Proposing of Motion 2 on Finance

On 27 May 2002, the then Minister of Finance and Personnel announced that a public consultation exercise on the review of the rating system had commenced.

What a pity that the parties in the Executive agreed to restrict the review to an exercise in tinkering instead of radical and progressive thinking.

What a pity that the review was constrained and the consideration of a move to local income tax was effectively ruled out.

What a pity that our local Ministers, many of whom had as councillors objected to the iniquitous regional rate, were prepared to bolster this system and perpetuate its inflation-busting increases during their tenure in office.

Isn’t it amazing how power can change people – oppose the regional rate when you can’t change it and support it when you could possibly do something about it. Is that politics, hypocrisy or simple lies and deceit? This party has consistently opposed that which is wrong and unfair – and we will continue to lead the charge for the abolition of this unfair tax, this flawed system.

We believe in transparency and accountability, we just don’t talk about it. We’re not nodding poodles. The present Secretary of State agreed with me that the present rating system is flawed.

Quote from Hansard, 9 November 1998 by Paul Murphy: “Mr Close was saying that the method of taxation which the Government have chosen is flawed. In a sense I agree that the rating system is a flawed system.”

Well, I say to the Secretary of State: a flawed system should be scrapped and not dickied up. You can’t make a silk purse out of a sow’s ear. We need radical change, not cosmetic change. Only scrapping the regional rate will achieve that change.

I am convinced that there needs to be a clearer separation of district council expenditure from Assembly expenditure. District councils, which should be reduced in number, have clear and identifiable functions that could continue to be financed through district rates. People know what they are paying for and can hold their councillors to account. The number of reliefs can be largely reduced and a move to capital values for domestic properties introduced. But Assembly expenditure should be financed via a local income tax and the block grant.

Total rate revenue in Northern Ireland raises £600+ million. The split between district and regional is 45/55. By scrapping the regional rate, rate bills would at a stroke be cut in half. The balance would be raised in a much less painful fashion through the income tax system where the present coding arrangements, which take account of personal circumstances and thus ability to pay, could be activated.

I am convinced that the Northern Ireland people will pay for services when they know and see what they are paying for. We are not spongers.

Talk of a sponge leads me finally to comment on water and sewage charges. The Minister has recently told us that there will be full consultation in relation to water charging. I hope that this consultation will be meaningful and that the voice of the people will be listened to. I have already urged her to come clean and stop the illusion that we currently receive our water free from the tap.

She knows that there’s no such thing as free water from the tap. She knows that the infrastructure, purification and so on is paid for through general taxation. Angela Smith wants to introduce yet another tax, that is the ‘tap tax’, to make water self-financing. If that is the case – and I believe that it is – will she, in her drive towards transparency and fairness, install water meters so that people can see what they are paying for, and can see how to reduce consumption, save water and thus save money.

The old argument that meters are too expensive just doesn’t wash. If this Government can set aside £1.75 billion – that is 175 thousand million – to kill people in Iraq and destroy what infrastructure remains there, just to satisfy the ego of the two ‘B’s – Bush and Blair – then a few hundred million for transparency and accountability through the provision of water meters makes good economic sense.

But then who said that economic sense or even common sense was the hallmark of this Government.

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