The ‘Cut the VAT’ coalition comprises 21 organisations, including the FMB, which has been campaigning to reduce the rate of VAT on repair, maintenance and improvement work for over two years.
A new report by Experian, on behalf of the coalition suggests that this year, more than 24,000 jobs in the construction sector could be created as well as an extra 31,000 other new jobs in the wider economy, just by cutting VAT to five percent on the labour element of repair, maintenance and improvement works for residential properties.
Speaking at the launch of the research in the House of Commons at the end of February, Richard Diment, FMB Director General said: “House building in the UK is at its lowest level since 1946. Cutting VAT would mean that many more homeowners could afford to have their homes retrofitted which would create savings for them on energy bills, leading to a reduction in fuel poverty. There is an enormous challenge to reduce energy consumption and improving homes will help this industry which has been through such difficult times recently. Zero carbon homes will have limited impact on the UK’s carbon emissions, a more effective way to reduce carbon emissions would be to ‘green’ the existing housing stock.”
The Government’s current focus on zero carbon housing will not do enough to tackle the UK’s carbon emissions as it would take more than 130 years to completely replace the UK’s existing housing stock with new carbon-zero homes. The extra demand created by a cut in the VAT rate on housing repair, maintenance and improvement to five percent could generate around £1.23bn extra expenditure over the next decade on energy efficiency measures. This would equate to an extra 174,000 homes fully insulated and with energy efficient boilers between 2010 and 2019, leading to a saving of up to 337,000 tonnes of CO².
If you want to read the full report, visit www.cutthevat.co.uk/cut-the-vat/research.