Daily Telegraph: Treasury 'made £ 525m from floods'

By David Thomas

CAMPAIGNERS have accused the Government of making a profit of almost half a billion £ from the floods that devastated parts of Britain last year.

The TaxPayers' Alliance (TPA) says that because of VAT charged on home repairs, the Treasury made £ 525 million from taxpayers for work carried out to rebuild property damaged by the flooding in the summer.

At the same time, they say that ministers have only put forward £ 86 million into a fund to help repair damage in areas such as Yorkshire and Gloucestershire which were worst hit by the weather, meaning it made a "profit'' of £ 439 million.

The campaign group, together with the Federation of Master Builders and other groups, has launched a coalition called "Cut the VAT'' to

get the tax streamlined down to

five per cent from its current 17.5 per cent rate.

Matthew Elliot, the chief executive of the TaxPayers' Alliance, said: "It is disgusting that the Treasury has profited from the misery and suffering of others.

"VAT on house repairs is harming our housing stock and punishing good behaviour, now it is penalising people who had suffered a natural disaster. The taxman has sunk to

a new low with this shameful

tax grab.''

Figures from the Association of British Insurers suggest that the average VAT bill for repairs after the floods was between £ 5,250 and £ 7,000. A cut in VAT to five per cent could have lowered this to £ 1,500, the TaxPayers' Alliance claims.

Brian Berry, the director of external affairs at the Federation of Master Builders, added: "What message does this send to people affected by last summer's floods?

"It is clearly very wrong that the Government should be making such large amounts of money out of other people's misfortune. Examples like this only go to show what an unfair tax VAT is.

"If the Government really wanted to get these flood-damaged communities back on their feet, cutting VAT would be a very good place to start.''

Widespread flooding occurred throughout Britain in June and July last year, devastating thousands of businesses and tens of thousands of homes, and further affecting up to a million people. Eleven people were killed.

The insurance industry has already paid out more than £ 3 billion for 180,000 claims.

Some houses were so badly flooded that homeowners are still living in caravans in their driveways as repairs continue.

The most severe floods occurred across Northern Ireland, Yorkshire, the Midlands, Gloucestershire, Worcestershire, Oxfordshire, Berkshire and South Wales.

Conservative MP Graham Stuart, whose Beverley and Holderness constituency in East Yorkshire was badly hit by the floods, said he calculated the amount recouped by the Government to be around £ 100 million. But he said even that was too much.

"It is a heck of a lot of money going into the Treasury at a time when many of my constituents are still homeless or living in caravans under a great deal of stress,'' he added. The Treasury yesterday defended its handling of the flood and the repair efforts following the rain, saying that last year's Comprehensive Spending Review had increased the amount of money available for bolstering flood defences.

A spokesman added: "The UK has the widest and most generous range of reduced and zero VAT rates in Europe, saving UK consumers over £ 28 billion every year.''

Comments

[Roger Jardine Thomas]

more on the story

http://thecelticlion.blogspot.com/2008/02/celtic-lion-fooding-and-national.html

[Riddiford of England]

The adjusting of vat rates is surely not a "competence" of our English government.

It is to our european government only that we may look for such a dispensation.

Given that some 70% of our legislation gestates in europe for the sake of completeness it would seem appropriate to acknowledge this influence in future posts.

[Mark Wallace]

We have done, Riddiford. Here:
http://tpa.typepad.com/campaign/2008/04/vat-and-the-eu.html