Builders call for VAT cut on house repairs

In a submission to the Chancellor ahead of Wednesday’s Budget, the NFBsaid a reduction in VAT would “help restore output to pre-crisis levels and help the industry grow through a consumer-led bottom up approach”.

It cites an independent 2014 Experian report shows that this measure could boost the UK economy by more than £15 billion from 2015 to 2020, create more than 95,000 jobs, save 240,000 tonnes of CO2 and bring thousands of empty homes back into use.

Julia Evans, chief executive of the NFB, said:

“The NFB is pleased that construction remains high on the government’s agenda, but the chancellor needs to find the missing pieces of the puzzle if he wants to achieve growth across all sides of the industry.

“Construction companies saw the highest number of total liquidations of any sector in 2013, with SMEs hardest hit. The Treasury should adopt the key measures set out by the NFB to ensure that the industry can power the economy from the bottom up”.

The NFB also wants a clear timetable on when any future asset sales will materialise into new infrastructure projects in order to drive up industry confidence and boost investment.

The Federation also wants the government to make housing schemes of over 1,000 units, a Nationally Significant Infrastructure Project (NSIP) in order to speed up the planning process and give developers and their subcontractors more clarity on future work.

The NFBsaid the Treasury must ensure that the British Business Bank will provide SMEs with the finance they need to grow.

“We are calling for the chancellor to ensure that the regulatory framework will allow alternative finance providers to flourish and provide competition to high street banks,” Evans said.

“A further boost to the bank would be welcomed but it must ensure that it reaches the companies intended.”

While official statistics and industry forecasts show that while the outlook is positive for the construction industry, particularly in the private housebuilding sector, total output has shrunk by 6% since 2008.

Construction companies, particularly SMEs, have been hardest hit by the recent downturn with around 21,000 going into bankruptcy or liquidation since the first quarter of 2009.