More than 50,000 jobs would be created if the Government cut VAT on the labour element of residential repair and maintenance jobs according to a new report.
The Cut the VAT Coalition report carried out by Experian concludes that more than 24,000 construction jobs and 31,000 wider economy jobs would be created by a cut to 5 per cent VAT.
The coalition, which includes the Federation of Master Builders and Royal Institute of Chartered Surveyors, presented the report at the House of Commons last week.
The report also reveals that a cut in VAT to 5 per cent would contribute more than £1.4 billion to the UK economy in 2010 alone, rising to £17 billion by 2019.
The UK’s housing stock would also benefit from a cut in VAT, as the research showed that cutting VAT could result in an extra £450 million a year for the improvement of the UK’s social housing stock.
This would be enough to renovate or bring back into use approximately 19,000 homes per year; by 2019 this could see up to 190,000 extra social homes back up to the Government’s Decent Homes Standards.
FMB director general Richard Diment said: “Housebuilding in the UK is at its lowest level since 1946, so building zero-carbon homes will have a limited impact on the UK’s carbon emissions, especially considering the existing UK housing stock is responsible for 27 per cent of total UK carbon emissions.
“A more effective way to reduce carbon emissions would be to ‘green’ the existing housing
“Cutting VAT would mean that many more homeowners could afford to have their homes
retrofitted, which would also create savings for them on energy bills, leading to a reduction in fuel poverty.”
RICS director of external affairs Gillian Charlesworth said: “A reduced rate of VAT will help make energy efficiency improvements to homes cheaper and bring empty homes up to a
“Such reductions have had a positive impact in the Isle of Man and France by increasing
construction activity and government revenue.”