The Chancellor has been urged to encourage building repair work through incentives in tomorrow’s autumn statement

Cutting VAT on repair and maintenance work to just 5% could create over 100,000 jobs by 2020, the Federation of Master Builders has claimed.

Research by Experian for the FMB concluded the cut on would create a total stimulus of £20.1bn in the UK economy by 2020. It would also result in 44,100 jobs in construction and 56,500 jobs in the wider UK economy, the research said.

Brian Berry, director of external affairs at the FMB, said: “Last year the construction industry took on over 26,500 apprentices, but a VAT cut for home improvements would increase demand in the sector and help create even more apprenticeship opportunities for young people.”

The research was unveiled just a day before Chancellor George Osborne is expected to announce measures to encourage growth and investment in the UK construction sector in his autumn statement.

Berry said the VAT change would remove perverse incentives to demolish and build new houses when older buildings could be restored, creating less CO2 and serve to meet the government’s carbon reduction targets.

The FMB estimated that the cut would drive greater take of energy efficiency measures in people’s homes and save up to 393,614 tonnes of CO2 emissions by 2020.

“This has been the government of cuts and we urge the Chancellor to make this selected cut as will help create much needed jobs, give homeowners the opportunity to have a more energy efficient home and critically will provide the stimulus that is needed to boost economic growth,” he added.

However, the FMB acknowledged the move would cost the Treasury up to £10bn in lost revenue by 2020.

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