29 Mar 2012

John Mason, the SNP MSP for Glasgow’s East End, has added his support to the campaign by the Cut the VAT Coalition to cut the VAT on housing repair, maintenance and improvement work to support employment in Scotland.

Research by Experian, commissioned in December 2011 by the Federation of Master Builders (FMB), found that a reduction in VAT to 5% on all home improvement work would create 2,103 new construction jobs in Scotland in 2012 alone, with figures in subsequent years suggesting that a total of 3,625 jobs could be created in the period to 2020 through incentivising home owners to repair and improve their homes. A lower rate of VAT would also help to improve the energy efficiency of our housing stock, reduce the advantage of rogue traders and help remove the perverse incentive to demolish older properties rather than bring them back into use.

Despite all of this, the Government instead decided to surprise the construction sector with a decision to remove the zero rate of VAT for approved alterations to listed buildings in the recent Budget announcements. This means that from 1 October 2012 the standard rate of VAT will apply to the alteration of a listed building, which is 20% more than the current rate. The impact will be significant in Scotland where there are around 47,600 listed buildings, totalling 1% of the nation’s total building stock.

SNP MSP, John Mason – Deputy Convener of Holyrood’s Finance Committee – has pledged his support for the campaign and has urged the UK Government to cut the VAT on housing repair and improvement works to support employment in Glasgow’s East End.

Commenting, the Glasgow MSP said:

“I am pleased to add my name in support of the Cut the VAT campaign.

“Small and medium sized companies in Shettleston are crucial to the local economy and would really benefit from a VAT reduction. The cut in VAT would also boost the campaign against rogue traders, poor quality housing and the number of empty properties in the area.

“As local MSP, housing is my top priority. Politicians regularly meet constituents who raise the issue of housing time and time again – there’s no doubt in my mind that this campaign would do a significant amount to help repair some of the properties in the East End that fall way short of the mark.

Grahame Barn, Director of FMB Scotland, welcomed John Mason’s support:

“This UK Government’s move to remove the zero rate VAT on alterations to listed buildings really is out of step with the industry’s wishes and the needs of the UK’s heritage buildings. The increase to 20% will prevent many from carrying out important improvement work to their properties, and will in turn put many more building firms at risk.

“If the Government is serious about supporting growth in the economy and cutting carbon it should focus on measures to encourage property owners to improve the UK’s existing buildings, and not do the opposite. The harmonisation of VAT at 5% for all housing repair, maintenance and improvement work would create jobs and reduce the competitive advantage of those operating in the informal economy.

“I hope all MSPs will support Kevin Stewart’s motion in the Scottish Parliament and help increase the pressure on the Chancellor to promote growth in this way.”