Northern Ireland Secretary asks civil service to consider revenue-raising measures

Northern Ireland civil servants have been asked how their departments could tax the public in order to plug the spending gap in finances.

The secretary of state Chris Heaton-Harris has denied his instruction is an attempt to pressure the DUP to re-enter Stormont.

Stormont parties have hit out at the move. Sinn Féin labelled it 'sabre rattling' while the DUP said if it was aimed at getting the party back into government it would not work.

The Northern Ireland Secretary has asked civil servants for information pertaining to revenue-raising measures such as domestic water charges, drug prescription charges and tuition fees, which he says will improve the sustainability of Northern Ireland’s public finances.

The DUP is blocking the devolved institutions in Belfast in a protest against post-Brexit trading arrangements and the party has insisted it will not return to Stormont until it secures further legislative assurances from the UK Government around sovereignty and trade.

Senior civil servants are currently running public services in the region in the absence of devolution.

They have estimated that Stormont departments need hundreds of millions of pounds in extra funding to maintain public services at their current level this year.

The areas the civil servants have been asked to consider are:

• The introduction of domestic water charges

• Drug prescription charges

• Raising higher education tuition fees to the same level as in England

• Cessation of industrial derating

• Reduction of concessionary fares schemes

• Cessation or reduction of non-domestic vacant property relief

• Introduction of domiciliary care charges

• Increase in Translink fares

• Increase in MOT charges

• Increased tariffs for on-street parking in specified areas

• Options for removal of NI only support for industries compared to the rest of the UK, e.g. hauliers

• Continuation of hospital parking charges. Proposals have been made to dispense with the charges.

Speaking to media at Erskine House in Belfast on Wednesday, Mr Heaton-Harris denied that the request to civil servants is aimed at putting pressure on the DUP to re-enter Stormont.

“Is it some sort of pressure to get the executive up and running? No, because it’s about trying to make sure that the budget is sustainable and that we can deliver proper, quality public services as we move forward in Northern Ireland that are sustainable and financially affordable,” he said.

Mr Heaton-Harris said the instruction to civil servants was to provide information to a future executive and he does not have the power to implement such revenue-raising measures.

He did, however, say he will not rule anything out if the devolved government does not return.

“I do have the powers to go to consultation on some of these matters in the future but I do not have the power to ask for revenue to be raised in Northern Ireland,” he said.

“I actually truly believe that should be something that locally elected politicians should do.

“But I wouldn’t rule out anything for the future if there was no executive in place.”

Mr Heaton-Harris is currently in negotiations with the DUP in relation to the restoration of the power-sharing institutions and said he has “tonnes of patience”.

“I don’t set timelines and I’m happy to move inch by inch, millimetre by millimetre to a solution which I think would be beneficial for everybody, which is when the executive is up and running and local decisions are being made by local people,” he said

“But it has its frustrations too.”

Mr Heaton-Harris confirmed on Wednesday he has used new powers provided through passage of the Northern Ireland (Interim Arrangements) Act 2023 for the first time to request information and advice on the revenue-raising measures.

His letter said he asked for information on measures such as introducing domestic water charges and drug prescription charges and increasing tuition fees.

There is currently no charge to the public for medical prescriptions in the region and Northern Ireland students who study at local universities pay £4,630 a year in tuition fees, compared with a maximum of £9,250 in England.

When asked about the impact of water and prescription charges on poorer households, Mr Heaton-Harris said the “opportunities and costs” of revenue-raising procedures will be evaluated.

“I mean, it would be much better if we did have an executive to be doing this and actually this information will be useful to any future executive in any choices that it might want to make,” he said.

“But, you know, these are important elements to understand that get a feeling for what can be raised, how it can be raised, what are the benefits and costs, opportunities and costs of doing any of these benefits – or all of them?”

He said businesses have told him problems with water and sewage capacity are hindering development in Belfast.

“I’ve been talking to businesses across Belfast who are now understanding the constraints of the water supply and the sewage issues that now are constraining development in the city,” he said.

“And if you want a prosperous city of your nation’s capital it needs to expand and bring in the wealth and bring in the investment and part of that is the infrastructure.”

Mr Heaton-Harris set a deadline of the end of June for the information to be provided by civil servants.

In the 2021 Spending Review, the Government said the total block grant for the Northern Ireland Executive would be £15 billion per year, on average, over the next three years.

The Government has provided around £7 billion in additional funding to Northern Ireland since 2014, on top of the Barnett-based block grant.

A Government statement said the Northern Ireland Executive public spending per person is about 20% higher than the equivalent UK Government spending in the rest of the UK.

It added: “The Secretary of State is seeking to ensure that work progresses towards a more sustainable budget position in Northern Ireland that better reflects the balance between locally generated revenue and UK Government funding that is happening across the rest of the United Kingdom.

“The Secretary of State will continue to engage with Northern Ireland Civil Service departments on the detail of their responses.

“Any final decisions for implementation should be taken by Northern Ireland’s elected leaders.”

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