Sammy Wilson warns on water charges as he ponders where his political future lies
Published 30/07/2013 | 01:30
Outgoing Finance Minster Sammy Wilson has warned that the cost of not charging water rates to households will rise steeply after 2015 and is already affecting spending on schools and hospitals.
And the DUP Assembly Member and MP has indicated that he will probably remain in Stormont instead of opting for Westminster, as had been widely predicted.
From 2015 double-jobbing will be illegal, and Mr Wilson told the Belfast Telegraph he will only quit the Assembly if there is no prospect of becoming a minister here again.
His warning over water charges came as his successor, fellow DUP member Simon Hamilton, said he had no intention of imposing them.
"I think the priority has to be that we maintain the principle of the lowest household taxes in the UK. That is a hard earned reputation that my predecessors have won and I am not going to be the one to lose that," Mr Hamilton said when asked whether he favoured imposing the tax.
Farmers and businesses currently pay for water, but we are the only part of the UK where householders are exempt.
The Department for Regional Development says that this year it is paying Northern Ireland Water a £275m "subsidy to NIW on behalf of domestic consumers in lieu of domestic water charges".
"This is money which we are currently putting into water that we are not putting into schools or hospitals," Mr Wilson said, adding "we made that decision when we laid down this four-year budget".
He warned that after that "it will escalate steeply" because the Treasury may stop treating NIW as an arm's-length body and reclassify it as part of Government.
That will lead to "additional VAT charges, depreciation charges which will increase the cost of our subsidy to Northern Ireland Water".
He declined to put a figure on the increase but said "it will not be in terms of tens of millions, it will be much more than that".
In 2009 ERINI, a think tank, pointed out this problem and estimated it would cost us another £400m a year.
Mr Wilson did not say what his recommendation would be. He confined himself to pointing to the looming financial black hole.
He pointed out that the cost would increase still further because we had to make major capital investments in NIW to avoid European surcharges.
In most other regions there are charges for water, which allow the water company to borrow on capital markets to fund investment.
In Wales water is run as a co-operative with profits harvested back in for the benefit of consumers.
Mr Wilson served as Finance Minister since 2009 and has been widely praised for his performance.
Yesterday Peter Robinson, the First Minister, spoke of his "excellent stewardship of this demanding portfolio".
He added: "Sammy steered the department through one of the most challenging fiscal periods in the history of the Executive."
The DUP leader also signalled that, if Mr Wilson opted to remain in Stormont he would be a "high priority" for consideration as a minister again in the future.
Mr Wilson told the Belfast Telegraph he had enjoyed being a minister "immensely".
"If I have to be a backbencher I would probably prefer to be on the back benches in Westminster than Stormont. If, on the other hand, there was the prospect of a ministerial post it would be an enticement to stay," he said.
"The good thing is that I have time to consider.
"When Peter first asked me to be a minister I said 'no', because I was enjoying Westminster so much, but I am glad he persisted.
"I have found the last four years in Finance very rewarding because I have been able to do things which affect people's lives."
Yesterday Mr Wilson spoke of his long personal friendship with Mr Robinson and praised his leader's judgment.
"My four years in Finance have been amongst the most fulfilling in my life," he said.
Although he would have personally liked to stay on, he believed that Mr Robinson had done the "right thing for the Assembly and the party" to bring on younger talent and give more people ministerial experience.
He pointed out that other parties like the UUP and SDLP had, in the past, failed to do this. He believed that this was one of the mistakes that had led to their decline.
However, he said he would like to be a minister again in the future.
He believed he is passing on the portfolio to Mr Hamilton at a good, but challenging, time.
"We are probably over the worst of the cuts from London.
"The biggest were at the beginning of this term" he said, adding "all the indications are that capital money will become more available".