Rating (Empty Properties) Bill

Thank you, Sir Alan, for your helpful advice. The reason why Treasury Ministers spoke was not any lack of confidence in ministerial colleagues, but the fact that this measure is palpably a straightforward tax demand. It is not about the more efficient use of land. It is about the more efficient—or, rather, the more rapid—acquisition of revenue for the Exchequer. These amendments put the Government to the test. If they are genuinely willing for land to be used more efficiently, and if they genuinely believe that the measure is about encouraging regeneration, they will have no hesitation in accepting the amendments, because they would exempt from the scope of the legislation properties that are empty specifically because they are going through the planning process. They would exempt properties that are in the middle of a regeneration programme, such as those for which planning applications have been made or which are awaiting the result of a planning appeal. Such properties should be specifically exempted. Let me explain why this specific exemption is worthy of this set of amendments. The amendments relate to the ideal of regeneration and, as we explored in previous debates, regeneration is a difficult process for those engaged in commercial property. When addressing regeneration in areas of past urban blight that require new commercial enterprises for new life to be breathed into them, we must recognise that people who are prepared to invest in those areas are taking a risk. Almost by definition, any area that is not currently a thriving business area—any area where additional commercial investment is clearly required or where we wish to encourage regeneration—is an area where the market fundamentals are not yet in place to attract the investment that we would all wish. Therefore, when someone brings forward a specific regeneration project, they do so with a close eye on the balance of advantage and the balance sheet. As they look at any particular regeneration project, they might look at a balance of sites in any particular city or town. They will try to get together a critical mass of land in the right areas to allow them to proceed with a regeneration project that will give them a satisfactory return on capital. As we all know, in the commercial property world sites can come up rather more slowly than one would wish in order to maximise the efficiency of a project. Nevertheless, in order to try to ensure that a project is both successful and genuinely transformative, an enlightened investor will wait and exercise patience until the exact portfolio of sites comes into alignment. As they wait for that to happen, it will of necessity be the case that some of those sites are left empty. They are elements in what will be a transformed landscape that cannot be transformed piecemeal. The developer has to wait until all those areas are available before he is ready to move. If the legislation is not amended, an additional tax will have to be paid on many of the parcels of land waiting to be packaged together, because the current relief on rating will no longer exist. That could mean that potentially viable regeneration projects would be rendered unviable as a result of the tax change. It stands to reason for every business that if it faces an increased tax bill, its economic activity will be penalised. As mentioned earlier, that is a not a hypothetical consideration, but a real-life concern. In an earlier debate, I mentioned the specific case of Palmer Capital Partners, which has, as reported in Property Week, already had to abandon regeneration projects because of the anticipated tax hit of this legislation. I am afraid that my accent meant that I did not pronounce the ““r”” at the end of Palmer sufficiently; the name is Palmer as in Huntley and Palmer, or Harry Palmer. The reason why that is relevant is that the Minister interpreted me to mean Palma, the capital of Majorca, the principal Balearic island, so he thought that the company was some sort of Mediterranean fly-by-night enterprise. That was an opportunity for him to suggest, with his characteristic sprezzatura, that the only people who were complaining were the villains whom he had previously identified in the property market—commercial property organisations that deliberately leave properties empty. I hope that he will take this opportunity to reassure Palmer Capital Partners that he appreciates that it is an entirely reputable organisation. He has the lifebelt of being able to say that it was my curious Aberdonian accent that lured him into making that mistake.