Static Caravans (VAT)

Cathy Jamieson Excerpts

Thursday 26th April 2012 Commons Chamber

[Mr Stuart]

My hon. Friend is right. All Government Members are committed to the aims and objectives set out in the Budget. We wanted a Budget for growth. We support lifting people out of tax; we support lowering corporation tax; we want investment; we want British industry to be supported. May of us are therefore gently but firmly—and, I hope, powerfully—saying to the Government this evening that this measure should be looked at again, and, as I have said, they have agreed to do so.

Terence Higgins, then Financial Secretary to the Treasury, said in March 1973:

“We have already distinguished between two kinds of caravan; the kind of caravan which is a home or a residence, and not normally the kind that one tows around—because even outside the West Country it would be too large to tow conveniently—and that which is not regarded as a home. Because of the general provision in legislation for relief from VAT for housing it was thought appropriate to include large caravans within the scope of relief.”—[Official Report, 20 March 1973; Vol. 853, c. 393.]

Therefore, any suggestion that that was not considered by this House is false. I hope that will be reflected on.

In June 1989, when my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) was Economic Secretary to the Treasury, he said that there was no question of withdrawing zero rating from the purchase of static caravans. He was right then, and we should stick with that view now.

I want to give the Minister 10 minutes in which to reply, if no other colleagues wish to intervene on me. [Interruption.] Give him eight minutes? Okay, fair enough. Finally therefore, let me pass on to the Minister some comments from a constituent of mine.

Aaron Cambridge and I live in the same town, Beverley in east Yorkshire. He works at Willerby Holiday Homes, which in the most recent industry returns at the end of last year was listed as having more than 800 employees. It is based in the constituency of the hon. Member for Kingston upon Hull East (Karl Turner), whom I am delighted to see in his place. Even without this proposed VAT increase, Aaron has been on a reduced work schedule of three-and-a-half days a week for the past six months. He told me that he has worked in the caravan industry for 24 years and can never remember such hard times for the industry. That is the situation the industry is in now, before this possible VAT increase. There are 800 staff just at Willerby, which is a manufacturer, and we know that there tend to be many more associated jobs in supplier firms and others around a manufacturing centre.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The hon. Lady rises to speak from the Opposition Dispatch Box. As that cannot be done in an Adjournment debate, may I ask her to make her intervention from the Bench behind?

[Cathy Jamieson]

I apologise, Mr Deputy Speaker. I still find the conventions of the House somewhat confusing.

[Mr Deputy Speaker]

So do I!

[Cathy Jamieson]

Does the hon. Gentleman agree that the Treasury should look again at the impact assessment? It estimates that it will take in some £35 million in 2013-14 as a result of this measure, but it should look again at the impact assessment to compare that with the amount of money that will be lost in the wider economy.

[Mr Stuart]

The hon. Lady is right. I have many more examples, including that of Laura Goldspink, who lives in my constituency and also works at Willerby Holiday Homes. Charles Gillett, who runs a business that is 100% reliant on the caravan industry, has talked of

“an industry on a knife edge, struggling to emerge from the ravages of the recent recession.”

He, too, pointed out that it is not 750 companies affected, but well over 2,000. Peter Smith, the chairman of the Swift Group—one of the leading employers in east Yorkshire, with 800 staff and a turnover of £200 million —has said:

“A very conservative HMRC prediction is a reduction in demand of 30% which would lead to the lowest market figure for over a decade of around 11,000 units,”

as we have discussed. He continued:

“Such a reduction is likely to increase the cost of materials (due to economies of scale), make credit harder to come by and jeopardise the viability of manufacturers and suppliers.”

I have said enough. Peter Smith put his finger on it, as have all the other Members who have spoken. The Budget is all about creating jobs, but if this measure is implemented, it would have exactly the opposite effect. What we ask, from both sides of the House, but particularly the Government Benches, is for the Minister to listen to the contributions to the consultation and reconsider.