The Green Party has pledged to cut VAT on housing repairs and renovations to 5% if elected to Government.
The current VAT rate stands at 20% but following a campaign led by the Federation of Master Builders (FMB), the Greens have promised to reduce this to the lowest level allowed by European rules.
The party argues that not only would this improve the quality of UK housing stock, it would also create 42,000 extra full-time equivalent construction jobs over the course of the next parliament. Using findings from the latest independent economic research conducted by Experian, it is also argued that the VAT cut would create an additional 53,000 jobs in the wider economy between 2015 and 2020.
The Green Party also believes the reduction, which would cost an estimated œ6.6bn, would incentivise the ?greening’ of homes through insulation and other measures and eventually result in an economic stimulus of œ15bn in the wider economy.
Tom Chance, housing spokesman for the Green Party, said:
“This VAT cut would be a real boost for green jobs and warm homes. It comes at a time when we desperately need to be investing in a nationwide home insulation scheme, to cut bills and end the scandal of fuel poverty.
“This election presents Britain with a chance to vote for change. This VAT cut, just one of an array of bold policies from the Green Party, demonstrates our commitment to building a Britain of warm, comfortable homes.”
The FMB-led Cut the VAT Coalition campaign is made up of an alliance of more than 60 charities, trade associations, business groups and financial institutions that are urging all parties to include the tax cut in their 2015 General Election manifestos.
Brian Berry, chief executive of the FMB, said:
“A VAT reduction on housing renovation and repair work will empower homeowners to contribute to growth, jobs and greener homes. There is no other proposal that will help the UK achieve so many of its economic, environmental and social aims with so little cost to the public purse.
“Independent research shows that the wider benefits of a VAT reduction on housing renovation and repair would stimulate more than œ15 billion of wider economic activity, which completely overshadows any direct losses to Treasury coffers due to a drop in the percentage charged for VAT. The Green Party is the latest political party to commit to a VAT reduction on housing renovation and repair and we are delighted they see the enormous value of this policy.”
New figures from Barbour ABI have suggested that home improvement applications increased by 12% in the UK over 2014, suggesting that workloads would increase further should a VAT cut be implemented.