Mike Nesbitt in call for 5% builders' VAT rate
An Ulster Unionist assembly election candidate has called on the Coalition Government to give construction a helping hand by introducing a 5% VAT rate on home improvements in Northern Ireland
Mike Nesbitt, who will run in the Strangford constituency, said a 5% VAT rate for home improvements on the Isle of Man had brought substantial benefits for the island's construction industry.
A proposal to apply the same clause here is contained in a discussion paper by Mr Nesbitt.
The former UTV Live anchor said: "The local construction industry is facing the perfect storm. With a 40% cut in its capital budget, the devolved government is not spending.
"We all know the banks are not lending, to builders or mortgagees. The sector needs a timely intervention, and the Isle of Man experience suggests this may be it. To be clear, we are not talking about lowering the VAT rate at your local DIY store. This is about making labour-intensive activity more affordable to the consumer.
"The housing market is pretty static at present, for obvious reasons. If people are not moving home, they might be tempted to improve their existing dwelling instead, but the current 20% VAT rate is a clear disincentive."
The candidate, who is a graduate of the Queen's University Business School, said his research into the Isle of Man experience showed other advantages of the move, including "job creation, skills retention, improving the existing housing stock and giving people an affordable way to improve their dwellings".