Rating (Empty Properties) Bill

The hon. Gentleman uses two completely separate parts of the argument; however, both emphasise the point that this provision is a tax increase. I should be interested to hear in the Minister’s summing up examples of tax increases that are good for business. This tax increase will be an additional hit on business and busts the RPI rule, and it will also have an effect on the commercial property sector. Those who hold shares in commercial property will, like our pension funds, suffer. As I said, I should be interested to hear of any example that the Minister can give of tax increases that work in the interests of beneficial commercial activity, because they very rarely do so. As we explained earlier, the principal justification for this measure is simply the raising of £1 billion. There are a number of different ways in which this measure will make life more difficult for businesses. We have outlined how it will make life more difficult regarding leases and the adverse effect on pension funds, but the manner of this change’s introduction could also lead to an increase in the number of companies contesting valuations, more tribunals, more bureaucracy and additional cost. So as we can see, the original foundations of the Government’s case are flimsy. The basis on which they are introducing this measure does not stand up. The costs for business are clear. Crucially, this change will also work against the improvement of the built environment. The Government now explicitly acknowledge in the Bill that there is a real risk that some people will vandalise their own property in order to escape liability for tax. During the paving debate on the Ways and Means motion, the Minister for Local Government said that it was debatable whether people would rip roofs off buildings and strip out floors in order to evade tax. However, what was debatable then has become a real danger that the Government now feel that they need to legislate to prevent. Indeed, schedule 1(4) is specifically intended to deal with that risk. That legislative change acknowledges the force of our argument that this legislation could lead to all sorts of perverse incentives and temptations in the operation of the commercial property market. More than that, the measure itself raises all sorts of questions. How will intent be proved? What exceptions will arise? We will have to wait for the answers until secondary legislation is introduced, but the Minister risks putting himself in the position of having to judge the intention of an individual when they change the use of their property, and all because of the creation of a perverse incentive. The truth, which the Minister has failed to acknowledge, is that the real reason why properties lie vacant for longer than they need to is not the existence of this rate relief but our dysfunctional planning system. The operation of the use class system and the making of a change of use so difficult prevent the property market from responding as rationally as it should to demand. In the previous debate to which I referred, several of my hon. Friends—my hon. Friends the Members for Salisbury (Robert Key) and for St. Albans (Anne Main) chief among them—pointed that out eloquently. The planning rules needed to be changed, so that the use of certain properties in their constituencies could be changed and they could move from a function that was no longer required to a new one that was very much wanted. However, because of obstacles and delays in the planning system, those properties were compelled to lie empty for too long. Under this measure, individuals who are desperate to see an active and effective new commercial use for their property will pay additional taxation even as they strive to do the right thing commercially, but are prevented from doing so by the planning system. Our built environment thus suffers, because buildings are not used as they should be. They are not used as effectively and efficiently as they should be to satisfy local demand, to meet local market needs and to ensure a proper return on the investments made.