Sefton Central Labour MP Bill Esterson said the Prime Minister was condemning hundreds of small businesses after refusing to consider cutting VAT.
“It would make important home repairs more affordable and help protect consumers from cowboy builders who currently flourish by evading VAT.
“This is a logical step to help boost the local economy and the government should get on and do it as a matter of urgency."
Bill said the Tory-Lib Dem government's own economic policies had made life for the construction industry very difficult.
Bill said: "David Cameron and the whole of the government knows the construction industry is currently very weak. The economic crisis hit the industry very hard, but the Tory-Lib Dem government's decision to make cuts in schemes like Building Schools for the Future has made a difficult situation much, much worse.
“Last January's rise in VAT to 20% has had a major impact by driving customers towards inefficient builders. The Federation of Master Builders' campaign to cut VAT to 5% on all home repair, maintenance and improvement work has now gathered the support of 50 different organisations, representing hundreds of thousands of businesses and members of the public.
"Independent research commissioned by the Cut the VAT campaign last year also reveals a long list of benefits tied to this specific VAT cut, including more protection for homeowners.
"It's just a shame that David Cameron refuses to listen."