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Gordon's empty rates response is all spin

publication date: Jul 9, 2009
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The Prime Minister has responded to the British Property Federation’s No 10 petition against empty rates declaring that the tax is an incentive for re-use of property, restating that 70 per cent of property owners will be helped.

The BPF's long-running campaign united business groups including the CBI and BRC as well as big names like Asda, Tesco and McDonalds. The website: www.emprates.com was launched to enable those affected to get in touch with their local MPs.

Liz Peace, chief executive of the BPF, said: “This response shows the government had totally lost touch with the realities faced by real business.Their response is spin of epic proportions.”

Figures from Knight Frank disprove the government’s statement about helping 70 per cent of properties with the rates holiday. Once charities and listed buildings – which do not pay empty rates anyway – are taken into account with other pre-existing reliefs, just 31 per cent of properties are helped in Manchester while the figure falls to 25 per cent in London.

The BPF estimates that over 15 million square feet of commercial space has been demolished by firms trying to avoid paying the tax.

The Government said: “The Government has no long term plans to reverse the changes to empty property rate relief introduced from 1 April 2008, however, as with all taxes the Government will keep the position under review. The Government decision to introduce from 1 April 2008 the reforms to empty property rate relief, charging 100% rates beyond the initial rate-free periods when properties stand empty, is right for the long term. It increases the incentive to re-let and re-use empty property.

“The Government has listened to the concerns expressed by property owners. The Chancellor announced in the Pre Budget Report (2008) that for 2009-10 all empty properties with rateable values up to £15,000 will be eligible for full relief. Up to 70% of all properties are rated under this threshold and if empty will pay no rates in 2009-10. Re-introducing the previous relief from rates for all empty property would cost £950m and would remove the incentive to re-use commercial property. The new time limited relief for lower value properties will help owners of smaller properties manage short-term pressures due to difficult property market conditions.”

Liz Peace, Chief Executive of the BPF, said: “In a recession where the property industry has been so badly hit taxing owners without tenants under the claim it will conjure up tenants and encourage property to be re-let is nonsense. It is illogical to suggest any business would want vacant space in a falling market. Where does the prime minister expect tenants to come from when one in five shops is shutting? The government claimed that empty rates relief was cut to reduce rents by releasing property into the market, but in some areas rents have fallen by 30 per cent because of the market drop off. Property firms are going bust too and none of them want any properties that earn them no income.”

Click here to read the petition 
Click here to petition No 10