§ Mr. TrimbleTo ask the Secretary of State for Northern Ireland what his policy is on removing rate relief on manufacturing industries. [153831]
§ Mr. PearsonThe policy rationale for retaining industrial derating in Northern Ireland no longer exists. This view is supported by leading business and economic commentators and by the outcomes of various studies and an extensive consultation exercise in 2002. An assessment of the impact of removal on manufacturers concluded that any increase in costs would be limited and the impact significantly reduced by phasing it out in the manner announced in April 2003.
165WThe phase out period will begin on 1 April 2005 and end on 1 April 2011. This means that manufacturers will have been given eight years to adjust and plan for paying full rates which is longer than the timeframe proposed by the former DFP and DETI Assembly Committees. They will have to pay only 15 per cent. of their full rates liability in 2005–06. This percentage will rise but on a very gradual basis over the next six years. This is a sensible, modernising reform measure that will bring Northern Ireland into line with the rest of the UK. There are other more effective ways of supporting businesses than retaining a blanket exemption for which there is no supporting rationale. Proposals for a hardship rate relief scheme for all businesses are being examined and will be published after consultation with Councils and business organisations.
§ Mr. TrimbleTo ask the Secretary of State for Northern Ireland how much revenue he estimates will be generated by the removal of rate relief on manufacturing industries. [153832]
§ Mr. PearsonThe estimated long-term yield from the rating of the manufacturing sector is around £55 million per year. This allows for possible valuation reductions as a result of appeals and is based on around 5,100 properties currently in the Valuation List becoming liable to full rates in 2011. Applying the 15 per cent, rate liability applicable in the first year (2005–06), the yield in that year is expected to be around £8 million. This additional revenue will be invested through the Reinvestment and Reform Initiative (RRI) to help fund a significant programme of major infrastructure projects in Northern Ireland over the next five years. Projects contained within the Strategic Investment Programme and totalling some £2.7 billion in value have already been announced. Investment in our public service infrastructure is essential for sustained economic growth and development. This scale of planned investment will significantly enhance Northern Ireland's prospects for long-term economic prosperity and future business success. The retention of industrial derating will not achieve these outcomes.
§ Mr. TrimbleTo ask the Secretary of State for Northern Ireland what steps are being taken by the Department of Enterprise, Trade and Industry and its agencies to ensure Northern Ireland's manufacturing industries are not disadvantaged by the enlargement of the European Union, with particular reference to the accession of low-wage economies in Eastern Europe. [153839]
§ Mr. PearsonInvest NI is working with companies in the manufacturing and internationally-traded services sectors to help them increase their competitiveness in home and international markets. Early results of research commissioned into the impact of EU enlargement on the NI economy, indicate that the overall impact is likely to be relatively limited. They also suggest that enlargement will offer opportunities, particularly for sectors with the greatest prospects for high value-added growth.
Around 60 Northern Ireland companies are already doing business valued at approximately £100 million in the Accession States. Invest NI has been active in organising a number of trade-related activities, targeted at certain Accession States.