Finance (No. 4) Bill

Gordon Henderson Excerpts

Wednesday 18th April 2012 Commons Chamber

[Albert Owen]

I will not give way again; I have already given way twice and I want to finish my point.

People who visit places such as the Isle of Anglesey, which I represent, want to go to them regularly. They will therefore buy terraced houses or properties at the lower end of the market and force up the prices of those properties. That will put pressure on affordable housing. I do not think that that is an issue that the Treasury has taken on board.

This exemption is not an anomaly, but is meant to help the industry. If that industry suffers, many people in the tourism and manufacturing industries across the United Kingdom will suffer. We have seen headlines about the granny tax, the pasty tax and the charity tax, but this proposal is an Osborne tax. It was made in No. 11 and will have consequences across the United Kingdom. Tonight, Members on both sides of the House have the opportunity to vote it down. That is the strongest and clearest message that we can send the Chancellor of the Exchequer and his lieutenant. That is true not only of the caravan tax but of the pasty tax, which I will also vote against if there is an opportunity to do so tonight. Let us be consistent. The caravan tax will not raise extra revenue for the Treasury, but it will damage jobs, entrepreneurs, coastal areas of beauty that rely on tourism and areas that rely on the manufacturing of caravans.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

I should like to draw to the Government’s attention a couple of anomalies in the VAT rules that they have created with their Budget proposals. That is quite ironic considering that the reason that Ministers have given for their proposals to change the current VAT rates for pies, pasties and caravans is to iron out such anomalies.

I start with hot food. The Government propose to amend note 3 in the existing legislation so that

“the current test for ‘hot takeaway food’ which is based on the purposes for which food is heated becomes a simpler and more objective test based on whether the food is above ambient air temperature at the time it is provided to the customer.”

That suggestion is nonsense, and I will explain why.

--- Later in debate ---

[Mark Garnier (Wyre Forest) (Con)]

My hon. Friend may be interested to hear that the written evidence given to the Treasury Committee by the Institute of Chartered Accountants in England and Wales states that these VAT changes are broadly sensible reforms

“but will still leave plenty of anomalies”.

[Gordon Henderson]

I can only agree with that:

I accept that there is an argument for trying to address the current situation whereby some shops sell hot pies without charging VAT but others, such as my local chippy, have to charge VAT on the hot pies that they sell. However, the Government’s proposal is not an answer. Nor, sadly, is the Opposition’s new clause 1, which is why I cannot support it. I very much hope that the hon. Member for Pontypridd (Owen Smith) will withdraw it, and that he and his colleagues will support new clause 5, which I believe would achieve the Government’s objectives while protecting businesses such as that run by my friend.

[Andrew George]

I am pleased that the hon. Gentleman will be supporting new clause 5. As he knows, no one eats fish and chips cold, but a lot of people eat a good pasty cold. In fact, they are delicious cold. A lot of people go to the many pasty bakers in my constituency, buy pasties hot, take them home, put them in the freezer and use them later. The Government’s proposal clearly does not address that type of consumption.

[Gordon Henderson]

I am pleased that the hon. Gentleman agrees with me that the proposal is nonsense, but I want to move on to caravans, which are important to my constituency.

The Government’s proposal is allegedly to iron out an anomaly by ensuring that the sales of holiday and leisure caravans are taxed consistently at the standard rate, but once again, it simply creates another anomaly, which I will describe in a moment.

The proposal must be one of the most ill-conceived and badly thought out of all the proposals in this year’s Budget. We have been told consistently that the Government want to help coastal communities, which have become increasingly deprived over the past couple of decades, and which often have a higher level of unemployment than other areas. The Isle of Sheppey in my constituency is one such coastal community. As I have mentioned in the House on a number of occasions, unemployment on the Isle of Sheppey is among the highest in the south-east of England. The island took another knock earlier this year when Thamesteel went into administration. To give them their due, both the Department for Business, Innovation and Skills and the Department for Communities and Local Government have been working hard with my local authorities to find ways of mitigating the closure of Thamesteel by encouraging the growth of other industries, but one of those industries is the tourism and holiday industry, which has declined over the past 40 years, since its ’60s heyday.

In recent months, we have seen the green shoots of recovery in our local tourism scene, boosted in part by the decision of Swale borough council to allow many caravan parks to extend their operating periods from eight to 10 months of the year. That decision gave caravan park owners a real incentive to invest in and upgrade their parks, but success in the caravan holiday business is reliant on a good mix of park-owned caravans for hire and pitches for owner-occupiers. The sale of holiday caravans will be very badly hit if they incur VAT at 20%, and, in turn, the park-owned business will be hit because operators will have to increase their hire charges to balance their books, driving away even more much-needed visitors.

Let us not forget that those visitors are not wealthy people; in the main, they are working class people who strive for a better life by having their own holiday home here in Britain. In my view, the policy has been dreamt up by somebody who has never holidayed in a caravan park, has no idea of how the holiday park business operates and has no conception of the disastrous effect the policy will have on many coastal and rural communities.

It is deeply ironic that the Government are striving to give coastal communities help up the ladder of prosperity while using their feet to kick away the very same ladder with this ill-thought-out proposal. I urge hon. Members to support new clause 6.

[Several hon. Members]

rose—