Vat Cut Would Build Jobs, Says Report

There's a simple solution being mooted for the ailing construction industry.

More than 24,000 jobs in the construction sector as well as an extra 31,000 other new jobs in the wider economy could be created in 2010 by cutting VAT to five percent on the labour element of repair, maintenance and improvement works for residential properties.

This was revealed on a new research report, Cut The Vat Research, launched today, by Experian on behalf of the 'Cut the VAT' coalition.

The report also reveals that a cut in VAT to five percent would contribute more than £1.4 billion to the UK economy in 2010 alone, rising to £17 billion by 2019. It also predicts that an extra 81,500 jobs would also be created in the UK by the end of the decade.

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.

Speaking at the launch of the research in the House of Commons, Lorely Burt MP for Solihull said: "The Liberal Democrats have long supported the Cut the VAT coalition's call for VAT to be cut on repair, maintenance and home improvements and this research proves what benefits a VAT cut could have for the UK.

"We need to act quickly to get people back into work and a cut in VAT would provide many jobs immediately and would continue to provide a sustained flow of jobs over the next decade."

Richard Diment, Director General of the Federation of Master Builders (FMB) said: "House building 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% of total UK carbon emissions.

"A more effective way to reduce carbon emissions would be to 'green' the existing housing stock. 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."

(CD/BMcC)