
Hanson): I beg to
move,
That the
Committee has considered the draft Rates (Amendment) (Northern Ireland)
Order 2006.
The order
was laid before the House on 9
October.
I begin by
welcoming you to the Chair, Mr. Chope. We have briefly
discussed the fact that you were once a local government Minister
yourself, dealing with many matters relating to local government
finance. I know that you will enjoy observing and chairing this
sitting, perhaps more than you would if you were a participant in the
debate. To make the point that I usually make on these occasions, let
me say that I very much hope that this type of event in the House of
Commons dealing with Northern Ireland matters will soon come to an end.
We hope that the Northern Ireland Executive will be restored very soon.
My right hon. Friends the Secretary of State for Northern Ireland and
the Prime Minister and I have been seeking to support the parties in
securing that restoration in the very near
future.
Lady
Hermon (North Down) (UUP): I am delighted to sit under
your chairmanship for the first time, Mr. Chope, and I am
most grateful to the Minister for taking such an early intervention.
Given that he sets great stock by the restoration of devolution in
Northern Ireland—we hope to meet that 24 November
deadline—why on earth are the Government bulldozing through this
Order in Council through Committee this afternoon, within weeks of the
restoration of
devolution?
Mr.
Hanson: If the hon. Lady had borne with me for a few
moments more, she would have heard the end of my comment. I certainly
hope that the Northern Ireland Assembly is restored very shortly to
deal with these matters but, unfortunately at the moment the Assembly
is not restored. I hope that it will be restored but it may not be. If
it is not and if we do not deal with this order here today, we will
find ourselves even further behind the United Kingdom in terms of
rating policy. The subject of the order has been under consideration
for four years, commencing with the Assembly consultation document in
2002. We need to progress the matter as a matter of
urgency.
We have a
duty to continue to govern on behalf of the people of Northern Ireland
until such time as agreement is reached at St. Andrews. As I mentioned,
taking forward rating reform has been discussed for four years. During
that period there have been two major 16-week consultation exercises,
the first held in
2002 and the second in 2004. A wide range of information has been
published on a dedicated website throughout that period. Eighteen
months ago Lord Rooker, my predecessor as Finance Minister, presented
our views, based on the 2002 and 2004 consultations and taking account
of the views expressed, on how best to proceed with the reform of the
domestic rating system. Since assuming the role of Finance Minister in
May this year, I have undertaken another consultation on the subject.
We have discussed further whether the consultation will secure the
implementation of our objectives, and I have reflected that in the
draft order.
We have
had at least 39 weeks of formal consultation to date. The reason I
answer the hon. Lady in the way that I do is to emphasise that we are
not bulldozing the measure through the Committee. A 39-week, four-year
consultation period strikes me as being eminently
reasonable.
Lady
Hermon: Throughout that period of consultation, which
political parties in Northern Ireland actually supported the proposed
change?
Mr.
Hanson: There have been a number of elements of support.
Individual members of all parties have said that they want a capital
value system. It has the support of a number of organisations in
Northern Ireland, including the Northern Ireland Council for Voluntary
Action, the trade unions and local councils, including some controlled
by the hon. Lady’s own party. My point is that the process was
started by the Assembly and by the directly elected Ministers, and we
have continued the process to
date.
Lady
Hermon: The Minister will recognise that that was a very
elaborate answer to a question that I did not ask. Would he answer the
question directly? Which political parties in Northern Ireland support
this
change?
Mr.
Hanson: As I said before, my hon. Friend the Member for
Foyle (Mark Durkan), on behalf of the Social Democratic and Labour
party, has indicated that a capital value system would be preferable to
many other systems. I accept that the Ulster Unionist party, her own
party, has been critical of the system all along. Different views have
been expressed formally. The Democratic Unionist party, represented by
the hon. Member for Belfast, North (Mr. Dodds), did not
formally, as a party, submit evidence to the consultation. The Alliance
party has expressed a desire for a fair local income tax proposal, but
it has already said that in the absence of such a tax, it is happy to
consider capital valuation. Sinn Fein, as one of the major parties, has
not expressed opposition to the proposal in broad terms. There are
different views on the proposals.
I say to the hon. Lady that our
consultations in 2002 and 2004 highlighted overwhelming general support
for the proposal to replace the present rating system with the capital
value system. I stand by both consultations.
Mr.
Laurence Robertson (Tewkesbury) (Con): I am grateful to
the Minister for giving way. I am certainly not a spokesman for Sinn
Fein, but I have just left a
meeting with one of its members who was elected to this House but who
does not take his seat, and he made it clear that the matter before us
should be left to the Assembly to decide. Even Sinn Fein is against the
measure—but why use one word when 100 will do? Why does not the
Minister say in answer to the hon. Lady,
“No”?
Mr.
Hanson: I say to the hon. Gentleman that I have in front
of me a consultation on the review of rating policy, which was produced
in May 2002, when directly elected Assembly Members were in charge, and
when Mr. Shaun Farren, a member of the Social Democratic and
Labour party, was the Finance Minister who produced the consultation
paper. There are a number of elements of support for these changes in
Northern Ireland. I agree with the hon. Member for Tewkesbury
(Mr. Robertson) that there are differing views, but several
bodies have supported and still support the implementation of the
proposal before us.
The proposal is not about
raising any extra money from the rates in Northern Ireland; it is about
how we distribute the burden of those rates among the population of
Northern Ireland. Nobody in the consultations wanted to continue the
old system of rates, but if the Committee or another place defeats the
order before us, that system will continue. The rating reforms in the
draft order have raised concerns and, as is already evident in the
Committee, elements of controversy. Some of those who responded to the
proposed legislation were critical of the fact that the last
consultation lasting only seven weeks. In fact, in the past couple of
days, a judicial review of the consultation procedures was undertaken
in court in Belfast. I am pleased to inform the Committee that within
the past few days, that application lodged in the High Court in
Northern Ireland was concluded and the draft order was proved to be not
unreasonable, given that the Department of Finance and Personnel had
previously carried out extensive consultation over 32 weeks. The Court
also dismissed the application to stop today’s sitting in the
House.
The new system
will be much fairer than the present one. For the benefit of members of
the Committee, let me say that if the new system is operational next
year, on current bill levels, 55 per cent. of households in Northern
Ireland will either see their bill reduced or pay the same as they do
now. If the system is operational next year, 68 per cent. of household
rate bills will either stay the same, decrease or increase by no more
than £1 a week. Many more houses will receive rate relief under
the new scheme than under the present scheme: currently, 175,000
properties receive benefit under the rate relief scheme, whereas under
the new scheme, 185,000 properties will receive that benefit. To
emphasise the point, an extra 30,000 properties in that 175,000 would
receive enhanced benefit on rate relief under the new scheme. In total,
40,000 more properties will receive either benefit for the first time
or enhanced benefit.
Lady
Hermon: The Minister’s language causes confusion.
He has said that an increased number of households will receive
enhanced benefit. Does that mean that they will receive it
automatically, or will there be an obligation to apply? If so, will the
Minister
explain the low take-up in Northern Ireland of benefits of all kinds,
particularly among the
elderly?
Mr.
Hanson: An application will have to be made, but in our
estimation the households in question will qualify for benefit. For
example, in the council area of North Down, in the hon. Lady’s
constituency, 53 per cent. of the population will be winners as a
result of the scheme. People will have to apply for rate relief, and I
want to see a good take-up of that relief. Our estimate is that 175,000
people receive benefit now and that next year 185,000 will receive
benefit under the new scheme, and of the 175,000 current recipients,
30,000 will receive a higher level of benefit than before. That is an
important point. I would welcome and encourage a benefit uptake scheme.
Just this Wednesday I put a half-page article in
The Belfast
Telegraph to encourage people to become aware of benefits so that
they can take up the ones appropriate to
them.
Mark
Durkan (Foyle) (SDLP): Will the Minister help us further
with the figures by telling us how many of those who will benefit under
the proposed scheme will get transitional relief rather than the
long-term relief provided
for?
Mr.
Hanson: The figures that I have given relate purely to the
rate relief benefit. The figures on transitional relief will be
additional. I shall come on to the matter of individuals who face
larger increases than those who qualify for benefit, but I have been
putting in place a transitional relief scheme that will allow people to
spread over a longer period the burden of the large increases that some
householders will face. I assure the hon. Member for North Down (Lady
Hermon) that the Rate Collection Agency is considering a range of
measures to ensure that ratepayers claim housing benefits. We wish to
work with the community and voluntary sector to ensure the good take-up
that the hon. Lady and I both
want.
To continue with
the theme of benefits, there is a new rate relief scheme in place for
students in full-time education and for people leaving care. It will
ensure that households in Northern Ireland that are completely occupied
by students will not face the same rate burden as other households as
part of their contribution to society. The transitional relief scheme
mentioned by my hon. Friend the Member for Foyle will be in place for
those who are hit hard by the scheme, and we have also put in place
help for people with disabilities whose properties have been
modified.
I know that
the order is controversial. You will already have gathered,
Mr. Chope, that the proposals are not universally welcomed
in Northern Ireland. However, I believe that the system will be an
improvement and distribute the rate burden among households more
fairly. It should therefore be welcomed by the Committee.
Let me make clear what we are
proposing clear. The order will replace the old rates system with a new
capital value-based system, placing a charge on the value of a property
as at January 2005. The new system will bring up to date the valuations
on which rates are charged and introduce for the first time a new range
of reliefs, which I have described. It will also extend the
assistance available to those on low incomes. It will make the system
easier to understand and, if agreed to by both Houses, it will operate
from April 2007.
The
draft order provides for the individual capital value system, and it is
important for me to focus on some of its articles so that the Committee
can examine it in detail. Article 4 will give powers subject to the
devolution of policing functions, which may happen in due course. It
sets out that part of the regional rate may be specified for funding
police services if the Executive so wishes. [Interruption.] I
hear a gentlemanly cough from the hon. Member for Belfast, North. He
will know that the devolution of policing is a difficult issue. There
are a number of steps to be taken, but we are simply putting in place a
power so that, if that devolution happens, by consent of the Assembly,
Her Majesty’s Government and the House of Commons, the restored
Assembly will be able to levy rates for policing purposes if it so
wishes. It could not currently do so. That is a technical matter, but
will be important in the event of future
changes.
