Gordon Brown is coming under pressure from his backbenchers to scrap a tax on empty property that is blamed for the demolition of buildings that developers cannot sell.
Sixty backbench Labour MPs have signed motions urging the prime minister to scrap the levy on empty shops, offices and warehouses that was introduced in the April Budget.
The move, which cut tax relief on empty buildings, was designed to punish developers who deliberately did not let buildings as they waited for rents to rise during the boom.
But the downturn in the economy has prompted a surge in vacancy levels across the property sector. Not only have big corporate landlords been hit but also private investors, small businesses and regeneration bodies such as Britain’s 22 “urban regeneration companies”, or URCs.
John Nicholls, chairman of the URC chief executives group, has warned that cities were starting to “look like broken teeth” as landowners flattened buildings to escape paying the tax.