Successive governments have been intransigent on empty rates. And as the economic climate has worsened, so have prospects for change. Until now. After EG’s lobbying efforts, a better policy could be on the cards.
No less a figure than George Osborne has asked for a working group to be set up to produce proposals on how empty rates could be changed. The chancellor agreed to review the widely loathed legislation on the back of an Estates Gazette investigation which showed that government itself spends millions on the tax.
Back in March we compiled figures that revealed that the combined empty rates bill incurred by Whitehall and town halls up and down the country has topped £50m over the past 12 months and would rise to £70m next year.
We passed the figures to York Outer MP Julian Sturdy, who put them in front of the chancellor this week. The submission persuaded Osborne to ask Sturdy to form a working group with six other MPs examining alternatives.
Let’s not get carried away. A review is no guarantee of change. But where high-profile campaigns about the cost to business have yielded little, it seems that highlighting the direct cost of the policy to the public purse has been more persuasive.
(Let’s also credit the deft footwork by a backbench MP: it’s enough to restore one’s faith in the parliamentary system.)
So what could change? Well, a Welsh government-commissioned study recommended this month that all new-builds be given up to three years’ exemption from the tax. So a similar measure is a possibility in England, as is full rate relief for low rateable value properties typically occupied by smaller struggling businesses.
And it is here that it gets interesting.
It is the cost to the public purse of changing the legislation that has stymied previous efforts to drive reform.
But today the government’s main problem is delivering a policy agenda with growth at its heart. Heralding changes to empty rates as part of a package of pro-growth policies would not just be positive in its intentions – for the first time, it could be politically acceptable too.
Speaking of parliament, you need the benefits of parliamentary privilege to be as outspoken as Jack Straw was this week about Peel Holdings.
In the Commons, the former foreign secretary accused Peel of “legal subterfuge” and “calculated deceit” in its efforts to undertake a £16m expansion of a retail park close to his Blackburn constituency.
Straw (who has his own neighbouring constituency interests at heart, of course) claimed that despite losing a public inquiry into extending its 250,000 sq ft Whiteberk retail park in Hyndburn, Lancashire, Peel had used 29 apparently minor planning consents obtained between 2008 and 2010 to reconfigure the scheme. Straw suggested that Peel and other developers were using such tactics in other local authorities as well.
Peel sees it differently of course, pointing to its £16m investment in 250 jobs at “a failing retail park”. Expect something even more forthright to follow.
So much has been written about the extraordinary resilience of residential in the capital that it’s hard to sort the wheat from the chaff. But the most complete piece of research on the sector in the capital remains The Red Book from EGi’s London residential research team. And it’s published this week.
Some findings surprise: constructions starts are back to pre-recession levels in certain areas; and by next year some areas will be back to pre-Lehman levels of construction completions. And while inner and outer London are on very different paths, it’s by no means boom for one and gloom for the other.
Download the executive summary for free at www.estatesgazette.com/theredbook.
