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The noble Baroness, Lady Harris, asked whether this order is inconsistent with the policy to increase revenue. The noble Baroness must appreciate that reforms we are talking about today and the level of future rate increases are separate issues. This reform is designed to raise the same amount of money, but that is not to say that year on year more money will not be needed to pay for wage increases for public servants and for progress in the services provided, but we can separate that out. None of the increases will come about because of this change. This change is revenue neutral. It is not a change designed to bring in more money to start with.
Lord Trimble: Does the Minister—
Lord Rooker: Can I just finish this point? It is not unimportant. The other order that I would have brought forward, relating to water, has not been brought forward for reasons we understand—I do not want to go down that route. If that reform does not come in, it will cost the Northern Ireland Budget a substantial sum of money, and it can come in only based on the new capital values of properties rather than the old system. That is another reason why we need a more modern system of rateable values. I gladly give way; I think I have finished.
Lord Trimble: I thank the Minister. He is being unrealistic. It has been, as he knows, Treasury policy to insist on substantial annual increases in rates for quite some time. While the Minister hopes that this proposal will be revenue neutral in the year in which it is introduced, there will be a significant increase in rates in that year because of the Treasury’s requirements. People on the ground are obviously going to judge this new system on the basis of the bills they receive. The 45 per cent, in particular, but also the 55 per cent, are likely to find themselves facing large increases because of the Treasury.
The Treasury’s insistence on rate increases will probably damn these proposals in the eyes of the people of Northern Ireland when they get their bills. The Minister is being quite unrealistic by emphasising that it is not a revenue-raising measure. The rates are a revenue-raising measure from the point of view of the Treasury, and the Minister knows that.
Lord Rooker: Let us get this clear. The rate increase this year was the decision of the direct rule Minister within the overall £9 billion budget. We chose to raise the rates by a fairly large figure to get extra money for extra services. It was not a question of the Treasury telling us to raise the rates; we did not do it that way.
We have a budget—a fixed amount, it is true. Do not forget that there is more public expenditure per head in Northern Ireland than anywhere else in the UK. Northern Ireland is not badly served in public expenditure per head—believe you me. That would be a debate I would advise noble Lords not to open up.
The rate increase this year was not Treasury led. I take my full share of responsibility. It was a local tax—a local charge—that Ministers in Northern Ireland could change. It would be exactly the same with locally elected Ministers. We saw the need for more money for three pots of services; we created extra funds for children, training and energy, and were quite open about why we did it. However, I repeat: the new system, year on year, does not raise more revenue. I am not saying more revenue will not flow, because—
Lord Rooker: Well, yes! That is all very well, but is the noble Lord therefore saying that public servants in Northern Ireland should not get a pay increase next year? Of course not. Where will the pay increase come from—an increase from the ratepayer? That has nothing to do with the change from rates to the modern system. People in Northern Ireland will understand that. Their taxes are like that; it is exactly the same. If that is the argument, I shall be quite happy to have it. I am sure, however, that people do not want to go down the road of saying, “Let’s freeze all the public sector pay in Northern Ireland, because we do not want to increase the rates”. Of course we are not going to do that.
This change is not the reason for any increase to pay for public servants’ pay increases. The figures will show that at the time. I cannot make it any clearer than that. I do not want to raise temperatures here by raising figures. This has gone on for some years. You must make the case forcibly: there are more gainers than losers and more help for the low paid under the new system. If noble Lords want to vote down the order, they must face and argue against that. That is why I am labouring the point. It is a fairer, understandable system. If people want to vote against it on that basis, they must take responsibility for their actions. That is why I am presenting it as I have.
On Question, Motion agreed to.
The Committee adjourned at seven o’clock.
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