Seventeen organisations including the Campaign to Protect Rural England, the Federation of Master Builders, the Heritage Alliance, Royal Institute of British Architects have joined forces to warn about the disruption the Budget measure is already causing to planned building projects and the threat it poses to the future of the UK’s historic buildings.

Brian Berry, chief executive of the Federation of Master Builders, said: “All of our organisations feel strongly opposed to the Government’s decision to remove the zero rate of VAT on approved alterations to listed buildings because it makes it so much harder to give them a sustainable future.

“Sympathetic alterations are often needed to ensure our historic buildings can continue to be of social, cultural and economic value.

This might mean improving listed town centre buildings, converting redundant farm buildings or renovating town halls and community buildings for the enjoyment of all.”

Heritage tourism contributes over £20bn a year to the UK economy, supporting almost half a million jobs.”

He warned: “We all saw the recent GDP figures showing that a decline in construction sector output helped drag the economy back into recession in the first quarter of 2012.

“So it is deeply difficult to understand why the Government is taking a decision that will lead to a further fall in construction activity.

“The Treasury has acknowledged this increase in VAT will have an adverse effect on the construction industry and we already know projects are being cancelled or curtailed.”

Under EU law once the zero rate of VAT has been removed it cannot be reinstated.

Kate Pugh, Chief Executive of The Heritage Alliance said:  “The 20% increase in VAT will make it a great deal harder for the charitable and private sector to carry out their responsibilities for looking after our heritage on behalf of the nation.

“The decision is entirely at odds with the Government’s assertions elsewhere that it is committed to promoting the reuse of historic buildings to support economic growth.”