Incentives encouraging energy efficiency are necessary if the government’s green pledge is to be taken seriously, insists the Federation of Master Builders.
Brian Berry, director of external affairs, said ahead of the 23 March Budget that the government’s loans proposal to support green homes was inadequate.
“A reduced rate of VAT to 5 per cent for all energy efficiency improvement projects would provide [a] boost as well as create much needed jobs in the building industry,” Mr Berry said.
The FMB said current VAT exemptions are too complicated and are not fulfilling their requirements.
Independent research commissioned by FMB has highlighted the effect the VAT rise will have on the construction industry, with an estimated 7,500 job losses in 2011.
This figure is expected to rise to 11,000 by 2019.
Mr Berry said: “The government has promised thousands upon thousands of new construction jobs as a result of the Green Deal, but unless homeowners are given the best possible deal on their improvements this flagship policy risks falling at the first hurdle.”
FMB is the largest trade association in the UK building industry, representing around 11,000 building companies.