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Editorial: So good Darling will ignore it!

It is, you will admit, unusual for any parts of the construction industry to come together but a story on the website – www.heatingandventilating.net – has come pretty close.
The construction industry called for a VAT cut from 15% to 5% on all private house repair and maintenance in the budget.

I wrote my comment before the Budget speech because, somehow, I knew that the idea is so sensible that our Darling chancellor would never in a million years have take it up.

If government ministers and the MPs ever looked up from filling in their second homes allowances or leaving highly-sensitive documents on trains they would realise there is a recession in the real world.
The rest of us all know that the recession is so bad that even banks had to be baled out. Ordinary people are losing their jobs and government seems incapable of stopping the rot.

Domestic house building has virtually stopped. No-one's job is safe and ordinary people have stopped spending because we do not know what will happen six months or a year from now.

Which is why I would add my humble voice to the call to cut VAT on the refurbishment and maintenance of homes.

According to the construction industry the move would provide a far more fiscal stimulus than many of the measures government has introduced or is considering. It will help to sustain employment in many thousands of SMEs and will use construction products, many of which are made in the UK.

According to the Royal Institute of Chartered Surveyors (RICS), some 300,000 construction jobs will go in this recession.

Lowering VAT on refurbishments and maintence in domestic dwellings has already been tried in Spain, Italy, Belgium and Portugal. In these countries the move has created almost 170,000 permanent additional jobs - and are you listening, Darling? - and in France the scheme resulted in a 500 million euro net increase in tax yields. Yes, even the French have a scheme like this.

Just this last argument should be enough to encourage government to go for it as far as I am concerned.
I don't know how many jobs this would create but even half that 17,000 extra jobs would be good. Workers get paid and pay tax which helps the economy so more people can be employed and so on.

I never understood why Mrs Thatcher, having beaten the miners, then closed the pits and bought coal from Australia. Yes, I know that it was cheaper but was it cheaper when you took into account how we had to pay benefits to redundant miners instead of paying taxes.

Come on, Darling, get real!
1 May 2009

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