Treasury officials will be urged by the construction industry to cut VAT on domestic repair and maintenance work to help solve the problem of spiralling house prices.
Industry leaders met with DTI officials last week to finalise details of a business plan for the tax cut, which is expected to be put to the Treasury by the end of September.

An insider at the talks said that the DTI had drawn up a consultation paper on a way forward for the talks between the Treasury and the industry. This included a scale of the likely cost to the Treasury of cutting the tax, how it would reduce the cowboy element and other benefits.

He said: “One of the benefits of the proposals is that by cutting VAT it may help stop the rising costs of house prices as people could afford to improve their existing homes.”