Business rate discount cut turns focus on Osborne

Chancellor George Osborne has come under pressure to ease the tax burden on owners of empty commercial properties in England after his party north of the Border criticised plans to cut the relief available in Scotland.

The SNP is planning to reduce the business rate discount given to empty shops and offices, from 50 per cent to 10 per cent, in a move it says will encourage higher rates of occupancy.

Scottish Conservatives said the plans were “straight out the Walter Mitty school of economic regeneration policy”.

This is despite the fact that, since taking power in Westminster, the coalition government has itself cut relief by removing an exemption from empty rates that had been granted to buildings with a low rateable value.

Osborne has asked a working group of MPs to produce proposals for how the empty rates regime could be changed, and Liz Peace, chief executive of the British Property Federation, said the Chancellor needed to consider the impact the current regime is having on small businesses.

She said: “We are pleased to see that the Scottish Conservative Party recognises how damaging empty rates are to both the property industry and the wider economy, and would urge the UK government to consider the concerns that they raise.

“There is no evidence to suggest that this tax hike will bring buildings back into use. Our experience in England is that instead it will lead to the demolition of perfectly usable buildings and choke off the development of new business space – particularly for SMEs, who rely on a steady supply of vacant property in which to grow.”