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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“Go raibh maith agat, a Leas-Cheann Comhairle.”
“<BR /> <BR />I look forward to Members' comments, and I commend the order to the Assembly.”
“In the period ahead, as Members will be aware, I will launch a review of the small business rate relief (SBRR) scheme, and, as part of that work, I want to look at what further measures can be taken to promote and sustain access to cash in urban and rural areas. <BR /> <BR />I turn to the statutory rule. Article 1 of the order sets out the citation, the commencement and the interpretation of provisions. Article 2 specifies a later date of 1 April 2026 for the purposes of the definition of "relevant year" in article 42(1G) of the 1977 Order, with the result that the exemption will continue until 31 March 2026. Article 3 revokes the Rates (Exemption for Automatic Telling Machines in Rural Areas) Order 2024, which had previously extended the exemption until 31 March 2025, prior to the measure expiring.”
“<BR /> <BR />The scheme will continue to apply to stand-alone rural ATMs that are individually valued in their valuation list, for example in separate units, on main streets or completely stand-alone units. For ATMs that are located in and valued as part of banks or building societies, the value of those machines is subsumed within the overall value of the property, meaning that they have no stand-alone rates liability. The current revenue loss associated with the measure continues to be modest, costing less than £50,000 in forgone rates revenue. <BR /> <BR />Although a modest measure in its scale and cost, the scheme continues to assist the retention of rural ATMs, which are important to many of our rural communities. The Finance Committee recognised that.”
“The order serves to retain the rural automatic telling machine (ATM) rates exemption scheme for the 2025-26 rating year. The scheme is an important localised measure with the policy objective of sustaining the provision of ATMs in rural areas. Previous research and analysis confirmed that stakeholders wanted to see the scheme retained, and it was one of the key requests from business organisations in the run-up to the Executive's return last year. I recognise that, as my officials have advised the Finance Committee in its engagement on the issue, the legislation goes some way towards helping the retention of specific ATMs in rural areas. The statutory rule (SR) extends the scheme to the end of March 2026.”
“I am more than happy to take a look at Mr O'Toole's proposal — we need to be imaginative and bold in our approach — but I will place on it the same premise as I used in the earlier debate: it will have to be evidence-based and data-driven, and we have to fully understand the positive and negative impacts of any decisions that we make not only on the rates base but on the broader business community and the economy. However, I am open to ideas and persuasion on all those matters. <BR /> <BR />The order before us today is a good measure, and, as I said, it has been copied elsewhere.”
“That ignores the fact that we are looking at the individual elements of the rating system, rather than simply doing a review. We are looking at each element to bring forward decisions. Members might be interested to know that reviews were carried out in 2007, 2012, 2016, 2017, 2019 and 2024. We now need to bring forward proposals for action, and that is what I intend to do during my time with this portfolio. I will look at the elements of our non-domestic and domestic rating schemes, bring them forward for decisions and move on to the next programme of work. <BR /> <BR />I will meet the business sector later this week.”
“I thank Members for their useful comments about the order. The scheme is an integral element in rebuilding the high street, as a number of Members referenced; in fact, the scheme was developed here and copied elsewhere. It was developed by my Department and copied in England, Scotland and Wales. The scheme was home-grown here. <BR /> <BR />Vacant commercial property is a blight on the appearance of our high streets across the North, as many Members have pointed out. By continuing the scheme, we can help to ensure that long-term empty commercial properties get another lease of life. That acts to improve the appearance of towns and create jobs in communities across the North. <BR /> <BR />The fact that the review process has taken over 10 years has been mentioned a number of times.”
“At the SL1 stage, Committee members indicated that they were content for the scheme to continue until 31 March 2026. Article 1 of the order sets out the citation and the commencement date, while article 2 provides for the amendment of article 31D of the Rates (NI) Order 1977 by substituting a new end date of 31 March 2026. I look forward to Members' comments. I commend the Rates (Temporary Rebate) (Amendment) Order (Northern Ireland) 2025 to the Assembly.”
“It will also help them adjust to full rates liability in due course and grow the tax base. At the same time, the Department will generate the same revenue as it would have done had the property remained vacant. As was outlined at the time of its reintroduction last year, the Back in Business scheme is one of those rare taxation policies that can create a long-term win-win outcome. The Department has scheduled a review of the exclusions that apply in the derating of commercial property for the new rating year. As a Department, we hope that that process will build on the foundations established by the Back in Business scheme to address the issue of vacant commercial units in our towns and cities. <BR /> <BR />Members of the Finance Committee received advice on the detail of the statutory rule (SR).”
“Since last May, 31 new and expanding businesses have availed themselves of the scheme, and that number continues to grow, along with a greater awareness of the provision. Today's extension of the scheme will allow Land and Property Services (LPS) to continue to receive new applications to the scheme up until 31 March 2026 and, critically, will allow the revised scheme, which has been in place for less than a year, to become better established. <BR /> <BR />The policy serves to make a stable and substantive difference to helping grow businesses, particularly in our town centres and on arterial routes. Critically, it moderates the business rate liability in a difficult first two years of trading, providing businesses with some certainty about their overheads and helping them budget.”
“That was available where a qualifying property had been empty for at least one year previously. In 2022, the then Finance Minister, Minister Murphy, amended the scheme to extend the duration of the 50% tax concession to 24 months in order to build a solid platform for new business occupations in the longer term. <BR /> <BR />The scheme is viewed as a vital step in boosting footfall for all businesses, new and old, and in helping to restore a vibrant business landscape.”
“Before dealing with the order itself, I will set out the background to the measure. The purpose of today's legislation is to extend the Back in Business scheme, which was reintroduced in May last year. The scheme serves to incentivise the occupation of property on the high street that is long-term vacant — property that has been unoccupied for the last 12 months and is therefore highly likely to remain unoccupied in the absence of any incentive. The scheme was first introduced as part of a package of measures aimed at assisting ailing businesses and improving the appearance of our town and city centres after the economic downturn. <BR /> <BR />The original scheme provided a one-year concession that allowed a 50% reduction to apply for the new occupier for one year.”
“I accept that no one likes to place further burdens on taxpayers, but the challenge from taxpayers will rightly be this: what difference will it make to public services? We all have a collective responsibility — more so in the Executive, I accept — to ensure that our public services improve.”
“Whether I agree with some of the policies or international connections of some of those companies, all of them provide employment here. Every one of them is putting a salary into a home. All companies support workers' families and communities. When we talk, quite rightly, about workers, we need to support the businesses that provide the employment and ensure that they treat those workers fairly. I will not make decisions without fully understanding their implications for the broader rates base and the broader economy and their impact on workers' families and communities. <BR /> <BR />I again recommend the order to the House. I believe that we are presenting a fair rates increase for businesses and domestic customers.”
“If I take action in one area of rating, what impact will that have on the sector in which I take that action? It may have a negative or a positive impact.”
“All rating policies are under review and will be over the next number of years. A saying that is very true, particularly when you are working in the Department of Finance, is that every action that you take has a positive and a negative reaction.”
“We allocated £61 million to Health for multidisciplinary teams; £27·5 million to the Department of Education for special educational needs; £20 million and £2·9 million to Justice; and £15 million to the Department for Infrastructure's urban drainage programme and £3 million for its proposals on transforming planning. All those are for the benefit of the public. <BR /> <BR />As I said, I have no difficulty with there being an Opposition in the Chamber; in fact, I think that it could bring value, but it has to bring alternatives.”
“In order to deliver public services, you need public workers. Public service workers have received pay increases over the past number of years, and there are proposals on the table for further pay increases. My first meeting as Finance Minister, by the way, was with the unions. I look forward to sitting down with the unions and others to discuss how we move forward in a three-year or four-year Budget and ensure that public-sector workers are properly and fairly paid in that period. <BR /> <BR />He talked about the other punishments that the Executive are going to impose on working-class communities. I am going to continue to invest in public services, just like the Executive did last week.”
“I am not objecting to your opposition; I am objecting to your style of opposition. I am objecting to the absence of alternatives. The Opposition in the South have to offer up an alternative Budget. They offer up an alternative Programme for Government. They offer up alternatives. I am asking you for the alternative. Today you are going to vote against £42·6 million extra going into the public finances, so the question is this: what are you going to cut from the Budget? The Budget is predicated on that additional money going into it. What are you going to cut off it? <BR /> <BR />Mr Carroll said that there was no proposal today for an increase in public-sector pay. You are wrong, Mr Carroll — absolutely wrong. Where do you think the £42·6 million is going? It is going into public services.”
“I will let you in in a moment. <BR /> <BR />He went on to tell us what is not in the Programme for Government or in this document or that proposal or the other. I put on record now that I am happy to sit down with you, Mr O'Toole, and work with you in a constructive manner on any proposals that you have on revenue raising or on the revenue or finance issues that relate to my Department. I will work with you constructively. What I find bewildering is the constant negativity about what the Executive should or should not be doing in the absence of any proposals on what you would do.”
“I welcome the Committee's work on the matter, and I note that it supported the order, albeit Mr O'Toole and Mr Carroll oppose it. Mr O'Toole went on to tell us about all the bad things that the Executive were doing and what they should and should not be doing. Nowhere in his speech, however, did I pick up on what the Opposition would do. If Mr O'Toole were standing in my place today, I wonder what the regional rate would be. Would it be 5% across the board? Would it be 4%, 2% or 1%, or would it be 0%? Nowhere did he tell me what it would be.”
“With every £1 million that we raise, we can employ 25 to 30 teachers, 25 to 30 nurses, 40 classroom assistants or 40 auxiliary workers. We can start closing the gap in childcare. Last year, we invested £25 million in childcare. Next year, we propose to invest £50 million in childcare through the Budget and £5 million through the June monitoring round. You can achieve none of those things if the regional rate remains static. You can make grandiose speeches and lambast the Executive. You can do all those things, but here is the reality: you will not have raised a single penny or increased investment in education, health, childcare or any other important matters that relate to our citizens' needs. <BR /> <BR />Mr O'Toole set out the Committee process.”
“I thank the Members who contributed to this important debate. A range of interesting but, perhaps, not always accurate views was expressed. <BR /> <BR />The key to these matters is what we do with every pound that we raise through rates increases. It is never popular to come into a political Chamber and say, "I support a rates increase" or "I support a tax increase", but you have to put that in the context of what you want to achieve through those increases. The increases that the Executive and I propose will raise an additional £42·6 million. A total of over £700 million will be raised through the regional rate, and well over £1 billion will be raised through the regional rate and local councils' rates. <BR /> <BR />Let us look at the regional rate and put the additional £42·6 million in context.”
“Go raibh maith agat, a Leas-Cheann Comhairle.”
“Article 3 specifies 29·8p in the pound as the commercial regional poundage and 0·5294p in the pound as the domestic rate poundage. <BR /> <BR />I look forward to hearing the comments that Members make in relation to the order, and I commend it to the Assembly.”
“How radical the improvement is will be a matter for the Executive as a whole to consider. For my part, I continue to progress policy to the point of Executive decision and build a progressive rates system based on the principles of fairness and equity, which aligns with and underpins the Executive's priority, stimulates our economy and supports the growth of our tax base by creating the conditions for businesses to thrive. <BR /> <BR />I move on to what is covered in the order in more technical terms. Article 1 sets out the title of the order and gives the operational date as the day after it is affirmed by the Assembly. Article 2 provides that the order will apply to the 2025-26 rating year through to 31 March 2026.”
“The order; the extension of the small business rate relief scheme; continued industrial derating support worth over £70 million; the Back in Business scheme; and the retention of the relief for rural ATMs were all secured in the past year by my Department and the Executive. It represents our ongoing delivery, in less than 12 months, to strike that balance. <BR /> <BR />Our work continues in this area as we progress our strategic road map for rating, which was outlined last year. We will continue that process as we move into year 2 of the strategic review of our rating system. <BR /> <BR />A consultation is ongoing on making the domestic rating system more progressive, and reviews of the aforementioned business rates scheme will be coming up in the next weeks.”
“The legislation before the Assembly reflects the uplift for domestic and business rates respectively that underpin the Executive's draft Budget for 2025-26. If the Assembly approves the order, it will mean that a domestic property with an average capital value of £123,000 will pay 60p a week more on the regional rate element of their bill. For businesses with a rateable value of £50,000, it will mean an additional £8·37 a week on that element. It will fix two regional rates in the pound for 2025-26: one for households and the other for business ratepayers. As I have said, the new rates have been set carefully to strike the right balance between generating income for vital public services and limiting increases as much as possible.”
“Those two areas have been selected to reflect the priorities of business stakeholders, and I am happy to prioritise them. I stress that "review" does not mean "removal". <BR /> <BR />For household bills, as I said, the domestic regional rate has previously increased at a similar level to the uplifts across England, Scotland and Wales; indeed, the increases in some local authorities in Britain are considerably higher, as all jurisdictions face the challenges posed by the autumn Budget. As an Executive coming into 2025-26, we continue to provide extensive support for businesses and households, including means-tested support for those on the lowest incomes. <BR /> <BR />I move to practical matters.”
“That is just one element of the over a quarter of a billion pounds of support that is provided to businesses through the rating system. Later today, the Assembly will have the opportunity to affirm the extension of the Back in Business scheme and the rural automatic telling machines (ATMs) exemption, both of which were restored by my Department last year. <BR /> <BR />Looking ahead, for stats on businesses in the rating system, my predecessor commissioned an Ulster University Economic Policy Centre study of the ongoing costs of doing business. In light of the autumn Budget and once that work is complete, my Department will review two support schemes in the business rates system: the small business rate relief scheme and the non-domestic vacant rating exclusions.”
“<BR /> <BR />Given the impact of the Chancellor's autumn Budget on businesses, the Executive took the deliberate step of agreeing that the regional rate increases for our local businesses should be 2% lower than those for households. The 5% and 3% increase for domestic and business rates respectively in today's order is an attempt to balance the clear need to raise money for vital public services while recognising ongoing challenges for businesses and households. <BR /> <BR />I am also announcing today that separate legislation has been taken through by my Department to extend the small business rate relief scheme for 2025-26, thus continuing to provide about 30,000 ratepayers here, in a tax base of 75,000, with reductions of between 20% and 50% in their rates bills.”
“Members will be aware that the Executive have no direct role in that decision-making process. This year, the Executive and councils had to undertake the rate-setting process in the difficult circumstances brought about by the Chancellor's autumn Budget at Westminster. The impact of specific decisions taken at that point on National Insurance contributions has led to well-documented concerns about increased costs for business, charities, the community and voluntary sector and central and local government. We are not alone in that, of course, with local authorities in England, Wales and Scotland increasing council tax by levels similar to the uplifts agreed by the Executive and our councils.”
“As Members will know, it provides a supplement to allocation via what is known as the "block grant" and constitutes between 4% and 5% of our overall spending power in the Budget. The regional rate is expected to raise in the region of £730 million in the forthcoming financial year. That will raise revenue that is vital to helping to fund our health service, childcare, education, public transport, roads and other essential public services and investment. The rating system as a whole provides significant revenue for both the Executive and councils, with well over £1·6 billion now being collected in rates — regional and district and domestic and non-domestic. <BR /> <BR />As well as the regional rate, the rates bill is made up of the district rates set independently by councils.”
“As Members will be aware, the order is made annually to set the regional rate. Members will also be aware from the written ministerial statement of 19 December 2024 of the regional rates levels on which the draft Budget was predicated. Those levels were agreed by the Executive in January to ensure that rates bills issue on time in April. Today's debate sees the Assembly undertaking its role in the annual process, debating the poundage agreed by the Executive and reflected in today's order. Before moving to the technical detail of the legislation, I will make a few points about the importance of the order. <BR /> <BR />The regional rate provides a vital source of income to fund public services.”
“The bids were agreed on the basis that they would not simply be five-year pilot programmes but would be integrated into Departments' delivery mechanisms. One of the board's roles will be to continue to monitor that. The board will report to me, and I, in turn, will report to the Executive. This is not a pilot scheme; it is about transforming public services in the long term.”
“As I said to Mr Gaston, I will continue to work with all Ministers on the delivery of the Programme for Government and on the change that is required to deliver public services.”
“The funding that is noted in front of you is successful and deals with part of the waste water treatment challenge that we face. I have previously said in the Chamber that, when we talk about waste water, we are often talking about hundreds of millions or hundreds of billions of pounds, but the reality is that a small injection of money at the right time and in the right place makes a difference. The £15 million will make a difference, and the £19 million that was announced in the October monitoring round made a difference. Let us look for finances where we can find them and at where we can do things differently on the transformation of waste water treatment. Let us also look for the significant funding that is required for waste water treatment works.”
“It is not my role today to answer questions on the Programme for Government. I understand that there was a full debate in the Chamber yesterday on the Programme for Government. I can, however, assure Mr Gaston that I will work with the Health Minister, as I will with all other Ministers, to deliver the Programme for Government commitments.”
“I cannot recall whether it is the full amount that was bid for, but it is quite a substantial investment. It looks at one of the elements of how we tackle the huge challenge of waste water infrastructure moving forward. Although not the sole solution, sustainable urban drainage will give us another option for how we deal with that huge challenge and in a way that is friendly to the environment.”
“I plan to make the board permanent before the second round and to propose a number of appointments to it that reflect different skill sets. In fairness to the three people who have worked on the interim board, they have done an excellent job. They have carried out their remit and allowed me, as Finance Minister, and the Executive to make this announcement today to transform public services. I will propose that we appoint at least two new people to the board: one will be an expert in science and data; the other's expertise will be in value for money.”
“The recommendations were made by the transformation board to the previous Finance Minister, who brought them to the Executive for ratification and agreement, or, if they so chose, disagreement. I should declare an interest as the former Infrastructure Minister. Of course, I would have liked to see the full £9 million given, but the board was dealing with bids of up to £750 million, so it had to make decisions or recommendations on the basis of the funding available to it. I think that the decisions and recommendations that have been made are good and will make a huge difference to the planning system and, therefore, to our economy.”
“We will have a debate about that on another occasion.”
“Some £27·5 million from the transformation fund has been allocated to the Department of Education for the special educational needs proposal. The delivery is focused on two strands. The first is focused on providing the right support at the right time for children and young people with SEN: for example, it will incorporate a range of tests and trial initiatives over three academic years, including early childhood interventions, alternative models of support for children with SEN, the development of special schools as centres of expertise and the piloting of inclusive play and nurture approaches. The second strand will focus on building a skilled and confident education workforce and ensuring that it is equipped and empowered to build supportive learning environments for pupils.”
“If I had not stood up here today as a member of a constructive Executive and announced £61 million of investment in Health, far fewer people would be able to access multidisciplinary teams, and the GP whom the Member refers to would be justified in his criticism of the slowness of delivery. We have just accelerated that delivery.”
“He clearly does not want to hear the answer.”
“Well, if you are interested, Mary Lou and her colleagues produce an alternative Budget and alternative Programme for Government each year. I am just looking forward to reading the same from the "constructive Opposition". <BR /> <BR />I will say this: if I had not stood up here —”
“I look forward to the day when I stand up in the Chamber and respond to a proposal from the "constructive Opposition". I really do look forward to that day, because the "constructive Opposition" have now had a year to bring forward their alternative proposals.”
“As I said to an earlier questioner, there are also opportunities now for Departments to look individually at how they deliver transformation within the budgets that are allocated to them.”
“It may be up to the individual Departments to publish their bids. I will take a look at who is responsible for that. In principle, I have no difficulty with publishing the bids, but it may be up to individual Departments to publish them. <BR /> <BR />Today, I have announced the funding allocations. It will be up to individual Departments to set out how they propose to deliver that funding in line with the letter of offer that will issue from my Department. As I said, experts will be appointed to oversee the delivery of those projects. I am not suggesting for one second that the funding that I have announced today will solve all the problems that Departments face, but it is a significant step forward with regard to transformation of services, how those services are delivered and the objective of delivering them.”