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Rating Reform

Volume 450: debated on Wednesday 11 October 2006

6. What steps he is taking to help those on low incomes during the introduction of rating reform in Northern Ireland. (92590)

The Government are committed to introducing a fair rating system for Northern Ireland based on the current value of people’s homes. Through housing benefit and the new rate relief scheme, more than 185,000 households in Northern Ireland will receive assistance in paying their rates. In addition, those in full-time education and training, as well as all 16 and 17-year-olds and young people leaving care up to the age of 21, will be exempt from rates.

I am very grateful to my hon. Friend for that comprehensive and welcome response, which is an example of reform tinged with sensitivity. As he now wears proudly the mantle of champion of the elderly, is he not aware of the 250,000 pensioners in Northern Ireland and will he not look at special support for a group that may be property rich but are often cash poor?

I am grateful to my hon. Friend. He will be aware that I have taken on the role of older people’s champion. Older people, for this purpose, are determined as those over 50, and I am 49 and a half, so I am just about there. The Government are committed to introducing a fair rating system, and the number of people who will receive benefits for their rates will increase as a result of the changes that we are bringing forward. Under the old rating system, some 175,000 people had help with their rates. Under the new proposals, 185,000 will have help and more of those will have greater benefits than before. I am committed to ensuring that people on low incomes have the best deal possible from this Government in paying their rates.

What help will be given to pensioners paying their rates who live in their own homes but support a family member in care? If there is a 5 per cent. cap in England, why is there not one in Northern Ireland?

We have tried to put in place a new benefits system that will help those in need to pay. There are many well-off pensioners who might not benefit from any schemes, but there are many low-income pensioners who will benefit from rate relief. The circumstances differ, but overall more people will benefit under the proposed new scheme.

I have taken a decision not to cap the rates in due course. That will affect approximately 3,000 properties. There are 700,000 properties in Northern Ireland. I am concerned about ensuring that the system is fair for the vast majority of properties—those who live in the largest properties can afford to pay a significantly increased contribution to their rates. That is my objective, and I hope that the hon. Gentleman, and in due course the Assembly, will share it.

I welcome the Minister’s answers relating to those on low incomes, but unfortunately, unlike the hon. Member for Ealing, North (Stephen Pound), I do not believe that they will work out in practice. Does the Minister accept that the parameters of low income are far too tight and that many people with pensions and very small savings will not qualify for any relief? Does he accept that people with disabilities will require their homes to be specially adapted before they qualify? There is a plethora of single-person households, carers and all the rest who will not qualify for relief.

No, I am afraid I do not accept that. To give an example, a pensioner couple living in a house worth £500,000 with a combined pension and income of £21,000 and £15,000 in savings will still benefit under the rate relief scheme. I believe that the scheme is fair and appropriate, and I commend it to the House.

By the very nature of the scheme, more people will be paying higher rates, and that will lead to a lower disposable income across Northern Ireland. That will lead to lower demand for goods and services, and that will lead to fewer jobs. How does the Minister square that with his intention to make more people in Northern Ireland economically active?

Our figures show that 55 per cent. of the population of Northern Ireland will pay the same or less in their rates than currently. We are not raising one single extra penny from the rating system in Northern Ireland. We are rebalancing that system and ensuring that it is fair for all.