NEW REPORT SAYS CONSTRUCTION JOB LOSSES COULD BE TACKLED WITH VAT CHANGES

New academic research conducted for the Repairing Britain campaign supports the campaign’s belief that the benefits of a cut in VAT to five per cent on property repairs would more than compensate for the loss in government revenue.

The detailed report, prepared by Teesside University Business School, presents a breakdown of the net losses to HM Revenue and Customs of reducing VAT and compares these with the estimated costs arising should the predicted 300,000 construction workers who will have lost their jobs during the recession, remain unemployed.

The study concludes that the VAT reduction can be justified for the construction jobs it would save and the improvement it would bring in the quality and energy efficiency of the UK housing stock.

Also calculated is the effect of equalising the rate of VAT charged on new build projects and refurbishments because at present, new buildings do not attract any VAT whereas the tax is levied at the full prevailing rate on repairs and renovations. However such a move is seen as likely to be popular and might slow down recovery.

As commissioner of the report, property repair and maintenance specialist Rok has sent a copy to the Chancellor, Rt. Hon Alistair Darling MP, in advance of the pre-budget report expected next month.

His attention is drawn to the key findings which are:

• The cost to the Government of reducing VAT on repairs to five percent would be £2.6bn, but demand for such services could increase by ten percent
• The cost to the Exchequer of 300,000 construction workers remaining unemployed throughout 2010 is £3.5bn
• Based on experience of the shorter and shallower recession of the 1990s, the sector’s job losses will result in a future skills shortage and consequent inflationary wage rises as the recovery takes hold
• VAT reduction on repairs will reduce the black economy and allow a better use of the existing stock of buildings to revitalise communities

Based on experiences from previous recessions, The Repairing Britain Campaign believes that many thousands of industry jobs are under threat. According to the report, tens of thousands of jobs in the construction sector could be saved as a result of a proposed VAT reduction.

The Repairing Britain campaign was created to boost the UK economy by stimulating the construction industry and encouraging the public and local authorities to take an interest in the maintenance of their homes and community buildings. It is spearheaded by Rok and supported by a range of industry-related businesses and organisations.

Garvis Snook, Chief Executive of Rok plc and spokesperson for the Repairing Britain campaign said: “We welcome the findings of this report which give validity to our arguments that a change in tax on property repairs could be cash neutral. The report supports our belief that a tax cut could keep more people in work at a time of rising unemployment and help the country return to financial stability and growth.”

ENDS
CONTACT: Jamie Collis on 01325 363436


Notes to editors:

*Companies and organisations supporting Repairing Britain include:
Rok plc
The Scottish Building Federation
Constructing Excellence
DeWALT
Myson Radiators
Marchday plc
Everbuild Building Products

About the ‘Repairing Britain’ campaign

The ‘Repairing Britain’ campaign has devised a Five Point Plan that the public can follow to support the industry, their local community and the economy:

1. Look around your community for disused buildings and those in poor repair; tell your council about them; organise a pressure group to get them fixed
2. Ask your council to agree to use local builders for refurbishment contracts and schemes under £10,000
3. Encourage local business owners to keep their buildings in good condition and energy efficient
4. Look at your own home to see what you can do to make it more energy efficient, or what maintenance jobs can be done now to prevent problems in future
5. And finally, sign the Downing Street e-petition for a reduction in VAT on repair work to 5 percent: http://petitions.number10.gov.uk/repairingbritain/

Employment

• In the 1990s’ recession the construction industry lost 350,000 jobs and many of those who left never returned. Refurbishment and improvement projects create many more jobs than new build schemes. Such work requires skilled local tradesmen and is more sustainable.
• With more work available, companies will be able to continue employing apprentices. Despite the obvious risks of a gap in the next generation of skilled workers, apprenticeship schemes have been cut dramatically in recent months.

Property

• There are an estimated one million empty homes in the UK today, and more than four million people on waiting lists for rental accommodation, plus according to the Local Government Association (LGA), five million people will be on social housing waiting lists by 2010. These empty homes could be made habitable much faster than new homes can be built. Repair and refurbishment of existing properties is also greener than starting from scratch on green fields. Rok wants to encourage a sense of civic pride in our surroundings; money is being spent on new housing developments while empty homes multiply in existing neighbourhoods, causing them to become under-populated and under-resourced.
• In addition to this, there are as many as 15 – 20 percent of properties across the UK are likely to be in poor condition, in need of repair or underused. These properties may be above shops, or even empty shops, old factories, warehouses, and private dwellings. If, over the next two years, we tackled just 20 percent of the buildings that needed repairing and turning into homes, we would create 250,000 new homes which would more than satisfy the country’s need.
• The average household could save as much as a third on its energy bills by using the latest energy saving options, work which seems much more manageable if given a tax incentive.
• ‘Repairing Britain’ is calling for an audit of empty buildings by local authorities to identify properties needing attention, at a time when the country needs 240,000 additional housing units a year and only 60,000 are being built we need to look at the buildings that already exist for new homes.
  

Construction News:
Scottish Building Federation calls for VAT cut to boost building

http://www.cnplus.co.uk/5210299.article

Vicky Banham of Rok commented:

"It is heartening to see the Scottish Building Federation keeping up the pressure on behalf of the industry and the widespread calls for a cut in VAT to 5% on home improvements and property repairs. The federation has done its homework with a survey of homeowners which found that half of them would be encouraged to commission work if the tax were cut to 5%.

"Michael Levack has been an enthusiastic supporter of our wider Repairing Britain campaign which has as one of its key demands, a cut in VAT on repairs and maintenance. He has invested in surveys and we've enlisted the help of university researchers to look at effects on government revenues of a VAT cut in the context of the construction jobs it would save. We hope our combined voices and those of the others clamouring for this important tax change will have the desired effect."

REPAIRING BRITAIN CAMPAIGN COMMISSIONS INDEPENDENT ACADEMIC REPORT INTO EFFECTS OF VAT REDUCTION ON REPAIRS AND MAINTENANCE

EVIDENCE SOUGHT FROM INDUSTRY EXPERTS

The Repairing Britain Campaign has commissioned The Teesside University Business School to prepare an academic report about the economic case for lowering VAT on building repairs and maintenance. Now the University is seeking evidence from people working in the sector.

The campaign, which is funded and spearheaded by Rok plc and supported by a number of leading industry organisations*, is calling on the Government to reduce VAT on property repairs to 5 percent.

This reduction would help stimulate the economy and industry sources believes as many as 250,000 of the construction industry jobs under threat from current economic conditions, could be saved.

It would also reduce the tax inequality that exempts new building projects from any tax while charging people making improvements to existing properties at the current top rate of 15 percent.

Central to preparation of the independent report is evidence gathering and the Business School is inviting construction industry professionals to provide information that will give an accurate report of the current state of the sector.

Individuals can submit data or anecdotal evidence to Andrew Harrison – a.harrison@tees.ac.uk, who is compiling the academic paper.

The Teesside University Business School is a well-respected academic institution, which works closely with industry to provide research, consulting expertise and support.

Garvis Snook, Chief Executive of Rok plc, who is spearheading the Repairing Britain campaign, said: “This independent report will deliver contemporary data on the likely effect on the sector and the wider economy if the Government were to be persuaded to reduce the VAT rate on property repairs and maintenance. It will provide academic evidence of the effect a cut would have on the construction industry labour market and the net income of the government.”

He added: “While the disparity in VAT rates between new builds and repairs and renovation remains, the sector will struggle to retain the skills it needs. Our campaign provides a workable and effective solution for the security of the sector and its workforce.”

Alastair Thomson, Dean of Teesside University Business School, said: “This is a very relevant and challenging issue and we are keen to investigate the case for a VAT reduction. Information provided by the construction industry will be an important part of the report and we are keen to hear from the sector with contribute to an accurate analysis.”

GREEN BRITAIN DAY USED TO ENCOURAGE INSULATION

The Repairing Britain campaign used Green Britain Day to encourage householders to to insulate their homes before the autumn.

The campaign, which aims to persuade the public and local authorities to take an interest in the maintenance of their homes and community buildings to secure 250,000 jobs in the construction industry, says that more than £350 a year could be saved on household heating bills through effective insulation.

It is recognised that home energy use is responsible for a quarter of all CO2 emissions in the UK and there are an estimated eight million UK houses with inadequate insulation.

Rok’s safety, health and environment director, Shaun Davis, said: “With the warm weather we’ve had recently it’s easy to forget that in the autumn the central heating will be back on with a vengeance and heat and energy will be escaping from hundreds of homes every day.

“Over the past couple of years, we have seen a big increase in insulation installations in the autumn. It’s definitely worth looking at insulating homes during the summer before the cold weather returns and the rush to insulate begins.”

Repairing Britain has also produced a series of simple tips to help save energy in the home:

1. Get your boiler serviced regularly, or better still get an energy efficient boiler installed – it could save up to £235 a year
2. A full set of heating controls is just as essential as the right kind of boiler. Look at installing a time programmer and room thermostats
3. Make sure pipes are lagged and you have no leaks, however small
4. Make sure you have cavity wall insulation, a third of your home’s heat is lost through walls
5. Even if you have loft insulation, is it thick enough? Moving from 50mm to 270mm can save you £45 per year
6. Make sure small cracks in skirting and floors boards are sealed to prevent draughts and heat loss
7. Make sure all your windows fit snugly, replace any broken catches or old frames. Better still install double glazing, it could cut your heating bills by £135 a year
8. Check tiles on your roof, cracked or missing tiles let water in and heat out
9. Use energy efficient light bulbs and fittings. These days all fittings, shapes and sizes are available including halogen and dimmable bulbs
10. Consider installing solar electricity systems. A 2.5 kWp system could provide 50% of a household's yearly electricity needs, saving around £250 off your electricity bill*. (* Assumes a 2kWp system with 50% on site consumption with excess exported to the grid on a typical export tariff.)

Green Britain Day is part of the Team Green Britain initiative, which is designed to make the UK the leader in the race against climate change in the run up to the London 2012 Olympics.

The Repairing Britain campaign says up to half a million jobs could be lost in the current downturn, but 250,000 could be saved by increasing refurbishment and improvement projects that create many more jobs than new build schemes, require skilled tradesmen and are more sustainable.

The campaign is supported by a group of some the UK’s most prominent construction industry experts including property maintenance and repair specialists, Rok, national radiator manufacturer, Myson, The Scottish Building Federation and international tool manufacturer, DeWalt.

ENDS

LEADING PROFESSIONAL POWER TOOL MANUFACTURER, DEWALT, GIVES SUPPORT TO REPAIRING BRITAIN CAMPAIGN

DEWALT, one of the world’s leading manufacturer’s of professional power tools and accessories, has given its support to Repairing Britain, the campaign to secure 250,000 jobs in the construction sector at risk during the recession.

Repairing Britain is designed to boost the UK economy by stimulating the construction industry and encouraging the public and local authorities to take an interest in the maintenance of their homes and community buildings.

The campaign says up to half a million jobs could be lost in the current downturn. However, it is highlighting that refurbishment and improvement projects create many more jobs than new build schemes, require skilled tradesmen and are more sustainable.

Repairing Britain has devised a Five Point Plan that the public can follow to support the industry, their local community and the economy:

1. Look around your community for disused buildings and those in poor repair; tell your council about them; organise a pressure group to get them fixed
2. Ask your council to agree to use local builders for refurbishment contracts and schemes under £10,000
3. Encourage local business owners to keep their buildings in good condition and energy efficient
4. Look at your own home to see what you can do to make it more energy efficient, or what maintenance jobs can be done now to prevent problems in future
5. And finally, sign the Downing Street e-petition for a reduction in VAT on repair work to 5 percent

The petition, which is on the Downing Street website, http://petitions.number10.gov.uk/repairingbritain/, requests a reduction in VAT on property repair work to 5 percent, which will provide a much needed stimulus.

DEWALT is long established as a leading supplier of high performance power tools and accessories to the global construction industry and is renowned for the powerful, durable and reliable qualities of its range.

Richard Mallinson, DEWALT Group Marketing Manager, said: “As a leading professional power tool manufacturer, the strength of the residential and commercial construction sectors is a key driver within our business. DEWALT, therefore, recognises and support the positive steps that the 'Repairing Britain' campaign is taking to help the look and feel of local communities and to protect and create jobs within the construction industry.”

Garvis Snook, who is spearheading Repairing Britain and is also Chief Executive of property repair and maintenance specialist, Rok plc, said: “DEWALT is a globally-renowned name in the construction sector and a respected commentator on the issues affecting the industry. They are part of a supply chain that requires an active construction sector, which can be achieved if the plans set out by Repairing Britain are followed.”
ENDS

CONTACT: Jamie Collis on 01325 363436

Pic caption: DEWALT backs Repairing Britain. Left to right - Brendan Jackson (DEWALT), Steve Allen (Rok), and Lionel Rowssel (DEWALT) (Picture by: Keith Taylor)

A HIGH RESOLUTION PHOTOGRAPH/VIDEO TO ACCOMPANY THIS NEWS RELEASE CAN BE DOWNLOADED FROM: http://www.recognitionpr.co.uk/journalistarea-story.asp?id=6737

Rok has welcomed the news that housing remains at the top of the government’s policy agenda.

Group sales and marketing director, Kevin Willetts, said there was no doubt there was huge unmet demand for affordable housing in the UK and a number of the announcements made today would go some way to addressing the problem.

“Rok believes there is still more to do in this area and would encourage the reuse of existing properties. The refurbishment of empty homes and dilapidated commercial buildings would be an even quicker and greener way to meet some of the housing need which is why Rok launched its Repairing Britain campaign and joined the growing calls from the industry and outside to cut the rate of VAT on repairs and maintenance to 5%.

“This new announcement is encouraging that the government remains committed to its promise of building 155,000 new homes before 2011,” said Kevin.

“We are pleased some of the red tape that has surrounded housing provided by local authorities is to be removed and that they will be given a greater say over what happens in their areas as they are best placed to fully understand the local need and where priorities should lie.

“We have won a number of framework agreements with local authorities and their management organisations and these arrangements are working well as we are helping them convert their existing land portfolios, create quality homes and maintain them for life.

“News that the Homes and Communities Agency’s Private Rental Sector Initiative has attracted widespread interest is an indication that more people are waking up to the fact that home ownership is becoming less of a reality for an increasing number of people. Quality, sustainable alternatives have to be provided rapidly and this is part of that mix."

MANCHESTER HEIGHT SAFETY SPECIALIST JOINS REPAIRING BRITAIN CAMPAIGN

Highwire Ltd, the Manchester-based height safety solutions specialist, has joined the Repairing Britain campaign, which believes a focus on building repair and maintenance can help secure 250,000 construction industry jobs at risk during the recession.

Repairing Britain is designed to boost the UK economy by stimulating the construction industry and encouraging the public and local authorities to take an interest in the maintenance of their homes and community buildings.

The campaign says up to half a million jobs could be lost in the current downturn, but 250,000 could be saved by increasing refurbishment and improvement projects that create many more jobs than new build schemes, require skilled tradesmen and are more sustainable.

Safety engineers Highwire deliver tailor-made height safety solutions including abseil track, Mansafe™ and bespoke structural fixings. Among its specialists, Highwire has a combined experience of more than 50 years in the construction industry working on a diverse range of projects from state-of-the-art new builds through to grade II listed buildings.

As part of its support of Repairing Britain, Highwire will be encouraging its employees, customers and contacts to sign the campaign’s petition on the Downing Street website, http://petitions.number10.gov.uk/repairingbritain/ to request the reduction in VAT on property repair work.

Highwire finance director Elizabeth Rickard, said: “Repairing Britain is a refreshing common sense approach to easing social deprivation, building community pride, encouraging energy efficiency and saving our construction skills base.

“A large part of our business is providing height safety services and equipment to building refurbishment projects and we are convinced that a reduction in VAT would seriously encourage an increase in property maintenance and repair work.”

Garvis Snook, Chief Executive of property maintenance and repair specialist Rok and is spearheading the Repairing Britain campaign, said: “There are hundreds of specialist businesses and thousands of employees that work in business like Highwire Ltd that play a huge role in the construction industry supply chain.

“If the recession causes the loss of the half a million construction workers that has been predicted we will see the skills of these companies disappear, which will present a major issue when the country begins to see an upturn.”

ENDS


Pic caption: Repairing Britain supporters Trevor Birchall from Highwire (left) and Jon Rukin (left), Rok Area Leader on the roof of Greggs bakery in Manchester. (Picture by: Bill McLaughlin)