Sinn Féin - On Your Side

Sinn Féin publish Rates submission

18 September, 2006


Sinn Féin South Belfast MLA Alex Maskey has said that the British government are determined to increase the rates pain facing everyone living in the north.

Speaking after Sinn Féin submitted its response to the consultation on the draft Rates Order Mr Maskey said:

"In relation to the recent public debate about rates Sinn Féin reject claims that we have not consistently raised the issue of public finance. Sinn Fein have not been silent.

"While responding to these specific proposals on domestic rates within the current consultation I want to make it clear that Sinn Féin have repeatedly raised public finance issues including tax varying powers, the Barnett Formula and a Peace Dividend directly with both the British and Irish governments, and also;

· During negotiations leading up to the Good Friday Agreement.

· Within the Executive and Assembly.

· During the negotiations ending in December 2004.

· As part of our ongoing discussion in relation to the Review of Public Administration.

· As part of the current negotiations.

"It is clear that the British government is determined to increase the rates pain facing everyone in the north. Evidence for this is in the 19% increase in the regional rate imposed on local councils this year and the determination to introduce the separate Water Charge.

"Sinn Féin believe that the best way to achieve a fair and equitable rates system is through the establishment of a power-sharing Executive with locally elected and accountable Ministers.

"Sinn Féin's preferred option is for the removal of rates altogether and replacement with a system of progressive direct taxation." ENDS

Note to Editors

Sinn Féin Response to the Consultation on the Draft Order in Council: the Rates Amendment Order

Summary

1. Sinn Féin believe that a power-sharing Executive with locally elected and accountable Ministers would be best placed to take forward the reform of the rates system and the opportunity to secure greater fiscal autonomy.

2. Sinn Féin have consistently challenged the lack of fiscal autonomy and argued for tax varying powers to be given to the Executive and for a substantial Peace Dividend to address inequality and the under investment in infrastructure.

3. Sinn Féin's preferred option is for the removal of rates altogether and replacement with a system of progressive direct taxation.

4. Without prejudice to the above, Sinn Fein believes that equality and ability to pay must be at the heart of any proposals which involve a continuation of a system of rates.

5. The rates system must meaningfully address disadvantage and low income. The British Government's current proposals do not address these core principles.

6. Regardless of the current proposals it is clear that the British government objective is to increase the overall rates burden on people in the Six Counties.

7. The issue of reliefs should be addressed through an income related system based on the ability to pay with specific exemptions for particular groups. The proposed system of reliefs either do not go far enough or meet these criteria.

Overview

Sinn Féin believes that this rating review is taking place within very narrow parameters and that we are being given limited options. The whole rating system in the north of Ireland needs a radical overhaul in the context of a complete review of Barnett, the need for a substantial Peace Dividend and the granting of tax varying powers to the Assembly.

Regardless of the current proposals it is clear that the British government objective is to increase the overall rates burden on people. We believe that the issues of rates reform cannot be addressed outside of the wider financial issues, particularly the clear strategy driven by the British Treasury to increase the overall revenue levels, as evidenced by the 19% increase in the central government regional rate in 2005/06 and the introduction of the separate water charge.

Current British Government proposals for a reform of the system of rates in the Six Counties will cause immense hardship for many people.

Sinn Féin's preferred option is for the removal of rates altogether and replacement with a system of progressive direct taxation.

However, within the context of this particular review we wish to make the following comments.

In previous consultations, Sinn Féin accepted that calculations of the domestic rates on the basis of rental value are unfair and in need of

reform.

While acknowledging that rates based on discrete capital values was a potentially more fair system of taxation, rather than one based on rental value, we highlighted our concerns about the inequity of the system being proposed. We urged the review to address the issue of equity. Our concerns have not been addressed in these proposals.

The stated aim of the review originally commissioned by the Executive was to deliver a system that was fairer and based on the ability to pay. These requirements have not been fulfilled by these proposals as the British government have failed to address the correlation between house value and income. As a result, there will remain many people in the anomalous position of being asset rich, but income poor, and therefore being asked to pay greater rates than they can afford.

We are not in favour of a blanket capping system, principally because of concerns that people on lower incomes would end up subsidising the very wealthy. However, every ratepayer is entitled to expect value for money in terms of services provided. An appropriate income based relief system would better meet the needs of the asset rich, income poor.

As we stated in our 2002 response to the original consultation Sinn Féin remain concerned that the banding system reinforces inequality. We remain in favour of a progressive, sliding scale, income related taxation system.

In relation to the proposed 25% reduction for people with a disability whose property has been modified Sinn Féin believe that such adaptations are not made to add value but on health grounds. Therefore such adaptations should be eligible for rates relief. Further consideration is required for all those with disabilities.

While Sinn Féin welcome any attempt to encourage young people into further and higher education, particularly as this represents an investment in the future we remain concerned that the proposed reliefs may not be passed on to students and may instead benefit private landlords. The public must be assured that this is not the case.

A reform of the rating valuation premised primarily on discrete capital values, while an improvement on the previous model, does not provide for a fair distribution of the rates burden. Both income and the ability to pay must be a core element of the new rates system for it to be fair.

The current debate on the issue of rates has not included any analysis of public service provision and particularly the value for money achieved within areas that suffer from under investment. Equally many people are being asked to pay substantial rates increases without any commitment to substantial improvement in public services or amenities. There must be a clear relationship between rates, income, value for money and quality of services provided.

Historical discrimination and decades of under-investment have resulted in serious disparities in the provision of public services and infrastructure, particularly West of the Bann and some deprived urban communities.

We have also raised our considerable concerns about the effect of the increase in the amount of money to be raised through local rates and charges and the impact on public services within the ongoing discussions in relation to the Review of Public Administration.

Sinn Féin continue to believe that any system of relief must take due account of income and the ability to pay and in particular ensure appropriate reliefs are available to the elderly, disabled and lower income householders.

Our consistent view remains that any system of rates must address disadvantage, income and the provision of services.

Sinn Féin believe that a power-sharing Executive with locally elected and accountable Ministers would be best placed to take forward the reform of the rates system and the opportunity to secure greater fiscal autonomy.

Sinn Féin have consistently raised concerns with the British government about their lack of financial support for the Peace Process and in particular the failure to tackle inequality and under investment.

What is needed is a more fundamental review of the manner in which local taxation is raised. Specifically, the raising of taxes through direct income tax rather than rates needs to be considered.

Where a continuation of a system of rates is proposed, the calculation of rates must include a variable element related to income.

It is essential that the rates system is both transparent and fair and ensures that the rates burden is fairly shared and based upon the ability to pay and related to the quality of services provided.

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