A RISING number of empty small shops in York is a threat to local shopkeepers and the unique character of the city centre, says the York branch of the Federation of Small Businesses (FSB).

A total of 150 small retail premises now stand empty in the city, it says, largely because London landlords have increased rents by up to 25 per cent, sending some small retailers to the wall and preventing others from taking their place, claims Maurice Willis, chairman of the 600-memberYork FSB branch.

Mr Willis said: "This is a terrible situation for a shopping and tourism centre. As well as posing a major threat to the livelihood of local shopkeepers, it threatens the character of York city centre if only large national multiples can afford to be based here. It could ultimately turn York into a retail park with the same multiple outlets as other areas. This would destroy York's unique character and have a knock-on effect for tourism. It is an issue which we believe the city needs to address in 2003."

Mr Willis, an independent tax consultant, said that while tourism was bouncing back in the city centre, there was concern about unfair competition created by the £55,000 turnover VAT threshold which enabled guest houses which are not registered for VAT to make easier profits than nearby competitors which are.

He said: "The VAT system is iniquitous.

"It means that people seeking accommodation go door knocking to see who is registered and who is not, and choose ones which are not."

Updated: 10:02 Tuesday, January 28, 2003