Stormont’s Level of Tax Intake is the Lowest in the Developed World.

An interesting report in the Irish News this morning as politics correspondent John Manley informs us that ‘Revenue raising by Stormont ranks lowest in the developed world’ and that is according to an Assembly research paper…

The briefing document also highlights how the devolved administration is almost £1bn worse off in the current financial year due to a shortfall of £400m and the ending of the so-called stabilisation funding worth £520m that the Executive received after its restoration in February 2024.

The document draws comparisons between Stormont and the other devolved administrations in Stormont and Wales, particularly on the thorny topic of water charges

Both jurisdictions also have domestic water charges, which the briefing paper says has the potential to generate “approximately £307m annually” in Northern Ireland. It says that up to an additional £226m could be raised every year through the suite of income generating measures which the then secretary of state Chris Heaton-Harris consulted on in 2023. The paper notes that no decisions have been taken on implementing the consulted measures and that “significant political opposition to several options – most notably domestic water charges – remains”.

The document is not wrong on the opposition to water charges, a poll last year in the Belfast Telegraph found that 95% of respondents were opposed to the introduction of either water charges OR prescription charges and no political party has wanted to risk the wrath of local voters by bringing them in. The assembly research paper goes on to list what it calls a “distinctive constellation of constraints”…

which include repeated Assembly suspensions, post-Brexit obligations under the Windsor Framework that limit fiscal autonomy in areas such as state aid and VAT, and a comparatively narrow private sector tax base characterised by higher economic inactivity and lower productivity relative to the rest of the UK.

The end result of which is that our local government is perpetually cash-strapped and seemingly unable to fund critical public utilities such as health, infrastructure and water utilities. The question posed to us as the public, who are suffering as our services fall apart, is what are we prepared to do to ensure those services are fit for purpose?

In the end, we get what we pay for.

Slugger Team

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