Unions protest.. Manufacturers protest..

Whether the protests by Trade Unionists and by manufacturers here will, ultimately, transfer through to pressure on our local political parties, as Lord Rooker clearly wishes [and Peter Hain as well, no doubt – Ed], is still open to question. For now the protests are being directed at the Secretary of State for Wales and Northern Ireland.. the decisions are being implemented on his watch after all.. even if MLAs could, theoretically, make changes to them. Update I should have pointed to the dissenting view on devolution Mick noted Just to note.. 1000th post.. and counting.

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  • slug

    Congratulations, Pete, on your 1000th [millennial? – Ed] post.

    Keep it up.

  • Observer

    Moaning about tax rises AND spending cuts?

    Which do they want least?

  • opendebate

    From BBC: “After being exempt for the last 20 years, companies in the province will soon have to pay full industrial rates”.

    Well folks, welcome at last to the real world. Does anyone think that ‘Norn Iron’ can for ever and a day continue to be the UK’s very own Disneyland?

    With a population of 60 million and varying needs and requirements, why on earth should 1.5 million people get special treatment?

    Get used to it folks. You now have to learn to pay your way and play the game.

  • Cataegus

    Opendebate

    The problem for many in business is not necessarily paying tax, but paying unfair levels of tax at inappropriate times. The rates system is based on a hypothetical rental value of the property and bears no relation to the income of the business. So if you are in a sector that is getting squeezed you may have negative earnings and be forced into bankruptcy by the rates bill. Employees are then made redundant, government losses income tax and there is a general loss of spending capacity and so the downward spiral starts.

    That’s why I would prefer a tax based on income to replace the rates, much fairer all round. The gross amount could be the same but let’s try and make it fairer.

    There is also the question of what the rates are to pay for and there are some aspects that are not entirely clear to me, like what happened to the money that once went to pay for the Water Service. Then there are the donations to various activities that I am not entirely sure the councils should support unless there was some overall coherent long term plan and benefit.

    What does business get for the money they put in? A crisp manufacturer doesn’t necessarily need the park, or swimming pool and has to pay separately to have its waste disposed off. So what do they actually get?

    If you own a business in one council area and live in another you don’t have any say whatsoever in how your money is being squandered. One man one vote is one thing, but no tax without representation is equally valid.

    Finally if you own a commercial property you are liable for rates even if the property is empty. Now monetarists would say that this would encourage people to reduce rents and up to a point yes it does. However imagine you owned a property in York Road or the Shankill, and through no fault of your own, it may be impossible to rent or sell; or imagine what could happen in an economic slump, the tax system could well exaggerate the down turn, no demand for property as businesses close so buildings lie empty and rates demands continue and owners go bankrupt, who gains? Or owner demolishes and again who gains?

    Remember if business can’t operate profitably here it will leave, and is leaving!!

  • slug

    Hains speech, which I have just read on the NIO website was very positive and encouraging.

    Hain is determined to press ahead on a shared future agenda with more integration in the education sector. The George Bain review of how to restructure local education will prioritise integration, not just integrated education in the way we have known it, but greater sharing of facilities and buildings.

    He also promised careful checks on the new Councils, to ensure they were not fiefdoms, to protect unionists where they were in a minority and likewise nationalists where they were a minority.

    The NIO’s previous consultation document suggested these would NOT be designation based but would be qualified majority voting with the level of the qualified majority being set to ensure that structural “ethnic” majorities would not be able to exploit the situation. That’s probably good news for the centre parties.

    He also wants more integrated housing and is proposing a more active approach to intimidating symbols.

    Encouraging to see the government engaging on these issues and problems, and not just taking a short termist approach.

    I hope the actions live up to the words. And of course its pretty questionable whether the NI Executive could do this stuff as well as the NIO….

  • sluggingmissfitz

    Slug
    I mentioned this on the other thread, but just in case you miss it, Hain ran into some diffs in Newry today. He was heckled on arrival and 20 or so of the delegates walked out and had a protest outside during the conference. I noted a very grim faced Dominic Bradley at one point, but didnt realise at the time what was happening

  • sluggingmissfitz

    Oh, but the reason I was writing was to say well done and thank you Pete, I really enjoy your posts.

  • slug

    Interesting Missfitz. I suppose that was part of the wonder how the rates protest went.

    How is Dominic Bradley perceived? Do you think he is a good politician?

    By the way, why have you put “sluggging” at the front of your name?

  • sluggingmissfitz

    Hi Slug
    I got a litte hassle via e-mail from someone here, but another contributor wrote and gave me some good advice. I’ve changed all of my details now and closed the other e-mail address and opened a new one. So thats that story.

    Dominic seems to be a bit of an enigma. He gets good coverage locally here, and seems to do a good job. I wouldnt have rated him as such, but he seems to have captured a good solid SDLP chunk. He also seems quite astute and appears well tuned in to local issues. He writes a weekly column as gaeilge for the newry democrat, so obviously trying to remind the republicans that he can do it too

  • slug

    The only thing is that the first four letters if your name is my name so people might get confused?

    Anyhow, interesting to hear that Dominic Bradley has a good local profile, a strong politician for the SDLP in their battle with their rivals. I don’t see him too much at NI level though.

  • sluggingmissfitz

    Well, slug, I will give it some thought and look for a new handle. But, I have this funny feeling we wont be confused for each other…….

  • Brendan, Belfast

    On the question of industrial de-rating, Basil McCrea and co seem to be relying heavily on the fact that they have support from “all of the local parties” – big deal. All of the local parties signed up to getting rid of industrial derating when they were in the Executive.

    this is another case of populism taking over from politics – like the water charges and the elb budgets.

    when will one single politican say where the money NI needs should actually come from?

    and as i understand it it is not merely the case that manufacturing businesses have been exempt for twenty years but rather that they have never paid rates. its just that 20 years ago England and Scotland abandoned their version of the same policy.

    last point – why should manufacturing sector get away without paying rates when the retail sector pays them? Doesn’t Tesco, or your local newsagent, employ people too?

    its the lack of deptjh or quality to the argument of these guys that i find most annoying.

  • Cataegus

    Brendan

    As I said above the main problem is that the rate system is perhaps inappropriate as a form of tax for ALL business as it is NOT BASED ON ABILITY TO PAY!!!!!! It also penalises those businesses that need space. For many it is not a matter of paying tax but a deep seated feeling that the tax falls heaviest on those least able to pay or on businesses that are on the knife edge. We really should move away from this tax it can close businesses unnecessarily.

  • Fraggle

    Slug, if that is your real name, you can’t go laying claim to all names beginning with ‘slug’ on a website called SLUGgerotoole.com.

  • Alan

    *As I said above the main problem is that the rate system is perhaps inappropriate as a form of tax for ALL business as it is NOT BASED ON ABILITY TO PAY!*

    It is the same for the rest of us, so why complain. Also, you know as well as I do that the bottom line can have an elusive quality year on year, which need not reflect the true position of an organisation.

  • Cataegus

    Alan

    I agree it is the same for everyone and I have continually argued that it should be replaced for everyone. Also it is a tax that penalises improvement or spacious working conditions which I feel is utterly perverse. It’s an insane tax, it’s not based on use or ability to pay and requires an additional department to collect.

    One of the differences between business rates and domestic rates is house holders have a vote.

    It is worse or more inappropriate for business because some business sectors require large floor space, whereas most houses are simply for family accommodation. (elderly also are hit)

    To take an example of Tesco and a carpet show room both with units of equal size but different turnover and profit should both pay the same tax? Should a small local convenience shop in the fringes of the city centre be forced to close because the property prices in the area have increased? Also if there are downturns and a business wants to close part of the factory or office should they be forced to sell due to a rates burden and thus remove the possibility of future reopening?

    The tax emphasises the effect of an economic down turn and I think that is really a dangerous mechanism to build in to the wealth creating sector.

    As for the elusive quality of the bottom line take it from me that that can only happen for money that you don’t need. If you need money to pay staff, invest or pay back loans the elusiveness you refer to really isn’t there. In some sectors you can play about with work in hand and liabilities but all that is doing in perhaps evening out peaks and troughs, and what you don’t pay this year you pay the next. It is not as good as you think unless you are an out and out crook. In my opinion many small businesses actually pay more tax than they should because they don’t keep all receipts and a lot of book keeping skills are quite poor. The people you really have to watch are the well educated ones with creative minds.

    I am not arguing that services don’t have to be paid for or that business should not contribute but just that this is a perverse tax which most take for granted but which has serious negative qualities.

  • Rapunsel

    Am I missing something here, but the protest is about stopping industrial derating, right. From Catageus post, one would assume this heinous tax is already in place? I was puzzled this afternoon when one of the union reps stated that the Prudential was leaving Belfast over this issue, this was denied by a company spokesperson, and I was of the opinion that wages costs in India are a fraction of the cost here. If we let companies off the hook on making this tax contribution based on their ability to pay, what will be the next demand– drive down the minimum wage, kets get rid of a few other cost drivers– that maternity pay thing costs us a forune etc etc. The idea that businesses are somehow discriminated against because they don’t have a vote is purely rubbish when we know government generally and new Labour in particular will develop and implement policy precisely to accommodate the needs of business. It pains me to say it but Rooker and Hain are right on this issue

  • Cataegus

    Rapunsel

    Are you self employed?

    This has nothing to do with the minimum wage; I would sooner see a higher minimum wage than have a rate system that is not based on a person’s ability to pay. The reason is staffing generally is a buoyant as your profit. Profit drops and generally so does the number of staff. High wage costs economy benefits those who have high productivity. High rates encourages people to use less space and promotes cramped working conditions and penalises improvement.

    I can only tell you my own experience and I am seeing several changes, people who once invest in commercial property are switching to residential, people are demolishing or making building un-rateable in difficult areas, and others are simply investing abroad or are moving their business elsewhere.

    Due to some projected run in times on schemes and what many see as the underlying political and economic instability I know quite a few people who are investing elsewhere. Individually it is a blip but collectively and if continued over a time it really is serious.

    I am not suggesting that business and commerce generally should not contribute tax but simply that the burden should fall on those able to pay and we as a society need to prioritise economic growth.