EU move to cut VAT will improve lives

Mar 20 2009 by Chris Knox, The Journal

WITH 300,000 construction jobs predicted to be lost during the recession, we’re looking for some form of relief.

While the banks are being propped up by Treasury scaffolding, what about our sector – one of the largest in the country – which is being shaken to its foundations by the current economic crisis?

With this in mind, it is no surprise that I, along with many others, was heartened by the decision by European finance ministers to allow EU member states to charge a reduced VAT rate of 5% on home maintenance and repairs. I won’t go into the argument of whether European legislation is a good or bad thing, but on this occasion the politicians’ intervention is to be wholeheartedly welcomed.

It is now down to the member states of the EU – particularly the UK Parliament – to implement this ruling and help kick-start the construction sector.

The Cut The VAT coalition has been campaigning for just such a move for a long time and its members have gained widespread support for this decision.

The welcome reflects the feeling that help is desperately needed for those in the construction and property sectors to survive the recession.

If you listen to experts at Pricewaterhouse-Coopers, eight building firms every day are going bust.

The UK Government will itself be among the beneficiaries if it opts for this course of action, receiving increased Treasury revenue and giving the industry a greater chance of contributing to both the green cause and the battle against fuel poverty.

What those who have welcomed this move all agree on is that the Government must act swiftly to take advantage of this ruling. Thousands of people live in need of adequate housing, with repairs and maintenance outstanding on the properties in which they live.

These people will be among the countless winners from this scenario as their lives will be improved.

With builders being given a boost in their fight for survival and the Treasury bringing in more money, it seems the decision facing the Government is, as they say, a “no brainer”.

For more information on Constructing Excellence in the North East, please contact Catriona Lingwood on (0191) 383-7435 or catriona@constructingexcellence-ne. org.uk.

Catriona Lingwood is director of Constructing Excellence in the North East