Finance (No. 4) Bill

Frank Dobson Excerpts

Wednesday 18th April 2012 Commons Chamber

[Andrew Percy (Brigg and Goole) (Con)]

I rise to support the comments that have been made by my right hon. and hon. Friends from across east Yorkshire, who have outlined the terrible impact that the so-called caravan tax will have on the county. For the sake of brevity, I shall not repeat their arguments.

Instead, I shall concentrate on a particular document that has caused me considerable alarm. It has also alarmed one of the park owners in my constituency. My constituency also covers part of Lincolnshire, which contains a large number of holiday parks that will be affected by the measure. The HMRC document that outlines a summary of the impacts says of the economic impact:

“This measure might lead to a small increase in the price of static caravans”.

Even I can do the maths on that one, even though my bank balance might suggest otherwise. Applying 20% VAT to the price of a static caravan is not a small increase; it is a considerable increase. One of my park owners told me that the manufacturers sell their units for an average price of £25,000. Doing the math, as the Americans would say, we discover that that will mean an increase of £5,000, which is not a small increase at all.

That same park owner also wanted me to pass on to Ministers a point that I thought we all understood—namely, that businesses make decisions based on the tax regime that is in place, and that they look forward and make those decisions for the many years ahead. Another of my constituents has invested £500,000 this winter to extend the number of pitches on a holiday park that currently has 450 pitches. He said that the tax change would make it almost impossible for him to continue to employ the same number of people that he does at present, or for that expansion, in a relatively depressed area, to go ahead. I urge colleagues across the House to vote tonight to save that industry.

[Frank Dobson (Holborn and St Pancras) (Lab)]

As the chair of the all-party parliamentary group on historic places of worship, I have been approached by people from all over the country and asked to come out against the proposal to take away the zero VAT rating on alterations to listed places of worship. Such alterations include improved access for the disabled, the installation of toilets and small kitchens, the provision of better heating and lighting and the introduction of more energy-efficient measures. They are not just for the congregation; they are for the whole community. They encourage the community use of religious buildings and make an increasing contribution to attracting tourists all over the country. These church buildings are vital, whether they be vast edifices like York Minster, of which as a York lad I am immensely proud, or small parish churches all over the country. The Government need to look again at this silly, stupid, unprecedented and unconsulted-on proposal.

[Mr Gauke]

We have had a thoughtful and impassioned debate this evening, and I am pleased to have the opportunity to set out the Government’s case for addressing some of the anomalies within the VAT system. In the time available, I will try to address as many points as possible, but I hope the Committee will forgive me if I do not take many interventions, so that I can cover as much ground as possible.

Let me begin with hot takeaway food. The current rules on the VATability of such food have been made complex and unfair by a patchwork of different legal decisions taken over the decades. The definition of hot takeaway food has been in place since 1984, and it applies to food that

“has been heated for the purposes of enabling it to be consumed at a temperature above ambient air temperature”

and that is

“above that temperature at the time it is provided to the customer”.

There have been repeated efforts since the 1980s, however, to chip away at this boundary. A number of businesses have argued in litigation that although the food they may provide to their customers is hot and is taken away, it should not be taxed as hot takeaway food, but should instead be zero-rated. Some have argued successfully that their intention was not to provide their customers with food to be eaten hot, but that they heated their food for other reasons instead—for hygiene reasons, or to finish the cooking process, or to provide evidence of freshness, or to create an aroma or to improve appearance, crispiness or texture.