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Robinson Praises Industrial De-rating Report

Finance Minister, Rt Hon Peter Robinson MP, MLA today announced the publication of the final report on industrial de-rating.
The report was independently produced by the Economic Research Institute of Northern Ireland (ERINI).
Acknowledging the work undertaken by ERINI, Mr Robinson said: "The report is a very helpful piece of research and as an independent study has helped inform the budget proposals which are out for consultation. These include my declared intention to hold the level of rates paid by the manufacturing sector constant over the Comprehensive Spending Review (CSR) period.
"Contrary to some recent allegations, the report points to a much lower risk of job loss from the phasing out of this support measure. However, I think we need to take a cautious approach to the whole issue, particularly in the wake of the Seagate announcement. This is why I am proposing to adopt a lower percentage of rate liability for this sector. I believe this is entirely in keeping with our top priority, that of economic development.
"I accept the Institute’s assessment that de-rating is not a measure that we would or could introduce today. We are bound by our membership of Europe, so new initiatives for providing direct support to manufacturing are not available to us. While there have been calls for the rating hold to be made permanent, and I fully accept that business has to plan and budget well ahead, it is my Department’s assessment that such a freeze could fall foul of our obligations to the EU."
The report also looks at alternative revenue raising measures, which have not been picked up through the Executive’s review of the domestic rating system. These include suggestions on local levies for vehicle testing and new vehicle registrations, and ideas around charging supplementary fees on liquor and bookmaking licences.
In referring to these the Minister warned:
"These are interesting suggestions, but they are no more than that at present. Before anything could be considered, the Department of Finance & Personnel (DFP) would need to establish the legality of any proposed measures and liaise with other departments.
"If ideas are considered worthy of further exploration, nothing could or should be done until there has been a proper assessment of impacts, a process of consultation with potentially affected parties, and of course the support of the Assembly.
No-one should jump to conclusions. Taxing everything that moves is not the way to economic prosperity for all. However, if Northern Ireland wants properly funded and effective public services, I will not dismiss out of hand any ideas for replenishing the potential loss of revenue associated with the phasing out of industrial de-rating."
The new report is currently being scrutinised by the DFP Committee and in the light of its assessment, the Minister will refer the matter to the Executive to ratify decisions on the way forward before the necessary legislation is presented to the Assembly.

NOTES TO EDITORS:

  1. The report can be accessed on the Rating Reform website at: www.ratingreviewni.gov.uk or on the Institute’s website at : www.erini.ac.uk.
  2. Under Direct Rule the Government decided to phase out de-rating to manufacturing companies in Northern Ireland from 1 April 2005. The legislation requires phasing out over the period 2005 to 2011.This year’s rate bill (2007/08) for manufacturers is 30% of full rate liability and before the recent announcement next years was scheduled to go to 50%
  3. The Economic Research Institute of Northern Ireland (ERINI) was established as an independent research organisation 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
  4. Media enquiries only to DFP Press Office on 028 9052 7375 or 028 9052 7644. Out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.