COMMITTEE FOR FINANCE AND PERSONNEL
MINUTES OF PROCEEDINGS
WEDNESDAY, 24 OCTOBER 2007
Room 152, PARLIAMENT BUILDINGS
Present:
Mitchel McLaughlin MLA (Chairperson)
Roy Beggs MLA
Dr Stephen Farry MLA
Simon Hamilton MLA
Jennifer McCann MLA
Adrian McQuillan MLA
Peter Weir MLA
In Attendance:
Shane McAteer (Assembly Clerk)
Vivien Ireland (Assistant Assembly Clerk)
Colin Jones (Assistant Assembly Clerk)
Paula Sandford (Clerical Supervisor)
Mary Thompson (Clerical Officer)
Apologies:
Mervyn Storey MLA (Deputy Chairperson)
Fra McCann MLA
Declan O’Loan MLA
Dawn Purvis MLA
The meeting commenced at 10.11 am in open session.
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Apologies
Apologies are detailed above.
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Draft Minutes of Proceedings 17 October 2007
Agreed: for publication on the Assembly website.
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Matters Arising
Members noted the following:
- Outstanding requests for information from the Department of Finance and Personnel (DFP).
- Draft letter to the other statutory committees inviting submissions for the Committee’s forthcoming report on the Draft Budget 2007.
Agreed:that the letter will issue as drafted.
- ‘Take Note’ debate on the Draft Budget 2007.
Agreed: that either 26 or 27 November would be a suitable date. A draft motion will be considered by the Committee at its meeting on 7 November for tabling with the Business Office.
- Response from Special EU Programmes Body.
Agreed: that members are content with the additional information provided.
- Publication of committee research papers.
Agreed: that all research papers provided to the Committee by Assembly Research & Library Service, including those provided recently in respect of the Review of Domestic Rating Reform, will be posted on the Committee website at the earliest opportunity.
- Official Report of the evidence session on the Dormant Accounts Bill
Agreed: that an Official Report will be made of this session and published on the Assembly website.
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DFP Briefing on the Review of Policy on the Location of Public Sector Jobs
The Committee received a briefing on the proposed Terms of Reference for the Review from Chris Thompson and Emma Wilson, Corporate Services Group, DFP.
Agreed: that follow up information will be requested from DFP on issues raised during the briefing.
Agreed: that the Committee will seek to commence a dialogue with the Chair of the Review Group once appointed.
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Evidence Session on Legislative Consent Motion for Dormant Accounts Bill
The Committee received oral and written evidence from Richard Pengelly and Agnes Lennon, Central Expenditure Division, DFP, and Neil Lambe, Principal Legal Officer, Departmental Solicitor’s Office, DFP.
Mr Weir joined the meeting at 10.55am.
Agreed: that a draft Official Report will be sent to the DFP officials to provide a written response on a number of issues raised by members. The Committee will reconsider this issue on 7 November.
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DFP Briefing on forthcoming Civil Registration Bill
The Committee received a briefing from Dr Norman Caven, Registrar General and Annette Gilkeson, Assistant Registrar General, Northern Ireland Statistics and Research Agency, and Cathy Collins, Principal Legal Officer, Departmental Solicitor’s Office.
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Subordinate Legislation – The Lands Tribunal (Amendment) Rules ( Northern Ireland) 2007
The Committee had previously considered the SL1, Statutory Rule and Explanatory Memorandum and had no concerns with the policy implications or merits of the provisions in the legislation. The statutory rule had been included in the Fourth Report of Session 2007/08 by the Examiner of Statutory Rules and no issues were raised from the Examiner’s technical scrutiny.
Question put and agreed: that the Committee has considered the Lands Tribunal (Amendment) Rules ( Northern Ireland) 2007 and had no objection to the rule.
The meeting continued in closed session at 11.44am.
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Consideration of Draft Committee Response to the Review of Domestic Rating Reform
Agreed: that the consideration of the Committee’s draft response to the Review of Domestic Rating Reform will be held in closed session, which is in line with normal practice for consideration of draft committee reports.
Members considered a response from DFP to queries raised at the Committee meeting on 17 October 2007.
Members noted a paper on congestion charges and road tolling, which had been received from the Federation of Small Businesses. This was included with the other written evidence received by the Committee.
Members also noted written comments on the draft response from Mr O’Loan and Dr Farry, which had been circulated in advance of the meeting.
The Committee undertook a paragraph-by-paragraph consideration of the 3 rd draft of the Committee response as follows:
Paragraphs 1 – 4 were agreed.
Paragraph 5 was agreed subject to a minor addition.
Paragraphs 6 – 7 were agreed.
Paragraph 8 was agreed subject to minor amendment.
Paragraphs 9 – 11 were agreed.Members deliberated on paragraphs 12 -16.
Agreed: To select paragraph 14 for the Committee’s recommendation on the option of ‘Changes to the Level of Maximum Cap’.
Paragraphs 17 - 19 were agreed.
Paragraph 20 was agreed as the Committee’s recommendation on the option of an ‘Introduction of a Minimum Payment’.
Paragraphs 21 – 25 were agreed.Members deliberated on paragraphs 26 -27.
Dr Farry: I beg to move
That paragraph 26 is selected for the Committee’s recommendation on the option of an ‘Introduction of Rating for Vacant Domestic Properties’, subject to inserting ‘starting with the properties with higher values’ after ‘implementation’ in line 5.
Question put and agreed to.
Paragraphs 28 – 32 were agreed.
Paragraph 33 was agreed subject to minor amendment.
Paragraph 34 was agreed.Members deliberated on paragraphs 35 – 36.
Agreed: To select paragraph 35 for the Committee’s recommendation on the option of ‘Amendments to the Rate Relief Scheme’ subject to the following being added to the end of the paragraph:-
‘…NI ratepayers if the increase is not funded by the UK Government as part of a wider reform of housing benefit. On the issue of funding uplift, the Committee calls on the Department to ensure that, by introducing this locally, NI would not subsequently lose out if the UK Government follows suit’.
Paragraphs 37 – 39 were agreed.
Members deliberated on paragraphs 40 – 41.
Agreed: To select paragraph 40 for the Committee’s recommendation on the option of ‘Revision of existing provision for education and travelling relief’.
Paragraphs 42 – 45 were agreed.
Members deliberated on paragraphs 46 – 47.
Agreed: To select paragraph 46 for the Committee’s recommendation on the option of an ‘Introduction of deferred payment scheme for pensioners’.
Paragraphs 48 – 50 were agreed.
Members deliberated on paragraphs 51 – 52.
Agreed: To select paragraph 51 for the Committee’s recommendation on the option of a ‘Revision of the early payment discount’.
Paragraphs 53 – 56 were agreed.
Members deliberated on paragraphs 57 - 58 and noted the written comments on these paragraphs which had been received from Mr O’Loan.
Agreed: To select paragraph 58 for the Committee’s recommendation on the option of ‘Reprofiling the existing Transitional Relief scheme’, subject to this paragraph being amended to read as follows:-
‘The Committee considers that the Department should establish whether there is sufficient evidence of need which would justify the significant administrative burden and revenue loss associated with an extension of the transitional relief scheme beyond the present 3-year period.’
Paragraphs 59 – 63 were agreed.
Members deliberated on paragraphs 64 - 66.
Agreed: To select paragraph 66 for the Committee’s recommendation on the option of a ‘Graduated Tax System’, subject to minor amendment.
Paragraphs 67 – 71 were agreed.
Members deliberated on paragraphs 72 – 73.
Agreed: To select paragraph 73 for the Committee’s recommendation on the option of a ‘Single Person Discount’.
Paragraphs 74 – 75 were agreed.
Members deliberated on paragraphs 76 – 77.
Agreed: To select paragraph 76 for the Committee’s recommendation on the option of a ‘Single Pensioner Discount’.
Paragraphs 78 – 80 were agreed.
Members deliberated on paragraphs 81 - 82 and noted the written comments on these paragraphs which had been received from Mr O’Loan.
Agreed: To select paragraph 81 for the Committee’s recommendation on the option of an ‘Automatic Pensioner Discount’, subject to this paragraph being amended to read as follows:-
‘The Committee supports the case for an automatic discount for pensioners over the age of 75. In addition, the Committee recommends further analysis by the Department of the affordability, in terms of revenue loss and of the potential impact on other taxpayers, of introducing an automatic pensioner discount. The Committee considers that this reform should be introduced if the further analysis indicates that it would be affordable.’
Paragraphs 83 – 87 were agreed.
Members deliberated on paragraphs 88 – 89.
Agreed: To select paragraph 88 for the Committee’s recommendation on the option of ‘Broadening of Existing Disabled Persons Allowance Provision’, subject to this paragraph being amended to read as follows:-
‘The Committee considers that there is a need to promote understanding and awareness of the existing Disabled Persons Allowance, both in terms of its rationale and the eligibility. The Committee recommends that the Department undertakes further analysis to establish the impact of the existing Disabled Persons Allowance before giving further consideration to the merits of the various options for broadening the provision.’
Paragraphs 90 – 92 were agreed.
Members deliberated on paragraphs 93 – 94.
Agreed: To select paragraph 94 for the Committee’s recommendation on the option of ‘Circuit Breakers’.
Having declared an interest, as someone who provides assistance on a family farm, Mr Beggs did not take part in the deliberations on the option of ‘Enhanced Discount to Farmers’.
Paragraphs 95 was agreed subject to minor amendment.
Paragraphs 96 – 97 were agreed.
Members deliberated on paragraphs 98 – 99.
Agreed: To select paragraph 98 for the Committee’s recommendation on the option of ‘Enhanced Discount for Farmers’.
Paragraphs 100 – 103 were agreed.
Members deliberated on paragraphs 104 – 105.
Agreed: To select paragraph 105 for the Committee’s recommendation on the option of an ‘Introduction of Discount for Owner Occupiers’, subject to the following sentence being added at the beginning of the paragraph:-
‘The Committee considers that the option of introducing discount for owner occupiers should instead be framed in terms of applying an additional rate on second homes.’
Paragraphs 106 – 109 were agreed.
Members deliberated on paragraphs 110 – 111.
Agreed: To select paragraph 110 for the Committee’s recommendation on the option of ‘Rates Credits’.
Paragraphs 112 – 113 were agreed.
Paragraphs 114 – 117 were agreed.
Members deliberated on paragraphs 118 – 119.
Agreed: To select paragraph 119 for the Committee’s recommendation on the option of ‘Banding of Capital Values (Council Tax type system)’.
Members deliberated on paragraph 120.
Dr Farry: I beg to move
That the following additional points be included in the table under ‘Arguments For’ the option of a ‘Local Income Tax’:
(a) ‘Some of the drawbacks of a Local Income Tax could be mitigated to an extent through application of the option at a Northern Ireland wide level.’
(b) ‘The application of Local Income Tax could be simpler than a series of rates reliefs.’
(c) ‘The Tax and Benefits system already takes families/dependents into account.’
(d) ‘There are several international examples of an income tax funding local or regional services.’
Question put and after further deliberation it was agreed: That the proposed points at (a) and (d) will be added under ‘Arguments For’ in the table at paragraph 120.
Paragraphs 121 – 126 were agreed.
Members deliberated on paragraphs 127 – 129, which included the following options for a Committee recommendation on ‘Local Income Tax’:
Paragraph 127 – ‘The Committee recommends that the Executive should take steps to introduce a local income tax, in particular as a replacement for regional domestic rates, as this would align local taxation more closely with the ‘ability to pay’ principle.’
Paragraph 128 – ‘Whilst recognising that there was no clear consensus in the evidence as to the merits of introducing a local income tax, the Committee recommends that the Department considers this longer-term option further in the context of the decision of the Scottish National Party Coalition to introduce a capped local income tax by 2010. In particular, the Committee believes that this further consideration should focus on the potential of a local income tax as a replacement for regional domestic rates, with the district rate continuing as a property tax based on capital value.’
Paragraph 129 – ‘Having considered the available evidence, the Committee recommends that the option of a local income tax should not be considered further at this stage but that the option could be reviewed in the longer term and in light of any future experience of a local income tax operating in Scotland.’.
As a consensus could not be reached on any one of the options, the Chairperson, Mr McLaughlin, proposed:
That paragraph 129 is selected as the Committee’s recommendation on ‘Local Income Tax’, subject to substituting ‘could’ with ‘should’ in line 3.
Question put.
The Committee divided: Ayes 4; Noes 2; Abstentions 1.
AYES
Mr Beggs, Mr Hamilton, Mr McQuillan, Mr Weir.
NOES
Dr Farry, Ms McCann.
ABSTENTIONS
Chairperson (Mr McLaughlin)
Question accordingly agreed to.
Agreed: that a reference will be made in the Committee’s response to refer the reader to the relevant Minutes of Proceedings for details of amendments moved and not agreed and of divisions.
Paragraphs 130 – 132 were agreed.
Members deliberated on paragraph 133, which read as follows:
‘The Committee’s recommendation on local income tax also applies to the option of income tax varying powers.’
As a consensus could not be reached on this paragraph, the Chairperson, Mr McLaughlin, proposed:
That the recommendation in paragraph 133 is agreed subject to being amended to read as follows: ‘Having considered the available evidence, the Committee recommends that the option of income tax varying powers should not be considered further at this stage’.
Question put.
The Committee divided: Ayes 4; Noes 2; Abstentions 1.
AYES
Mr Beggs, Mr Hamilton, Mr McQuillan, Mr Weir.
NOES
Dr Farry, Ms McCann.
ABSTENTIONS
Chairperson (Mr McLaughlin)
Question accordingly agreed to.
Agreed: that a reference will be made in the Committee’s response to refer the reader to the relevant Minutes of Proceedings for details of amendments moved and not agreed and of divisions.
Paragraphs 134 – 136 were agreed.
Paragraph 137 was agreed as the Committee’s recommendation on the option of a ‘Local Sales Tax’.
Paragraphs 138 – 140 were agreed.
Paragraph 141 was agreed as the Committee’s recommendation on the option of a ‘Poll Tax’.
Paragraphs 142 – 147 were agreed.
Paragraph 148 was agreed as the Committee’s recommendation on the option of a ‘ Tourist Tax’.
Paragraphs 149 – 154 were agreed.Members deliberated on paragraphs 155 - 157 and noted the written comments on these paragraphs which had been received from Mr O’Loan.
Agreed: To select paragraph 156 for the Committee’s recommendation on the option of ‘Road Charging’, subject to the paragraph being amended to read as follows:
‘Whilst recognising that there was no clear consensus in the evidence as to the merits of road charging, the Committee recommends that the Department considers the option further, particularly in terms of its potential economic impact, costs and benefits, feasibility, effectiveness in reducing road congestion, and in the context of decisions on the other rating reforms.’
Paragraphs 158 – 162 were agreed.
Members deliberated on paragraphs 163 – 164.
Agreed: To select paragraph 163 for the Committee’s recommendation on the option of ‘Green Taxes’, subject to substituting ‘taxes’ with ‘taxes/credits’ in line 1.
Paragraphs 165 -172 were agreed.
Members deliberated on paragraphs 173 – 174.
Agreed: To select paragraph 174 for the Committee’s recommendation on the option of ‘Land Valuation Taxation’.
Paragraphs 175 – 177 were agreed.
Members deliberated on paragraphs 178 – 179.
Agreed: To select paragraph 178 for the Committee’s recommendation on the option of ‘Derelict Land Taxation’, subject to the deletion of the last sentence.
Members deliberated on Paragraph 180.
Dr Farry: I beg to move
That paragraph 180 is agreed subject to the following being added to the end of the paragraph:
‘The Committee recommends that the Regional Rate and District Rate element of rates bills should be clearly differentiated on household rates bills, including through specifying the precise sum that is being allocated to each.’
Question put and agreed to.
Members deliberated on Paragraph 181.
Dr Farry: I beg to move
That paragraph 181 is agreed subject to the following being added to the end of the paragraph:
‘The above comments of the Committee are limited to the matter of transparency, and are made without prejudice to wider discussion on the recommendation of the Independent Review of Water Reform.’
Question put and agreed to.
Paragraphs 182 – 186 were agreed, subject to adding an additional paragraph to explain that, when finalising the response, the Committee had received correspondence from the NI Fair Rates Campaign relating to the uptake of housing benefit and rate rebate claims from owner-occupier ratepayers.
Agreed: that a reply to the correspondence from the NI Fair Rates Campaign will be sought from DFP and that both pieces of correspondence will be included as appendices to the Committee’s response.
Paragraphs 187 – 193 were agreed.
Paragraph 194 was agreed subject to the third and forth sentences being amended to read as follows:‘However, the Committee has been advised that, even within existing legislative parameters, there are opportunities to create a more progressive system of regional taxation that would not adversely affect economic development.’
Paragraph 195 was agreed.
Agreed: That the amended Committee response to the Review of Domestic Rating Reform will be sent to the Department as soon as possible.
Agreed: That the amended Committee response, together with the evidence received, will be formatted as a formal Committee report and considered at the meeting on 7 November with a view to the report being approved for publication.
The meeting continued in open session at 1.37pm
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Committee Work Programme
Members considered the current draft of the Committee work programme until Christmas recess.
Agreed: that the current draft work programme will be published on the Assembly website.
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Correspondence
Members noted the following correspondence:
- DFP - Statutory Legacy.
Members noted that the Department has accepted several of the Committee’s earlier proposals.
Agreed: that the Committee will provide a written response to the Department recommending that the period of five years for the review of statutory legacy figures be reviewed regularly.
- DFP – SL1 for The Administration of Estates (Rights of Surviving Spouse or Civil Partner) Order ( Northern Ireland) 2007.
Agreed: that the Committee has no concerns with the statutory rule and will not require DFP to provide any further briefing.
- Committee for Social Development - Inquiry into Town Centre Regeneration.
Agreed: that the Committee for Finance and Personnel was not in a position to make a submission to the Inquiry but will wish to consider any response provided to the Inquiry by DFP.
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Any Other Business
None.
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Date, Time and Place of Next Meeting
The next meeting will be held on Wednesday, 7 November 2007 at 10.00am in Room 152 Parliament Buildings.
The Chairperson adjourned the meeting at 1.39pm.