Ahead of the Chancellor’s first Budget on Wednesday
11 March, the Federation of Master Builders (FMB) is calling on
the Government to cut VAT on home repair and renovation works to
boost economic growth nationwide and help level up across the
country. As well as helping to kick start order books, a VAT cut
would support local builders’ contribution to the UK’s net zero
carbon emissions target by 2050 and preserve Britain’s built
heritage.
In its pre-Budget submission to HM Treasury, the FMB,
the largest trade association in the UK construction industry, is
calling for the labour-element of VAT to be cut from 20% to 5% on
repair and renovation works on domestic
dwellings.
Brian Berry, Chief Executive of the FMB, said: “The
new Chancellor has a unique opportunity in his first Budget to
signal a green, positive outlook for builders who are critical to
delivering the homes and infrastructure this country
needs.”
“The fact that nearly two-thirds (59%) of
builders say cutting VAT would boost their business sends a
clear message to the Government that if it is wants to deliver
sustained economic growth in our building industry this is the
single best policy change to achieve that.”
In new data released by the FMB today, 212 out of 357
small to medium-sized building companies sampled told us that the
new Government could best support the construction industry by
using new freedoms granted by the UK’s exit from the European
Union to cut VAT.
Cutting VAT will also encourage homeowners to invest
in the sorts of renovation and retrofit work that the country
will need if it is to meet the Government’s target of bringing
all homes up to EPC Band C by 2035. Currently just 29% of
households meet this test.
Brian Berry said: “We need a National Retrofit
Strategy that sends homeowners and landlords a strong signal to
invest in their properties, reduce costs, and cut carbon. Cutting
VAT is the key to unlock this and set us on track to achieve Net
Zero by 2050 by saving almost 240,000 tonnes of CO2 from 92,000
homes. That means we need to urgently insulate eight million
lofts, eight million solid walls and five million cavity walls.
Making homeowners more likely to take these steps by cutting VAT
would give the Government a good news story ahead of hosting the
UN Climate Change Conference (COP26) later this
year.”
A cut in VAT would also help reverse the trend of
left-behind areas and delivering the Government’s commitments to
invest in place making. The Government should take up the
recommendations of its own Building Better Building Beautiful
Commission and align the tax requirements for new and existing
buildings.
In its pre-Budget submission, the FMB is also calling
on the Government to:
•Support small to medium-sized house builders by
reforming planning fees;
•Create incentives for low-carbon house builder
pioneers; and
•Review and reform the UK Apprenticeship Levy to
ensure construction has the skills it needs.
ENDS
NOTES TO EDITORS
About the research
As part of the FMB’s quarterly State of Trade Survey,
we asked 357 small to medium-sized (SME) business owners in
December 2019 how the new Government could best support the
construction industry. Their responses are listed in the table
below.
|
How can whichever government is
elected best support the construction
industry?
|
Number of respondents
|
%
|
|
Tackle cowboy builders by introducing a
licensing scheme in construction
|
99
|
28
|
|
Cut VAT on all home improvement
work
|
212
|
59
|
|
Support SME house builders by freeing up
more small sites
|
23
|
6
|
|
Support SMEs to take on more
apprentices
|
11
|
3
|
|
Incentivise homeowners to upgrade the
energy efficiency of their properties
|
12
|
3
|
