The Get Britain Building campaign has hailed a new report detailing the financial benefits of cutting VAT on RMI work as an “important step” in pressing the government to lower the tax.
The report, by the Cut the VAT Coalition, is billed as the first costed proposal that demonstrates the economic, social and environmental benefits of a reduction in the tax.
Its House of Commons launch was supported by Solihull MP Lorely Burt, who said the research proved the benefits of a VAT cut in the UK.
Main points claimed by the “Opportunities” report include the creation of 55,000 jobs in the first year of a VAT cut (from 17.5% to 5%), the freeing up of £450m per year for renovations on social housing, 19,000 social houses being brought back into use each year and sustainability improvements to 174,000 private houses.
It also claims that a cut would contribute more than £1.4bn to the UK economy in 2010 alone, rising to £17bn by 2019. An extra 81,500 jobs would also be created by the end of the decade.
The report estimates that the cut would cost the government a mere £102m per year – a quarter of the car scrappage scheme.
Campaign spokesperson Mike Leonard said the “faceless wonders at the Treasury” could no longer afford to ignore the opportunities provided by a VAT cut.
He said the Treasury now had its own incentive to research how the measure could become even cheaper if it were extended to all elements of RMI that included improvements in a building’s environmental performance.
