In the last few weeks I have updated you on the campaign against the introduction of VAT on static caravans. There has been times when I thought I was banging a solitary drum, as other than the local media, this issue seems to have taken a back seat to other measures in the Budget, such as the Granny Tax and the Pasty Tax. MPs for Hull and East Yorkshire though have been working hard to ensure this issue gets a national audience, and eventually this has worked.
As I have previously said, 95 per cent of static caravans manufactured in the UK are built in Hull and East Yorkshire. The decision from George Osborne to slap 20 per cent VAT on the cost of a static caravan will have a profound effect on jobs in the caravan industry. Rather than end a tax anomaly, the Chancellor has decided to widen the VAT net. This decision could result in thousands of jobs losses, and end up costing more than it brings in extra revenue.
In a vote in the House of Commons on Wednesday, all the local MPs (with the exception of Greg Knight, the Conservative MP for East Yorkshire) voted against this measure, however the government still won the vote with a narrow majority of 25. Graham Stuart, the MP for Beverley and Holderness, has secured another debate in the House of Commons next week in an attempt to change the government’s mind. The consultation period has also been extended by two weeks.
Tax simplification should mean just that: taxes are transparent and easy to understand. It should not be used as an excuse to raise taxes, which is exactly what George Osborne is doing. Jobs are scarce in Hull and the East Riding, and the Treasury admits its decision will have a dramatic impact on the caravan industry. At a time when we all are trying to kick start the economy, the last thing we need is the Government jumping in with two feet and derailing the economic prosperity of Hull and East Yorkshire; an area which is already suffering high unemployment.
We urge the Chancellor to think again, and give our full support to the MPs who voted against this measure on Wednesday.