23 March 2007 ERINI to conduct industrial derating review
The Finance Minister, David Hanson MP, has confirmed the appointment of the Economic Research Institute of Northern Ireland to conduct a review of industrial de-rating.
Mr Hanson also announced the Government’s decision to defer the next revaluation of non-domestic property here. It will be for the Assembly to decide when this should take place. Announcing ERINI’s appointment, he said:
“I have listened carefully to the views expressed by local political parties and representatives of the Northern Ireland manufacturing sector on the impact of industrial de-rating.
“The initial research and analysis carried out by the Working Group established by the Secretary of State, which included members of the NI Manufacturing Focus Group and Amicus, proved very useful. I concluded that further, more detailed analysis, would be required to inform any decision on the issue.
“I am pleased that ERINI, which in only a few years of existence has quickly established itself among the leading independent research institutions here, will be undertaking a full and comprehensive policy review on industrial de-rating and its impact.
“This review will enable the returning Assembly to make an informed and balanced decision on the phased introduction of industrial rating within the wider context of the budget process.”
Victor Hewitt, Director of ERINI, welcoming the appointment, said:
“
This is an important piece of research and analytical work. In being awarded this commission by the Minister, I consider it reward for the achievements of the organisation in the recent past and for our record of successfully challenging strategic thinking in the NI public sector.”
Mr Hanson also confirmed his intention to defer the revaluation of non-domestic property:
“
I have decided to defer the non-domestic revaluation exercise until after 2009. This will allow the Assembly sufficient time to consider all the relevant factors and to make an informed decision on an appropriate time to conduct the revaluation.
“It is important that locally elected representatives have the opportunity to debate and decide upon issues, such as these, that will impact on many local businesses.”
NOTES TO EDITORS:
The Government decided to phase out de-rating to manufacturing companies in Northern Ireland from 1 April 2005. It will be phased over a period - 2005 to 2011.
All the extra revenue generated from the gradual removal of de-rating will be available for investment in public services and infrastructure in Northern Ireland. In 2005/06, when rating liability was 15%, some £10.9 million was collected from around 4,300 businesses. This year’s rate bill (2006/07) is 25% of their full rate liability and around £20 million has been billed.
A Working Group was established in September 2006 as a forum for the Northern Ireland Manufacturing Focus Group (NIMFG) and Amicus to voice their concerns about the impact of the removal of industrial de-rating on manufacturing. Having considered the Working Group’s findings, the Government was not persuaded that a case remains for retaining de-rating, but it accepted that there is a need for further work on the issue. The Government decided to peg the phased increase at 30% next year, instead of the expected 35% (this 5% difference will cost £3.7m in lost revenue for 2007-08.)
The Economic Research Institute of Northern Ireland (ERINI) was established as a company in June 2003 following the decision by the Assembly to merge the Northern Ireland Economic Research Centre (NIERC) and the Northern Ireland Economic Council (NIEC). It is a Company Limited by Guarantee and has a Board of 14 directors, all appointed by Ministers, comprising representatives from academic, business, trade union and other interests. More details can be found at: www.erini.ac.uk
The last non domestic revaluation was in 2003 and, before that, in 1997 and 1976. Revaluations have the objective of ensuring equity and fairness by redistributing the rating burden in line with up-to-date rental values thus reflecting social, economic and environmental changes since the previous revaluation.
The next non domestic revaluation in Great Britain is scheduled for April 2010.
