Construction lobbyists campaigning for a VAT reduction on housing renovation and repair are claiming that it could boost the UK economy by more than £15bn by 2020.
They say that a VAT reduction could also create more than 95,000 jobs and save 240,000 tonnes of CO2 from thousands of homes.
The numbers are from a report produced by Experian, backed by a coalition of more than 60 charities, building trade associations, business groups and financial institutions. They want all three main political parties to commit to this VAT reduction in their 2015 general election manifestos.
Federation of Master Builders (FMB) chief executive Brian Berry said: “A VAT reduction on housing renovation and repair work will empower home owners to contribute to growth, jobs and greener homes without placing a burden on the Treasury. 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 that the wider benefits of 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.
Glass & Glazing Federation chief executive Nigel Rees 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.”
National Federation of Roofing Contractors chief executive Ray Horwood 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. The strong leadership message this sends to all political parties would, in addition, be a boost and clear message of support to the responsible and qualified SME firms that will undertake this work.”
Institute of Historic Building Conservation chair Mike Brown said: “The care and maintenance of our heritage buildings is often crafts-based and, as such, labour intensive, so a reduction in VAT will help support those skills and thousands of jobs across the sector. 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, allowing diminishing resource to be directed towards delivering better informed energy conservation measures, compatible with the fabric of the building.”