Belfast Telegraph

Tuesday 16 September 2014

Pressure on Assembly to raise cash

Toll roads, a special tax on property developers, an increase in planning service charges and a hike in MOT fees have all been discussed at Stormont this week as the Executive looks at new ways to raise cash for devolution.

With London expected to tighten the block grant to Northern Ireland just days before the Executive proposes its first budget and programme for government, ministers are being pushed to come up with new ways to generate money.

Finance Minister Peter Robinson has been discussing proposals for increasing revenue with other ministers and officials during a heavy round of meetings in recent days.

Mr Robinson is due to present the draft version of his first full budget next month, shortly after Chancellor Alistair Darling unveils the results of the Government's comprehensive spending review.

That review is expected to limit the growth of Northern Ireland's block grant to 1%.

If the Executive absorbs water charges, that increase effectively disappears - and ministers will have to find other means of raising money for any new projects. They are also considering where current spending can be cut, with the civil service appearing to be a likely target.

At present, the Executive raises money primarily through the regional rate. But that only pays for about 5% of the £8bn spent every year, with most of the rest coming through the block grant.

The Executive could increase rates, but Mr Robinson indicated yesterday that he wants to fix the levels of domestic rates for three years, to let householders know what to expect on their bills.

Sinn Fein has already advocated tax raising powers for the Assembly, but the Executive is also discussing ways to make consumers pay for more for public services up front, rather than subsidising them through taxes.

They could impose charges on developers to pay for the extra burden new housing puts on public services. New roads could be paid for by tolling, existing charges could be increased to make agencies self-financing.

The Varney Review on corporation tax is expected to report in early October, before the Northern Ireland budget, but expectations of a major cut in the tax appear to be fading at Stormont.

The Executive wants the tax cut to 12.5%, the level in the Republic, to make Ulster as attractive to overseas investors.

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