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21 September 2006 Edition

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Rates Order Sinn Féin submission

British determined to increase rates pain

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.

Maskey spoke to An Phoblacht after Sinn Féin submitted its response to the consultation on the draft Rates Order, explaining Sinn Féin's approach to the issue. "Current British Government proposals for a reform of the system of rates in the Six Counties will cause immense hardship for many people.

"Rates reform must be based on key principles, namely, 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.

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

Water charges

Maskey also highlighted the real agenda being missed in the current debate on rates: "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.

"The British Government want to reduce the Treasury subvention by increasing local taxation and reducing public expenditure," Maskey said.

The door for this was opened up by Mark Durkan and David Trimble in the Reform and Reinvestment Initiative they negotiated with the British Treasury, which was based on increasing 'local revenue streams' through rates increases and water charges. It also paved the way for the stealth privatisation agenda in the north.

Maskey noted the impact of the DUP's failure to engage in getting the political institutions back up and running and highlighted the fact that the last Executive was able to cap rates at 3.3% for businesses and 8% for households.

"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," he said.

Sinn Féin has also rejected demands for a banding system or the introduction of a cap on the grounds that neither are part of a progressive (sliding scale) form of raising revenue. The danger with the populist demand for a cap is that it would mean people on lower incomes would end up subsidising the very wealthy.

"A better solution would be an income-based relief system to protect people who are asset rich, income poor - particularly pensioners on fixed incomes," 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 Féin has not been silent," he added.

Sinn Féin has 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 Preparation for Government committee meetings
  • As part of the current negotiations

Summary of Sinn Féin submission

  • 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 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 underinvestment in infrastructure.
  • Sinn Féin's preferred option is for the removal of rates altogether and replacement with a system of progressive direct taxation.
  • Without prejudice to the above, Sinn Féin believes that equality and ability to pay must be at the heart of any proposals which involve a continuation of a system of rates.
  • The rates system must meaningfully address disadvantage and low income. The British Government's current proposals do not address these core principles.
  • 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.
  • 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 meet these criteria or do not go far enough.
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