The Construction Products Association is urging Chancellor Gordon Brown to use the current review of European VAT policy to ensure a reduced rate option for building repair work in the UK.

The calls come ahead of the Ecofin meeting on the November 25 which offers all member states the opportunity to reduce rates of VAT on all construction work.

A spokesman for the Treasury told ePolitix.com: "The current proposals from the Commission on VAT are unacceptable, and we have made it clear that we will veto them. We will defend our current reduced and zero rates, to progress the government's objectives."

Forum Response: Construction Products Association

Jean Emblin, external affairs director for the Construction Products Association told ePolitix.com: "The repair cost of the estimated 2.7 million non-decent properties needs to be cut. There is a need to incentivise the regeneration and re-use of vacant buildings. The Construction Products Association believes the review of European VAT policy is an unprecedented opportunity to ensure a reduced rate option for building repair work in the UK is obtained.

"The Association has joined forces with a broad coalition of organisations which believe that building work covering the repair, maintenance and improvement of housing and historic buildings should be taxed at a lower rate of VAT. This would encourage landlords and homeowners to better maintain their properties and bring them up to modern standards of energy efficiency. It would also encourage owners to improve and extend their homes, easing development pressures on Greenfield sites.

"The Association believes that the draft report of the European Parliament's Economic and Monetary Affairs Committee offers the right balance, by allowing member states to maintain their individual derogations but also building more flexibility into the application of reduced rates of VAT by widening Annex H. The UK delegation must ensure that they find a compromise solution along these lines rather than vetoing the whole proposal."

Forum Response: Council of Mortgage Lenders

A spokesperson for the Council of Mortgage Lenders told ePolitix.com: "For some time the CML has raised the question of the current burden of VAT on home improvement and repairs. The cost of VAT is rarely recovered through increases in value and acts as a disincentive to take on necessary works that have wide individual and community benefits. We would like to see VAT reduced to five per cent, bringing the UK into line with changes already made elsewhere in the European Union.

"The government has recently introduced a decent homes standard in the private sector, albeit limited to concerns with vulnerable households.

"The burden of VAT at 17.5 per cent will impact upon efforts to meet those standards. Given the government's concerns regarding disrepair in the owner-occupied sector they will ultimately have to accept that the standard should be applied to all homes, and that more will need to be done to encourage repairs and improvements. A reduced VAT rate would make a major contribution."

Forum Response: English Heritage

Jeff West, director of policy for English heritage, told ePolitix.com:"At present, VAT provides a perverse incentive to neglect maintenance and make unnecessary alterations to listed buildings. This wastes resources and is not sustainable. It penalises individual householders and voluntary groups who are unable to claim back the tax."