Refurb VAT cut can deliver £15bn economic boost

Aaron Morby 10 years ago
Share

A VAT reduction on housing renovation and repair would boost the economy by more than £15bn from 2015 to 2020.

The latest estimate on the economic stimulus provided has been seized upon by industry campaigners to turn the heat up on Government to act.

An independent research report by Experian also found that a VAT reduction
could create more than 42,000 extra construction jobs and an extra 53,000
jobs in the wider economy by the end of this period.

It would also support the Government’s ailing green policies by saving 240,000 tonnes of CO2 from thousands of homes.

While the cumulative net loss to the Treasury over the five-year period would be just £6.6bn, believe the researchers.

More than 60 charities, trade associations, business groups and financial institutions have united in now calling on all three main political parties to commit to a VAT reduction on repairs in their 2015 General Election manifestos.

Brian Berry, chief executive of the Federation of Master Builders, said: “There is no other proposal that will help the UK achieve so many of its economic, environmental and social aims with so little cost to the public purse.

“This research shows a VAT reduction on housing renovation and repair would stimulate more than £15bn of wider economic activity, which completely overshadows any direct losses to Treasury coffers due to a drop in the percentage charged for VAT.

Berry added that it was a myth that EU law prevented the government from reducing VAT on housing renovation and repair.

“This research report clearly shows that almost half of EU member states are currently enjoying the economic, environmental and social benefits that this VAT reduction can bring.

“Why should the UK not follow suit?” asked Berry.

Nigel Rees, Chief Executive of the Glass and Glazing Federation, said: “As the report shows, reducing VAT from 20% to 5% on housing renovation and repair has significant long terms gains, not only for economic growth and job creation, but also for carbon reduction, as many contemporary home improvements will include the installation of energy efficient products.”

Ray Horwood, chief executive of the National Federation of Roofing Contractors, said: “There are a range of complementary reasons for this sensible reduction in VAT on housing renovation and repair that play to government objectives and overall consumer expectations.”

Mike Brown, chair of the Institute of Historic Building Conservation, said: “The case for the reduction in VAT is particularly important in making the difference between a historic building being saved or being unviable.

“On top of that, more affordable day to day care and maintenance would help save countless older buildings from the destructive and costly cycle of decay and restoration.”

Latest news

Quartet win £490m North West & Central railway works deal

Skanska, Kier, Octavius Infrastructure and Story Contracting bag major projects deal
27 mins ago

Site labour rates start rising again

Industry's biggest payroll firm says "it feels like things could be turning round"
9 mins ago

Galliford Try names new finance director

Rentokil's Kris Hampson joins contractor to replace Andrew Duxbury
1 hour ago

Hydrogen-fuelled diggers to be allowed onto highways

Government to raise barrier to widespread use of hydrogen fuelled plant in construction
17 hours ago

Council boss hits out at bat threat to £274m road job

Natural England threat to scheme due to be built by Ferrovial
1 hour ago

Unite Students plans first major mixed-use scheme

Developer's first mixed BTR and PBSA project to be built in Edinburgh
16 hours ago

Plans in for £118m Government hub in Darlington

Work pencilled to start later this year on 1,450 civil servants homes
16 hours ago

New contractor highlights Henry Construction jobs on website

New firm lists jobs by failed contractor to show its experience
1 day ago

Contractors line up for £2.6bn Anglian Water AMP8 deal

Eight big names land places on pioneering @one Alliance
2 days ago

McAleer & Rushe bags first major later living project

Work to start this month on 167-flat Royal Tunbridge Wells project
1 day ago

Kier starts first all-electric prison houseblock job in Kent

Next-generation fully electric T60 prison houseblock to be built at HMP Elmley
1 day ago

Keepmoat sees better times ahead in housing market

Profits dip in 2023 despite construction of record number of new homes
1 day ago

Vistry signs partnership deals for 1,900 mixed tenure homes

West Sussex former airfield and Newmarket sites to break ground
2 days ago

Turnover at Wates tops £2bn for first time

Construction division exceeds £1bn turnover as average contract value hits record high of £48.3m
2 days ago

L&G looks to sell Cala Homes in exit from house building

Insurance giant reported to be preparing to offload 3,000 homes-a-year developer
3 days ago

Multiplex profit almost trebles as margin hits 5.5%

Revenue jumps 20% to £675m as big London scheme complete
2 days ago

TopHat puts plans to open huge Corby factory on hold

Advanced manufacturing facility was due to employ 1,000 people
2 days ago

Laing O’Rourke lands Calderdale hospital job

Enabling works to start by the end of this year at West Yorkshire site
2 days ago

Go-ahead for £475m Sunderland film and TV studios

Work to start this year on first phase Corwn Work studios
2 days ago

Willmott Dixon set for £20m Stockport Community Hub

Planning decision expected in June on Marple leisure and health clinic project
2 days ago

Police hunt for blundering dumper truck thief

Raider drove into a fence before getting stuck on a bank
2 days ago

Beattie Passive files administration notice

Passivhaus pioneer has been in business for more than ten years
3 days ago

McAlpine set for £50m space and tech centre

Northumbria Uni sign pre-con deal for new satellite research hub
3 days ago

VolkerFitzpatrick seals £34m Kent road viaduct

Work to start next year on Sturry Link Road near Canterbury
3 days ago

Eight win £600m Scottish civil engineering framework

Balfour, Farrans, Graham and Morgan Sindall win major works lot
3 days ago

Site engineer crushed to death by excavator

22-year-old victim died just months after graduating from university
5 days ago

NG Bailey fined £135,000 after hospital site death

Worker died after striking overhead beam while navigating a mobile elevating work platform
5 days ago

Kier lands £30m Mansfield Connect project

Construction to start in January 2025 on town centre regeneration scheme
3 days ago

Award-winning steelwork firm files administration notice

Kelpies steelwork specialist SH Structures files court notice
6 days ago

Plans to be lodged this summer for 54-floor London office

99 Bishopsgate proposal to build City's fifth tallest building
6 days ago

Contractor services