DAVID PENN RAISES QUESTION WHETHER WE SHOULD NOW GET RID OF BUSINESS RATES TAX ON EMPTY COMMERCIAL PROPERTIES ALTOGETHER
David, who is Vice-President of the Chamber made the point that this tax is helping to prevent developers and their funding parties build commercial properties speculatively.
He made the point that the problem doesn’t exist where pre-lets are agreed, i.e. construction starts once an occupier has committed, but SMEs cannot wait up to 18 months for a new building. The policy of charging rates on empty properties, even with a short-term “rates holiday”, means new small to medium offices and industrial units are in short supply.
Freeing up land for development and capitalising on the region’s major infrastructure projects will be key factors in the economic growth of Coventry and Warwickshire, businesses in the area have been told.
The area’s strategic geographic location at the heart of the country, together with its strong manufacturing base is driving demand from firms for commercial property, the annual conference of the Coventry and Warwickshire Chamber of Commerce heard.
The points emerged during a debate by a panel of stakeholders brought together to discuss the state of the economy in Coventry and Warwickshire.
David Ayton-Hill, head of economy and skills at Warwickshire County Council, said the investment potential of the area was strong; with the local authority receiving a high number of inquiries from firms asking about relocation opportunities.
He acknowledged there was a need to free up land to meet that demand – something the county council was actively pursuing.
Nuneaton MP Marcus Jones (pictured during the panel) said the area was already in a strong economic position and with developments such as HS2 and UK Central on the horizon then this would only get better.
However, in order to capitalise on the potential there needed to be an over-arching strategy implemented that ensured all stakeholders were working together.
Mr Jones said one of the key factors that had to be tackled was skills development because if the region did not have the future skilled workforce it needed then all the potential risked being wasted.
Mr Ayton-Hill said retaining graduates from the area’s colleges and universities would be an important factor in achieving this as it was a way of upskilling the workforce of the future.
Debbie Harper, area director of business banking for HSBC, said anchoring graduates to the region was especially important to the bank and was a key art of its strategy in relocating the headquarters of its UK retail bank to Birmingham.
David Penn, of Bromwich Hardy, said a reform of business rates so SMEs were more encouraged to pursue new-build opportunities might also help to sustain a key sector of the region’s businesses.
Mr Jones said he accepted that not every firm had been a winner in the most recent revaluation of business rates but said that hard as it was to accept, the business rate was a very reliable tax for the Government and one that was worth £26bn to the Exchequer every year. To consider replacing it with something else would be a major challenge.