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Builders push Brown on VAT

Low rate on repair work seen as important anti-cowboy measure as Europe reaches agreement to extend scheme to 2010

THE FEDERATION of Master Builders has called on chancellor Gordon Brown to sign up to a new European Union deal to cut VAT rates on repair, maintenance and improvement.

The 25 EU member states thrashed out a compromise deal last week to allow countries to retain lower VAT rates until 2010 under an experiment which began in 1999.

But Mr Brown has so far resisted moves to allow a 5 per cent rate across the UK. Only the Isle of Man has been allowed to take part in the experiment.

Mr Brown now has until March 31 to propose lower levels of VAT for the UK.

The FMB is calling on the chancellor to slash rates in order to support the TrustMark anti-cowboy scheme, launched to consumers last week.

FMB director-general Ian Davis said: 'The Government now has a tremendous opportunity to demonstrate the depth of its commitment to TrustMark builders.

'Reducing the VAT on domestic RMI work will deprive rogue traders of much of their commercial advantage, and act as a further encouragement for homeowners to look for legitimate traders and avoid cheap deals and shoddy work.'

The construction industry has been calling for reduced VAT for years to combat the black economy and aid regeneration. But the chancellor has consistently ignored their pleas despite retaining a zero rating on new build.

The Czech Republic, Poland and Cyprus all dropped their opposition to the deal on reduced VAT at a meeting of European finance ministers.

FOCOPE, the construction lobby group in the European Parliament, welcomed the compromise as eight member states who have taken part in the experiment feared that a return to higher VAT levels could cost around 250,000 jobs.

The European Commission is to prepare a report on the impact of lower VAT levels on job creation, economic growth and the internal market by June 2007.