Rates (Jersey) Law 2005 amendment to maintain the 2019 value of the AIRF for 2020: Law Drafting instructions

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A decision made on 24 June 2020

Decision Reference: MD-TR-2020-0076
Decision Summary Title:	Maintaining the 2019 value of the Annual Island-Wide Rates Figure (AIRF) – Article 20(1) of the Rates (Jersey) Law 2005		Date of Decision Summary:	23 June 2020
Decision Summary Author:	Comptroller of Revenue		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title:	Authority to instruct Law Drafters with a view to maintaining the 2019 rateable value of the AIRF for the 2020 rateable year.		Date of Written Report:	23 June 2020
Written Report Author:	Comptroller of Revenue		Written Report : Public or Exempt?	Public
Subject: Authority to instruct Law Drafters to make Regulations under the Covid-19 (Enabling Provisions) (Jersey) Law 2020 to amend the Rates (Jersey) Law 2005 to maintain the 2019 value of the AIRF for 2020.
Decision(s): The Minister approved the report and authorised the Comptroller of Revenue to instruct law drafters to make the necessary changes.
Reason(s) for Decision: Ministerial approval is required to make the necessary legal changes.
Resource Implications: Officer and Assembly time only. The loss of the uprating is expected to reduce Government income by around £360,000 in 2020.
Action required: The Comptroller of Revenue to forward the decision to the Principal Legislative Drafter and to provide support to the Principal Legislative Drafter to ensure the required legislation is prepared.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Rates (Jersey) Law 2005 amendment to maintain the 2019 value of the AIRF for 2020: Law Drafting instructions

Treasury and Exchequer

Ministerial Decision

Request for Authority to Instruct Law Drafters in respect of Maintaining the Annual Island-Wide Rate Figure (AIRF) for 2020 at the 2019 value.

Purpose of Report

1.1 Following lobbying from the Comite de Connetables, the Minister has agreed to review the case for maintaining the Annual Island-Wide Rate Figure (AIRF) at its 2019 value for the 2020 rateable year – to provide further support to islanders as we come out of Covid-lockdown.

1.2 Parish rates are to be maintained at 2019 levels.

Background

2.1 The Island-Wide Rate was introduced at the time when the Government took over responsibility for social welfare from the Parishes. It is not hypothecated: the cost of social welfare far exceeds the revenues from this revenue stream.

2.2 Article 20(1) of the Rates (Jersey) Law 2005 obliges the Comite to revalorise the IWR in line with inflation. The Comite has lobbied the Treasury Minister to stop this revalorisation for the 2020 rateable year in light of the Covid-19 Pandemic. The Comite is not increasing Parish rates.

2.3 We estimate that not revalorising the IWR will keep £4 in the pocket of a family living in an “average” 3-bed home. The public purse will lose around £360,000 in 2020 only.

2.4 Effecting this change will require an amendment to the Rates (Jersey) law 2005 using Regulations made under the Covid-19 (Enabling Provisions) (Jersey) Law 2020 which will give immediate effect to the change. In order to use these emergency powers, it will be necessary to specify that the 2021 rates are uprated against a deemed 2020 increase – so limiting the loss to the public purse only to 2020.

3. Conclusion

Freezing the IWR will not significantly help islanders in financial distress nor will it significantly deprive the public purse of monies to help islanders in distress. Provided the Assembly is willing to invest the time needed to pass the legislation, the freezing of the IWR will synchronise the approach of the Parishes and the Government to the treatment of both parts of the rates charge and send a further signal that the Government is helping islanders to pull through the Pandemic.

4. Financial & Staffing Implications

Negligible. The main cost is officers’ time. The public purse loses around £360,000 for 2020.

5. Recommendation

Freeze the Island-Wide Rate at the 2019 rateable level for the 2020 rateable year.

Report author: Comptroller of Revenue	Document date : 23 June 2020
Quality Assurance / Review :	File name and path:
MD Sponsor: Comptroller of Revenue	File name and path: