The Federation of Master Builders believes that last week’s Pre-Budget Report will not help to make the UK’s 26 million existing homes greener and more energy efficient, which is a key Government target.
Brian Berry, director of external affairs at the FMB, said: “The Chancellor’s decision to increase VAT to 17.5 per cent is a serious blow for both householders and builders wanting to refurbish properties to make them greener and more energy efficient.
“Given the Government’s stated commitment to refurbish every single home by 2030, it is very disappointing that the Chancellor has decided to increase the VAT rate.
“The Chancellor has missed an important opportunity today to announce a comprehensive range of targeted incentives to kick-start the retrofitting market, which is worth at least £3.5 billion every year.”
He added: “What is encouraging in the short term is the fact that public spending will grow by 2.2 per cent in 2010/2011, as this will help to keep thousands of jobs in the construction sector.
“Public expenditure in construction is the most beneficial use of public expenditure because every £1 invested in construction generates £2.84 in total economic activity.
“Such investment should help to tackle the growing housing crisis. This year, we are only likely to see about 100,000 new homes being built, against a target of 240,000, which is bad news for the five million people on social housing waiting lists or those wanting to get on the first rung of the property ladder.”