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Wilson sets up group to lobby for VAT reduction

Minister to arrange talks with Treasury in push to lower tax on repair and maintenance to 5pc

CONSTRUCTION minister Brian Wilson has thrown his weight behind a cross-departmental working group to step up the case to slash VAT on repair, maintenance and improvement work to 5 per cent.

The minister - who has just taken construction into his title following a shake-up at the Department of Trade and Industry - proposed to set up a working group with industry representatives, DTI civil servants and Treasury officials on the VAT reduction issue during a post-Budget meeting with the construction umbrella bodies.

Construction Industry Council chief executive Graham Watts said: 'Brian was very positive and committed about supporting the campaign to reduce VAT. He offered to broker a meeting between the construction industry and the Treasury to set up a review of the issue.

'It's going to be a long haul process, but we think that the Treasury is more likely to overhaul the tax when it has conducted its own independent study.'

Mr Watts added: 'This budget was never going to be one for cutting taxes, but there is every chance in the future that there could be a staged reduction in the VAT rate.'

Construction Products Association chief executive Michael Ankers said: 'We are encouraged that the minister has confirmed his support and this cross departmental working group is evidence of that, especially when the Treasury has been putting barriers in the way on previous occasions.

'It is also vital to the success of the government's Quality Mark scheme.'

It is understood that the working group will be up and running in September in readiness for Chancellor Gordon Brown's next pre-Budget statement in November.

Construction union Ucatt and transport union TGWU are also seeking separate meetings with the Treasury on the issue of bogus self-employment.

Mr Wilson told Construction News: 'It is our job to enable the industry to speak to the right people on issues like this. I encourage construction to seize the opportunity to put its case.'