Oral Answers to Questions
Debate between Mark Pawsey and Esther McVey(6 years, 4 months ago)
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Mark Pawsey (Rugby) (Con)
The NAO report acknowledged the close links between local authorities and universal credit. As one of the first full-service sites, Rugby and its borough council received an £85,000 payment to assist with the cost of digitisation. Will the Secretary of State join me in welcoming that valuable support for local authorities in full-service areas?
Commercial Property
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Mark Pawsey
I thank my hon. Friend for his contribution; he makes a very good point. The hope that the application of empty business rates would encourage the property owner to accept lower rents in order to keep their buildings occupied, and that it would support businesses in the economy generally, has not been realised. There is a parallel here with the position taken by Opposition parties in respect of welfare reforms. The Opposition say that there is no point in trying to force people to take jobs because there are no jobs available. Similarly, there is no point in trying to force landlords to let commercial property cheaply if there are simply no occupiers to take up the space. There are absolutely no incentives for property owners to keep their buildings empty and not be active in seeking occupiers. In the case of Mr Summers, his failure over the past two and a half years to find a tenant has not been for the want of trying.
As mentioned by my hon. Friend the Member for Nuneaton (Mr Jones), one way in which property owners can avoid their liability for empty property rates is simply to demolish the property—if there is no building, there is no business rate. The RICS survey shows that the application of vacant property taxes is currently the strongest single factor in determining which buildings are demolished. It is often the older, less attractive properties for which, in times of recession such as now, it is more difficult to find a tenant. However, in most cases such properties are perfectly sound, usable buildings. An unintended consequence of the 2008 changes is that much of such low-cost industrial accommodation will no longer be available. Just as the country starts to emerge from recession, the start-up businesses that will be so important to our future prosperity will not be able to find any premises to operate from.
As my hon. Friend the Member for South Staffordshire (Gavin Williamson) mentioned, given the anxiety of completing a building, not being able to find a tenant and thus becoming liable for empty property rates, it is absolutely no surprise to find that property development companies are no longer developing commercial property on a speculative basis.
Esther McVey (Wirral West) (Con)
I congratulate my hon. Friend on securing the debate. During the past couple of years in Liverpool and Merseyside, there has been considerable regeneration both as a result of speculative build and because people really wanted to put their heart into the city to develop and grow it. The tax on empty properties has stopped that process in its tracks because people wanted to look for secondary investors while developing inner-city areas.
Mark Pawsey
I thank my hon. Friend for that contribution. Clearly the redevelopment and stimulation of our town centres has been brought to a halt by this legislation, which has made that process much more difficult. Commercial property development companies are no longer building property speculatively—by which I mean property being built in the expectation of finding someone to occupy it, rather than having an occupier already in place. No new building has taken place and nothing has been left in the pipeline for later. Again, as the country emerges from recession, the consequence of that is that the accommodation needed by our businesses will still be in the form of paper plans, rather than completed buildings.