§ 7.6 p.m.
§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield) rose to move, That the draft order laid before the House on 24th October be approved.
§ The noble Baroness said: My Lords, this order makes a number of important changes in Northern Ireland's rating legislation, principally in the Rates (Northern Ireland) Order 1977. For a number of years, the rating system in Northern Ireland has been significantly different from that which obtained in the rest of the United Kingdom and this difference has increased since the introduction of the council tax and uniform business rate.
§ The different legislative regimes stem mainly from the fact that in Northern Ireland it is central government and its agencies which provide up to 90 per cent. of the services which in 'Great Britain are the responsibility of local authorities. In these very different circumstances the Government have no plans at present to make fundamental changes in the Province's rating system, but it is necessary to review the legislation regularly. This order does just that. In addition, the order makes specific provisions in preparation for a non-domestic revaluation which will take effect from 1st April 1997.
§ I shall now deal briefly with the substance of each of the main articles. Article 3 of the order will enable the Department of Finance and Personnel to make regulations providing for different rate poundages to apply to the domestic and non-domestic sectors.
§ Article 4 removes an ambiguity in the law by providing a uniform method for determining the date of rate liability.
§ Article 5 is again related to the revaluation. A revaluation does not in itself result in any overall increase in ratepayers' liability. Generally speaking, higher valuations are offset by lower rate poundages.
§ However, a revaluation does redistribute the rate burden between individual ratepayers. That, indeed, is the purpose of having a revaluation.
§ The order enables a transitional relief scheme to be considered which can be used subsequent to a revaluation to moderate the swings between ratepayers if these are judged to be too severe.
§ Article 6 will enable the extent of all property occupied by a utility to be defined in an order after which a conventional, rental-based assessment can be undertaken. That will bring Northern Ireland into line with Great Britain.
1408§ Article 7 will enable different types of property occupied by the Department of the Environment Water Executive, such as reservoirs, treatment plants, pipelines, and so on, to be valued as a single item and entered as such in the valuation list.
§ The effect of Article 8 will be to remove from the overall valuation that part of the valuation attributable to the dwelling house before consideration is given to the primary use of the remainder of the premises and the applicability or otherwise of industrial derating to that part.
§ Article 9 should be read in conjunction with Article 12, paragraphs (c) and (d). Taken together these will enable the definition of a railway to be revised and updated and the valuation of a railway to be specified in an order, and for that valuation to be apportioned between the various district council areas. At present railway property in Northern Ireland is valued at 1914 and 1932 rental levels.
§ Article 10 is intended to clarify what is a difficult area of the law by distinguishing between a private dwelling, the owner of which takes in the occasional lodger, and a commercial enterprise specialising in rented accommodation. It rests on the concept of "primary use". This will bring Northern Ireland into line with Great Britain.
§ Article 11 provides for buildings associated with salmon and eel fishings, public parks and certain public recreation areas not to be hereditaments. That means that they will be removed entirely from the valuation list. In 1994 an amendment to the principal order provided that salmon and eel fishings, which make use of fishing engines as defined in the 1966 Fisheries Act, would cease to be hereditaments. It had been assumed that this would include buildings used for the storing of fish and equipment.
§ However, recent legal advice is that the 1994 amendment may not have fully achieved its purpose and these buildings may continue to be rateable. The present change will remove any doubt. The removal of public parks and other recreational areas from the valuation list is a technical change only, since they are already fully exempt from rates. The article is a parity measure which brings the treatment of parks broadly into line with Great Britain.
§ I referred earlier to Article 12 in connection with the valuation of railways. The article has three other purposes. First, it will enable a so-called "decapitalisation rate" to be prescribed in an order instead of being applied administratively as at present. This refers to a rate of interest employed in the valuation of specialist public sector buildings which are not usually rented; for example, schools, hospitals and leisure centres. It is a technique used to convert capital cost to an annual value. It is another parity measure with Great Britain.
§ Secondly, the article will enable Northern Ireland's plant and machinery regulations to be brought back into line with those in Great Britain. That had been the position until the 1995 revaluation when the Great Britain regulations were changed.
1409§ I hope the House will agree that these are important, useful and straightforward changes which have practical consequences for ratepayers in Northern Ireland. I beg to move.
§ Moved, That the draft order laid before the House on 24th October be approved.—(Baroness Denton of Wakefield.)
§ Lord Williams of MostynMy Lords, I thank the Minister for that introduction. Only she could have made the rating of hereditaments occupied for the purposes of sewerage services an object of such glittering interest, particularly at this time of the evening.
Life is often so unfair. Why is it that our colleagues who live in Northern Ireland are not to have the treat of the poll tax or council tax?
I have one or two questions, delivered in perfect innocence. Is there to be a uniform business rate in Northern Ireland? Is there, lurking behind this apparently innocent scheme, a plan for the privatisation of water services or the railways in Northern Ireland? I have one last question—because I am conscious that we have other business to which to attend in the Northern Ireland context this evening. Is it anticipated that the rates payable by individuals will rise? If not, why is the order needed at all? We shall not oppose the order.
§ Baroness Denton of WakefieldMy Lords, I thank the noble Lord for suggesting that I have skills that I thought were beyond me. Normally I say that things are done better in Northern Ireland. On the question of the community charge or poll tax, I shall simply confine myself politically to saying that, in this instance, they are different.
The noble Lord brings out three "nervousnesses". I assure him that it is not the intention to bring forward the unified business rate. Separate rates are needed as a technical measure; after the revaluation, the domestic and non-domestic sectors will be on different valuation bases. In such circumstances the uniform rate poundage which the existing legislation requires cannot be applied. It is not the intention of this order to bring forward to the House a privatisation move. The article on the water service merely provides a statutory basis for current administrative practice. As the railways were last revalued in 1914 and 1932, one feels that there is a very definite commonsense requirement that they should move into this decade.
There will be no overall increase in rates liability resulting from the revaluation. But for the most part higher valuations are offset by lower rate poundages.
A revaluation produces winners and losers—those whose valuations change by more or less than the average. At the end of the day we aim to have a fairer distribution of the rate burden. I commend the order to the House.
On Question, Motion agreed to.