RESTORATION of full relief from Empty Property Rates (EPR) will not be possible within the foreseeable future due to the dire state of the country’s finances, a key figures in the Shadow Cabinet last night predicted.

Philip Hammond, Shadow Chief Secretary to the Treasury, said that he is fully aware of the “terrible economic impediment” the rates are having on business and regeneration, and he pledged that while scrapping EPR would not be initially possible under a Conservative government, it would be “on the agenda”.

Speaking to The Northern Echo, Mr Hammond said that with public borrowing reaching £175bn and the “absurdly optimistic” predictions for economic recovery which were made in the Budget, it was not practical to be able to immediately reverse a tax which the Treasury predicts will yield £1bn.

His comments come as a blow to the Building on Success campaign, run by The Northern Echo and North- East Chamber of Commerce (NECC), which calls for full EPR relief to be reinstated.

Relief on empty buildings was offered until April last year, but was scrapped under an initiative introduced by then-Chancellor Gordon Brown.

Criticism has now mounted on current Chancellor Alistair Darling for failing to act in last week’s Budget to remove the EPR burden on business.

Mr Hammond, visiting the region yesterday, said: “We would like to be able to reinstate EPR relief, it is a huge burden, and we are seeing the demolition of buildings which could house businesses or start-up businesses when the recovery comes.

“We fully realise these rates are a terrible economic impediment.

However, with the state of public finances, it is not that easy just to reverse a £1bn tax increase.

“We are aware how damaging it is, but to make a pledge to reverse it is something we cannot commit to.

“It will be on our agenda for change, but our number one priority must be to reverse the increase in National Insurance contributions announced for 2011.

“To introduce a tax on jobs is the worst possible thing you can do, so we need to deal with that as the most important thing.”

Last night, NECC urged Mr Hammond and the Conservative Party to consider how EPR stood as a barrier to future growth and economic recovery, and to pledge decisive action in reinstating relief.

Ross Smith, head of policy and research with NECC, said: “We recognise public finances are tight, but taxing a symptom of the downturn through EPR will only hinder the economic recovery needed to fix this.

“The £1bn that the Treasury has claimed EPR would raise is being chipped away as properties are let for uneconomic uses, knocked down or simply not built in the first place.

“But the health of the region’s commercial property market is being chipped away at the same time and that must be arrested.”