By Daniel Hunter
MPs are calling on the Government to take urgent action on Empty Property Rates (EPR), a tax which is stifling investment, enterprise and job creation across the UK.
At a House of Commons reception on Wednesday, MPs from all major political parties expressed their support for the Business Centre Association’s (BCA) EPR campaign.
The reception was attended by leaders of Local Enterprise Partnerships and flexible space operators from around the UK, who explained how investment and speculative development has come to a halt in all regions outside London since the Government lowered the EPR threshold to £2,600 RV in April 2011.
“There are several business centres in my constituency. They were all originally built on a speculative basis and have supported many start-up businesses over the years," Marcus Jones, MP for Nuneaton who said.
"Start-ups are critical for bringing growth back in this country. But speculative construction of business centres is being put at risk by Empty Property Rates. This should be of great concern to Government.”
Julian Sturdy MP, who led a debate in the House of Commons last month highlighting the hardship caused by EPR added:
“With the Chancellor’s budget approaching on the 21st March, today’s reception is both important and timely. EPR is an enemy to enterprise and a potential brake on the economy. It is stopping the private sector growth that we need to achieve. The next stage of our campaign is to lobby the chancellor.”
Business centres and flexible space operators are private-led organisations that support more than 40,000 start ups and SMEs across the UK. They provide easy in, easy out agreements that allow occupiers to expand or contract according to market conditions without financial penalty. As a result of this churn, operators will always have vacant space, achieving a maximum occupancy of around 90 per cent.
Harry Platt, chief executive of the Workspace Group and BCA Chairman said:
“EPR is grossly unfair. It is a recurring tax on well managed existing space which runs at 90 per cent occupancy. It is also a blunt instrument that places the heaviest financial burdens on operators in the worst hit economic regions. In short, it is a tax on innovation, entrepreneurship and job creation.
“The UK is the world leader in flexible space expertise, with 40 million square feet and 400,000 workstations. Flexible space operators play an essential role in nurturing enterprise in the economy. We welcome David Cameron’s recent initiative to release Government empty properties. However, we would emphasise that the Government needs to work with partners experienced in flexible space provision. BCA members can provide help — but at the same time they should not be penalised by this empty rates tax on job creation in the SME sector.”
The BCA is calling on the Government to reinstate the EPR threshold to £18,000 RV and to introduce an exemption period of three years for all new speculative and refurbished property developments.
Liz Peace, chief executive of the British Property Federation, commented:
“The restriction of empty rates relief has caused considerable hardships in the shape of business contraction and failure, redundancies, the demolition of usable buildings and the shelving of new projects. Small businesses, both in the property sector and in the wider economy, have been particularly hard hit — which is why we urge the Chancellor to restore the relief for businesses with a rateable value under £18,000.
“But we are also calling for targeted relief that would encourage property owners to get on with regeneration schemes and speculative development. A steady supply of new business space will be vital if SMEs are to play their part in growing our economy, but at present the rating system discourages the development of the kind of facilities they so badly need.”
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