Rates rethink key to building prosperity
LAST month the Department of Finance announced ground-breaking proposals to re-invigorate the rates system, revitalise high streets, spur economic regeneration, discourage dereliction and decline, and raise extra funding for public services.
Economic commentators have responded favourably, one describing it as an “excellent and well-judged package”.
The reforms include reducing the subsidy for houses worth over £400,000, a £22 million hospitality and retail initiative, an incentive for energy efficient homes, a tax on derelict land, and pilot Business Empowerment Zones in parts of east and west Belfast that haven't fully shared in the peace dividend.
These proposals draw largely from an extensive consultation conducted by my Department last year and an evaluation of the Small Business Rate Relief (SBRR) scheme carried out by Ulster University's Economic Policy Centre.
Introduced in 2010 in response to the economic downturn, the SBRR subsidises the rates bill of lower value premises. It helped businesses with cash flow during a particularly difficult time but the University recommended that the scheme be phased out due to “limited quantifiable economic impacts such as increasing employment or investing in machinery”. I accept this recommendation and will continue the scheme for one more year before it is closed.
The University also recommend replacing the SBRR with a more targeted initiative that stimulates economic growth.
I am convinced that this support should be directed towards hospitality and retail to help realise our untapped tourism potential and revitalise small shops facing the rise of online shopping and the decline of the high street. That's why I have proposed a £22 million stimulus for those sectors.
I intend to ensure that this initiative provides value for money by “requiring businesses to apply for it through a simple one page application showing that the firm had invested in increasing the productive capability or capacity of the firm” as recommended by the University.
:: Mairtin Ó Muilleoir is the Stormont Finance Minister
I look forward to refining these proposals during the forthcoming consultation and bringing about the step change in rates required to spur prosperity.