John O'Dowd
Upper Bann · Sinn Féin · Northern Ireland
“As I set out in response to the previous question, we have in place the vacant property rate relief scheme and the small business rate relief scheme, which are very successful. I set aside £10 million in the draft Budget for small business rate relief to be invested.”
“I am particularly keen to hear from those impacted by vacant commercial units and especially about how any phased increase can be implemented in a sustainable way that is fair, proportionate and sustainable within the tax system.”
“I outlined my intent to take that approach in my statement on 18 November, alongside the fact that reform of rating policy should support growth, make better use of property and ensure that the system is fair, proportionate and aligned with wider economic objectives.”
“The accelerator will operate alongside our highly successful Back in Business scheme, which has helped to bring over 100 vacant high street properties back into use since May 2024. Those issues have been the subject of considerable interest and comment in the Assembly, and it is right that we grasp the nettle now.”
“There are no circumstances in which a hard border would be good for the people of Ireland; it would not be good for anyone. Those who suggest that are being naive at best and dangerous at worst, in the sense of not understanding this society. <BR /> <BR />Rural communities along the border are one and the same.”
“This announcement represents the next step in that. That said, I also put on record my intention to strengthen support for small businesses. In that vein, £10 million has been set aside in the draft Budget to broaden the impact of the small business rate relief scheme in order to increase the number of businesses that can benefit from it.…”
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“<BR /> <BR />I draw Members' attention to the report on our recent public consultation on the details of the baby loss certificate scheme that was published last week. The report sets out the views and opinions of the 1,182 people and organisations that responded to the consultation on a wide range of matters, including eligibility criteria, certificate content and changes. I am grateful to all those who took the time to contribute to the consultation, and I am sure that it was difficult for many contributors as they reflected on their personal sad experiences. The consultation will help to shape the scheme around the needs and expectations of families. <BR /> <BR />I turn to the amendment.”
“Members will recall from the Consideration Stage debate two weeks ago that the Bill will do three important things. First, it will place the temporary power contained in the Coronavirus Act 2020 that enables the remote registration of deaths and stillbirths and the electronic transfer of registration documents on a permanent footing. Secondly, it will rectify differences in the birth and stillbirth registration processes for some opposite-sex and same-sex female parents. Thirdly, it will enable the making of secondary legislation for the introduction of a baby loss certificate scheme. I am grateful to Members for the support that they have shown for the Bill to date and, in particular, for the favourable comments from all sides on the proposed baby loss certificate scheme.”
“Further to that point of order, Mr Deputy Speaker, what would be the appropriateness of the Opposition coming forward with any proposals or any idea?”
“Those protections remain in place and will continue to protect those people. If people find themselves having to pay a greater percentage of rates, because the maximum capital value rises, and if their income qualifies them for protections, those protections will continue. The Older People's Commissioner recognised that protections are in place in his response to the consultation. Both the proposals that the Member refers to and the proposals that I am announcing today are fair and equitable and protect the most vulnerable in our society.”
“The proposals that I put before us today open up the property market to a challenge and an opportunity that, thus far, is only lying vacant and empty.”
“The non-domestic vacant rating policy that I am announcing today and the proposals for it will encourage property owners to make those properties usable again, whether that is by reletting it to a business or a business entering it because of the other small business rate relief enhancements that we want to do or because of the expansion of businesses or whether it is driven through the fact that a property owner may say to himself, "Well, if I continue to leave this former business property empty, I will have to pay increased rates on it. Why do I not use it for housing? Why do I not convert it into property?". Will it be more attractive when they put it on the market and housing associations perhaps purchase those properties moving forward?”
“However, if we are bringing in significant extra revenue, there is a cost associated with collecting that revenue, but, as long as we collect more revenue in a fair and equitable way, the Member will, I think, accept that there are costs associated with that.”
“As the Member knows from a previous debate here, the rates debt has reduced by 20%. We continue to take action on the rates debt. I want to see further reduction in that, but, when you are collecting the scale of revenue that we are collecting, there will be a certain amount of debt because of factors including representations from MLAs to my Department around trying to assist ratepayers who find themselves facing genuine challenges, so there is a balance to be got in all of those things. However, there are also those who will not pay or refuse to pay, and they will be pursued vigorously through the courts. <BR /> <BR />As for the estimated £20 million in revenue collection, at this stage, I am not sure what percentage will be used for what the Member has outlined.”
“Across a wide range of topics, challenges and opportunities facing the Assembly and the Executive, we need to work in partnership with one another. Doing so will mean that there has to be give and take on all sides and being open to ideas and discussions around proposals on all of these things. The reality is that no one is expecting the Chancellor to announce a Budget that will alleviate the pressures that our public services, business communities and workers and families are under. Therefore, the Executive have to look at new and imaginative ways in which we can help ourselves. I believe that the proposals that I have outlined today and the proposals in the previous paper that I put before the Executive are imaginative and assist the Executive to meet their challenges and opportunities moving forward.”
“If they are prepared to expand, we will also support them through that proposal. There is a balance to be achieved in all of those things, but looking to expand the small business rate relief scheme is a good way forward.”
“Rent levels are driven by the market and what people are prepared to pay, and I have limited ability to change that. However, if we support more businesses through the small business rate relief scheme, the burden of the rent that is placed on them will be lessened, because their rates will be reduced.”
“This is about how we support small businesses, enhance our town centres and city centres and move away from the blight of vacant properties.”
“I am not exactly sure of the point that the Member is making. Apologies. All businesses pay some form of rates, with the exception of charity shops. My intention through the small business rate relief scheme is to support more businesses by looking at support from 20% up to 50% and looking at what categories those fall into. Non-domestic vacant rating is currently sitting at 50%. I want to see that rise over a number of years up to 75%, and then up to 100%. When that is fully operational, it will bring us in around £20 million extra. I will provide further clarity to the Member if I have not correctly understood the point that he made. My understanding is that all businesses are involved in the payment of rates of some kind.”
“Taxation has a number of policy intentions. One is, obviously, to raise revenue. Another is to support habits that a Government want to progress. The revitalisation of our town centres, city centres and villages is important. Non-domestic properties lying vacant is a blight. The proposal fits in with work that other Ministers are doing. <BR /> <BR />As I said in my statement, all rating policies will be reviewed over the next number of years. That review will include whatever support or lack of support is in place at that stage. We want to see properties being brought back into use. The Communities Minister is facing challenges with social housing and housing. If I can assist in a way that brings properties back into use, whether for housing, commercial use or something else, I will do so.”
“If we can encourage more businesses to expand physically, that will be good news for our construction sector and our economy in general. I am delighted to be able to bring forward the proposal, and I hope that it will move forward quite quickly.”
“That is a very innovative way to move forward and encourage our businesses that want to expand to do so. Quite understandably, when a business owner is looking at their future business plans and to expand, they will have to take into account whether their rates will go up as a result of that and whether, while they are establishing that expansion of their business, they will be able to afford it. If the proposal goes through, we will say to businesses, "Yes, move ahead with that expansion and create a larger premises. We will support you, at least in the first year of that expansion, in relation to your rates. We won't charge you for the additional space that you have". That will allow them time to develop that expansion of their business.”
“I can understand some of the frustration that is in sectors out there about this, but we have to work our way through those processes and be mindful that significant supports are already in place.”
“It is worth noting that 75% of our small businesses receive support through the rates system. It costs the Executive somewhere in the region of, I think, a quarter of a billion pounds annually. That includes pubs and the hospitality sector, so quite a significant support package is in place. However, I thought that it was only right and proper that, given that Scotland and England are going through a process and will garner data and information that is similar to what we require for our system, we await their review. There is no point in my duplicating work that is going on elsewhere at this stage. Work is about to start, I understand. We will garner the information and challenges from that and see how we can support our business or what changes need to be made through that.”
“If others have alternative proposals, I am open to hearing those as well.”
“Some of the changes are possible with the non-domestic vacant rating policy. We have to identify finances to go towards more support for small businesses through the small business rate relief scheme. I could come to the Chamber and say, "I want to do this, but I need more money", I could look at myself and say, "Can you give me more money?", or I could bring forward proposals that identify from where within the current system we could raise finances that are fair and equitable and put protections in place, and we could then move forward in that direction. We have not yet had discussion or agreement at the Executive on the proposals. I continue to hope that that paper will be presented and that we can have discussion and make progress on it. I think that it is fair and equitable.”
“There has been engagement on that through a previous review. While the Older People's Commissioner can obviously speak for herself, the commission is on record as saying that the review and proposals that we have brought forward are workable. Protections are in place for the most vulnerable in our society, and older people will come under those protections if the changes that we propose bring them into a category for that. That engagement has proven worthwhile, both to the commission, hopefully, and to my officials for planning a way forward on the proposal. As I said in my statement, change is difficult, but we have to do things differently and, as an Executive, look at areas where we can raise additional finances. I believe that the changes that I have proposed are fair and equitable and have protections in place for the vulnerable.”
“It will require cross-departmental working. I am conscious of the AERA Minister's Dilapidation Bill. Through the rates process here, we can assist in regenerating our town centres. Centrally, that is the Communities Minister's role, although the AERA Minister is playing a role, and I can play a role as Finance Minister. With a fair wind, we can complete some of the work within the mandate. That will require some legislative changes to be made, and I have asked officials to start work on those immediately to see how quickly we can progress the matter.”
“I concluded my remarks by saying that partnership working in the Chamber and around the Executive table will be required if the changes are to be delivered. I believe that, when Members have had the opportunity to scrutinise what I am proposing, they will see the benefit to the business sector and the fact that it is the proper and right way to move forward. If we keep that in mind, progress can be made quickly.”
“One criticism that I recall hearing from the Member is that we have not progressed reviews quickly enough. He now criticises me for progressing reviews too quickly. As the Member will be aware, the fact of the matter is that to change policy and legislation, there has to be a review framework. and there has to be consultation and engagement with the sector. Following that, we can come forward with either a policy change or legislative change. In my statement, I set out a number of areas in which, I believe, both policy change and legislative change will benefit our business sector, and I set a time frame within which I wish to make those changes. I assure the Member that I am dedicated to driving that agenda forward.”
“We remain on track to facilitate changes for businesses by April 2026, provided that political agreement can be achieved to do so. I recognise that change is hard, but, if we keep doing the same thing, we will keep getting the same outcomes. People elected us to serve and deliver, and I want to deliver positive change, but that will require buy-in and partnership working.”
“As part of the review, we worked closely with the hospitality sector. Since the Executive returned, a central ask from that sector has been for an assessment of the valuation methodology for the receipts and expenditure method of valuation, where that is used for pubs and hospitality. Similar sentiments have been expressed in Scotland and England, and both jurisdictions have announced that they will review how the methodology is used there. I am pleased to confirm that we will take account of any findings of those review processes in order to assess any implications that they may have for our local valuation processes. <BR /> <BR />My Department has done significant work over a period of less than a year since the strategic review of rates was announced.”
“The consultation will seek views on policy options for using the rating system to aid business expansion rather than inhibit it, while also unlocking future increased rates income for local and central government. That unlocking of future tax-base growth will operate alongside initiatives that have been brought in since the restoration of the Executive last year, such as the Back in Business scheme.”
“In turn, that additional rates liability creates more revenue for public services. I recognise, however, that the initial outlay, coupled with the associated increased rates liability, can be off-putting for some businesses that are waiting to take steps towards expansion. To that end, I want to progress rating policy so that the additional rates liability incurred is staggered. That may mean the difference between a business deciding to expand and deciding not to. <BR /> <BR />I am happy to announce that my Department will undertake a consultation process in the new year to progress development of the business growth accelerator policy.”
“It is, however, a significant change, connecting so many strands of Executive policy, so Executive agreement will be required before the change can be implemented. I have instructed my officials to take forward the policy work that is required to secure Executive agreement. I also appreciate that, in order to respond to the concerns expressed during the review, there will need to be sufficient lead-in time for any change to allow owners to respond to that future shift in policy direction. <BR /> <BR />As I have stated, engagement with stakeholders over the summer was extensive. One of the discussion points was this: what can be done through the rating system to encourage business expansion? When a business makes a decision to expand, its rates liability will usually increase immediately after the work is completed.”
“Support for increasing liability was understandably weaker for less commercially viable areas, where owners can struggle to let properties, despite taking active steps to do so. On balance, however, I take the view that, in order to tackle the high prevalence of vacant units, I now need to move the non-domestic vacant rate from 50% to 75% and then to 100%. When fully implemented, it is estimated that the changes have the potential to unlock a further £20 million of revenue between central and local government. <BR /> <BR />Given the Executive's Programme for Government (PFG) commitments on housing and regeneration and the work being done on preventing dilapidation, there is a unique window of opportunity to maximise the impact of the changes through working actively across Departments.”
“<BR /> <BR />The progress made on taking forward policy considerations on rate relief demonstrates my commitment to delivering positive change. To be clear, in order to translate policy into action, Members must understand that progressive rating does not mean considering policy proposals in isolation but as a whole. <BR /> <BR />On the second area for review, I have already stated in the Chamber and at the Finance Committee that I want to increase the level of liability for non-domestic vacant rating. Admittedly, the views on that policy varied in the review feedback. The case for increasing liability was clear-cut for commercially attractive areas and for areas where there is clear regeneration potential.”
“Those two factors, plus the fact that changes can be made alongside doing the revaluation exercise, give us an opportunity to make important changes while maintaining the overall level of rating revenue generated through the broader rating system. <BR /> <BR />I am also willing to consider all ideas on co-funding models from Departments and councils to enhance small business rate relief support. Supporting small businesses should be high on all our agendas, and working in partnership to optimise joint efforts is my preferred approach. My officials are working at pace to put out proposals for consultation between now and the new year in order to get the views of businesses before final proposals are submitted to Executive colleagues for decision.”
“Given that Reval2026 will be the fourth revaluation process in 11 years, it is my preference to raise the rental value thresholds so that they are broadly in line with valuation list growth. I will consult in the next few weeks on both methods in order to continue to allow changes to be made for the next rating year. The scalability pertaining to both forms of enhancement is critical and forms a key part of the discussion. It is no secret that the Executive's finances are under significant pressure at present. I have brought forward proposals on two policy areas that would raise £9 million. Likewise, lowering operating costs through rate support will in itself have the potential to grow the tax base by bringing more businesses into the rating system and generating more revenue in overall terms.”
“I see no hierarchy in need. <BR /> <BR />I want to encourage business start-ups of any type and to do what we can by lowering operating costs for businesses in that category. There are two methods by which I can deliver an enhancement to the current small business rate relief scheme. The first method is to increase the amount of reductions delivered under the scheme. The current reduction levels of 20%, 25% and 50% have remained static since the scheme was last reviewed in 2012. It is my preference to increase those reduction levels. The second method of enhancement is to increase the upper valuation threshold that applies in the scheme. Again, that upper valuation level has not been increased since 2012 and needs adjusted to modern rental values.”
“It comes as no surprise that other jurisdictions are also supporting that ambition through their own policy proposals. <BR /> <BR />The analysis from my Department concurred that there was a need to enhance support aimed at bolstering businesses in smaller properties. While the approach taken in other jurisdictions has been to cherry-pick specific sectors, that is often done on the basis of legacy support put in place during the pandemic. I have listened to the views provided and am instead in favour of taking a sector-neutral approach to any enhancement of small business rate support. I want to create an environment that brings businesses into town and city centres. However, I want that to be an environment that creates a level playing field for all types of businesses by enhancing support across business types.”
“I want to see extra help going to small business properties that provide vital employment and support workers, families and communities. Today's proposals, which stem from the discussions with businesses, align with my desire to deliver positive change for businesses and boost economic growth. <BR /> <BR />First, I will talk about the small business rate relief scheme. It was clear from the strategic review of that area that there was an appetite among representative bodies, industry and local government for enhanced support to be delivered to small businesses. Our local economy is overwhelmingly made up of SME businesses, and around 90% of them are classified as microbusinesses with fewer than 10 employees. I fully endorse such an approach. A sustainable small business sector is at the heart of a thriving economy.”
“The proposals that I am bringing forward pave the way for that while recognising the financial realities within which we are operating. It would be easy for me to set out my policy aims and seek additional funding to support them: that is not what I am doing. Operating a responsive and progressive rating system cannot mean layering additional supports at the cost of other Executive priorities. Instead, we must carefully consider how best the limited support levers available can be applied in the current operating context to best effect. I am not seeking additional funding to enhance support for businesses; instead, I am asking for support to deliver changes in one part of the rating system that allow additional support in another, with the two adjustments operating on a cost-neutral basis.”
“Where changes to make the system more progressive can act to deliver change in one area, those savings can then allow us to ease the tax burden on others. <BR /> <BR />Following the public consultation on increasing the maximum capital value and reducing the early payment discount, which concluded in April, responses were assessed and proposals put forward to the Executive in June for a decision. Those proposals have the potential to unlock £9 million of government spending power. To illustrate the significance of that in rating terms, that £9 million being diverted to the small business rate scheme enhances an existing scheme that costs £22 million and already supports 30,000 ratepayers. <BR /> <BR />Many in the Chamber have called for additional support for small businesses since the Executive returned last year.”
“Today, I will outline how I intend to bring about change that will see enhanced support for small businesses, which are the backbone of our local economy; change that tackles the high level of vacancies in our town and city centres; change that supports businesses that are starting out; and change that helps accelerate business growth. I cannot do that in isolation, and I have spoken many times in the House and around the Executive table of the constrained financial environment within which we operate. In terms of how we deliver rating change in such a context, the interlinked nature of rating policy, both domestic and non-domestic, is critical. That is particularly the case as we aim to improve the system with limited resources.”
“Less than a year ago, it was announced that my Department would undertake a systematic review of all rates supports. Substantial progress has been made to date, with four policy reviews completed. I am accelerating the review process and can confirm today that every rate support will have been reviewed by the end of the 2027-28 rating year. The remaining policy areas will be front-loaded in order of strategic importance within the remaining time frame. <BR /> <BR />The aim of the process has been and remains to secure positive and progressive changes to the rating system. That need has been echoed strongly by interested parties through the course of significant engagement with my officials.”
“I wish to provide Members with an update on the progress made on the review of the rating system and my intended steps over the coming weeks.”
“That is another reason why it is important that Ministers have these settlements earlier rather than later in the financial year. I suspect that that question is more for the Department for Communities, but I assure the Member that I am more than happy to cooperate. If there is a way around the rules on benefits that the Executive can deal with that without further financial consequences, I am happy to cooperate with the Communities Minister on that.”
“In this instance, the Executive have said to the Health Minister, "If you overspend, it will come off your next year's budget", but, in this case, we have approved what is known as a ministerial direction.”
“The Member refers to "stringent" fiscal rules. I want independence here, but, in the meantime, I want full fiscal devolution to ensure that the Assembly and Executive make the decisions on all the fiscal rules that govern them, because, in my opinion, some of the fiscal rules from Treasury hamper us. For instance, we cannot hold a reserve here, but I think that a reserve would be very useful to the Assembly and Executive. A departmental budget cannot be overspent — a departmental budget should not be overspent. An overspend may arise, but that has consequences for future years' Budgets, because the Treasury will immediately remove that overspend from the next year's Budget. That has consequences for the entire Executive, and the Executive have to make decisions on how they deal with the implications of Treasury actions.”
“That was emphasised again to the Health Minister, and he accepts it, but there still needs to be a savings programme in the Department of Health. Last Thursday was not a full stop on a savings programme in the Department of Health. That work has to continue, and we will continue to engage at ministerial and official level on the Health budget to ensure that we make it as balanced as possible.”
“In relation to broader Executive decisions, it was the Executive who decided to put an extra £55 million into childcare, and yes, I will take credit for that. If the Executive have to make difficult decisions, I will take responsibility for those. That is the nature of the game. You cannot shirk all responsibility, and the danger is that some will shirk all responsibility. When they do that, they do not deliver what the public expect of a leader in any organisation, which is to take a leadership role and take the hits with the highs. That is just the way it goes. <BR /> <BR />As for what the Health Minister has to do next year, we will not know exactly how much of an overspend there will be in the Department of Health until the end of this financial year.”
“Yes. Collectively and individually, Ministers are going to have to do that. As I said in response to one of our colleagues, it is better if Ministers identify pay awards early in the financial year, rather than later in the year. If there then needs to be a top-up as part of a broader award, that has to be done. There is now an opportunity for Ministers to look at a three-year pay award programme. That will give them and workers certainty in planning.”
“Anybody watching or listening to events in London — to the Chancellor or to those who debate and discuss the Chancellor's views — would have known clearly that there were not going to be major Barnett consequentials this year.”
“As you know, I was Minister of Education during difficult financial times, and my budget balanced each year. It is difficult and, at times, unpleasant for all Ministers, but that is why they are paid the big bucks. There is responsibility in that, and Ministers are paid the big bucks to make the decisions. As for how things move forward, people should have been discussing budgets and what we should do on 10 January, 10 February,10 March and 10 April, instead of on 10 November. Decisions should have been made in and around then, and statements issued from boards at that stage. <BR /> <BR />I have been clear with ministerial colleagues from the outset that I did not expect there to be any significant Barnett consequentials this year. That is not because I am some financial wizard.”
“However, similar percentage savings plans have had to be achieved in all Departments, and behind each of those is a very difficult decision for the Minister, the officials and everyone else who is involved. If we are to work to a plan, however, and that plan is the Budget Act, we must make those decisions and deliver in conjunction with that and with our Programme for Government.”