Newsroom

Commons reception see MPs hit out over Empty Rates

A parliamentary reception was held this evening in response to the growing row over Gordon Brown’s tax on empty commercial property where numerous MPs hit out at the devastating effects of the tax.

Today’s event, which saw a House of Commons dining room packed with concerned MPs, was hosted by the Business Centre Association and Labour backbencher Phil Wilson, who replaced Tony Blair as MP for Sedgefield.

The BPF joined forces with Property Week on Monday to deliver an open letter to Brown backed by some of the UK’s biggest brands, including BA, McDonald’s and Nokia, view the cover here and the letter here.

The reception saw Wilson urge fellow MPs to sign an Early Day Motion - a Commons petition - calling on the government to re-instate relief for businesses from paying full business rates on empty offices, shops and warehouses.

Support for the motion, placed by Halifax MP, Linda Riordan, has doubled in the last fortnight with over 70 signatures from MPs of all parties. Click to see the full list.

Gordon Brown cut the relief while chancellor and from this April firms have had to pay full rates after a three month period of grace for retail and office space, and six months for industrial units. Before that, they received 50% and 100% relief respectively, meaning that industrial space has been massively hit.

Conveniently, Brown’s own constituency isn’t affected, as the legislation does not apply in Scotland.

The British Property Federation (BPF), which has led the lobbying campaign against the stealth tax, said empty rates were like making the unemployed pay income tax because vacant properties earn no income.

Phil Wilson, MP for Sedgefield, told the reception:

“It is fundamentally unfair that firms get taxed on these properties when they’re trying to bring new jobs and new investment into these areas. It is something I have pointed out very strongly to the minister and obviously I am keeping up the pressure and I will continue to press this issue with the government.”

Tom Stokes, managing director of business centre developer Evans Easyspace, said:

“We will never be fully let and will always have vacancies, but local authorities and most people in the public sector would say this is a good thing. It allows you to always have space for companies to move into if they wish to change or downsize. We are being penalised for providing a flexible option which is good for the economy and good for small businesses. There are an awful lot of MPs sympathetic to the cause, but I am not sure people in government understand what the real implications are for the economy. Constituency MPs that see the harm being done in their local areas do, but ministers seem to be turning a blind eye to that.”

Clive Betts, Labour MP for Sheffield, said:

“We are in very peculiar circumstances right now and this means the government really has to respond. We are trying to offer extra funds to help small businesses, yet we are charging them tax for having empty properties that are a result of the current downturn and something beyond their control. The government should reinstate empty rate relief, at the very least for the period of economic circumstance we are going through now.”

Jennifer Brooke, executive director of the Business Centre Association, said:

“While there are a lot of MPs aware of the issue, they were not aware of the total impact it is having on local economies, on redevelopment or on jobs. Within the regions developers need to be raising this issue and flagging it up with their local MPs. The loss to the Exchequer through demolished buildings or through lost jobs cannot be quantified but it will far outweigh what is raised through the tax.”

Liz Peace, chief executive of the BPF, said today:

“Properties are empty because we are in a downturn, not because people want them empty. While it is an accusation that has been levelled at the industry in the past, right now it is a ludicrous suggestion that defies common sense. Empty rates makes a mockery of the government’s supposed desire to support business and promote flexible leasing. More MPs are now becoming aware of how this threatens jobs and regeneration, and the longer ministers ignore the issue, the worse it will get.”

Laura Sandys, Conservative candidate for Thanet South in Kent, said:

“Today’s reception has been a welcome realisation of the fact that MPs from across the UK are up in arms over this tax. People in Thanet in Kent have been particularly badly hit by this tax It smacks of hypocrisy that the government can claim to value business whilst trying to tax offices, shops or warehouses that are empty because of the economic downturn. As Alan Duncan, the Tory business spokesman correctly said, this tax is immoral and the people of Kent deserve better treatment than this.”

Bob Laxton, MP for Derby, said: “For the sake of regeneration and development the Government needs to think twice about this ill conceived tax.”
Chris Mullin, MP for Sunderland South, said: “I hope the government moves swiftly, otherwise we shall have a disaster on our hands. I am aware of several companies in Sunderland who may be forced out of business unless common sense prevails. It will also deal a blow to regeneration efforts in the North East since no one is going to develop new business premises on a speculative basis if they have to pay the full business rate regardless of whether or not they can find a tenant.”

Newcastle MP Nick Brown, who is also chief whip, said: “We are in a position where people are pulling buildings down, which is an unintentional but destructive consequence of this, and the way to avert that is to grant relief. It is highly unlikely we will grant wholesale relief, but something could be done in the old industrial areas.”

For more information see www.bpf.org.uk or contact 020 7828 0111

Maddie Williams, media officer, 020 7802 0364
Andrew Teacher, head of media, 07968 124545