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Discussions around future rates of VAT do not feature as part of the coalition agreement reached between the Conservatives and the Liberal Democrats although the issue received significant attention in the course of the general election campaign. Reducing VAT on building refurbishment was a key proposal in the environmental chapter of the Liberal Democrats’ 2010 General Election manifesto.
At the same time, speculation is mounting that the new Government may have to increase the basic rate of VAT in its forthcoming emergency budget.
SBF has long campaigned for VAT on repair and maintenance works to be cut to 5% as a means of stimulating the construction industry while also boosting the energy efficiency of the built environment and helping tackle climate change.
A major petition on the Number 10 website, launched by building firm and SBF member Rok, calls on the UK Government to cut VAT on repair and maintenance work to 5%. The petition, which has already gathered around 7000 signatures, is due to close on the 3rd June.
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SBF Chief Executive Michael Levack has written to Lib Dem Cabinet Members the new Secretary of State for Energy and Climate Change Chris Huhne, the new Secretary of State for Scotland Danny Alexander and the new Chief Secretary to the Treasury David Laws, urging them to work with Cabinet colleagues to deliver a significant cut in the rate of VAT on repair and maintenance work as a matter of priority.
Mr Levack said: “During the recent coalition talks between the Conservatives and Liberal Democrats, there was a good deal of talk about a lot of common ground existing between the two parties in the area of environmental policy.
“On this basis, I would hope that the new Government can add a substantial cut in VAT on repair and maintenance works to their list of common policies. With rising expectations that the forthcoming emergency budget will include an increase in the standard rate of VAT above 17.5%, I believe the case for a differential on VAT charged for building maintenance and repair works has never been stronger.
“A targeted VAT cut would give a major shot in the arm to the construction sector, which has suffered significantly from the economic downturn. It would encourage much greater investment towards greening Scotland’s 2.3 million homes and many other buildings up and down the country. At the same time, it would help to equip thousands of young construction workers with valuable green skills.”
Andy Mallice, Managing Director of Rok Scotland, added: “The entire construction industry has been hit hard by the recession and we are not out of the woods yet. We need firm action from the new government now to secure jobs and apprenticeships in the Scottish building trade. The VAT cut can help secure the recovery and ensure we retain the construction skills base Scotland will need for the future.”
(GK)
