Empty Property Rates (SMEs)

Mark Pawsey Excerpts

Wednesday 11th January 2012 Westminster Hall

[Julian Sturdy]

I appreciate those comments. The BCA was also talking about returning to the threshold figure of the recessionary times of £18,000. Given the tough economic times that we face, those two policies would help the situation.

[Mark Pawsey (Rugby) (Con)]

On the exemption period, does my hon. Friend agree that six months is too short a period in which to find a new tenant? The commercial property market is difficult. Six months between one tenant leaving and the finding of a new tenant is insufficient to do the necessary marketing, to show people round and to get people into the accommodation. At the very least, the exemption period needs to be increased.

[Julian Sturdy]

I entirely agree with my hon. Friend. The six-month exemption period—indeed, it is only three months for retail premises, which is obviously even shorter—is incredibly burdensome for property owners. He is right that the short exemption period is difficult when marketing these properties and looking for new tenants.

We have to accept that there must be churn within the market. No one will ever say that we will get 100% of such properties filled up. Even in the best of times, we are perhaps talking about filling 80% to 85% of properties, and there must be that effective churn within the market to allow flexibility within businesses.

--- Later in debate ---

[Julian Sturdy]

I entirely agree with my hon. Friend and that point is very well made. In fact, the whole hub of the argument is about fairness. People are completely prepared to pay tax on income earned, but this tax on empty properties could be seen as a tax on failure and it is just simply unfair.

Similarly, there is nothing fair about forcing entrepreneurs to consider selling, abandoning or even demolishing their premises because of the threat of excessive taxation. To penalise a property owner whose property falls vacant in recessionary times is not a prescription for economic recovery but a recipe for economic stagnation. Our stance on empty properties requires a fundamental review.

[Mark Pawsey]

rose—

[Philip Davies (in the Chair)]

Does the hon. Gentleman have permission from both the Member who secured the debate and the Minister to speak?

--- Later in debate ---

[Mark Pawsey]

Mr Davies, I have spoken to my hon. Friend who secured the debate, but not the Minister. Could I have two minutes to speak?

[Philip Davies (in the Chair)]

You can speak very briefly, because we want to hear the Minister’s response to the debate.

[Mark Pawsey (Rugby) (Con)]

Thank you, Mr Davies, for calling me to speak.

I declare my entry in the Register of Members’ Financial Interests and I remind the Chamber that I raised this issue in Westminster Hall in November 2010. Interestingly, Mr Davies, you were in the Chair then too. Equally interestingly, there was no attendance at that debate by any Opposition spokesmen, which perhaps indicated the Opposition’s level of concern about matters affecting business.

At that time, I raised a constituency case, as my hon. Friend the Member for York Outer (Julian Sturdy) has done today. My constituent had a commercial property as an investment, which he had acquired after selling his business that had been located there. In recent months I, too, have visited constituents who have been very much affected by the changes including, most recently, an engineering company that has a vacant unit on its site, is unable to find a tenant and is liable to pay the commercial rates. In his reply to me a year ago, the Minister spoke of support to small business generally, but regretted the fact that the Government were unable to offer the concession that property owners would like.

My hon. Friend the Member for York Outer drew attention to the fact that the situation has become worse rather than better as a consequence of the fall in the exemption limit from £18,000 to £2,600, which means that the large majority of properties are now included. My hon. Friend spoke about the need for a private sector-led recovery from the recession we are suffering. Critically, at a time when we are demolishing perfectly sound industrial premises to avoid paying the vacant commercial rate, and developers are not developing new industrial and commercial premises because if they do so they might be left vacant, we are making it more difficult for small businesses to get started. There are strong reasons why the Government need to address the issue, and I very much look forward to the remarks that the Minister may make to be able to assuage the fears of businesses in this sector.