Motorhomes and Vehicle Excise Duty

Ruth Jones Excerpts

Tuesday 21st January 2020 Westminster Hall

[Ruth Jones (Newport West) (Lab)]

I beg to move,

That this House has considered motorhomes and vehicle excise duty.

It is a pleasure to serve under your chairmanship today, Sir David. It is good to see you in the Chair for this debate, because I know that this is an issue that you have raised at the highest levels of Government and that you take it very seriously indeed. As you cannot contribute to the debate this afternoon, I will speak for both of us in saying that this issue is serious and real, and that we will keep raising it until the Government take the necessary action. We are not prepared to let the motorhome industry collapse because of Government miscalculation.

I thank the National Caravan Council for bringing this matter to the attention of Parliament, and I am very grateful to have secured this important debate today. The impact of vehicle excise duty on motorhomes and campervans is a niche topic but an important one. The industry and many motorhome users are calling for motorhomes to be removed from the car vehicle excise duty regime, and for motorhomes to be taxed as private light goods vehicles or private heavy goods vehicles, until they can be added to the forthcoming graduated vehicle excise duty regime for commercial vans, from which they are originally derived.

The calls for action are more obvious than many may think. After all, a motorhome is not a car, as motorhomes are designed to perform a function other than general transport of people or goods. They are derived from the chassis of a heavy commercial vehicle, such as a van or a truck, and they have large engines, so motorhomes should not be taxed as cars, when they are clearly not built to be cars or used as such.

So I am pleased to have the opportunity to raise this issue today and it is good that the Exchequer Secretary to the Treasury, the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), is here to listen to the arguments, understand the concerns and—hopefully—update the House on what measures the Treasury will take to ensure that this anomaly can be addressed and solved at the earliest opportunity that the Government can find.

To be clear, I am calling for a fair approach when it comes to the taxation of motorhomes and campervans. This is a cross-party call for action, both politically and geographically.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

In my area, Swift Caravans has already announced redundancies and I am aware that other companies are currently consulting on making more people redundant. There is huge cross-party support on this issue, as shown by the event that we held in October, the joint letter that we sent to the Minister and the event that we will hold in February. Given that cross-party support and the impact on the industry, does my hon. Friend agree that the Government need to take action now?

[Ruth Jones]

Obviously I agree, and I thank my hon. Friend for intervening to make a powerful point. Yes, there is cross-party support, and she has highlighted both what has been done so far and what we will do in the future. I know that many right hon. and hon. Members who could not be here in Westminster Hall today also support this call for action.

The vehicle excise duty payable for new-generation motorhomes and campervans first registered after 1 September 2019 increased from £265 per year, going up to £2,135 in the first year; it will then be £465 a year for the next five years. That is a huge increase in costs for those people who choose to buy a motorhome and who enjoy using it, and I hope that the Government will reflect on the impact of this massive rise.

The increase in the level of taxation has been applied to all motorhome vehicles, including those fitted with new-generation greener and more energy-efficient engines. If the Government are serious about their climate change targets, why are they not treating light commercial vehicles as cars for the purposes of taxation? Instead of generating an additional £28 million—approximately—from the relatively small number of new-generation motorhomes, they could generate almost £700 million from vans alone.

Let me be clear that that projected £28 million will be raised only if motorhomes continue to sell at rates similar to those in the past. However, I have been informed by the industry that, as my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has already mentioned, registration rates are declining rapidly because of this tax.

[Holly Lynch (Halifax) (Lab)]

I am eternally grateful to my hon. Friend for securing this debate and for the powerful speech that she is making. Further to the point that she has just made, I will point out that businesses such as Richard Baldwin Motorhomes, which is located in my constituency, Bentley’s Caravan and Motorhome Services, and Caravan Guard and Leisuredays, which is an insurance company that specialises in providing insurance cover for motorhomes, directly employ 60 people in my constituency. Those companies are saying, as my hon. Friend has just said, that such jobs will be at risk if we cannot find the fair approach that she is calling for.

[Ruth Jones]

Absolutely—I thank my hon. Friend for making another powerful point. Jobs in this industry are being lost. That is not right and we must do everything we can to protect those jobs.

Ministers repeatedly refer to the importance of incentivising drivers and vehicle owners to choose low-emission alternatives. However, if someone wants to buy a new motorhome, or if someone wants to manufacture one, there are no alternative engines. So, where is the incentive? There is not one, which is why it is so wrong that motorhome owners are being disadvantaged by having their vehicles taxed as if they were cars. Motorhomes are not cars.

It is important that we regulate emissions and do what we can to preserve our environment, and it is right that owners of new vehicles are encouraged to choose cleaner and more efficient engines. Indeed, the car and light commercial van industries have been consulted on the impact of the worldwide harmonised light vehicle test procedure and the implementation dates have been delayed. It is regrettable that the motorhome industry has had no such assistance from the Government.

We must also remember that, unlike cars and light commercial vehicles, motorhomes are the smallest group of vehicles, travelling just 3,000 miles per annum on average and contributing just 0.22% of all emissions. The Government should encourage people to stay here in the UK and holiday at home. I know from my many staycations in Wales that there are some wonderful beaches, and places for people to rest and enjoy themselves, so that they can spend their money within the UK.

[Peter Aldous (Waveney) (Con)]

The hon. Lady is making a very powerful speech. Does she agree that there are clear parallels between this tax and the aborted static caravan tax in 2012, with disproportionate impacts on those areas where these vehicles are manufactured and indeed on the holiday areas that she has just talked about?

[Ruth Jones]

Absolutely, and the hon. Gentleman makes that point very clearly. I will come on to the importance of staycations in this country now.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Lady agree that because motorhomes are used on average for only 31 days each year, a tax of £70 a day is not likely to produce the kind of result that she is talking about?

[Ruth Jones]

Absolutely, and the right hon. Gentleman must have read my speech because I will come on to that very point later.

What happens to staycationing locations across the UK that will lose income and tax revenue because of these proposals? Have the Government completed any studies on this issue? What do they propose to do for people who lose their jobs in the tourism sector because of this arrangement?

We know that staycations stop people from getting on planes, which damage our air, or taking cruises, which damage our marine ecosystems and pollute our waters. So, by holidaying at home, we see lower levels of greenhouse gas emissions and thus less pressure is put on our environment.

The increase in taxation is already having a significant impact on the staycation industry. Unlike the car industry, the motorhome sector saw modest growth year on year up to September 2019, when it recorded a fall of over 7%. That was the very month that the increase came into effect.

I would like the Minister to explain why the Government are penalising 15,000 motorhome-owners, who all contribute to our domestic tourism industry and only use their motorhomes for leisure purposes for about 30-odd days a year, as we have already heard. The policy cannot be about reducing air pollution levels, because if it was, the Government would have a more thought-through and logical approach.

[Gillian Keegan (Chichester) (Con)]

The hon. Lady is making an excellent speech, and I agree with her. There is a disparity between motorhomes, which on average do about 3,000 miles a year, and light vehicles and vans, which do 12,800 miles a year on average with exactly the same carbon dioxide emissions per mile. Does she agree that if we are trying to tackle climate change, motorhomes are not the area on which to focus?

--- Later in debate ---

[Ruth Jones]

I agree with the hon. Member entirely. She has made a powerful point.

I want us to think about the people we are talking about. There are people across the UK who use motorhomes and there are manufacturers, as we have already heard, in Hull and other areas. Many committed holidaymakers are using their vehicles to holiday at home in the UK. Those UK-based holidays are a much-needed boost to our regional economies and our coastal and rural communities. Indeed, motorhome and caravan owners make a key contribution of some £9.3 billion every year to the tourism industry and the economy, according to recent UK Caravan and Camping Alliance impact reports.

The days and months ahead as we leave the European Union remain uncertain and a little unclear. We do not know what economic winds may sweep us up or what global shocks may hit us, so the Government must focus on all measures to make life easier and our economy stronger—not weaker. One way to do that would be to tackle the problems associated with the vehicle excise duty for motorhomes. Let us think about the people who will be affected. There are almost a quarter of a million motorhome owners in the UK today. According to figures from the NCC, 81% are over 55 years old, and more than 50% are retired.

Motorhome and campervan purchasers are often older people who have saved for much of their lives to purchase these leisure vehicles. I do not think the Government want to be accused of making such lifestyle choices unattainable or of taking away the means for ordinary people to enjoy such holidays.

[Mr Richard Holden (North West Durham) (Con)]

I have Elddis, a manufacturer of caravans, and Weardale, an area where many motorhome users go, in my constituency. Does the hon. Lady agree that this policy could have unintended consequences for the environment in terms of more CO₂ emissions from foreign travel and for the Government through a hit on taxation with VAT and other duties when money is not spent in the UK?

[Ruth Jones]

I thank the hon. Gentleman for making that succinct and clear point. He does it so much better than I could. Why are we penalising those who will not see their incomes grow or those who have stable incomes and have planned accordingly for their futures? They are entitled to holidays, and the Government should not make it difficult for them. I note that my hon. Friends the Members for Kingston upon Hull West and Hessle (Emma Hardy) and for Kingston upon Hull East (Karl Turner) take that point seriously and have made it over recent months. We now have a Government with a solid majority who are looking to their first post-election Budget. I am sure the Chancellor is busy across the road as we approach 11 March, but I remind the Government that they have no more excuses for inaction. They have a clear majority in this House, so they can act if they want to.

[Craig Mackinlay (South Thanet) (Con)]

I thank the hon. Lady for securing this powerful and important debate. She has made the point that it is often elderly, retired people who enjoy such vehicles, but quite a big lump of younger families also enjoy motorhomes. The clear point is surely that these are not vehicles for personal transport, but leisure vehicles. Has she ever seen such a vehicle in a supermarket car park? I never have.

[Ruth Jones]

The hon. Gentleman makes a powerful point. As I said earlier, these vehicles are not designed to be used as cars because they are not used to transport goods and people as cars are. He is quite correct in that.

I urge the Minister to listen to the industry, to Members from all parts of the House and to the thousands who enjoy using their motorhomes, and to get this mess sorted out.

[Mr David Davis (Haltemprice and Howden) (Con)]

rose—

Economy and Jobs

Ruth Jones Excerpts

Monday 20th January 2020 Commons Chamber

[Ruth Jones (Newport West) (Lab)]

I commend the hon. Member for Dover (Mrs Elphicke) on her maiden speech and thank her for the measured and thought-provoking way she delivered it. I also thank her for explaining to us the familial links between Members for her constituency—that was very helpful.

I am delighted to be able to speak in this important debate on jobs and the economy. It is my privilege to represent Newport West, my home and birthplace. I am grateful for the opportunity to serve all the people who live there, and I will work hard in the many days, months and years ahead to ensure that their voices are heard in the House.

Over my life to date, the nature of employment has changed fundamentally, as has the type, scope and size of industry in my constituency. The closure of the coal mines and steel works saw a massive and destructive loss of jobs in south Wales, but Newport West is now home to groundbreaking companies such as Airbus, the Rutherford Cancer Centre and the Catapult compound semiconductor cluster, which is the only one of its kind in the UK. As such, I welcome the Government’s commitment to making the UK a global science superpower and investing in research and development. I encourage any relevant Minister to come to Newport West: I will take them to visit those businesses so that Members can see the industry-leading work taking place in my constituency. Importantly, it will give Ministers the chance to learn about these success stories and inspire them to replicate Newport West’s success throughout the UK.

Furthermore, I welcome the Government’s move to ensure that investment in industries such as computing are prioritised. Additionally, if investment in hubs in world-leading universities is promised, I recommend that the Minister visit the University of South Wales campus in my constituency to see the fantastic work being done in the field of cyber-security. It is a hub where businesses and university students learn from each other, providing cyber-security services to companies worldwide.

The Government propose in the Queen’s Speech to bring forward an employment Bill, and claim that they will protect and enhance workers’ rights.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an outstanding speech about the importance of so many things. Over the weekend, the Chancellor made some controversial comments about the possible lack of alignment between Britain and the rest of the EU after Brexit. Does my hon. Friend—like me, the Confederation of British Industry and many major British trade unions—have deep concerns about the Chancellor’s rather rash statement?

[Ruth Jones]

Absolutely. I thank my hon. Friend for intervening because he made an excellent point. We well know that workers’ rights are not a priority for the Government. In fact, from what has been outlined so far, it seems they will attempt to proceed with no input at all from the trade union movement. I regret that and urge the Government to think again. I hope Ministers will remember that those people whose job is in a workplace that is represented by a trade union work in a safer, better-paid workplace. I encourage the Government to keep the trade unions involved in any plans they may make to change the current settlement on workers’ rights. It would be beneficial not only to the Government but to people in Scotland, Wales, Northern Ireland and England if the Tories worked with the trade union movement rather than against it.

The Government cannot be trusted to improve the settlement for workers on their own. They celebrate high employment rates at every opportunity, but in reality the figures mask high levels of people in insecure work, under- employed and on low pay. In other words, there are thousands of people on zero-hours contracts working a few hours a week, unable to make ends meet and often having to get a second or even a third job. As in-work poverty soars, the reliance on food banks continues to increase. At the same time, many people are losing their homes. In-work poverty is the moral disgrace of our age. Around one in five people in working households now live in poverty. That is the legacy of 10 years of Tory austerity.

We now live in an increasingly unequal society. In my constituency of Newport West, the average household wage in Marshfield is double the average household wage in Pill—and those areas are only six miles apart. We must make every effort to level up wages and create a more equal society. The Government can improve the working lives of millions of people in the UK if they take sustainable and effective action on the living wage, and they must take enforcement action against those businesses that refuse to pay it.

Just days ago, a number of my constituents lost their jobs at Liberty Steel in Newport. Many others in Stocksbridge, Rotherham and Brinsworth had the same devastating news. Only a few weeks before that, the Orb steelworks in Newport was mothballed. It was the only plant producing electrical steel in the whole UK. This is madness. I know that the thoughts and sympathies of the whole House will be with the people who find themselves out of work and facing an uncertain future. There is never a good time for someone to lose their job, but the situation is particularly hard coming so soon after Christmas. With those job losses in mind, I urge the Government finally to take real action to protect and defend the UK steel industry. Steel remains vital to the ongoing security and independence of the UK manufacturing sector, while providing good jobs for thousands throughout the country. I welcome the Government’s commitment to the jobs of the future, but I encourage those on the Treasury Bench to remember the jobs of today.

This is the second Queen’s Speech debate in my time in the House—and I have been here for only nine months. As I approach the first anniversary of my time in the House, I pledge to hold the Government to account for the promises they made to my constituents and people right across the country. I accept that the Government have won a majority, but they must now deliver on their pre-election promises. I will be here day in, day out to ensure that they do.