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FSB support Plaid calls for targeted VAT cuts

19/07/2022

Plaid Cymru’s Hywel Williams MP has welcomed the support of the Federation of Small Businesses (FSB) in calls for targeted VAT cuts in the construction and tourism sector to help restore economic growth.

Mr Williams recently advocated lowering VAT from 17.5% to 5% on maintenance and home renovations works and proposed amendments to the Finance Bill to this effect.

Mr Williams said:

“The FSB’s own figures have shown that business confidence has fallen dramatically. That is why we must have strong measures to tackle this – and one of the ways Plaid Cymru has advocated is targeted VAT cuts.

“For example, Plaid Cymru’s idea for helping the construction industry is to cut VAT on home renovations from 17.5% to 5%.

“This would provide additional work for small, local builders and help off-set the drop in work that will come from the public sector when these cuts filter through.

“We have an ageing housing stock in Wales where renovation is badly needed to improve the quality of housing. A VAT cut would mean that this could be done cheaper and better.

“The construction industry in Wales employs more than 100,000 workers, mostly in local small or micros firms with a handful of people, so increasing growth in this area would be felt across Wales.

“I have campaigned for several years to cut the VAT on housing renovation. It is a shame that both the previous Labour government and the current government ignore this method of increasing growth in the construction and tourism sectors when both could do with such a boost.

“Previous pilot schemes on a VAT cut suggest that it will be finance neutral, meaning the government neither makes nor loses money because of it, but that it provides extra jobs in the sector.”