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Blears hints at rates U-turn

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Hazel Blears has given the clearest signal yet that the government is preparing a U-turn on abolishing empty property rates relief.

Speaking at a fringe event at the Labour Party conference, the communities secretary admitted "circumstances have changed" since the policy was devised.

It was implemented in April on the back of recommendations from Sir Michael Lyons’ inquiry into local government and Kate Barker’s national review of land use planning .

"What we’ve seen in the last few months has changed the economic landscape out there," Ms Blears said of the recent fall in demand for commercial properties.

"We now need to look at the cost benefit. I won’t say the original policy is hitting the same buttons as it was two years ago so we need to keep that under review and see if it is worth making any change."

Since April, property owners have had to pay full business rates on empty commercial properties. Previously office and retail space received a 50% relief, while warehouse and factory owners received full relief.

However, the change has prompted fierce criticism. John Nicholls, chair of the Urban Regeneration Companies chief executives group, claimed "cities are beginning to look like broken teeth", as a result of unfinished developments and pre-emptive demolition.

Ms Blears told the fringe event there were "different problems in different regions in relation to different kinds of properties".

Meanwhile, Birmingham City Council leader Mike Whitby (Con) claimed the government’s "tax now, ask questions later policy" was damaging regeneration and business.

Speaking at an event organised by the British Property Federation (BPF) at this week’s Conservative party conference , Cllr Whitby claimed businesses with empty property in Birmingham will pay almost£23m this year as a result of the relief’s abolition.

The council itself will be paying an extra£817,000 on empty council-owned property.

A BPF spokesman claimed it had been told by local government minister John Healey there were no plans to restore the rate relief.

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