Simon Hamilton
Strangford · Democratic Unionist Party · Northern Ireland
“I have emphasised to the Member and the House before, that, whilst I accept that those are not good enough — that is why we have been developing the plan — there are alternative technologies in place that can present opportunities for those who just cannot get acceptable speeds.”
“I thank the Member for his intervention. There are some initiatives that I believe will help and act as a driver to improve broadband access. One such intervention is the broadband universal service obligation (USO), which is being taken forward by Her Majesty's Government.”
“I thank the Member for his question. However, he is conflating two issues. I wrote to his party leader, and indeed to all Assembly party leaders, before making the announcement that I did last week about wanting to publish the details of the businesses in receipt of the non-domestic RHI scheme. It was my intention to do that tomorrow.”
“<BR /> <BR />The Chancellor, in his autumn statement, made some more funding available for telecommunications, and my Department is studying that and seeking to avail itself of that to the fullest possible extent.”
“In addition, my Department is managing a contract for the delivery of the superfast rollout programme, which, by 31 December, will provide access to superfast broadband with speeds of at least 24 megabits per second to a further 38,000 premises, both business and residential, across Northern Ireland, including in the Newry and Armagh cons…”
“I signalled the intention to do this a few weeks ago. The Member and the House will know that inspections of all installations would have taken place over the 20-year lifetime of the RHI scheme.”
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“<BR /> <BR />Whilst the Programme for Government is not my ministerial responsibility, other than the responsibility that I have for DFP-specific targets in it, the Member might like to know that a midterm review of our Programme for Government targets is ongoing, and the targets are being looked at in the context of having an additional year. Rather than a brand-new, full Programme for Government, Ministers are looking at extending existing targets and, when appropriate, introducing new ones. Progress is being made in developing a list of additional targets, some of which reflect emerging problems. As the situation has not largely changed, we will want to roll forward many of the issues in the existing Programme for Government.”
“As much as we may sometimes wish welfare reform would all go away, we cannot lose focus on the fact that we are arguably past decision point on this. It is now starting to infect our political discourse generally, but, particularly from my perspective, it is infecting our ability to do budgeting and finance properly in the Northern Ireland Executive. We need to do that because the second tranche of reductions in-year is related specifically to welfare reform and there may be other things that we want to fund in October monitoring, but £87 million has to be found to pay for the penalties and then £114 million next year and the IT costs as well. We should not lose sight of the issue or say that it is not an issue and that we can park it. It is absolutely core and central to the problems we face.”
“I would like ideally to get agreement on a draft Budget by the end of this month or the start of next month, enter into a 12-week consultation with the public and then come back with final Budget proposals by the end of this year. That is an incredibly challenging timetable. It would be challenging in any circumstances, but it is exacerbated by the fact that we have all the pressures that I was talking about before plus £114 million of welfare penalties next year and the potential of investment in IT costs next year as well. So, there is work going on, but it is not moving at a pace that I would like it to, and it is imperative that the Executive very quickly agree a draft Budget to give a degree of certainty across Departments about what next year will look like.”
“It then got bogged down in the issue of welfare reform, and we quickly moved into the June monitoring situation, where it was pointless for it to come forward until we knew exactly what was going on, or not going on, with welfare reform. The long and short of all that is that we are now in an incredibly challenging position in respect of our 2015-16 Budget. <BR /> <BR />Sometimes, in this place, there is a focus on getting the October monitoring round dealt with, and I absolutely accept that it is incredibly pressing and that urgent action is required in respect of the October monitoring round, but we should not lose sight of the fact that we do not have a Budget in place for next year yet.”
“In December last year — I think it was 10 December — I tabled a paper to the Executive outlining at that stage — obviously things are quite fluid and change all the time — what I believed the challenges were for living within our means for the next financial year. It also set out a fairly extensive pre-consultation process where we could have involved a range of people from the community, business, the voluntary sector and various interest groups and could have had a gradual, slow process of building up towards formal agreement of the Budget. Unfortunately, like so much in this place, that was unable to proceed. It was not taken or examined by the Executive, and it was not discussed.”
“I am more than happy to meet him, primarily for me to get a better understanding of exactly what is going on, as, if I have a better understanding of what is going on, it helps me in discussions with the Executive and other Ministers about the real pressures that need our attention and ones that, perhaps, the overall justice budget can absorb itself. So, I am more than happy to have the discussion. However, the Member is right to highlight that there are consequences coming, and that will not be helped by the fact that we will have welfare reform penalties to pay, which will have a disastrous impact on justice and policing just as they will on health, education and other public services as well.”
“In fact, in January this year, I met, along with the Justice Minister, the then Chief Constable, Matt Baggott, and the action point from that meeting was that the Department of Finance and Personnel would engage at official level with the Department of Justice and the police. That did not start off as I had hoped; it was not done quickly enough or at the level that I had wanted. It has improved and is improving, and I hope that there will be opportunities for me to meet face to face with the Chief Constable.”
“Perhaps I should start by saying that I would rather that we were not passing on to the Department of Justice, the whole justice family and particularly the police, any reductions in spending capacity above and beyond what is necessary. I think that we all accept that times are tough. As I outlined to Mr Beggs earlier — hopefully he listened this time — we face a range of pressures that will necessitate cuts across the board. I do not want to see any reductions in the police budget above and beyond what is necessary. <BR /> <BR />I am more than happy to meet the Chief Constable and, indeed, anybody from the policing team.”
“So, what the Chief Constable is saying does not, on the face of it, tally with what is happening with reductions in-year. <BR /> <BR />I am aware that there are other pressures. The Member, given his membership of the Policing Board, will perhaps be better aware of some of the pressures that the police, in particular, are facing. There are issues around working time directives and security. There are also various other issues in the Department of Justice, such as legal aid, that are causing difficulties for the Minister. I presume — and I am only presuming — that the reason why higher cuts are being outlined by the Chief Constable is that it is a reflection of what needs to be done to deal with the overall pressures within the justice family as opposed to specific cuts being levied on the policing budget.”
“I thank the Member for his question. I know that he has a particular interest in this issue given his membership of the Policing Board. I have listened to at least two media reports where the Chief Constable has outlined the extent of pressures, reductions and cuts that his budget is facing in-year. I suppose that I took more interest in that because they do not tally precisely with the reductions that the Department of Justice is facing in-year. The Member is right to highlight that the Department of Justice budget is facing in-year reductions of around £30 million to £40 million. The police get the biggest chunk of the Justice budget, but that accounts for, I think, only around 66% of the total Department of Justice budget.”
“Sizeable reductions are required because of the position that we find ourselves in with welfare reform. The lack of maturity on welfare reform does not translate well into dealing with a situation like corporation tax, but I still remain personally committed to doing it. We are incredibly close to having those powers devolved to Northern Ireland. It would be a shame if we were not able to do what we in this House all want to do — with a few notable exemptions — and reduce corporation tax because of a lack of political maturity on the part of Sinn Féin and the SDLP.”
“I accept the point that the Member and, indeed, other Members made in the debate yesterday about a situation where you cannot deal with it. We hear the yelping and screaming that there has been because of the reductions in-year and the reductions anticipated next year. That does look challenging in dealing with a situation like corporation tax. Whilst I am an enthusiast — I remain an enthusiast because I think that it is ultimately to the benefit of the Northern Ireland economy in creating those 50,000 to 70,000 higher-paid, higher-skilled jobs — it requires a degree of maturity on the part of some in this House that has not been on show up to this point. <BR /> <BR />It will necessitate sizeable reductions to public spending in Northern Ireland.”
“I have long been an enthusiast for the devolution of corporation tax. That is a position that is supported by almost all of the parties in this place. I have been an enthusiast for what I believe to be the right reasons. There would be a cost; we accept that there would be a cost. Perhaps sometimes it is easy for some in the House to agree to the beneficial side of it, which would be somewhere between 50,000 and 70,000 higher-paid jobs coming into Northern Ireland over the next decade, but they do not always think about the downside of it. That is something that I have been incredibly mindful of and would expect to be mindful of, and you would expect me to be so in the job that I am in.”
“Yet there are some in the House who, when they have got all that they can get, when everybody from the Chief Secretary to the Treasury to the Secretary of State to the Deputy Prime Minister to the Prime Minister himself tell them that negotiations have ended and that there is no more to come, still dig in and demand more. We have a very attractive package. It will not solve everything in respect of welfare reform, but it will mitigate the worst problems for people in Northern Ireland in a way that people in England, Scotland and Wales will not benefit from.”
“It is a package of measures that contains support and help for some of the most vulnerable in Northern Ireland who may have had difficulties moving from the current welfare situation to where they might be after welfare reform. <BR /> <BR />Let us not forget this: on DSD's estimation, the majority of people in Northern Ireland will be no worse off or better off as a result of welfare reform. Less than a third of people would be in a difficult position as a result of it all and, therefore, needing not as much help as the rest of the people who would benefit from it all. <BR /> <BR />The Member talks about a situation in which we should go and ask for what Scotland has. Every time that I have met with the Scottish Finance Secretary, John Swinney, he has been looking to get exactly what we have — exactly what we have.”
“I knew that Martin McGuinness had agreed a package on mitigating measures for welfare reform. He told us that he took it to his party and his party did not agree, but it is clear from that comment that not everybody in the party saw what the measures were. A package of mitigating measures — far in excess of what the Scots have got — has been negotiated by Nelson McCausland, the Minister for Social Development. It is a package of measures that includes ensuring that the much-hated bedroom tax does not affect anybody who is already a tenant in Northern Ireland. It also includes a series of issues and flexibilities around the payments of direct payments to landlords, split payments and more frequent payments, which is not the default position in the rest of the United Kingdom.”
“We also have a range of other departmental and Executive pressures that have been building up, and they add up into the difficulties that we are having with our finances. If I had welfare legislation passed and I could get that £87 million and not have to hand it over to Treasury, it would not solve all of the problems, but it would go a hell of a long way to mitigating some of the worst problems that we are dealing with in our Budget in this year.”
“I thought that that was something that the Ulster Unionist Party had some sympathy for; I thought that it was supportive of my party's pressing for welfare reform legislation to be passed. Perhaps, however, there is a new dispensation, again, in the Ulster Unionist Party where it is having a different position on welfare reform — having, of course, been the party that went to the polls in 2010 on a manifesto that called for the welfare reform that is going through. <BR /> <BR />I have never denied that there are other pressures in the Budget. We have basically "flat cashed" our resource budget from 2010, which, again, were spending plans in the Tory party manifesto which, of course, the Ulster Unionist Party was fully signed up to in 2010.”
“It is very clear that the Member who was sitting in the Chair yesterday during the debate on the Budget was not listening to a word that was said in that debate. It was very clear from what I said in that debate — I have been consistent throughout — that welfare reform is a problem. We have already lost £13 million from our ability to spend as a Government. That might be a small amount in the grand scheme of things, but it is £13 million that could and should have been spent on public services in Northern Ireland. <BR />We are preparing to remove a further £87 million, which is the equivalent of 2·3% of reductions to all Departments excluding Health and Education. It is an issue that is growing and growing and growing as a problem. It will be £114 million next year and £200-odd million each year after that.”
“While some of these measures will have a cost attached, it will be ultimately for the Executive to determine the level of funding they set aside for this purpose. The estimates of these costs are small when considered against the costs of not progressing welfare reform.”
“With your permission, Mr Deputy Speaker, I will answer questions 5 and 14 together. The UK Government have confirmed that the Northern Ireland block allocation will be reduced by £87 million in 2014-15 for non-adherence to the welfare reform initiative. Should the stalemate on welfare reform continue, this cost will be £114 million next year and will quickly escalate to over £200 million a year. Of course, this does not include the substantial costs of securing an IT system to deliver welfare payments in Northern Ireland. <BR /> <BR />The Minister for Social Development has proposed a range of measures that will soften the impact of some of the most controversial aspects of welfare reform.”
“It would be, as I said earlier in response to Mr McElduff, a fundamental change in the underpinning principle of rates, which is that it is a payment for services and not a payment for the property itself. We have to be very careful about breaking that principle. Because of that, and because of the fundamental shift that it would be, we have to consult very carefully, particularly with landlord interests to ensure that whilst they may not be sympathetic or supportive — most landlords do a good job and do what they are meant to do — they understand the reasons why we are thinking about heading in that particular direction.”
“It is a subject that has clearly provoked a lot of interest in the House. If the volume of correspondence and queries via the Committee are anything to go by, there is a mood for us to do something in respect of it. In broad sweeping terms, I am keen to look at how we can remove any doubt whatsoever from the situation and that it will always be the case, irrespective of how the rent is paid or the capital value of the property, that it is the landlord who is responsible. <BR /> <BR />I say that in terms of a general policy direction; there are issues that have to be considered very carefully before we end up, potentially, at that destination.”
“<BR /> <BR />In those rare circumstances where it comes up as an issue — many Members have raised various individual cases with me in the past — Land and Property Services will attempt to be as understanding as it possibly can within the current legal position and will try to work with people to ensure that the rates are paid in as flexible and sensible a way as possible. <BR /> <BR />That is the current position; there are some changes going through this year, as I have outlined, but I am keen to look at perhaps a more radical approach and a radical rethink to ensure that this type of problem, whether small in volume or not, does not arise in future at all.”
“The one thing that I will say is that the legislation is clear but perhaps not well understood. Section 20 of the 1977 Order makes it clear that, where the capital value is less than £150,000, responsibility lies with the tenant to pay the rates bill. I know that Land and Property Services has attempted to communicate that in various ways through landlord representatives and Housing Rights Service, but it is clear that perhaps the message is not always getting through to the people who need to get it.”
“<BR /> <BR />You can move that figure up or down, but the essential issue here is that, for a small number of people — and I accept that it is a small number of people — any threshold is, apparently, an incredibly traumatic experience for those who go through it and believe that they have paid their rates, and they then find out that they have not and the liability is still there. I do not deny that. I am not so much focused on what the threshold is; it is whether now, as part of what I outlined in the initial response to the Member, we should have a threshold at all.”
“The current threshold of £150,000 of capital value was amended and increased on the basis of the last domestic revaluation, which was around 2006-07. It was set a little higher. It probably should have been a little lower, but it was increased and set at £150,000. The reason why it was set at £150,000 was that it was found, on analysis, that properties with a lower capital value had a much more transient population, therefore, there was difficulty sometimes in finding rating liability, whereas those over the £150,000 threshold tended to be properties that were rented by people who remained in situ for much longer.”
“I have also asked my officials to look into the issue next year, with a view to more fundamental reform. It is a difficult area, and we need to be careful that we do not stray too far from the principle that rates are charged for services as well as a local tax. The current arrangements, however, do confuse, hence the need for a radical rethink. In doing so, it is important that other changes affecting landlords, such as direct payment of housing costs under universal credit, are taken into account.”
“With your permission, Mr Deputy Speaker, I would like to group questions 4 and 7, as they both relate to landlord liability. I am aware of a number of cases where the landlord has taken payment from the tenant in respect of rates as part of a tenancy agreement but not passed payment on to the Department. In respect of those disputed cases, I can confirm that there has not been a recent increase in the number of instances. <BR /> <BR />My Department has already taken legislative steps to clarify the position on landlord liability. Primary legislation was introduced earlier this year to remove complex tenancy criteria from legislation. I will also be taking forward new legislation later in the year to standardise landlord allowances. Both changes arose from public consultation last year.”
“That is why it is silly for some in this House who want to pursue and are supportive of the devolution of corporation tax to fritter away tens of millions of pounds and, ultimately, hundreds of millions of pounds paying welfare reform penalties when we are already facing budgetary challenges and face the very real prospect of further reductions as the price for getting corporation tax.”
“However, we also have to ensure that if somebody comes and invests in Northern Ireland and brings 1,000 high-tech, highly skilled, high-paid jobs that we have 1,000 people with the skills that are required to do that. So, it will be an incredibly challenging situation in which, on the one hand, we are reducing our public spending because of the cost of corporation tax, which could be in excess of £300 million a year and rising, but, on the other hand, we still need to invest.”
“Work would need to be done in advance to ensure that we were ready for that moment and could seize the opportunity that a lower rate of corporation tax would present in Northern Ireland. Of course, that would require continued and perhaps even increased investment in certain areas, such as what Invest Northern Ireland does in projecting a positive image of Northern Ireland as a place to invest. You cannot project that image if you do not have substance behind it. One bit of that would be having lower corporation tax, which would attract types of companies to invest in Northern Ireland that have not done so before.”
“I wonder why the Member might highlight skills in particular as something that might need future investment. <BR /> <BR />The Member is right: if we get the power — I believe that we are incredibly close to getting it now that the Scottish referendum is out of the way, and there is no excuse for the Prime Minister to delay in giving us a clear indication that we will get the power — then it is over to us, in many respects, not just to pass legislation in the House but to get ourselves ready for the time when, in a few years, we would have a significantly lower corporation tax rate. It was never about just having a significantly lower rate of corporation tax.”
“I think that we are this close to getting those powers and should not be distracted by chasing moonbeams such as income tax or VAT, which we cannot legally get, or other powers that we might be able to get but that would not have the transformative economic effect that corporation tax would have.”
“It is one that, I think, all of us in the House have, with a few notable exceptions. At the top of that shopping list is corporation tax. Whilst a discussion will naturally flow from what happened in Scotland last week — something that will continue to be played out in the weeks and months ahead as the Union as we know it undergoes a degree of change, driven mostly by Scotland — it is important that the House, the Executive and all of Northern Ireland do not lose sight of our number one objective, which is the devolution of corporation tax. It is a sizeable, chunky, costly power to devolve, but it comes with, I believe, considerable benefits. We must continue to focus on corporation tax.”
“There are some in the House — we know who they are — who want to take a maximalist approach to the devolution of fiscal powers. My view on the devolution of any fiscal power is that it has to pass two tests. One is affordability. That is incredibly important in a region like ours, which is dependent to the tune of £10 billion a year on a subvention from London. This is an incredibly difficult hurdle to pass in respect of fiscal devolution or tax-varying powers being devolved to the Assembly. Take income tax, for example. Every percentage that you reduced it would cost our spending power as an Executive around £90 million. The same is true for other duties and taxes. If you want to move in a downward direction, there is a cost. <BR /> <BR />I do have a shopping list.”
“Scotland would have legislative devolution and authority for welfare, but any changes made or any differentiation from parity would come at a cost to the Scottish people, and they would have to find that money for themselves. That is exactly what we have at the minute. That is what is causing us problems. For us to do anything over and above what the Scots may or may not get, it has to be viewed from the perspective that there is clearly not the maturity in this place to take some very difficult decisions with the powers that we have, never mind getting additional ones.”
“Therefore, it is something that I am prepared and content to try to do. It would be done and, I hope, it would be received in the spirit of an independent, authoritative view on the best estimate, given the figures and complexities, of what the effects, good and bad, would be, what the costs are and what the costs of an IT system etc might be. That is work that I will do. <BR /> <BR />Of course, within that, there is scope to look at what is happening elsewhere and what may happen in Scotland. It is important to note that, whilst many things have been promised to the people of Scotland, it is not yet clear what they are going to get. From my perspective, on first analysis of what was on offer to the Scottish people around welfare, it did not strike me as being massively dissimilar to what we have.”
“I was before the Finance and Personnel Committee last Wednesday. Over the course of the session, one of the issues that came up repeatedly was the plethora of information from a range of sources around welfare reform, whether they be governmental sources here in Northern Ireland or in London or, indeed, charities or other organisations that have produced analyses of the effects of welfare reform on Northern Ireland. The very clear message coming from the Committee was that it would be important that I, as Minister of Finance and Personnel, perhaps commission a piece of work that came up with, I suppose, an authoritative view on what the effects would be. That is something that I had myself been thinking about and, indeed, that the Executive had discussed but had not taken forward collectively.”
“The Government have not yet formally set out any proposals for enhanced devolution for Scotland, so I have not requested at this stage a meeting with Her Majesty's Treasury.”
“I will need to bring back the conclusions to the Executive and this place very quickly thereafter so that, if we want to extend the scheme, change it slightly or adapt it, we can have that in place for April next year and help out some more businesses at the end of the recession.”
“Although I think that there are clear arguments that we are in economic recovery, I do not think that it is uniform. It is patchy. Certain sectors, including retail, which is one of the main beneficiaries of small business rate relief, are still struggling and, I think, will need some further support to see them through at least another year, if not longer. That is why, rather than, as the legislation required, bringing the scheme to an end, I initiated the commissioning of a review to be carried out by NICEP. It has been engaging in consultation over the past number of months. I am due to get its report very soon.”
“The small business rate relief scheme has now been in existence for a number of years and has been extended twice in its lifetime, to the point at which, with it and other support that we offer as an Executive to business ratepayers, over half of the business properties in Northern Ireland get at least 20% off their rates bill. That is something that the House should be immensely proud of. It was right that we stepped in when we did and introduced the support that we did. Many businesses in Northern Ireland are still trading in part because of the help that we have been able to offer them through rates relief. <BR /> <BR />It was introduced as a recessionary measure. It was there to get businesses through the very difficult years that we have been through and out of which we are now starting to emerge.”
“<BR /> <BR />Shortly, I will announce the details of the rates convergence scheme that we will put in place, and that may deal with some of the problems. We are reviewing the small business rate relief scheme as well. I am waiting for the Northern Ireland Centre for Economic Policy (NICEP) to come back with conclusions on that. That will assist some losers as well. It needs to be done on the basis of what valuations actually come forward finally. If necessary, the Department and I are open to looking at a scheme that would deal with the ratepayers who are worst affected on the basis of an analysis of how many there are and to what extent they are worse off.”
“<BR /> <BR />As I said in response to the original question from Mr Ramsey, even if somebody's rateable value goes up, we will not know whether that means an increase in the rates bill on the previous year until we and the councils strike our elements of the regional and district rate respectively. Some people will see a hit and an increase. That is something for which, in the past, we certainly would have introduced a transitional relief scheme. At this time, a transitional relief scheme would be complicated by the fact that there will be council mergers. The Member's constituency is in an area where four councils will come together. The basis on which you would work out an accurate transitional relief is complicated by the fact that you are merging all those different councils and different rates.”
“One of the things that I and, indeed, my predecessor — he was the Minister who initiated the revaluation some years ago — have been at pains to stress at all times is that there will be winners, there will be losers and there will be many who remain the same. We have consistently tried to communicate that, but I am not convinced that the message has always got through. I think that there are some in business who believe that the revaluation will be a panacea — to borrow the First Minister's word from yesterday — for all their problems. I am afraid that the news for some is that it will not be a panacea, and some rateable values will go up.”
“We expect — indeed, we anticipated this with the large retail levy — that edge- and out-of-town shopping centres will have a significant increase in their rateable value and, perhaps to balance that out, the rateable value of some town centres — not all — will go down.”
“<BR /> <BR />There are no guarantees for Londonderry, as there are no guarantees for Newtownards or any part of Northern Ireland. However, you would expect, where the rent increase on the basis of April 2013 is below the average of what it was back in the early part of the century, rateable values to go down and, where the converse applies, rateable values to go up. There will be some winners, some losers and many who remain the same. <BR /> <BR />It is too early to say what the situation will be in the Member's constituency or, indeed, in any constituency, but what is developing at this early stage is that the value of the list has increased by somewhere between 5% and 10% and that certain towns will do better than others, as will certain parts of towns.”
“The Member and I will meet, I think, next Monday, and he is bringing along some traders from Londonderry to have a conversation. I hope, on the one hand, to explain why things are the way they are and, on the other hand, perhaps to give a little hope that the revaluation may be the answer for some if not all of those traders. <BR /> <BR />As the House will appreciate, the purpose of the revaluation is not to increase the overall rates take across Northern Ireland; it is to get a fairer balance. It is about addressing exactly the sort of situation that the Member talks about in which traders in one part of a city or in one town maybe think that they are being disadvantaged compared with traders or businesses in another part of the city or, indeed, another town.”
“I am pleased to say that Land and Property Services (LPS) remains on target to deliver the new values that will be used in non-domestic rates bills from 1 April 2015 onwards. LPS has already completed draft valuations of all 72,500 non-domestic rateable properties in Northern Ireland. Individual values will continue to be refined by LPS valuers over the coming weeks, and a breakdown of the revaluation effects by sector and by council will then be available on the basis of the new 11 district council areas. Figures showing the effects of the revaluation at a constituency level are, therefore, not available at this stage. In many ways, the effects of the revaluation will not be fully understood until the new district and regional rate poundages are known.”