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UK govt urged to make commercial property rate changes in pre-budget report

A growing number of Labour MPs are backing a campaign started by the British Property Federation to reverse new rules that came into effect in April. Before that offices and shops were exempt from taxes on empty properties for three months, and then only had to pay 50%, while industrial properties had complete exemption.

Chief whip Nick Brown is the latest political heavyweight to back the campaign. He described the tax as 'destructive'.

Just a week ago business minister Lord Mandelson described it as 'good for business', but as the in-depth article in PropertyWire's feature section shows it is leading to commercial property owners demolishing empty buildings rather than pay the tax because it is cheaper to do so.

MPs are now hoping that there will be some element of relief introduced at next week's pre budget report. A dossier was delivered yesterday to the government showing further evidence of demolitions caused by empty rates.

Nick Brown said he believes the campaign is having an effect. 'I do think the government will look at granting relief. We are in a position where people are pulling buildings down, which is an unintentional but destructive consequence of this, and the way to avert that is to grant relief,' he said.

The opposition Conservative party is also backing the campaign. 'The fact Labour's own Chief Whip is leading this tax revolt shows just how damaging this levy is,' said Eric Pickles, Tory local government spokesman.

'The Chancellor Alistair Darling has an opportunity to make a small tax concession that would hugely help businesses survive the current economic bloodbath. It is vital he uses the pre-Budget report to do this, sending a clear message that the government wants to support, not hinder, recovery,' said BPF director Peter Cosmetatos said.