Covid-19: Economy - Motion to Consider

Part of the debate – in the House of Lords at 3:06 pm on 4th June 2020.

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Photo of Lord Empey Lord Empey UUP 3:06 pm, 4th June 2020

My Lords, a number of colleagues have mentioned housing. However, there is a perverse government policy with regard to the application of VAT that applies in the housing market. It is environmentally and in many other ways more economic to encourage the development of social and other housing on brownfield sites where existing infrastructure is already in place. However, the way the VAT system works is that we incentivise people to build on greenfield sites, which is counterintuitive.

I have raised this issue in the past, and the Treasury’s argument has been that there would be refurbishments and renewals of brownfield properties, and therefore that there would be dead weight if the VAT were reduced or removed on brownfield work and refurbishments. However, we are in a new era now, and I believe the Treasury should revisit this. Removing that cost in redevelopment of brownfield sites, for commercial and particularly housing projects, could be a stimulus but would also help solve the housing problem, which is at the core of poverty and so many social and other issues.

Will the Minister examine the possibility of using the VAT system to encourage the redevelopment and refurbishment of properties on brownfield sites and not give an incentive to people to build on greenfield sites?