Property chiefs call on Cable, Pickles and Spelman to keep pledges to scrap “damaging” hardship tax on empty property

18 Jun 2010

Policy area: Tax & Finance, Town centre & Retail

Property chiefs are calling on business secretary Vince Cable to reverse a tax on empty property which both he and current communities secretary Eric Pickles declared was “damaging” while in opposition.

The so-called ‘bombsite Britain’ tax which levies full business rates on unoccupied offices, shops and warehouses, has famously led to millions of square feet of property being demolished since it came in two years ago.

Described as a ‘tax on hardship’ by business leaders, it was derided for making a bad situation worse by hitting the cash flows of under-pressure business looking to save money by downsizing property, often forcing them to cut jobs instead.

Although a concession was made by Labour 18 months ago, only the very smallest properties were spared from paying the tax.

Ahead of the emergency Budget, business leaders are calling on the new government to keep their promises by reminding them of all the things they said in opposition to the tax. (See notes.)

In a recorded interview on the campaign website set up to battle the tax, Dr Cable called the tax “counterproductive” adding that it was “economically very damaging”.

Liz Peace, chief executive of the British Property Federation, said:

“It’s one thing to sit in opposition and criticise bad decisions but the real test comes in having the bottle to undo them and put things right. Of course we are in a climate where tax cuts are not viable, but the simple fact is that taxing empty properties at a time where high streets are falling apart is making a bad situation worse. This tax was opposed by hundreds of MPs, including the current secretaries of state for Business, Communities and Environment. If they do not un-do this damaging tax next Tuesday, questions will no doubt be asked.”

Francis Salway, chief executive of Land Securities, said:

“Whatever difficult decisions the new chancellor takes on Tuesday, it is absolutely vital that growth and enterprise are not hampered by spending cuts and tax rises. Empty rates has been a tax on hardship at the worst possible time and it is absolutely essential that the budget revokes it fully to support business occupiers and ensure the future provision of commercial space.”