Static Caravans (VAT)

Thérèse Coffey Excerpts

Thursday 26th April 2012 Commons Chamber

[Mr Stuart]

According to the National Caravan Council, if we take Her Majesty’s Revenue and Customs forecast of a 30% reduction in demand, home production will reduce to 10,689 units—the lowest production level on record—with inevitable consequences for manufacturers, suppliers and parks.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I suggest that there has been a misunderstanding in the Treasury about the proportion of people who own such homes and stay in them for long periods at a time as against regular weekly letting. Does my hon. Friend know that if people stay in a hotel for more than 28 days, VAT does not have to be paid? Some parallels could be drawn.

[Mr Stuart]

My hon. Friend is right. I am not sure that I am ever going to get on to the issue of the non-anomaly that this measure is tackling. We are fortunate that Roger Tym & Partners produced a report on the economic impact of UK holiday parks in January this year, showing that 85% of static units are privately owned and that the remaining 15% are rented out as part of a park’s letting fleet. The market that will be most hit is the one that drives profits on these parks and drives investment. I do not think that the Treasury factored that into its calculations properly.