Belfast Telegraph

Sunday 20 April 2014

Robinson asked to look again at road charging

'Raise cash to soften rates bills'

Road charging should be considered as a way of softening the impact of household rates, Stormont's Finance Committee told the Executive today.



BY CHRIS THORNTON



In a report on rates reform, the Committee called on Finance Minister Peter Robinson to give further consideration to congestion charges and toll roads.

They also want a longer look given at "green taxes", like charges for plastic bags, and recycling incentives.

However, they opposed a series of other proposals for localised taxes for Northern Ireland, including a regional income tax, a sales tax or a levy on tourism.

They also came out against giving the Assembly the power to vary existing taxes.

The report was issued today in response to the Executive's review of household rates, which was prompted by the direct rule regime's decision to bring in a new property tax system this year.

The new system is based on the estimated value of a house. Under the old system - based on 19th century property systems - rates were charged according to the estimated rental value of a house.

In their direct recommendations on the rates, the committee also wants Mr Robinson to look again at the cap on rates for homes worth more than £500,000.

There was no cap under the original proposals, meaning that the owners of Northern Ireland's most expensive homes would pay higher property taxes than billionaires living in central London.

The cap saves 0.5% of Northern Ireland home-owners an average of about £1,000 a year, according to today's report.

The committee - while not reaching a consensus on the issue - repeated concerns about the "overall affordability and fairness" of the cap.

Concerns have been previously raised about savings for the richest home-owners causing slight increases to everyone else's bills.

The committee also signalled that the English Council Tax system - previously rejected here - should be reconsidered.

While the system here charges each home on the basis of its individual value - which requires a time consuming and expensive revaluation every five years - the Council Tax system uses a rougher banding to calculate charges.

Homes fall into bands based on the type of house and the area in which it sits.

The report opposed a discount for people living on their own, saying it would "fail to target those most in need, would be subject to potentially high levels of fraud as well as being costly in terms of revenue loss".

But the committee supported a discount for single pensioners, and other measures that would soften rates bills for old householders.

Road charges were previously discussed within the Executive when the draft Budget was being formed over the summer and early autumn.

The committee considered that issues like pollution, global warming and crowded roads were all arguments in favour of road charges.

But arguments against the proposal included that it is "potentially unacceptable to the general public", could hit hardest on those with lower incomes and would be expensive to police.

"Whilst recognising that there was no clear consensus in the evidence as to the merits of road charging, the committee recommends that the Department considers the option further, particularly in terms of its potential economic impact, costs and benefits, feasibility, effectiveness in reducing road congestion and in the context of decisions on other rating reforms," the report said.

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