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.”