In last night’s debate David Cameron criticised the Liberal Democrats for proposing to charge VAT on newly built housing. He claimed this would be a tax on jobs, first time house buyers and would reduce the number of affordable homes. Typically the Conservatives have totally misrepresented the Liberal Democrat policy.

It is true that there is a policy to levy VAT on new homes, but this is to be balanced exactly by a reduction in VAT on repair and refurbishment costs to make the policy revenue neutral – so no additional tax will be collected.

Why is this good for Lymm? Because most of the expenditure on housing in Lymm is on repairs refurbishments and extensions; no significant new build is likely to be allowed in Lymm for the next 15 years so the emphasis will be on improving the existing stock. As the Liberal Democrat policy is likely to drop the VAT on such work from 17.5% to 5% or so, this will help Lymm’s householders, or their landlords, to improve homes and make them more energy efficient.

At the moment some 250,000 homes around the country are empty. Providing a tax incentive to get these back into use is the most effective way of providing much more affordable housing. Also this is not a tax on jobs, because repair and refurbishment is much more labour intensive than new build. So switching resources to this will provide more jobs and raise skill levels.

Will new house buyers be badly disadvantaged? Not necessarily. Instead of keeping new house prices low builders and developers have squandered money on ‘incentives’ and ‘free’ gifts which lost their value as soon as a house was lived in. These overpriced new homes, that couldn’t hold their value in the first few years of ownership, and easy money, contributed to the banking and debt crisis. If VAT is charged it is hoped that more basic new homes which offer better value for money will be built and that part of the impact will be to reduce land prices.

For Lymm this VAT cut will be a very welcome bonus for everyone needing to repair, improve, refurbish or extend their home.