PP 2014/0119(1)

REPORT OF THE

SELECT COMMITTEE

ON THE DOMESTIC RATING SYSTEM

(PETITION FOR REDRESS)

2014-15

VOLUME 1

Report & Annexes

REPORT OF THE SELECT COMMITTEE

ON THE DOMESTIC RATING SYSTEM

(PETITION FOR REDRESS)

On 19th March 2014 it was resolved –

That a committee of three Members be appointed with powers to take written

and oral evidence pursuant to sections 3 and 4 of the Tynwald Proceedings Act

1876, as amended, to consider and to report to Tynwald by October 2014 on

the Petition for Redress of Mr David Buttery presented at St John’s on 6th July

2009 in relation to replacing the domestic rating system with a fair local

services tax.

The powers, privileges and immunities relating to the work of a committee of

Tynwald are those conferred by sections 3 and 4 of the Tynwald Proceedings Act

1876, sections 1 to 4 of the Privileges of Tynwald (Publications) Act 1973 and

sections 2 to 4 of the Tynwald Proceedings Act 1984.

Committee Membership

Mr C C Thomas MHK (Douglas West) (Chair)

Mr A L Cannan MHK (Michael)

Mrs B J Cannell MHK (Douglas East)

Copies of this Report may be obtained from the Tynwald Library, Legislative

Buildings, Finch Road, Douglas IM1 3PW (Tel 01624 685520, Fax 01624 685522) or

may be consulted at www.tynwald.org.im

All correspondence with regard to this Report should be addressed to the Clerk of

Tynwald, Legislative Buildings, Finch Road, Douglas IM1 3PW.

- 12 -

VOLUME 1

I. THE COMMITTEE AND THE INVESTIGATION ................................................... 1

COMMITTEE PROCEDURE 1

SCOPE OF THE INVESTIGATION 2

II. THE DOMESTIC RATING SYSTEM AND THE NEED FOR REFORM....................... 2

CONTEXT: LOCAL AUTHORITIES IN THE ISLE OF MAN 2

DOMESTIC RATING: THE EXISTING SYSTEM AND ITS STATUTORY BASIS 3

BILLING ARRANGEMENTS AND OTHER CHARGES (WATER, SEWERAGE AND BURIALS) 5

VIEWS OF THE PETITIONER, LOCAL AUTHORITIES AND OTHERS ON THE EXISTING SYSTEM 6

Town and country ...........................................................................................................................8

Ability to pay ...................................................................................................................................9

Rates paid and services consumed................................................................................................10

III. IS RATES REFORM DEPENDENT ON LOCAL AUTHORITY REFORM?..................10

IV. OPTIONS FOR RATES REFORM ......................................................................11

THE PETITIONER’S PROPOSAL: A LOCAL SERVICES TAX 11

A LOCAL INCOME TAX 12

A PROPERTY TAX BASED ON CAPITAL VALUE (BANDED OR OTHERWISE) 12

A PROPERTY TAX BASED ON AREA 13

A PROPERTY TAX BASED ON UPDATED RENTAL VALUE (BANDED OR OTHERWISE) 14

V. OVERALL CONCLUSIONS AND NEXT STEPS ....................................................14

VI. CONSOLIDATED LIST OF CONCLUSIONS AND RECOMMENDATIONS ...............14

ANNEX 1: PREVIOUS PROPOSALS FOR REFORM....................................................17

ANNEX 2: PAPER DATED 30TH APRIL 2014 BY THE TYNWALD CHAMBER AND

INFORMATION SERVICE ABOUT OTHER JURISDICTIONS........................................23

ANNEX 3: PAPER DATED 8TH SEPTEMBER 2014 BY THE TYNWALD CHAMBER AND

INFORMATION SERVICE ABOUT TRANSITIONAL ARRANGEMENTS IN ONCHAN......27

ANNEX 4: ANALYSIS OF LOCAL AUTHORITY RESPONSES........................................29

VOLUME 2

ORAL EVIDENCE ...................................................................................................31

MONDAY 9TH JUNE 2014 EVIDENCE OF MR DAVID BUTTERY, PETITIONER, AND OF MR CLIVE MCGREAL

AND MR ANDREW WALLIS, TREASURY 33

FRIDAY 27TH JUNE 2014 EVIDENCE OF MR ANDREW JESSOPP AND OF MR RICHARD RONAN MHK AND

MR KEVIN GILLESPIE, DEPARTMENT OF INFRASTRUCTURE 59

WRITTEN EVIDENCE .............................................................................................89

APPENDIX 1 REPORT OF THE DEPARTMENT OF LOCAL GOVERNMENT AND THE ENVIRONMENT ON THE

EFFECTIVENESS OF THE PRESENT LOCAL GOVERNMENT STRUCTURE ON THE ISLAND AND THE

DEPARTMENT’S SUPERVISORY POWERS (OCTOBER 2004) 91

APPENDIX 2 REPORT OF THE COUNCIL OF MINISTERS WORKING GROUP SET UP TO CONSIDER WATER

RATES (JUNE 2010) 127

APPENDIX 2A ANNEX 1 TO COMIN REPORT ON WATER RATES: FUNDING OPTIONS RELATING TO WASTE

MANAGEMENT SERVICES, SEWERAGE TREATMENT AND SUPPLY OF WATER (AUGUST 2003) 149

APPENDIX 2B ANNEX 2 TO COMIN REPORT ON WATER RATES: DOMESTIC RATES REVALUATION (OCTOBER

2004) 169

APPENDIX 2C ANNEX 3 TO COMIN REPORT ON WATER RATES: REPORT OF THE SELECT COMMITTEE ON

THE PETITION FOR REDRESS OF GRIEVANCE OF MARGARET HELEN HYDE (NOVEMBER 2002) 189

APPENDIX 2D ANNEX 4 TO COMIN REPORT ON WATER RATES: CORRESPONDENCE RECEIVED (2008–

2009) 213

APPENDIX 2E E-MAIL DATED 22ND AUGUST 2014 FROM JACQUI SINCLAIR, CABINET OFFICE, WITH

ATTACHED COUNCIL OF MINISTERS PAPERS 269

APPENDIX 3 SUBMISSION DATED 23RD APRIL 2014 FROM MR DAVID BUTTERY 287

APPENDIX 4 SUBMISSION DATED 24TH APRIL 2014 FROM THE TREASURY 293

APPENDIX 5 SUBMISSION DATED 30TH MAY 2014 FROM THE TREASURY 299

APPENDIX 5A SUBMISSION DATED 8TH AUGUST 2014 FROM THE TREASURY 311

APPENDIX 6 SUBMISSION DATED 6TH MAY 2014 FROM THE DEPARTMENT OF INFRASTRUCTURE 317

APPENDIX 7 SUBMISSION DATED 8TH MAY 2014 FROM THE DEPARTMENT OF INFRASTRUCTURE 321

APPENDIX 7A SUBMISSION DATED 27TH AUGUST 2014 FROM THE DEPARTMENT OF INFRASTRUCTURE 325

APPENDIX 8A LOCAL AUTHORITY SUBMISSION: ANDREAS 329

APPENDIX 8B LOCAL AUTHORITY SUBMISSION: ARBORY 333

APPENDIX 8C LOCAL AUTHORITY SUBMISSION: BALLAUGH 337

APPENDIX 8D LOCAL AUTHORITY SUBMISSION: BRADDAN 341

APPENDIX 8E LOCAL AUTHORITY SUBMISSION: CASTLETOWN 345

APPENDIX 8F LOCAL AUTHORITY SUBMISSION: DOUGLAS 349

APPENDIX 8G LOCAL AUTHORITY SUBMISSION: GERMAN 357

APPENDIX 8H LOCAL AUTHORITY SUBMISSION: JURBY 361

APPENDIX 8I LOCAL AUTHORITY SUBMISSION: LAXEY 365

APPENDIX 8J LOCAL AUTHORITY SUBMISSION: LEZAYRE 369

APPENDIX 8K LOCAL AUTHORITY SUBMISSION: MALEW 373

APPENDIX 8L LOCAL AUTHORITY SUBMISSION: MAROWN 377

APPENDIX 8M LOCAL AUTHORITY SUBMISSION: MAUGHOLD 381

APPENDIX 8N LOCAL AUTHORITY SUBMISSIONS: MICHAEL 387

APPENDIX 8O LOCAL AUTHORITY SUBMISSION: ONCHAN 393

APPENDIX 8P LOCAL AUTHORITY SUBMISSION: PATRICK 397

APPENDIX 8Q LOCAL AUTHORITY SUBMISSION: PEEL 401

APPENDIX 8R LOCAL AUTHORITY SUBMISSION: PORT ERIN 405

APPENDIX 8S LOCAL AUTHORITY SUBMISSION: PORT ST MARY 409

APPENDIX 8T LOCAL AUTHORITY SUBMISSION: RAMSEY 413

APPENDIX 8U LOCAL AUTHORITY SUBMISSION: RUSHEN 417

APPENDIX 8V LOCAL AUTHORITY SUBMISSION: SANTON 423

APPENDIX 9 PAPER BY THE DOUGLAS BOROUGH TREASURER 427

APPENDIX 10 SUBMISSION DATED 19TH JUNE 2014 FROM COUNCILLOR DAVID ASHFORD 441

APPENDIX 11 SUBMISSION DATED 8TH MAY 2014 FROM MR MICHAEL CAIN 451

APPENDIX 12 SUBMISSION DATED 17TH APRIL 2014 FROM MR J T DUFFY 463

APPENDIX 13 SUBMISSION DATED 7TH JUNE 2014 FROM MR PAUL FELLOWS 469

APPENDIX 14 SUBMISSION DATED 1ST JUNE 2014 FROM MR TIM NORTON 473

APPENDIX 15 ADDITIONAL SUBMISSION DATED 3RD JULY 2014 FROM RAMSEY TOWN COMMISSIONERS477

APPENDIX 16 DIGITAL APPROACH APPLIED IN GUERNSEY: PAPER BY DIGIMAP 481

1

To: The Hon Clare M Christian, President of Tynwald, and the

Hon Council and Keys in Tynwald assembled

REPORT OF THE SELECT COMMITTEE

ON THE DOMESTIC RATING SYSTEM

(PETITION FOR REDRESS)

I. THE COMMITTEE AND THE INVESTIGATION

Committee procedure

1. This Committee was established by the following resolution of Tynwald on 19th

March 2014:

That a committee of three Members be appointed with powers to take written

and oral evidence pursuant to sections 3 and 4 of the Tynwald Proceedings Act

1876, as amended, to consider and to report to Tynwald by October 2014 on

the Petition for Redress of Mr David Buttery presented at St John’s on 6th July

2009 in relation to replacing the domestic rating system with a fair local

services tax.

2. The original motion tabled by Mr Thomas did not set a timescale for the Committeeto report. The words “by October 2014” were inserted by way of an amendment inthe name of the Treasury Minister, Mr Teare, which was approved by Tynwald.

3. We have met on six occasions and taken oral evidence on two of these. The oralevidence is reproduced within this Report.

4. We sought written evidence from the petitioner, local authorities, the MunicipalAssociation, the Local Government Unit of the Department of Infrastructure, theTreasury and the Cabinet Office; and, at a later stage in our inquiry, from Members

2

of Tynwald and the public.1 The written evidence was published on our websiteduring the course of the investigation and is also reproduced within this Report.

5. A summary of previous proposals on rates reform since 1979 is at Annex 1.

6. A paper from the Tynwald Chamber and Information Service on equivalent systemsin other jurisdictions is at Annex 2.

Scope of the investigation

7. The terms of our remit, and of Mr Buttery’s petition, are limited to domestic rates.We have made occasional reference to the following somewhat related topics butdetailed consideration of them is beyond the scope of this investigation:

• commercial rates

• local authority finance in general

• water rates

• the Sewerage Charge

• burial rates.

II. THE DOMESTIC RATING SYSTEM AND THE NEED FOR REFORM

Context: local authorities in the Isle of Man

8. The Isle of Man has 24 town, district, village and parish authorities plus additionalbodies including some joint committees and boards. Local authorities have variedresponsibilities which may include refuse collection, street lighting and cleaning,public information and advice, tourism and abandoned vehicles. Responsibility forother services is carried in some cases by local authorities and in other cases bycentral government. This applies to housing and to a number of other areas.2

9. There is a wide disparity between the local authorities in terms of area andpopulation, and in terms of the type, level and cost of services provided. The largest,Douglas Corporation, reported gross expenditure in 2012/13 of some £30.4 million,53% of the total expenditure of all local authorities. At the other end of the scale theexpenditure of Santon Parish Commissioners in the same period was £65,563.3

1In July 2013 the Council of Ministers published a commitment to complete a public consultation on

reforming domestic rating. See Annex 1.2

Further detail on local authority functions is in Appendix 1, Part Two, paragraph 2.0; see also thematerial circulated by the DoI in response to Tynwald Question 32 of 16

thOctober 2012, published as

part of the Appendix to Hansard for that date.3

GD 2014/0007, laid before Tynwald in March 2014

3

10. A significant reform was proposed in a report published in October 2004 by the Department of Local Government and the Environment. This Department had responsibility for local government until 2010 when this function was transferred to the Department of Infrastructure. The Minister in 2004 was Hon John Rimington MHK. His report proposed, among other things, a structure of “Douglas plus four” with Douglas unchanged and the other 23 authorities merged to form regional authorities for the North, South, East and West. The report appeared on the Order Paper for debate at the December 2004 sitting of Tynwald but in the event it was not moved.

11. As noted above, a detailed consideration of local authority reform is outside the scope of this Report. We would comment, however, that Mr Buttery’s submission does highlight the differences between local authorities in terms of both what they provide and how this provision is financed.

Domestic rating: the existing system and its statutory basis

12. Domestic rates are just one of the sources of income available to local authorities. Others include commercial rates, grants and agencies from central Government, charges for services, rents and investments.4 These other sources of income are outside the scope of this Report. It should be noted, however, that different authorities derive vastly different proportions of their income from these different sources. Moreover, there are significant differences in how the provision of each service is financed, both between different providers and between different services.

13. The domestic rating system involves Treasury and local authorities carrying out distinct roles. The Rating and Valuation Act 1953 places a duty on the Treasury to determine a rateable value for every property in the Island and to hold a “valuation list” for each area including the proprietor and occupier of each property. The Local Government Act 2006 requires each local authority to charge a rate for every property in its area, based on the rateable value of the property. Thus while each individual local authority has discretion to set its own rate, it can only do so within the framework laid down by central Government.

14. The Rating and Valuation Act 1953 provides, at section 2:

“Gross value” means the rent at which a hereditament might reasonably be

expected to let from year to year if the tenant undertook to pay all usual

tenant’s rates and taxes and if the landlord undertook to bear the cost of the

repairs and insurance, and the other expenses, if any, necessary to maintain the

hereditament in a state to command the rent.

4 Appendix 5, Annex 24

4

Provided that in estimating the annual rentable value of a hereditament to a

tenant, no account shall be taken of the value of any services which the

landlord renders, or procures to be rendered, to the tenant (either alone or in

common with other tenants of the landlord) other than the provision of, or

repairs to, or maintenance of, the hereditament.

[…]

“rateable value” shall be the sum remaining after making the deductions from

the gross value, as set out in the Fourth Schedule to this Act.

15. In its written evidence the Treasury explained the operation of this legislation as follows:

The rating assessment is firstly determined by reference to the Gross Value of

the property which is, briefly, the annual rental value on the assumption that it

is vacant and to let, with the new tenant responsible to pay the rates and the

landlord responsible for carrying out any repairs necessary to maintain the

property in a state to command that rent. This basis applied irrespective of

whether the property is owner/occupied or rented and is known as the

“hypothetical tenancy”. The authority for the foregoing is the Rating and

Valuation Act 1953.

The Gross Value (annual rent) is based upon rental evidence circa 1968 to 1970,

available just prior to the last general rates revaluation on the Island which was

completed circa 1972. New properties are valued by reference to the 1968/70

rental values (capital values are not relevant) and this is known as the “tone of

the list”, thus ensuring that a new dwelling (or any other type of building) is

given a Gross Value or rental value on the same basis as that attributed to a

similar dwelling/building that existed at the date of the last revaluation. In

practice this means that modern rental values are not relevant, as the property

is taken back as if it existed in 1972, and then valued in rental terms by

reference to rent levels that existed at that time.

From the Gross Value a statutory deduction is made to allow for the landlord’s

notional repairs under the hypothetical tenancy. For example, in the case of

“dwelling houses and other buildings, or other buildings only” the deduction is

“20 per cent or one fifth”. The authority for the foregoing is the Fourth

Schedule to the Rating and Valuation Act 1953. The resulting figure is the

5

rateable value and this is multiplied by the rate in the pound to give the total

rate poundage to be paid in each rating year. 5

16. Under section 3 of the Rating and Valuation Act 1953, the Treasury is required to prepare a list all properties and their values “from time to time”. As mentioned in the evidence quoted above, the last general revaluation on the Island was completed in around 1972. The Treasury in its written evidence to this Committee has also stated:

Revaluations should be carried out every 5 years to maintain realistic and

relevant reference points.6

17. We consider that irrespective of any moves towards a new rating system, a revaluation should be conducted. This could be done under the existing statutory framework, i.e. on a rental basis. Regular revaluation is so important that a specific timetable should be written into primary legislation in any case.

Recommendation 1

That irrespective of the range of possible outcomes of any further consultation on reforming the basis of domestic rating, a revaluation should be carried out, potentially under the existing statutory framework.

Recommendation 2

That the Rating and Valuation Act 1953 should be amended in any case to include an express requirement for a revaluation every 5 years.

Billing arrangements and other charges (water, sewerage and burials)

18. Douglas, Braddan and Onchan collect their own domestic rates. For all other local authorities the rates are collected by the Treasury and passed on to the authority concerned.

19. The rates bills issued by the Treasury also include certain other charges which relate to some extent to the valuation lists held by the Treasury under the Rating and Valuation Act 1953. This is administratively efficient but has led to a perception that these other charges are more closely related to domestic rates than is in fact the case. The charges concerned are:

water rates. Under section 25 of the Water Act 1991 the Manx Utilities Authority is required to calculate the water rate on the basis of the Treasury’s valuation under the Rating and Valuation Act 1953. However, the water rate

5 Appendix 5, Annex 23

6 Appendix 5A, paragraph 2(i)

6

is determined by, and payable to, the Manx Utilities Authority and not the local authority;

the sewerage charge. This is levied by the Manx Utilities Authority under the Sewerage Act 1999. The Sewerage Charge Order currently in force (SD 2014/0040) cross refers to the list of properties maintained under the Rating and Valuation Act 1953. However, the sewerage charge is determined by, and payable to, the Manx Utilities Authority and not the local authority;

burial rates. These are levied by the Treasury and payable to the churchwardens under the Burials Act 1986. This Act requires the churchwardens to determine a rate based on the Rating and Valuation Act valuation, but the rate is payable to the churchwardens and not the local authority.

20. Any change to the basis of valuation under the Rating and Valuation Act 1953 for the purpose of domestic rates would have a knock-on effect for water and burial rates. However, as mentioned above, a detailed consideration of those effects is outside the scope of our investigation.

21. There is no express statutory basis for the Treasury to act as agent specifically in the collection and payment of water rates and the sewerage charge. Instead, the Treasury Minister has pointed to the Treasury’s general powers under the Treasury Act 1985.7 We consider that an express power would be preferable.

Recommendation 3

That when domestic rating legislation is being amended, the opportunity should be taken to give Treasury an express statutory power to act as a collection agent for other public bodies.

Views of the petitioner, local authorities and others on the existing system

22. Mr Buttery argues in his petition that the domestic rating system is:

anachronistic, in that it was conceived at a time when the population was mainly static whereas today people move around the whole Island freely and in particular many people who do not live in Douglas nevertheless travel to Douglas every day and make use of services provided by Douglas Corporation; and

unfair, in that it is a tax on the property as opposed to the person and therefore takes no direct account of the person’s ability to pay.

23. In his written submission he identifies a further, related concern:

7 See Tynwald Question 11 of 17

th June 2014

7

The current rating system takes no account of the level of services used by the individual.8

24. We asked all local authorities whether they thought the existing system was fair. Their responses are reproduced within this Report together with a brief covering analysis.9 The analysis shows that all the urban authorities consider the existing system unfair; while opinion in the rural areas is divided.

25. The Treasury said in written evidence:

The Treasury considers that the current domestic rating system, based on the

Rating and Valuation Act 1953 (as amended), is outdated and in need of

reform. The system is likely to be unfair. For example:

the existing assessments were carried out in the late 1960s and were

based on rental values;

properties in rural areas were let at low rents at that time, resulting in

lower rateable values than properties in towns and villages;

the capital values of rural properties have risen over the years, leading

to a greater rating disparity between apparently similar properties.

The perception of what constitutes a fair system of taxation is, however,

subjective. In other words, almost any approach to taxation will be considered

unfair by some. 10

26. The Department of Infrastructure commented that the fairness of the domestic rating system was a matter for the Treasury but also drew our attention to some of the anomalies caused by the existing system which were set out in the 2004 report by the Department of Local Government and the Environment at paragraph 3.4.1 of that Report.

27. An illustration similar to those in the 2004 report was given by Malew Commissioners, who wrote:

Malew Commissioners are of the opinion that the rating system does contain

some inequality but not in the sense that is raised by the petitioner: The

inequality that exists is in relation to properties in the “countryside” as opposed

to those in the villages within the same Parish or local authority. For example

there is currently (at the time of writing this submission) a property that is for

8 Appendix 3

9 Appendix 8 and Annex 4

10 Appendix 4

8

sale within the rural area of the parish of Malew with an asking price of some

£2.5m that pays in the region of £500 pa rates as opposed to modest bungalow

for sale within the village of Ballasalla for £170k that pays slightly more. There

are some properties in the more rural areas that pay such small amounts in

rates that it actually costs this authority more just to empty their waste bins, let

alone the other services provided. 11

28. Patrick Commissioners wrote:

The Commissioners concede that domestic rating is less fair than it could be.

However, any alternative is likely to be somehow unfair unless all local services

are taken by central government and paid for from central taxation. This, in

turn, would remove local accountability for services. 12

29. It is notable that although there is a widely held view that the current system is unfair, this view is for widely varying reasons. It follows that there are widely differing views as to what any reform needs to achieve. Mr Buttery’s dissatisfaction derives from the domestic rates being a tax on property whereas he favours a tax on the person taking into account ability to pay and payment related to consumption. The Treasury, conversely, appears to accept the merit of a tax on property but is dissatisfied only with the current method of valuing that property. Local authorities encompass the full range of opinions.

Town and country

30. It is certainly true that many people who live outside Douglas pay lower rates than Douglas residents and also make use of services provided by Douglas Corporation. However, it cannot necessarily be inferred that this is to the detriment of Douglas ratepayers. As one Douglas Councillor, Cllr David Ashford, put it in a submission to us:

There are very few services provided by Douglas Council that it could be argued

do face increased demand due to visitors to the town and must be provided,

not as a matter of choice, but in order to meet that demand. One such service is

street cleaning, which logically faces a higher demand due to the pressures of

footfall through the town. But one of the things that the petitioner does not

seem to acknowledge in his petition or the evidence provided to the Committee

on 9th June is that services such as street cleaning are subsidised to a certain

extent by central government and therefore as taxpayers the visitors to

11 Appendix 8

12 Appendix 8

9

Douglas are indeed picking up an element of the bill for the increased costs in

relation to that area. 13

31. Looking at the responses we received from local authorities overall, it is notable that there was no support for an “all Island rate”. We consider that the ability to determine the rates is an important function of local authorities which should remain with local authorities. It follows that a single “all Island rate” would not be appropriate, other than in the extreme circumstances of a complete merger leading to a single all-Island local authority.

We conclude that while increased mobility is indeed a feature of Island life

today, it does not follow that all services should be delivered on an Island-wide

basis. People living in different parts of the Island should in principle remain

entitled, through their elected representatives at local authority level, to

determine the services provided in their area, recognising that such services

may benefit not only residents of the area but also visitors from on and off the

Island.

Ability to pay

32. We do not necessarily accept that a tax on a property as opposed to a person is necessarily unfair. It is true that occupancy rates vary, and in particular that large properties are sometimes occupied by small numbers of people. Nevertheless, a presumption that the owners and occupiers of larger properties are likely to be able to pay higher taxes cannot be said to be intrinsically unfair. We consider that the case has not been made for a fundamental shift from a property tax to a personal tax.

Recommendation 4

That Tynwald is of the opinion that any reform to the domestic rating system should continue to include an element based on property.

33. The Rating and Valuation (Amendment) Act 1991 inserted a new section 63A into the Rating and Valuation Act 1953 providing for rent rebate schemes. This section has not been implemented.14 A rebate system could assist with cases of hardship and we are disappointed that no such system has been brought into effect.

13 Appendix 10, section 1

14 Appendix 5, Question 2

10

Recommendation 5

That Tynwald calls upon the Treasury and the Department of Infrastructure to work with local authorities to introduce a rate rebate scheme to take account of an individual’s ability to pay.

Rates paid and services consumed

34. On the petitioner’s point about the link, or lack of it, between rates paid and services consumed, we acknowledge that a “user pays” may be a suitable model for the funding of some public services. The question of whether a particular public service should be funded by its users or through general taxation needs to be considered on a case by case basis and is beyond the scope of this investigation.

III. IS RATES REFORM DEPENDENT ON LOCAL AUTHORITY REFORM?

35. Some local authorities put it to us that the fairness of the domestic rating system is inextricably linked with the fairness of the overall local authority structure. As Douglas Corporation put it:

true fairness will not be achieved until the reform of Local Government is

implemented. 15

36. Mr Richard Ronan MHK, speaking in his then role as Member of the Department of Infrastructure with responsibility for local government, agreed. He said:

I think we have to look at this in the round. I honestly believe that a fairer local

tax structure, whatever that might be… needs to be delivered by a structure,

probably more regional, that can deal with that.16

37. Others in central Government appear to have taken the opposite view. In its October 2004 report recommending a change to a regional structure, the Department of Local Government and the Environment wrote:

If the current system of rateable values, which is based on notional rental

values, changes to a system of capital values then the existing imbalances may

change but there may still be a need for resource balancing. 17

38. In the same month the Financial Controller wrote in a paper for the Council of Ministers:

15 Appendix 8, Douglas submission, Question 1

16 Q 128

17 Appendix 1, Part 1, paragraph 3.1

11

Proposals made by the Department of Local Government and the Environment

in respect to changes to the organisation of Local authorities have noted that a

move to capital values will not impact on such plans. However, it will be

necessary to re-calculate the banding charges in order to ensure that in total,

the amounts of income remain constant. 18

39. On 16th October 2012, speaking in Tynwald, the Chief Minister Mr Bell said:

The structure for determining rateable values for taxes on property requires

reform. By the end of this administration, we will have introduced a fairer and

more consistent approach.

Later in the same speech he also said:

An extensive review of the Island’s local government structure has been

ongoing for several months and the Council of Ministers expect to receive an

interim report in December, outlining possible options for modernisation.

We note that Mr Bell made no commitment to implement modernisation of the local

government structure within a particular timescale. This is in contrast to his

approach regarding the rating system, which he undertook to make fairer and more

consistent “by the end of this administration”.

We conclude that, while the context of the domestic rating system would be

affected by any reform of local government structures, improvements in the

domestic rating system itself need not be delayed pending substantive progress

towards any reform of the Island’s overall local government structure.

IV. OPTIONS FOR RATES REFORM

The petitioner’s proposal: a local services tax

40. Mr Buttery proposes what he calls a “local services tax”. It would be paid by:

everyone between the ages of 16 and 75 resident on the Island with exceptions

for those in full time education, armed forces, long term incapacity etc. 19

He sets out his method of calculating the tax payable in the following terms:

Combine the annual cost of all services currently paid for by rates and divide

that amount by the number of citizens eligible to pay LST. 20

18 Appendix 2B, page 9, under heading “Conclusions”

19 Appendix 3

12

41. Mr Buttery’s local service tax is a charge on the person as opposed to the property. Although he proposes exemptions for those less able to pay, his proposal does not amount to an income tax because it is based on the number of citizens resident in an area irrespective of income. It might properly be characterised as a poll tax.

42. We asked Treasury what work has been done on a tax based on occupancy. The Financial Controller wrote:

It is considered that this would be unjustifiably expensive to administer as the

cost of collecting (and enforcing collection) of a poll tax, particularly with a

transient population, would be high. 21

43. We have concluded that the case has not been made for a fundamental shift from a property tax to a personal tax in respect of the services provided from funds raised in the domestic rates process. It follows that we cannot support Mr Buttery’s proposal.

A local income tax

44. We asked the Treasury what work had been done on a local income tax. The Financial Controller wrote:

This is not considered viable with the current 24 local authorities and it is

considered that it would only become potentially viable if the number of

authorities were to be significantly reduced to 4 or 5, even then the process and

collection regime is likely to be more costly than at present. It would be

problematic in terms of collection and rate charges owing to the uneven spread

of industrial, retail and central business districts. 22

45. It is beyond the scope of this investigation to consider the merits of moving the financing of public services away from income and other taxes towards payment by the user or financing using the rates system.

A property tax based on capital value (banded or otherwise)

46. A revaluation based on banded capital values was recommended by Treasury to the Council of Ministers in April 2003 and was the subject of further detailed work by the Treasury throughout 2003 and 2004 when detailed investigation of the impact on potential winners and losers in a move from the current rates system to one based on capital values was carried out in Onchan and Michael parishes.23 This was also the

20 Appendix 3

21 Appendix 5A, Question 2, item (v)

22 Appendix 5A, Question 2, item (vi)

23 Appendices 2A and 2B; see also Annex 1

13

option favoured by the Select Committee which reported in 1986.24 It is similar to the UK’s Council Tax. The advantages of such a system include:

capital value is thought to be more easily understood than rental value

capital value can be based on up-to-date and readily available evidence

the use of banding would reduce administrative costs.

47. The disadvantages include:

any system of banding can produce anomalies at band margins

according to the Treasury paper of 2003, banding is a regressive form of taxation. Although some amelioration can be achieved in the selection of the number of bands there is a marked tendency for poorer households to incur a higher proportion of their disposable income in taxation based on such a system of assessment.

We conclude that a property tax based on capital values (banded or otherwise)

could be an acceptable way forward.

A property tax based on area

48. In 2007 Guernsey replaced its equivalent of the domestic rates with a tax based on the plan view measurement of a property’s built environment and land. An advantage of such a regime is that the area of a property’s land and buildings is an objective quantity and, once measured, will remain fixed unless property is improved. A potential disadvantage is that it makes no distinction between the tax liability attached to property in one part of Guernsey as compared to another – hence a proprietor in a more expensive area would pay the same as a proprietor in a less expensive area if his property had the same area, even before different rates of taxation were applied in different areas.

49. Guernsey used an interesting digital approach to help its transformation to a property-based system which is described in Appendix 16.

We conclude that a property tax based on area could be an acceptable way

forward.

24 The 1986 Select Committee report is available in the “published evidence” area of the present

Committee’s website

14

A property tax based on updated rental value (banded or otherwise)

50. This would represent “no change”. An advantage would be that it could be institutedwithout the need for new primary legislation. A disadvantage is that rental valuesare thought to be poorly understood.

We conclude that a continuation of the current regime based on rental values

suitably updated could be an acceptable way forward.

V. OVERALL CONCLUSIONS AND NEXT STEPS

51. We have concluded that there is an urgent need for a revaluation and a case for awider reform, but that Mr Buttery’s proposal will not address the issues. We haveheard a range of views from local authorities – some favouring a revaluation underthe existing statutory framework, some a capital value model, and some a modelbased on area.

52. We have considered the “banded capital values” system which was recommendedby the Treasury in 2003 and remains the Treasury’s favoured option. We haverecognised that the Treasury’s favoured option could be an acceptable way forwardbut we have also noted that there are other options which could also be acceptable.

53. Our engagement with local authorities has illustrated the wide variety of views heldby councillors and commissioners throughout the Island. We have experienced forourselves the difficulty faced by the Municipal Association in arriving at any kind ofconsensus view on behalf of local authorities as a whole.

Recommendation 6

That Tynwald calls on the Council of Ministers and the Treasury to worktowards the objective of consulting on, and legislating for, a modernised orreformed rating system and that such modernisation should take placewhether or not any reforms are proposed to local authority structure.

VI. CONSOLIDATED LIST OF CONCLUSIONS AND RECOMMENDATIONS

54. The conclusions and recommendations of this Report are reproduced here for easeof reference.

15

Recommendation 1

That irrespective of the range of possible outcomes of any further consultationon reforming the basis of domestic rating, a revaluation should be carried out,potentially under the existing statutory framework. (paragraph 17)

Recommendation 2

That the Rating and Valuation Act 1953 should be amended in any case toinclude an express requirement for a revaluation every 5 years. (paragraph 17)

Recommendation 3

That when domestic rating legislation is being amended, the opportunityshould be taken to give Treasury an express statutory power to act as acollection agent for other public bodies. (paragraph 21)

55. We conclude that while increased mobility is indeed a feature of Island life today, itdoes not follow that all services should be delivered on an Island-wide basis. Peopleliving in different parts of the Island should in principle remain entitled, through theirelected representatives at local authority level, to determine the services provided intheir area, recognising that such services may benefit not only residents of the areabut also visitors from on and off the Island. (paragraph 31)

Recommendation 4

That Tynwald is of the opinion that any reform to the domestic rating systemshould continue to include an element based on property. (paragraph 32)

Recommendation 5

That Tynwald calls upon the Treasury and the Department of Infrastructure towork with local authorities to introduce a rate rebate scheme to take accountof an individual’s ability to pay. (paragraph 33)

56. We conclude that, while the context of the domestic rating system would beaffected by any reform of local government structures, improvements in thedomestic rating system itself need not be delayed pending substantive progresstowards any reform of the Island’s overall local government structure. (paragraph39)

57. We conclude that a property tax based on capital values (banded or otherwise) couldbe an acceptable way forward. (paragraph 47)

58. We conclude that a property tax based on area could be an acceptable way forward.(paragraph 49)

16

59. We conclude that a continuation of the current regime based on rental valuessuitably updated could be an acceptable way forward. (paragraph 50)

Recommendation 6

That Tynwald calls on the Council of Ministers and the Treasury to worktowards the objective of consulting on, and legislating for, a modernised orreformed rating system and that such modernisation should take placewhether or not any reforms are proposed to local authority structure.(paragraph 53)

C C Thomas

A L Cannan

B J Cannell

September 2014

17

ANNEX 1: PREVIOUS PROPOSALS FOR REFORM

A1. This Report is the latest in a long line of Reports on domestic rating and relatedissues.

A2. Local government in the Isle of Man can be traced back to the Towns Act 1852. Thehistory of Reports and legislation from that date to 1967 is set out in the FourthInterim Report of the Select Committee of Tynwald on the Rating of DomesticProperty, dated June 1983.25

A3. The late 1960s and early 1970s saw the last comprehensive revaluation of domesticproperty in the Island.

A4. On 12th December 1978 Tynwald established a Select Committee on the Rating ofDomestic Property.

A5. This Committee reported in 1979, 1980, 1982, 1983 and 1985 (twice).26 Its operationcoincided with a time when the Conservative Government in the UK was planning tointroduce the community charge, or poll tax – to move in other words from a tax onproperty to a tax on persons. The final report of this Select Committee rejected theidea of a poll tax but recommended the establishment of a Select Committee on thestructure of local government.

A6. The Select Committee on the Structure of Local Government produced, in May 1986,what it called its “First Interim Report”. The report, which was received by Tynwaldwithout any debate on 17th June 1986, commented that:

Whatever system of local government is required and whatever method of

funding is determined as being most equitable, it is clear that a review of the

valuation of properties on the Island would be desirable, in order to adjust

values and clear anomalies. It is the view of the Committee that if there should

be a revaluation it should be carried out on capital values and not rentable

values as at present. 27

A7. This Select Committee was discharged by resolution of Tynwald on 20th January1987. The resolution was made in the context of the establishment of the system ofMinisterial Government and an associated desire to cut down on the number ofCommittees.

A8. In the late 1980s and early 1990s the UK Government implemented its proposedcommunity charge or poll tax: first in Scotland and then in England and Wales. The

25Available in the “published evidence” area of the present Committee’s website.

26All of its reports are available in the “published evidence” area of the present Committee’s website

27Paragraph 5(c)

18

community charge was controversial and unpopular. By the mid 1990s it had beenreplaced throughout Great Britain by the Council Tax, reverting to a tax on propertybut now based on the capital value of the property rather than its rental value.Although based on property, the Council Tax regime in England, Wales and Scotlandalso took some account of the number of persons living in a property and inparticular incorporated a 25% discount for a single person living alone.

A9. In 2001, in a petition presented on Tynwald Hill, Helen Margaret Hyde asked that asimilar discount be given on domestic rates in the Isle of Man. This petition wasreferred to a Select Committee which reported in November 2002.28 The SelectCommittee recommended against a single person’s discount but invited the Councilof Ministers and the Department of Local Government and the Environment toreview the rating system.

A10. In 2003 and 2004 a review was conducted by the Treasury and reported to theCouncil of Ministers. The Council of Ministers does not appear to have published itsproposals at that time. We have, however, obtained and published two Council ofMinisters papers from those years, one from August 2003 and one from October2004.29 They recommend a move to a system based on banded capital values.

A11. In July 2004 the Treasury undertook a pilot study of 1,000 properties in Onchan andKirk Michael showing how they would fare under the proposed new system. A reporton the findings of this study is incorporated within the paper which went to theCouncil of Ministers in October 2004. The new proposals were designed to produce aprogressive charging regime that, while using capital valuations as its basis, alloweda significant factor to be introduced between the highest and lowest valueproperties. The Treasury paper commented:

Inevitably, this will be well received by the owners of Band A properties who

benefit from a rateable value reduction but will create dismay for many owners

of higher value properties.30

A12. From December 2004 to April 2005 the Treasury consulted local authorities on theproposed new system.31 For the April 2005 sitting the then Treasury Minister, MrBell, tabled the following motion for debate:

That Tynwald -

(1) Adopts in principle a system of capital value banding in place of the existing

domestic rating system;

28Appendix 2C

29Appendices 2A and 2B

30Appendix 2B

31See answers given to Questions in Tynwald on 21

stOctober 2003, 14

thDecember 2004, 15

thMarch

2005 and 19th

April 2005.

19

(2) Approves detailed legislation be introduced into the Branches to enable the

revised system to operate with effect from April 2007; and

(3) Authorises the Treasury to commence the revaluation process and ancillary

works necessary to implement the new system.

A13. In the event this motion was not moved. Mr Bell explained as follows:

It is my intention to withdraw Item 7 tomorrow, (Mr Cannan: Hear, hear.) to

allow me to consult again with the Council of Ministers, to see whether, in fact,

wider circulation of the pilot schemes can be achieved, to enable my officers to

complete the one final meeting with the local authorities, which is, in fact, a

combined meeting of three northern authorities.

I will arrange, then, for a further presentation to be put on for Members to

explain in more detail, I hope, how the scheme will work and, indeed, allow

individual Members, if they so wish, time to come and see my officers on a one-

to-one basis, to go into further detail.

It would then be my intention, after that exercise, to return with this Item in

due course, once that exercise has been finished, Mr President.32

A14. In 2006 Northern Ireland, which had not experienced the poll tax or communitycharge of the early 1990s, moved from a system based on rental values to a systembased on capital values.33

A15. In 2007 Guernsey replaced its equivalent of the domestic rates with a tax based onthe plan view measurement of a property’s built environment and land.34

A16. In April 2009 the Council of Ministers set up a working group on water rates. Becauseof the link between the water rate regime and the Rating and Valuation Act 1953,that Working Group looked back at the October 2004 paper. In its report, dated June2010, it reported that:

[In 2004] Council approved the revaluation project and agreed that a motion be

submitted to the December 2004 or January 2005 sitting of Tynwald requesting

Tynwald’s agreement to and support of the project … However for reasons that

are unclear the Motion was withdrawn and the matter was not progressed.35

321146 T122

33Annex 2

34See Appendix 16

35Appendix 2

20

The 2010 working group recommended that the Council of Ministers re-approve the2004 proposals.

A17. Speaking in Tynwald in October 2012 the Chief Minister, Mr Bell, said:

As far as the review of the rateable value of property is concerned, that has

been a regular feature, Madam President, as we all know, in this Chamber for

years about the discrepancy between rateable values. We did, whilst I was

Treasury Minister – I think as far back as 2006-07, something like that –

embark on quite a major problem. In fact, we had two pilot schemes set up in

Kirk Michael and Onchan, I think, to test it and equally I think my officers went

round the local authorities on the Island to start to engage them with that. The

cost at the time was somewhere in the region of £1 million, not £3 million,

although I have to say at that point we did not have the £1 million, which in

some respects slowed it down, but following on from that we were overtaken,

Treasury overtaken, with a huge amount of work. Not too long after that the

credit crunch came, Kaupthing came etc, and so it got put on the back burner.

It has been there ever since. There is still a demand for us to at least make a

start at looking at bringing fairness into the rateable value system and,

finances allowing, that is what we will do.36

A18. In July 2013 the Council of Ministers published an “Agenda for Change” quarterlyperformance report. This document includes, as a corporate objective:

Complete a public consultation on reforming domestic rating, take appropriate

legislation through the branches of Tynwald and complete valuation

assessments for substantially all properties affected by 30 September 2016.

A19. In January 2014 the Council of Ministers published an “Agenda for Change” quarterlyreport which stated:

Corporate objective: Complete a public consultation on reforming domestic

rating, take appropriate legislation through Tynwald and complete valuation

assessments for substantially all properties affected by 30 September 2016.

RAG status: Green

Comment: A public commitment to this reform has been made. Treasury has

now finalised research into the options available which are due to be presented

to the Council of Ministers for consideration in Q4 2013/14.

36On the cost of a general revaluation, see also Keys Question 1.1 of 28

thFebruary 2012 and Tynwald

Question 17 of 20th

March 2012

21

A20. On 4th February 2014 in the House of Keys Questions about the rating review wereasked of both the Chief Minister and the Treasury Minister. The Treasury Ministersaid:

It is my intention that the review of rateable values will be completed between

March 2015 and September 2016.

A21. In March 2014 the present Select Committee was established.

A22. In May 2014 the Council of Ministers published an “Agenda for Change” quarterlyreport which stated:

RAG status: Amber

An update presentation to Council on rating reform was planned for Quarter 4

of 2013/14. However, Tynwald will now review the rating system via a

Committee of Members, which is to report back to Tynwald by October 2014.

Treasury will take the advice of Council on how best to support the work of this

Committee.

A23. In July 2014 the Council of Ministers published an “Agenda for Change” quarterlyreport which reported no change of position from the previous quarter.

A24. In the same month the Council of Ministers was invited to note the formation of a“community delivery working group” to set strategy and guide the move to morelocal delivery of services. The group was to comprise the Ministers for Environment,Food and Agriculture (Mr Ronan); Infrastructure (Mr Gawne); and Policy and Reform(Mr Robertshaw).37

37Council of Ministers Paper 245/14, included within Appendix 2E

22

23

ANNEX 2: PAPER DATED 30TH APRIL 2014 BY THE TYNWALD CHAMBER AND

INFORMATION SERVICE ABOUT OTHER JURISDICTIONS

TYNWALD INFORMATION SERVICE

Tynwald Library, Legislative Buildings,

Finch Road, Douglas, Isle of Man, IM1

3PW

TYNWALD

Tinvaal

Telephone: 01624 685520

Facsimile: 01624 685522

E-mail: library@tynwald.org.im

For: Select Committee on the Domestic Rating System Date: 30/04/14

From: Kirree Ronan

Re: Rating Systems in other jurisdictions

Guernsey

Guernsey property tax comprises of a parochial rate, set by the Parish Assemblies, and an all island rate, set by the States Assembly.

A need for a review was identified in 2004 as the existing Tax on Rateable Values legislation, originally passed in 1976, was no longer fit for purpose.

As a result of the review the Taxation of Real Property (Guernsey and Alderney) Ordinance 200738 was passed. This new legislation meant that tax would now be paid on the “plan view measurement of a property’s built environment and land.”39

The rate of taxation is reviewed yearly and set out in a Property Tax (Rates) (Guernsey and Alderney) Ordinance.40

38 http://www.guernseylegalresources.gg/CHttpHandler.ashx?id=69145&p=0 (Link to consolidated text)

39 http://www.gov.gg/article/106572/Tax-on-Real-Property-TRP 40

http://www.guernseylegalresources.gg/article/109828/Property-Tax-Rates-Guernsey-and-Alderney-Ordinance-2013

24

Jersey

The Jersey Rates comprise of Parish and Island Wide elements, as explained within the rates section of the Parish of St Helier website.41

The current rates legislation was approved in November 2005 – Rates (Jersey) Law 2005.42

The Legislation was brought in following a proposition which had been put to the Assembly in March 2005 – States of Jersey Proposition - Machinery of Government: Relationship between the Parishes and the Executive.43

Following a report to the Assembly in February 2006 (Rates (Jersey) Law 2005: Apportionment of Island-Wide Rates Figure44) further regulations were introduced under the Law with regards to the proportion of the rates figure to be met by domestic and non-domestic rates. The Rates (Apportionment) (Jersey) Regulations 200645 were approved in November 2006.

Northern Ireland

Northern Ireland rates comprise of Regional Rate, set by the Northern Ireland Assembly and a District Rate set by the local councils. A guide to “How rates bills are calculated” can be viewed on the government website.46

Having been last reviewed in 1976, a review of the domestic rating system began in 2000 and was moved forward in 2002. As a result of the review the Rates (Northern Ireland) Order 197747 was amended in November 2006 by the Rates (Amendment) (Northern Ireland) Order 200648. This legislation introduced a move from a rental based domestic rating system to one based on capita values. A Rates (Capital Values etc) (Northern Ireland) Order 200649 had been approved in April 2006 detailing how those capital values are determined.

A review of elements of the rating system has been ongoing since that time and details can be viewed on the Northern Ireland Department of Finance and Personnel website.50

41 http://www.sthelier.je/rates/rates-faqs/

42

https://www.jerseylaw.je/Law/Display.aspx?url=/law/lawsinforce/consolidated/24/24.950_RatesLaw2005_RevisedEdition_1January2011.pdf 43 http://www.statesassembly.gov.je/AssemblyPropositions/2005/15290-31168-2332005.pdf 44

http://www.statesassembly.gov.je/AssemblyReports/2006/1556-46587-1322006.pdf 45

https://www.jerseylaw.je/Law/Display.aspx?url=/law/lawsinforce/consolidated/24/24.950.10_Rates(Apportionment)Regulations2006_RevisedEdition_1January2007.pdf 46 http://www.nidirect.gov.uk/index/information-and-services/property-and-housing/rates/your-rate-bill/how-rate-bills-are-calculated.htm 47

http://www.legislation.gov.uk/nisi/1977/2157/contents 48

http://www.legislation.gov.uk/nisi/2006/2954/contents 49

http://www.legislation.gov.uk/nisi/2006/611/pdfs/uksi_20060611_en.pdf 50

http://www.dfpni.gov.uk/rating-review/index.htm

25

England, Scotland and Wales

The collection of Council Tax in England, Wales and Scotland is governed by the Local Government Finance Act 1992.51

The Valuation Office Agency compiles Council Tax valuation lists for England and Wales and in Scotland the Scottish Assessor carries out that task (Property valuations are based on what they would have sold for on 1st April 1991). This allows properties to be allocated to a band from A-H with local councils setting the amount of tax to be paid for each band.

This and further information regarding the allocation of Council Tax bands can be found in the government’s “Working out your Council Tax”52 section of the website and the “Understanding your Council Tax banding”53 publication.

I also include a link to the Scottish Assessor54 website for your information.

51 http://www.legislation.gov.uk/ukpga/1992/14/contents 52

https://www.gov.uk/council-tax/working-out-your-council-tax 53

http://www.voa.gov.uk/corporate/_downloads/pdf/VO7858_understanding_ct.pdf 54

http://www.saa.gov.uk/counciltax.html

26

27

ANNEX 3: PAPER DATED 8TH SEPTEMBER 2014 BY THE TYNWALD CHAMBER

AND INFORMATION SERVICE ABOUT TRANSITIONAL ARRANGEMENTS IN

ONCHAN

TYNWALD CHAMBER & INFORMATION

SERVICE

Tynwald Library, Legislative Buildings, Finch

Road, Douglas, Isle of Man, IM1 3PW

TYNWALD

Tinvaal

Telephone: 01624 685520

E-mail: library@tynwald.org.im

For: Jonathan

From: Information Service

Re: Rating in Onchan

- when the merger took place?

- what the rate was in the Village before the merger?

- what the rate was in the Parish before the merger?

- what the rate was in the combined authority after the merger?

- who ended up paying a higher rate?

- whether they had to pay the higher rate straightaway or after a period of phasing?

- if the people moving to a lower rate also had a phased transition?

- what the legislative basis was for any phasing?

Before the Merger of the Onchan District, the two districts were split into two- (a) Village District of Onchan and (b) the Parish District of Onchan.

In 1984/85 the Village Rate was 68p and the Parish District was 13p.

28

The merger took place 1st April 1986 between the two, when the Onchan District Act55 was passed, The Act merged the Village (Urban) Districts and the Parish (Rural) Districts of Onchan into Onchan District.

The 1986 amalgamation stated that the Rural Rate should be 25% of the Urban in 1986, increasing by 5% per year until it reached 50%.

Second reading and clauses of the House of Keys Hansard 26th November 1985 explains the phasing.56

The higher rate was paid by the Village (Urban) District and the Parish (Rural) Districts were reduced by the amounts stated in Schedule 3 of the above Act by phasing over the period 12th May 1986 to 12th May 1990.

Another phasing in occurred in 2006 by The Onchan District (Differential Rating ) Order 2006- SD 0112/0657 phasing in from 1st April 2006 to 1st April 2009.

55 http://www.tynwald.org.im/business/committee/DRS/Briefing/1986%20Onchan%20District%20Act.pdf

56 http://www.tynwald.org.im/business/hansard/19802000/HK-19851126-v0103.pdf

57 http://www.tynwald.org.im/links/tls/SD/2006/2006-SD-0112.pdf

29

ANNEX 4: ANALYSIS OF LOCAL AUTHORITY RESPONSES

Date Q1 - is the current system fair?

Q2 - what system would you prefer?

Q3 - other comments

TOWNS AND VILLAGES

Castletown 08/04/2014 No Floor area Against Buttery proposal

Douglas 28/04/2014 [No] Refer to Treasury Consider water rate and sewerage charge

Peel 22/04/2014 No Current system favours rural residents

Onchan 24/04/2014 No No simple solution

Port Erin 16/04/2014 No Different comments from different commissioners

Port St Mary 17/04/2014 No Floor area Against Buttery proposal

Ramsey 25/04/2014 No Market values of property

Against Buttery proposal

PARISHES

Andreas 26/04/2014 Yes Content with status quo

Arbory 28/04/2014 No Distinguish Douglas business district from Douglas residential area.

Against Buttery proposal. Consider access to services, ability to pay, admin costs and independence of LAs.

Ballaugh 26/04/2014 Yes Content with status quo

Braddan 12/05/2014 No Occupancy

Bride No response received

German 01/05/2014 Not answered Far too serious to answer in one meeting.

Jurby 26/04/2014 Yes Content with status quo

30

Laxey 17/04/2014 No Size of property and land

Lezayre 28/04/2014 Yes Against Buttery proposal, seen as taxation without representation

Lonan No response received

Malew 04/04/2014 No Property values Against Buttery proposal

Marown 24/04/2014 [No] Property values Against Buttery proposal. In favour of localism.

Maughold 07/05/2014 No Rates should be closely connected to cost of services. Favour sheading model for LA reform.

Michael 28/04/2014 [No] Revaluation needed Consider commercial rates also

Patrick 15/04/2014 Yes LAs already operate on a regional basis

Rushen 24/04/2014 No Revaluation needed Against Buttery proposal

Santon 03/04/2014 Yes Reduced rates for vulnerable groups

Urban Rural

Existing system is fair 0 7

Existing system is unfair 6 8

Preferred basis of rating

Rental value 5

Capital value 3

Floor area 3

Occupancy 1

Parliamentary Copyright

available from:

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