It’s now two months since the UK voted to leave the European Union and we remain in the midst of political turmoil never seen before. We have seen resignations and coups attempts sitting alongside seemingly certain government decisions delayed for further rethinks (Hinckley Point) and water cooler whispers that the House of Lords may after all, overturn the decision of the British public to leave the Union.
And while our elected members of Parliament fight for the ideological high ground and debate the best approach for Brexit, British businesses are left wondering “what next?” Not what’s the next thing to happen politically, but what do we do next? How do we take control of our business, our industry, our future in the wake of Brexit and how do we navigate a successful course for our future in amongst uncertainty at home and abroad.
Because, whatever happens over the coming weeks and months within the Palace of Westminster, once Article 50 https://www.gov.uk/government/publications/the-process-for-withdrawing-from-the-european-union is activated our diplomats will have up to two years to negotiate the terms of our departure with their counterparts in the EU, and so it seems the only thing which is certain is that uncertainty will be the watch word in our short to medium term future.
And so, while we wait for the diplomats to thrash it out we must take control of our own destinies. We must get ever closer to our customers and reassure them of our plans to remain stable and secure suppliers of goods and services, be the companies our customers can rely on when all else seems unstable and ensure our plans are agile and that we pivot our approach as and when the national direction of travel becomes clear.
At the NHIC www.nhic.org.uk we bring together organisations and companies from across the home improvement industry and focus on championing the improvement of the UK’s homes both in the private and social sectors. Our members provide products and services, which help homeowners and tenants take control of their living environments – whether through improving energy performance through insulation, minimising water usage in bathrooms and kitchens or ensuring the very roofs over their heads are safe and well maintained. Our member contractors provide insured warranties when work is secured via a government Competent Person Schemes https://www.gov.uk/building-regulations-competent-person-schemes so that the consumer is protected against the unforeseen of a contractor not being able to meet their obligations.
The NHIC was established in 1974 by the late Lord Ezra of Horsham and colleagues and they created the principles which guide us today. Through our values-based membership we work across the UK home improvement sector to support homeowners and tenants to reduce energy bills and improve living standards through product innovation and the improvement of standards.
It is with these principles in mind that I recently wrote to key government officials drawing their attention to the work carried out by the Cut The VAT coalition last year which delivered the independent report by Experian demonstrating the potential benefits of a targeted reduction in VAT from the current 20% to 5% for all housing renovation and repair works.
The report demonstrated that a targeted reduction in VAT of 15% during 2015 to 2020 could provide a huge economic stimulus of more than £15 billion over the five-year period and could also create more than 42,000 full time construction jobs and an additional 53,000 jobs in the wider economy.
While the numbers would need to be reviewed within post-Brexit parameters, the NHIC believes that they are so compelling that at this time of national uncertainty government could stimulate and support UK businesses, the wider economy and improve UK families living standards through adopting a measured cut in VAT focussed on housing renovation and repair works.
Through a targeted reduction of VAT for at least the period of two years while Article 50 https://www.gov.uk/government/publications/the-process-for-withdrawing-from-the-european-union negotiations are undertaken, government would stimulate domestic home improvements on a scale never seen before. Jobs would be created whilst providing much needed surety to UK businesses. In addition, in the short term the UK would once again look an attractive place for those international companies who provide goods and services in to the HMI sector.
Reducing VAT on renovation and repair works is not an untested philosophy; Similar VAT reductions have resulted in an increase in consumer demand and employment in both the Isle of Man and the Netherlands.
In addition to the persuasive finances and job creation figures, there could also be almost 240,000 tonnes of CO2 saved from 92,000 newly refurbished homes.
This targeted reduction in VAT could be used to support government initiatives such as Each Home Counts through:
- Stimulating so called able-to-pay households to carry out renovation and repair works thus increasing the amount of works being carried out across the UK
- Improving industry standards through the use of only approved contractors being able to offer reduced VAT thus encouraging the best contractors to get involved
- Stimulate demand for energy saving from homeowners and tenants
All of this activity at a time of need for the nation would not only improve the quality of homeowners and tenants lives through improved living standards, it would reduce our carbon footprint alongside the creation of new jobs and wealth at a grass roots level.
I will keep you posted through this blog on progress, but if you wish to get involved and join the NHIC please visit www.nhic.org.uk/membership or contact me email@example.com Please also join the conversation on social media by searching #thenhic
The full report can be viewed on the NHIC website at www.nhic.org.uk/CUTtheVAT