§ Lord Hyltonasked Her Majesty's Government:
Whether they consider that a reduction in the rate of VAT charged for repair, maintenance and improvement of buildings is likely to improve the balance between reuse of existing structures and new building; whether this will help to diminish the amount of unfit housing and generate more sustainable employment; and, in particular, whether they are studying the results of a tax reduction of this kind in France. [HL1856]
§ Lord McIntosh of HaringeyThis Government have already reduced the rate of VAT to 5 per cent for certain services where a price cut will have the greatest effect on the regeneration and renewal of the UK's housing stock. In Budget 2001, we introduced reduced rates for the renovation of dwellings that have been empty for at least three years and for certain residential conversions. These measures help to bring vacant homes back into use and encourage better use of existing housing stock. We keep under review the use of other reduced rates for construction work where these will help with regeneration and renewal but we believe that unemployment can be tackled more effectively by targeted schemes such as the New Deal. The outcome of France's tax reduction, and reduced rates generally, are due to be reviewed by the European Commission this year, and we will be monitoring that work closely.