VAT rise will hit building jobs (From York Press)

VAT rise will hit building jobs

2:41pm Thursday 12th January 2012 in Jobs News

MORE than one in five small building firms say they will be forced to cut jobs as a direct result of the VAT increase to 20 per cent.

More than half of these small businesses also reported falling workloads as a consequence of the VAT hike, the Federation of Master Builder’s (FMB) latest State of Trade Survey has found.

Brian Berry, director of external affairs at the FMB, said: “More than 200,000 construction jobs have been lost since 2008 when the UK economy was hit by recession.”

He said although there were many factors, the survey shows the rise in VAT has made things worse. A separate piece of research by Experian also estimated that nearly 4,000 jobs were lost in the housing repair maintenance and improvement (RM&I) market last year as a result of the rise in VAT.

Mr Berry said: "The research also shows that a targeted reduction in the rate of VAT on just the labour element of domestic RM&I works could cost as little as £161 million but could generate a total stimulus effect of £1.7 billion and create 34,400 jobs by the end of 2012. Such a cut could also release £374 million of public money to refurbish over 20,000 units of social housing stock and help meet the Government’s energy efficiency objectives.”