Call for VAT cut and reduced stamp duty to meet government targets
The Federation of Master Builders has called on the government to deliver a green budget to support hard-pressed small to medium sized builders.
The association demands a reduced rate of VAT on home energy efficiency improvements to help keep SMEs afloat and deliver on strict climate targets.
Research published by Experian last year predicted 11,000 jobs will go in the housing repair, maintenance and improvement sector over the next decade as a result of January’s VAT hike from 17.5% to 20%.
The FMB also called on the government to reduce stamp duty to stimulate the flagging housing market.
Brian Berry, director of external affairs at the FMB, said: “In the current economic climate householders will need more than just loans, as currently proposed by the government in its Green Deal finance package, to make existing homes more energy efficient.
“A reduced rate of VAT to 5% for all energy efficiency improvement projects would provide that boost as well as create much needed jobs in the building industry.
“The construction industry’s prospects for 2011 look bleak. Small and medium sized building companies are continuing to report falling workloads and a third expect to have to cut staff this year.
“The stimulus effect of a targeted VAT cut would far outweigh the cost to the Treasury and would help to deliver the government’s low carbon policy objectives.”