Cut the VAT group says up to 24,000 construction jobs could be created if VAT was cut on home improvement work

More than 50,000 jobs could be created in the construction and associated industries if the government cut VAT on home maintenance and improvement work, according to campaigners.

A report produced by Experian for the “Cut the VAT” coalition, says that 55,000 jobs would be created by levelling the VAT rate to the 0% charged on new-build housing. Of the new jobs, 24,000 would be in the construction industry, and 31,000 in the wider economy, contributing £1.4bn to the economy in 2010.

Derelict farm
Credit: C@rljones

The coalition also said the move would allow an extra £450m to be invested in improving the country’s social housing stock, potentially paying for improvements to 19,000 social homes. It said a cut would also have a much larger impact on reducing emissions from housing than building low carbon new homes.

The research report was funded by the Federation of Master Builders, The Royal Institution of Chartered Surveyors, The National Trust, The Country Land & Business Association, The Bathroom Manufacturers Association and The Countryside Alliance, on behalf of the coalition, which includes 19 organisations in total.

Richard Diment, director general of the Federation of Master Builders 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. A more effective way to reduce carbon emissions would be to ‘green’ the existing housing stock, and cutting VAT would mean that many more homeowners could afford to have their homes retrofitted.”

RICS Director External Affairs Gillian Charlesworth said similar policies in France and the Isle of Man had actually increased tax revenue by prompting more activity. She said: “A reduced rate of VAT will help make energy efficiency improvements to homes cheaper and bring empty homes up to a habitable standard.”