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MPs join property industry in urging Osborne to ease 'bombsite Britain tax'

The British Property Federation (BPF) has urged George Osborne to use his Budget to unleash small business growth through reform of empty property rates, amidst a groundswell of support from backbench MPs.The BPF’s Budget submission comes as MPs from across the political divide prepare to lobby the Chancellor, arguing that empty property rates - where businesses have to pay full business rates on empty buildings - is damaging economic growth and holding back investment.Conservative MP Julian Sturdy has written to the Chancellor requesting an urgent meeting with backbenchers. It is understood that as many as 65 MPs support reform of the empty rates tax. The move follows a Westminster Hall debate called by Sturdy in January at which reform was supported by both Government and Opposition MPs. Empty rates has been dubbed the ‘bombsite-Britain tax’ because it has caused millions of square feet of empty property to be demolished. This perfectly usable space could have been let on flexible terms to small businesses.It is also holding back the growth of SMEs, which rely on a ready supply of vacant space in which to grow. Business centre owners are at present unable to build or offer this space due to the high cost of holding empty property caused by empty rates.In its Budget submission the BPF has called for targeted concessions that would help the SME sector. It has asked for relief from empty rates for low value properties, which was withdrawn by the coalition Government last year. It also wants to see relief from empty rates for new development, and for buildings that fall empty in the context of regeneration and refurbishment.Julian Sturdy, MP for York Outer, leading the calls to the Chancellor, said: "Empty property rates are a regressive and negative form of taxation which choke economic growth and penalise those already suffering from the wider economic situation. I firmly believe that the Government should take action at the upcoming Budget to bring some relief to those within the property industry and that’s exactly what I shall be asking the Chancellor to do.”Paul Uppal, MP for Wolverhampton South West, told the Westminster Hall debate that Empty Property Rates had held back regeneration within his constituency and caused developers to see empty property not “as an opportunity but as a millstone around their necks”. Bill Oliver, chief executive of St Modwen, one of the UK’s leading regeneration specialists, said: “Empty property rates are a major disincentive to carrying out speculative development for small business premises. There is certainly demand for new space from businesses and any relief that can be brought in to help stimulate activity in the sector would benefit both developers and occupiers, and would certainly be welcomed.” Liz Peace, chief executive of the British Property Federation, said: “Not only is it unfair to tax those saddled with property that they cannot let or use; we are certain that the restriction of relief carries hidden costs in the shape of business contraction and failure, redundancies, demolition of serviceable buildings and shelving of new projects. We believe SMEs – both in the property sector and in the wider economy – will have been particularly disadvantaged as a result of the current rules.”Jennifer Brooke, executive director of the Business Centre Association, said: “Business centres are playing a vital role in the UK economy by supporting more than 40,000 SMEs and start ups. The benefits of raising the empty property rates threshold would far outweigh the costs, as it would lead to job creation, incentivise investment and stimulate growth which has come to a standstill since the threshold was reduced. If the Government does not act quickly, the BCA predicts that there will be a critical shortage of flexible space within the next two years.”The BPF has re-vamped its empty rates website: www.bombsitebritaintax.co.uk to provide a focal point


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