Hain under pressure to cap NI business rates

Northern Ireland Secretary Peter Hain today faced demands from all the North’s major parties and businessmen to change plans to force companies to pay rates on their properties.

The Northern Ireland Manufacturing Focus Group has received the backing of the Democratic Unionists, Sinn Féin, the nationalist SDLP, the Ulster Unionists and the cross-community Alliance Party in its efforts to persuade the British government to cap rates bills for firms at a quarter of their overall value.

The group’s campaign has also received the backing of Ulster Unionist leader Sir Reg Empey, the Economy Minister in the last Stormont devolved executive, the SDLP’s Sean Farren who served as Finance Minister and the DUP’s Lagan Valley MP Jeffrey Donaldson.

A rally is also being planned for Belfast Waterfront Hall, with a cavalcade of lorries and vans owned by firms affected by the imposition of rates from Stormont travelling to the city centre concert venue.

The Northern Ireland Manufacturing Focus Group has warned that 30,000 jobs could be shed if companies have to pick up the cost of the full value of their rates and they also believe it could significantly hamper investments with businesses opting instead to locate south of the border.

Group spokesperson Basil McCrea said the support of the parties was hugely significant and he hoped Mr Hain would take on board the suggestion that the industrial rates bills should be capped at 25%.

“Companies may not close down immediately but all future investment plans will be directed away from Northern Ireland,” he warned.

“Over a relatively short period of time we will lose much of our manufacturing base.

“This disastrous state of affairs is not brought about by international competition but by the ill-considered actions of a government which has been misinformed.

“The ending of industrial de-rating is not inevitable. The situation can be reversed by changing government policy .”

Mr McCrae said the rate could be set at a more reasonable level by either Westminster or a future Northern Ireland Assembly.

He continued: “We fervently hope that if the Assembly is recalled, our local MLAs can rise to the challenge.

“Otherwise, it’s down to the direct rule administration to save Northern Ireland industry. Either way, without urgent action, time is running out for industry in Northern Ireland.”

Previously Northern Ireland businesses did not have to pay rates but last year the government began to phase in industrial rating.

Manufacturers had to pay 15% of their projected bill but this year the bills they have received have been for 25% of the full value.

It is envisaged that a firm will have to pay eventually the entire value.

Mr McCrae said his group had along with the parties requested a meeting involving the politicians with Mr Hain to discuss the situation.

Democratic Unionist MP Jeffrey Donaldson said he had no doubt that more manufacturing jobs would be lost as a result of the imposition of rates.

“The Secretary of State has spoken about the need to reduce Northern Ireland’s reliance on the public sector, yet what we have here is a tax which is choking off investment and costing jobs,” he argued.

“This meeting will allow us the opportunity to paint the very bleak picture in terms of the future of manufacturing here unless this issue can be resolved.”

Ulster Unionist leader Sir Reg Empey accused the Northern Ireland Office of showing no real interest in supporting manufacturing in the North.

“The Northern Ireland manufacturing sector faces enough competitive disadvantages without the imminent imposition of an additional tax burden through the removal of industrial de-rating,” the former Stormont Economy Minister said.

“The increased costs and consequent job losses to a sector that employs a significant proportion of private sector employees in Northern Ireland would be a serious blow to our regional economy.

“There is a case for reform, in order to ensure that industrial de-rating genuinely benefits our hard-pressed manufacturing sector – for example, de-rating applying to manufacturing sites and not to properties used as stores.

“We are also mindful of the Scottish Executive’s pledge to ensure that Scotland’s business rate does not adversely impact on the competitiveness of Scottish manufacturers.

“The Direct Rule administration’s approach to industrial de-rating suggests that it has little or no interest in supporting our manufacturing sector.”

Nationalist SDLP enterprise spokesperson Sean Farren called for a more rational, targeted system of industrial incentives to counteract regional disadvantages for manufacturers.

“The whole issue of industrial de-rating must be considered in the context of the huge competitive advantage conferred by the 12.5% rate of corporation tax in the Irish Republic, which we strongly believe should be matched in the North.”

Alliance MLA Sean Neeson, who was the deputy chair of the enterprise committee in the last Assembly, said de-rating would clearly put Northern Ireland firms at a major disadvantage compared to the Irish Republic with its low rates of corporation tax. The East Antrim MLA said: “It will drastically affect companies, both large and small.

“Hopefully the Assembly will be restored sooner rather than later and this is an issue that the Alliance Party will be taking forward.”