SHADOW Chancellor Ed Balls announced his five-point plan to kick-start the economy at the Labour Party Conference this week.

Point four called for an immediate one-year cut in VAT from 20% to 5% on home improvements, repairs and maintenance.

This move would greatly benefit the construction and refurbishment industry and the announcement was welcomed by the building sector for which this issue has been the focus of a long-running campaign.

Alongside Constructing Excellence, the Federation of Small Businesses and the Federation of Master Builders are supporters of the VAT cut and believe the UK should follow in the footsteps of other EU countries which have cut VAT for the construction sector.

The campaign for the Government to ‘Cut the VAT’ has been an ongoing one for the past few years and its intensity has increased since 2009 when the EU decided to allow member states to lower VAT on property refurbishment.

While Constructing Excellence welcomes Mr Balls’ announcement, it’s a pity that Labour didn’t put forward this notion while it was in power when it actually had the ability to do something about it.

Under the current VAT regime, it is more cost-efficient to demolish a dilapidated building and start from scratch, than it is to renovate it.

A cut in the VAT on home improvements and refurbishments will have a positive impact as it will directly benefit small businesses and act as a catalyst for growth in the UK economy creating thousands of jobs.

It will also serve as an aid to bring thousands of empty properties back into use and assist those who can not afford repairs.

A move to lower VAT on home improvements would also encourage green refurbishments of domestic properties and help the UK to fulfil its pledge to reduce carbon emissions by 80% by 2050.

For more information on Constructing Excellence in the North East, contact chief executive Catriona Lingwood on 0191 374 0233 or email catriona@cene.org.uk