The Federation of Master Builders (FMB) is demanding a tougher line from MPs following the publication of today's report into the construction industry. The report "Construction Matters" by the Business and Enterprise Committee, recommends that the Treasury conduct a full analysis of the overall consequences of cutting the rate of VAT on all repair and maintenance work but stops short of recommending a cut in VAT.
Richard Diment, Director General of FMB said:
"This report is a step in the right direction but just doesn't go far enough. There are reports from all over Europe which describe the benefits of cutting VAT on domestic RMI works; Italy found that around 35,000 firms emerged from the informal economy when it cut the vat. The Isle of Man report showed that, when they introduced the reduced rate there, the number of VAT registered firms increased, the size of the informal economy reduced and more employment was created. The report also pointed out that the Isle of Man benefited from improvements to existing housing stock and reduced pressure on green field site developments."
Diment continued: "102 MPs have already signed the Early Day Motion calling for a cut in the tax that people have to pay just to keep their home in decent condition. We hope that the Treasury will go beyond the recommendation of this report and cut the VAT now."
16 July 2008
