Rates relief whitewash will prove 'disastrous' for regeneration

Government proposals on cutting business rates relief on empty property are disastrous and will undermine government policy on regeneration, says the British Property Federation.

Gareth Lewis, BPF director for finance and investment policy said: "The consultation document published this week adds to the unanimous feeling of disbelief across the industry about the way this legislation has been rushed through without consultation and with absolutely no regard for proper consideration of the consequences. The consultation concentrates on anti-avoidance measures (15 pages out of 21) and discussions on listed buildings, with no invitation for comments on the important aspects such as the exemption periods of three and six months which formed part of the government's original budget proposals.

"This is extremely disappointing and the only glimmer of hope in reducing the significant adverse impacts of the proposals contained within the Ratings (Empty Property) Bill, is for the government to reconsider the exemption periods and make use of the powers that allow it to reduce the rates to 50pc."

It is those areas on the margins that are in dire need of regeneration will be hit hardest by this.

Currently, companies looking at investment opportunities in deprived areas would be prepared to take the costs of temporarily leaving properties empty on the chin while they redevelop an area and woo in business tenants and retailers. Cutting relief will tip the balance and remove the viability of regenerating Britain's poorest areas, widening the poverty gap even further.

The anti-avoidance measures likely to be introduced will also heighten the bureaucratic nightmare already suffered by UK business. There is no discussion on exemption periods or anything likely to have a positive impact on an otherwise disastrous set of proposals. Instead, the focus is very much on ensuring that the government gets its money.

Liz Peace, chief executive of the BPF, said: "The government believes that taking away rate relief will force people into filling their buildings. This defies common sense in that no one deliberately keeps properties empty – it helps no one – landlord or tenant, and cutting the incentives for those companies willing to take on and regenerate what are initially non-profitable areas, will similarly serve only to harm those areas. Cutting this relief ignores the basic fact that having empty property is a something that no landlord deliberately seeks."