LONDON: The Construction Products Association is urging the Chancellor to use his Autumn Statement next week to kick start economic growth. CPA has identified three ways in which construction can deliver both short-term and long-term benefits for the UK economy as a whole.

The CPA called on the Government to re-balance the economy between current and capital budgets, without increasing overall public spending.

Government should focus more on capital expenditure, as this will provide the most benefit for economic growth.

It must encourage take-up of the Green Deal by ensuring that a 5% rate of VAT is applied to all Green Deal-compliant work.

At a time when government is trying to reduce energy use, it is perverse that energy saving work is subject to 20% rate of VAT while fuel itself is subject to the 5% rate.

The Government must also make greater use of private finance streams from cash-rich corporations that are looking to invest in areas that are relatively low-risk.

This could occur through government backed bonds or Tax Increment Finance (TIF).

Michael Ankers, CPA's chief executive, said: "We are at a critical turning point in our economic recovery and it is essential that the Chancellor uses the Autumn Statement to set out practical ways in which government can encourage a private-sector led economy.

"The Government has identified construction as being one of the key industries that can boost economic growth and help drive the UK economic recovery. Yet, at present, our forecasts show that the industry will experience no growth until 2014.

"Our proposals for the Autumn Statement are sensible measures that will greatly improve the prospects both for our industry and the economy as a whole, without undermining the government's plan for reducing the fiscal deficit," said Mr Ankers.

"The Government's housing strategy, published yesterday, goes some way to addressing the failing housing market yet it is merely a small step in the right direction and more must be done to boost construction and the wider economy."