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VAT cut would create more than 50,000 jobs

The Cut the VAT coalition is claiming that reducing VAT to 5% on the labour element of home improvements would create more than 50,000 jobs in the UK.
The coalition says that such a move would create more than 24,000 jobs would in the construction sector alone, with a further 31,000 jobs in the wider economy.

The group also claimed that the jobs total could rise to more than 81,000 by the end of the decade and said the measure would contribute more than £17 billion to the British economy by the year 2019.

Mike Leonard, Director of the Modern Masonry Alliance, said that after playing a “key role” in the long-running campaign the evidence was now available to show that reducing VAT to 5% on labour would be a “sensible investment”.

He added that the move would “stimulate employment”, encourage improvements to the UK’s 26 million homes and help the country in its mission to reduce its carbon emissions.

“Whatever the colour of the next government the target to reduce carbon by 80% by 2050 will still be in place. A strategy is urgently required to incentivise the private housing sector which represents over 75% of UK homes,” he said.

Leonard suggests a simple scheme whereby homeowners who invest above £5,000 on a single home improvement project such as new bathroom or kitchen or extension and who also carry out a consequential environmental improving would enjoy a 5% rate of VAT on the labour element of the project.

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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