Who pays to put out the fires?

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Monday 23 January 2012

Call me obsessive but whenever something dramatic happens to a building or land, I often wonder, “who owns it”?

The fire on Morrison Street in November 2011

It happened when protestors demonstrated outside Millbank Tower in London and smashed in the windows (since you ask, the owner is Basio Holdings Ltd., Tortola, British Virgin Islands).

It happened more recently in November last year when a massive fire destroyed the old Co-op building in Morrison Street in Glasgow.

The owner of the building is Straben Developments Ltd. of Belfast which bought the building in September 2007 for £4,200,000. It has lain derelict ever since and given the effort by Strathclyde Fire and Rescue to put out the blaze, I got to wondering how much it must have cost to put the fire out and who pays? The fire and rescue (and police) services are paid for by Glasgow City Council who, in turn are financed by a grant from the Scottish Government and from Council Tax and Business Rates levied across the city. Business rates are assessed according to the rateable value of a property (which broadly equates to its rental value) and the poundage (a pence in the pound rate - currently 42.6p). So, for example, a property assessed at £100,000 will pay £42,600 per year to the local authority. So how much has Straben Developments Ltd. contributed to the costs of the public services in the city which rushed to protect their £4.2 million property? Well, 130 Morrison Street has a rateable value of £300,000 and thus, since September 2007, Straben Developments might be expected to have paid a total of around £500,000 in local taxes. Except they haven’t, because empty industrial buildings are exempt from business rates. So, while this company sits on its asset (which I am sure is fully insured), they pay nothing towards all the services that the City of Glasgow provides that ensure their land and property retains its value. Is this not the height of unfairness when citizens and small businesses across Glasgow are all paying their fair share? The situation becomes even more bizarre when one learns that Strathclyde Fire and Rescue do themselves pay business rates on all of their fire stations and other premises. Indeed in the year to March 2011, they paid a total of £2,117,373 in rates including £563,235 in the City of Glasgow alone! So the rescuers pay local tax but those who benefit pay nothing. It is high time such exemptions were abolished or (better still) a land tax was introduced to prevent such buildings lying derelict in the first place and to make sure the owners pay their fair share towards the costs of those brave firefighters and their equipment which so quickly came to try and put out the fire.

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Who pays to put out the fires?

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