Brown attacked over renovations VAT
Shadow chancellor Matthew Taylor has demanded the scrapping of the 5% concessionary rate of VAT on the cost of renovations, to be replaced by the previous 17.5% rate.
In addition, the Liberal Democrat called for an increase in public expenditure to provide funds for social housing.
The shadow chancellor said: ‘These tax breaks for conversion services are a more expensive and a less effective option than building cheap housing.
‘Unlike social housing the homes created under this scheme do not help the most needy as they are not targeted towards people on low incomes.
‘These tax breaks further complicate our tax system without providing the required benefits. Promoting property renovation is one thing – doing it at a cost to the taxpayer rather than building a new home is quite another.’
Taylor was drawing on figures from the Social Housing Investment Project undertaken by Cambridge University for Shelter showing a cost of social housing per dwelling of Pounds 55,000 – 80,000.
Figures he drew from Budget 2001 documents showed the cost of reducing VAT per dwelling would be Pounds 115,000 or Pounds 115m per annum in total.
He added: ‘Wasting money that could be spent on housing the homeless or other social issues is simply irresponsible. It’s time for a rethink before Brown wastes any more taxpayers’ money.’
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