What about help for small businesses?

Sep 5 2008 by Chris Knox, The Journal

WE can safely say that our slowdown is entirely due to the empty rates decision, the managing director of Evans Easyspace was quoted as saying when interviewed about the company’s decision to cut its development programme by more than 90%.

As one of the country’s biggest developers of small business units, it has apparently felt the brunt of a difficult governmental decision.

By removing tax relief on empty business properties, the Government has left developers such as Evans Easyspace and Segro, which has also stated that the policy will erode its profits, without a financial safety net in the current climate.

Removing the tax would encourage developers to push for full occupancy and to make the most of each unit.

However, it also promotes a build-to-order mentality, to ensure developers are not paying tax on empty units. The alternative option of leaving the tax in place would have allowed such businesses to continue creating units, allowing greater choice for small and medium-sized enterprises to command lower rents, reducing a key cost at a difficult time.

It would also have meant that those units left empty by grace of the tax relief on empty business property could be ready for new businesses to move into when the economy eases and allows them to start up or grow.

Last week, the Government announced help for first-time buyers and people struggling with their mortgages in an effort to boost the housing market.

One of the key rules for an individual in a recession, if indeed that is where we are headed, is to keep your job.

What about helping small businesses to survive without loss?

Surely, as they cut both stamp duty and a tax relief which could potentially help businesses at this time, they are feeding the economy on an individual and family level with one hand and taking away on a broader scale.

As is so often acknowledged, the built environment is a key factor in shaping the lives which inhabit it.

In this case, it can aid business, in turn helping the individual.

Currently, with one of the Government’s top regeneration advisers saying that buildings are being knocked down in efforts to beat the tax, the only people this policy is helping are those in the demolition industry; a finite economic boost, as there is only so much surplus they can raze.

For information on Constructing Excellence in the North East, contact regional director, Catriona Lingwood, on (0191) 383-7435 or catriona@ constructingexcellence-ne.org.uk.

Catriona Lingwood is director, Constructing Excellence in the North East