Labour’s support for the VAT cut, as part of its five-point growth plan, was welcomed by the Federation of Master Builders (FMB).
FMB director general Richard Diment said: “A targeted cut in VAT for home improvement works makes good economic sense as the total stimulus effects of such a cut would be more than double any net loss to the Treasury as well as helping to create tens of thousands of new jobs.
This policy makes sense on every level. It supports economic policy by creating jobs and generating growth; it supports environmental objectives by helping to bring derelict homes back into use thus taking pressure off the green belt land to provide new housing; and it tackles rogue traders and tax dodgers by reducing their competitive advantage over legitimate businesses.”
Mr Diment added: “Once again we, and our supporters across the ‘Cut the VAT Coalition’, call on the government to adopt this policy.”
Other measures in Labour’s growth plan are:
- Repeat the bank bonus
- Bring forward infrastructure projects
- Bring the general VAT rate back down to 17.5% for a temporary period
- A one-year national insurance tax break for small firm that take on more workers