This conference calls upon Her Majesty's Government to eliminate empty property business rates permanently on all vacant properites for those landlords who clearly demonstrate that they are actively and effectively marketing their empty commercial/industrial properties for rental.

Proposed: Adrian Forsell

Seconded: Elaine Vandelli

Region: Leicestershire/Northants/Rutland

Personal votes for:         166

Personal votes against:  14

Branch votes for:            126219

Branch votes against:     2219

In proposing the Motion, Adrian Forsell set out the background to the whole debate. 100% rates on empty properties were announced in the April 2007 budget and imposed from April 2008. The tax will generate between £1 and £1.5 billion. Full rates are payable once the property has been empty for 3 months for shops and offices and for 6 months in the case of industrial space. It is a tax without an income stream to pay for it.

The objective of the change was to reduce business rates and improve the UK's competitiveness by bringing empty properties to market. Centre Point is the classic example. Valued according to the rental income, it was actually worth more empty in a rising market. For a small private landlord though, empty properties mean no income and an increased risk of vandalism.

However, the situation has changed and while we have a temporary 1 year suspension of this tax for properties with a rateable value of less than £15,000, Scotland and Northern Ireland have 50% relief.

The other objective was to get brownfield sites developed. However, in the first 6 months after the change was introduced some 5 million sq ft of workspace was demolished or is pending demolition to avoid the cost of rates. Much of the space being demolished is secondary commercial space. Exactly the type of space used by start up and struggling businesses as it is cheap. 

In less than a year the reforms are wreaking havoc and resulting in higher not lower rents.

Elaine Vandelli seconded the motion with points about pensions and business survival. Many business people relied on the income from their property as their pension. It being more stable than the stock market. Now they have no income and are being forced into selling. The public sector is similarly affected with Swindon paying out £110,000 on 1 40 acre site alone.

The change hits businesses managing for survival. Stuck with a lease on property that is now too large, the obvious answer is to sub let. Until that is accomplished they have to continue paying rates as well as rent. A cost which could make the difference between survival and closure.

Roger Culcheth supported the motion on behalf of National Policy, pointing out that legislation is not required to move to a relief of 50%.

Speakers supporting the motion confirmed the points made by the main speakers with one member reporting bankruptcies amongst private landlords already as a result.

There was just one speaker against the motion. He recommended caution as the revenue would have to be replaced from somewhere.

In summing up, Adrian Forsell condemned the reforms for being introduced without listening to the business organisations. He warned that the destruction of business premises would lead to real problems once the upturn comes.