Rating (Empty Properties) Act 2007

I am always keen to ensure that theory and practice come together and are resolved effectively. The reforms are relatively new, so we will need to look at the patterns and see whether the changes have made a difference. I am confident that they have. My hon. Friend asks whether there will be regional variations—an interesting point that must be considered. It is important to sit down and assess whether the changes are making the difference that Barker suggested they would make. The Government have estimated that the reforms could result in an overall reduction in business rent across the commercial property sector of between £80 million and £165 million. Such a reduction should directly benefit many local companies up and down the land, which is important when the world economy is facing an increasingly challenging environment. The UK is well placed to meet these challenges, thanks to the resilience and stability engendered by the Government's macro-economic framework and a decade of reform that has promoted open and flexible markets for labour, products and capital. To help business further, from 1 April we have seen the implementation of the major package of business tax reforms announced in the 2007 Budget, including the reduction in the main rate of corporation tax to 28 per cent., which will deliver the lowest ever rate in the UK and the lowest in the G7, improving competitiveness and encouraging investment. All these measures need to be seen as a package. To assist deprived areas, the business premises renovation allowance, which was introduced on 11 April 2007, almost a year before the reforms to empty property relief took effect, gives 100 per cent. capital allowance for the renovation of empty commercial property in deprived areas, as defined by the UK assisted areas map. Hopefully, that measure will also make a difference to many local companies. The package of measures should help to tackle low demand for property, as it is designed to increase competition in the economy more generally and to maintain the UK's attractiveness as an investment location, thereby helping to attract foreign direct investment and to stimulate innovation and growth. It is fully understood that the circumstances of property owners and the reasons why properties lie empty vary from case to case, and that many owners are genuinely trying to let their property, as my hon. Friend has made clear during this debate. However, too many commercial properties lie empty indefinitely, in many cases blighting communities and wasting the potential of brownfield assets. As a consequence, other areas are then developed. The Government no longer believe that we should continue to offer tax reliefs for buildings to lie empty, so the reforms were applied to all non-exempted properties in England, on the basis that it is in the interest of all communities that land and property are utilised efficiently. Indeed, we find empty properties in all communities in England. For example, in 2004-05 empty properties were found not only in areas of low demand, such as Wolverhampton or Sandwell, but within fast-growing and strong regional economies, such as Ealing, Manchester and Birmingham. Furthermore, in removing the total exemption for industrial properties, the reforms improve the fairness of the system between different sectors of the property market, by ensuring that the incentive to re-let or redevelop a property is applied to all empty properties, whether they are in the industrial, office or retail sectors.