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Work Programme (Wales)

(Translation) It is lovely to speak again under your chairmanship, Mr Caton. I shall be brief because I have already spoken—an opportunity for which I am grateful. Before the Committee adjourned, I was referring to targeting cuts in VAT at certain areas, such as the construction industry. There is no VAT on new build, which is very advantageous given the need to build hundreds of thousands of homes, as is the intention in south-east England. However, VAT is payable on repairs and that is disadvantageous in Wales, where so many houses are in need of repair and the deterioration in housing stock needs to be corrected. As I said earlier, since 2009 the European Union has allowed states to reduce VAT to 5% for such work. Some countries have already taken advantage of this opportunity, and Italy, for example, has found that the reduction in the VAT rate has led to an increase in the amount of money they get in. It is the famous Laffer curve—if the rate is cut, people start businesses, pay their tax and the sum increases, so there are advantages. I am strongly in favour of cutting VAT for small businesses, especially builders who employ many people. That is also the view of the Federation of Master Builders, which has been campaigning to that end for many years.