The Chancellor has missed a golden opportunity to reverse decades of underinvestment in Britain’s ageing housing infrastructure by not implementing a reduced rate of VAT on domestic renovation and repair, leaving millions of households powerless in the face of rising fuel bills, says the Federation of Master Builders (FMB).
Brian Berry, Chief Executive of the FMB, said:
“In his Autumn Statement George Osborne says he is backing British business and British families, and correctly named housing as the general public’s top infrastructure priority. However, the Government continues to focus on big-ticket projects such as road and rail, which will be years in the planning and are unlikely even to begin within the term of this Parliament. The Chancellor has missed an opportunity to reduce VAT on housing renovation and repair. This would deliver an instant economic fillip to millions of households that are struggling with the ever-increasing cost of living and give Britain’s builders the boost they need to capitalise on the recovery.”
“Householders need more help to combat the rising cost of heating their homes, and lowering the rate of VAT charged on all housing renovation and repair would do this at a stroke – for example a 15% reduction in the rate of VAT on insulation and double glazing would represent a significant saving to the customer, and empower homeowners to protect against spiralling energy bills. Switching tariffs can defend against shock price rises in the short term, but only by making your home more efficient can you arrest, or even reverse, the seemingly inexorable rise in the cost of energy.”
“Furthermore, diverting £4 billion raised annually in carbon taxes into a mass programme of publicly funded energy efficiency improvements would help those who can’t afford to pay for this work up front. Not only would this lift millions of the most vulnerable out of fuel poverty, it could also provide more than 70,000 new jobs by 2015.”
“We welcome steps to cut corporation tax and extend business rates relief for small businesses, and there’s good news too on 20,000 new higher apprenticeships and the freeze on fuel duty. Raising the cap on local authority borrowing by £300 million to improve or build social housing is at least a start, but much more needs to be done to address a chronic lack of investment in housing, which the Chancellor claims he views as a key priority.”