Pictured above: BVWM executive director James Watkins

The Government says it will keep the issue of empty property relief under review, but for the moment can't afford to act.

The pledge came in a letter to Business Voice West Midlands from the Department of Communities and Local Government.

BVWM has been pressing hard for a re-think on what pundits have dubbed the "bombsite Britain tax", so named because some owners have resorted to knocking down their own properties to avoid the charge.

Developers across the country are angry that the measure, introduced by the previous Labour administration, is being extended by the Coalition even though the Conservatives condemned it in opposition. It is scrapping rates relief for empty properties with a rateable value under £18,000. From April the threshold for exemption will drop to a rateable value of £2,600. It is reckoned this will pull in an extra £400 million a year.

The development prompted BVWM to write to Communities and Local Government Secretary Eric Pickles pleading with him to consider the long term damage being done to cities.

However, the Government has again insisted that, given the parlous state of the public finances, it needs the money.

It states: "The Government fully appreciates the problems caused by the reform of empty property rates.

"However its ability to take action on this matter will need to be balanced against the overriding need to reduce public expenditure and support the economy generally by reducing the deficit."

Acknowledging there would be "disappointment" at this stance, it added: "The Government are keeping the current empty property relief scheme under review."

The DCLG also highlighted help to small businesses.

"The Government has already made small business rate relief more generous by providing eligible small businesses who occupy property with a rateable value of less than £6,000 a 12 month rate holiday.

"More generally the Government are considering the possibility of giving local authorities wide-ranging discretionary powers to grant business rate discounts, so that they can better respond to local circumstances."

BVWM executive director James Watkins said: "It is at least encouraging that the Government is still keeping this tax under review. Nevertheless this is an iniquitous burden.

"Normally there is some speculative property development to set against the downturn in the economic cycle in the expectation of improved prospects in the future. Such activity has been critical in keeping in place significant local employment and also in helping the general local economy weather these downturns.

"Void business rates have reportedly led to a check on these developments which, in turn, has negatively impacted on growth prospects for a number of local areas. In addition, local businesses who are trying to make ends meet with reduced operations during this difficult economic period are being penalised when, as a result of their initiatives, they are faced with this imposition."