House builders call for VAT cut
House builders have urged chancellor George Osborne to slash VAT ahead of next week’s Budget in order to feed consumer confidence.
The National Federation of Builders has called for the tax to be cut to 5 per cent after it released figures showing that construction output fell year on year in January.
Volume of output fell by 2.3 per cent in January 2012 compared with January 2011.
Sameena Thompson, External Affairs Director at the NFB, said: ‘It is worrying that construction continues to have a hard time weathering the economic storm. Overall output has fallen, and it is clear that the industry is now feeling the full brunt of the public sector cuts.
‘Whilst new infrastructure work is mitigating against this somewhat, the hope for thousands of small and medium sized builders lies in the new work, and repair and maintenance sectors, where we have seen some green shoots.’
Ms Thompson added that a cut in VAT would boost demand and provide more income for the government.
‘It is essential that the Chancellor urgently considers a cut in VAT to 5 per cent in his forthcoming Budget,’ she said. ‘Such a cut will create consumer confidence and demand, leading to improved revenues to the Government from the boost in much needed orders.’