Anger over plan to end tax relief (From Swindon Advertiser)
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Anger over plan to end tax relief
12:30pm Tuesday 19th August 2008 in News
Work is under way to destroy the Clare's Retail Equipment building
A 'STEALTH tax' on empty buildings has led to Swindon Council demolishing one of its sites at a cost to the taxpayer of £430,000 and it is unlikely to be the last.
The site of the former supermarket supply firm, Clare's Retail Equipment, is to be pulled down to avoid paying £110,000 a year in business rates.
From April this year business rate relief on empty properties was cut by the Government, on the basis that it would reduce rents and increase property supply.
But, according to Swindon Council's lead member for resources, the charge is forcing the council to use taxpayers' money on pulling down buildings.
Coun Nick Martin (Con, Shaw and Nine Elms said: "We are spending public money demolishing buildings to avoid this ill-thought out stealth tax.
"We set aside £430,000 in this year's budget for the destruction of one property."
And Coun Martin refused to rule out the possibility that other buildings would go the same way.
He said: "Clares won't be the only one."
Coun Martin also refused to rule out negative effects on Swindon's regeneration plans.
He said: "Swindon, like many other towns across the country, could suffer if regeneration projects are shelved as a result of this.
"We want MPs to take note and for the Government to urgently reapply the relief on empty property."
North Swindon MP, Michael Wills said: "It is a great shame that once again this council has decided to make a serious issue into a political stunt.
"If they really cared about the future of the town centre they would have contacted me about this issue.
"After all, I was responsible for approaching the Government to set up the New Swindon Company in the first place and getting the funding for it.
"It just proves that this council are not seriously interested in the long term future of the town, just political yah-boo."
Coun Martin denied he was making a political stance on the issue and said he was responding to a request to speak by the British Property Federation.
Peter James, chief executive of The New Swindon Company, said: "This will do nothing to help the regeneration of our towns and it simply puts another burden on developers.
"Sites have been demolished to make way for massive regeneration, but charging empty rates means that developments are likely to take even longer and will see smaller businesses face an even tougher time in the current climate."
Mr Wills said: "I am surprised that Peter James should lend his name to such destructive, ill-informed game-playing."
Comments(15)
RF1
says...
12:36pm Tue 19 Aug 08
Did no one think perhaps that 430 grand could have been spent on trying to encourage someone to move in and use the building and thereby generate some income?
Malkym
says...
12:46pm Tue 19 Aug 08
ItsPavAgain
says...
12:47pm Tue 19 Aug 08
"After all, I was responsible for approaching the Government to set up the New Swindon Company in the first place and getting the funding for it."
So Wills is admitting responsibility for the white elephant that is the New Swindon Company?
RF1
says...
12:51pm Tue 19 Aug 08
ItsPavAgain
says...
12:54pm Tue 19 Aug 08
RF1 wrote:If only it was that cut and dried RF1.
Another superb SBC own goal!Did no one think perhaps that 430 grand could have been spent on trying to encourage someone to move in and use the building and thereby generate some income?
Have you read the reports of commerical property company Brixton's £236.7m loss, or their chief executives assessment of an "apocalyptic outlook" for the commercial property sector?
It's not just SBC who is finding it hard to rent out commercial porperty at this time.
And as ever, the government appear to be doing their best to make the situation worse.
yingtong
says...
12:59pm Tue 19 Aug 08
genisis300
says...
2:02pm Tue 19 Aug 08
genisis300
says...
2:05pm Tue 19 Aug 08
genisis300 wrote:wish i had read that a bit better,
i wonder how much the tax would have been for that building for the year,
What i don't understand is that it would have cost £110k for a year or £430K how is that cheaper, The site will have to be redeveloped before it can be re-used costing more money,
nuddy2
says...
2:13pm Tue 19 Aug 08
£430k sounds like a lot of money, but with the tax on the empty building coming in at
£110k per annum and the chances of renting the building again virtually zero, from where I am sitting £430k to demolish it was probably the best option.
‘course, it may also have suited SBC to demolish it because isn’t this the areas that’s being looked at as a university site?
From an historical point of view, it’s a shame that this building is being demolished, as it was the last major rolling stock repair shop (no.24) to be built by the GWR and was the only building from the vast carriage and wagon works that was not demolished when it closed down in the 1960’s.
No idea why Wills is waffling on about SBC making this political, after all the fact is, it is his Government that's introduced the tax, not Swindon Council.
Big Mac
says...
3:17pm Tue 19 Aug 08
North Swindon MP, Michael Wills said: "After all, I was responsible for approaching the Government to set up the New Swindon Company in the first place and getting the funding for it.
This must be a first, a Labour MP openly admitting to such a disastrous mistake.
It's all becoming clearer now. I had wondered why the Council now had to ask the New Swindon Company for permission to actually do anything around the town - Wills obviously parachuted them in so that Labour maintain control of a town where the electorate has clearly said they want nothing to do with Labour and their failed policies.
And how interesting that both Swindon Council AND their new overlords, the New Swindon Company BOTH squarely blame Labour's stealth tax policies for this latest debacle.
Hmm, a Labour MP pretending they haven't introduced a new stealth tax... hands up anyone who believes him?
Still, barely another 18 months to go and then you, along with your partner in crime Snelgrove, are well and truly history Mr Wills.
Bobfm
says...
5:33pm Tue 19 Aug 08
What the article doesn't say is that Labour did build in an escape clause when enacting the legislation, which took account of any down turn in the economy. The act was finalised in 2007 and only became active in April 2008. It is the view of the BPF and frankly would be the view of anyone with half a brain, that to actually bring into force this legislation when it was clear, post Northern Rock, that Britain was in the 'sh*t and this would just make things was frankly stupid and as Minister for Business, is Wills still that or does he have another job, he should have advised his buddy Brown, what a disaster this move was.
I would suggest anyone wanting to read a full account of yesterdays press conference, with the inane rant of the Labour councillor you should visit TalkSwindon.org, it should be up shortly
I Too
says...
9:13pm Tue 19 Aug 08
If it had been used as part of a university, it wouldn't have been demolished with our council tax
Justin Tomlinson
says...
9:51am Wed 20 Aug 08
As an elected member Nick has the right to raise and respond to issues, especially as he is the Lead Member on Finance.
Bob did well to raise this issue - we all want Council Tax money to be used effectively, lets hope this prompts some action from the Government.
Bobfm
says...
11:14am Wed 20 Aug 08
Bobfm
says...
7:07am Thu 21 Aug 08
It seems now that major developers are speaking out, this from the Mail.
The ballad - famously covered by Jimi Hendrix - sums up the credit crunch when it says: 'There must be some kind of way out of here / Said the joker to the thief / There's too much confusion / I can't get no relief.'
Gateshead-born Mr Wheeler - a self-confessed Dylan fan - compares equity-based opportunist buyers to 'thieves' and owners who will not sell to 'jokers'.
In prosaic terms, the company has suffered under a new tax on empty buildings and the fall in value of its rental portfolio.
Net assets are down 26 per cent to £1.16bn while its share price dropped by more than 9 per cent to 224.75p at the end of trading.
'There is confusion - and an element of denial - over direct property pricing due to lack of transactions,' Mr Wheeler declared.
He added: 'The apocalyptic opening lines of Bob Dylan's All Along The Watchtower seem to capture the beleaguered mindset of the UK commercial real estate market.'
Mr Wheeler's company has also found itself with a growing number of empty properties with a rise from 15.4 per cent in December to a total of 18.7 per cent in June.
'It's our job to tell it like it is,' Mr Wheeler said.
'It's wrong for any business to just hope the economic problems will go away. It's an uncomfortable message, but it's honest and fair.'
However, Mr Wheeler did hold out some hope for a better future and said that Brixton could hold back the economic downturn by not starting any new developments. (It seems the BPF have it spot on)
Instead the developers could keep a look-out for distressed properties when price hit rock-bottom - it is only when these properties come onto the market that there may be a way out of the current situation.
'We are here with the cash to take advantage of those opportunities,' said the chief executive.
The retail market accounts for only 20 per cent of Brixton's portfolio, so even though Mr Wheeler explains that there is no way of telling when the property market will improve, his company should be able avoid any major problems.
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