Chancellor should include VAT cut for building repairs in budget says local MP

9.50.00am BST (GMT +0100) Tue 21st Apr 2009

A VAT cut on repairs and improvements would help the construction industry

A cut in the rate of Value Added Tax on building repair and improvements is needed to provide a boost the building trade and bring construction workers back into employment, according to Manchester Withington MP, John Leech.

John Leech MP has written to the Chancellor, and is calling for a reduction in VAT to five per cent on building repair and improvement work to existing buildings to be introduced in next week's budget.

The construction industry has been particularly hard hit in the recession, with over 60,000 people in the sector having lost their jobs, including many in Manchester and new building construction falling by a third in the last year.

John Leech MP said:

"This reduction in VAT would benefit millions of UK home owners by getting rid of rogue builders, helping those who cannot afford vital repairs to their homes, and bringing empty homes back into use. Such a reduction would also make it easier for home owners to make energy efficient repairs and improvements to their properties.

"It's just crazy that there is a big VAT rate on repairs, but no VAT on new buildings. The gap between the two makes no sense, as it is just as important to repair an old building as it is to build a new one.

"The government has already wasted billions on a VAT cut that has made no difference, and should instead invest money in cutting VAT in an area that would create jobs, and help lead the construction industry on the road to recovery."