Government chief whip calls for empty property relief return
Nick Brown, government Chief Whip, has broken rank with the party line and called for Empty Property Relief to be reinstated.
Controversy is raging over what is described as a tax on empty properties with an open letter from Tesco, British Airways, Nokia and Legal & General with hundreds of other UK companies to the prime minister yesterday, and around 120 MPs signing an early day motion on the topic.
The government is thought to earn around £1 billion a year from taxes on empty properties.
Rate relief on empty properties only lasts for six months on industrial sites and three months on commercial sites.
Previously industrial sites had 100 per cent for however long they were empty and commercial sites had 100 per cent relief for three months and 50 per cent relief there after.
But the current property downturn means some firms are finding it more profitable to demolish buildings than pay the extra.
Disagreements over the tax have now entered the government.
Chief Whip Nick Brown has called on relief to return in old industrial areas such as his own Newcastle constituency.
"Although it may be appropriate in London and the south-east, these are completely different circumstances we have in the north-east, and I do think the government could look at granting relief in the old industrial areas like we have here," he told the Northern Echo.
"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."
The British Property Federation (BPF) is now calling on Alistair Darling to perform a u-turn on the tax relief in his pre-Budget report next week.
"It has been a problem since day one," a BPF spokesperson said.
He maintained the campaign to get a u-turn had "massive support", but could not be confident of a change.
However, trade secretary Peter Mandelson has lent his support to the tax.
He told the Telegraph: "I dont think now is the time to bring back the business rate relief on empty properties, as I believe this can benefit small businesses.
Landlords are more likely to bring down rental prices if they are looking to find new tenants quickly, which is good news for tenants.
Roger Gale, a Kent Conservative MP for North Thanet, said: "This is the politics of the madhouse. We are imposing a policy that was dreamed up years ago under very different economic circumstances and introduced on April Fools Day this year at the start of what we now know to be a deepening recession.
"In the Wonderland that this Alice Minister inhabits there are clearly queues of shopkeepers and manufacturers waiting to pay rent for premises.
"In the real world of east Kent, life is, sadly, just not like that. Charging the owners of these premises retrospective rates on empty properties is about as tying a stone to the leg of a drowning man and telling him to swim."
Liz Peace, BPF chief executive, said: "How can the government ignore the views of so many MPs, experts and real people? No one with a basic understanding of business supports this."