Campaign victory as Osborne set to scrap 'tax on tourism'

As Ministers begin settling in to their departments, the Yorkshire Post has learned alternative proposals are to be drawn up to Labour plans which could have cost the tourism industry 200m a year and endangered 4,500 jobs.

The move to scrap tax breaks for people who let out holiday homes – which would only have raised the Treasury 20m – had already been put on hold in the rush to get legislation through parliament before the election campaign, and now Mr Osborne is expected to kill it off altogether by unveiling an alternative plan when he presents his first Budget in less than 50 days' time.

The pledge – which will meet little Liberal Democrat opposition because they too had opposed the tax change – marks victory for the Yorkshire Post's Give Tourism A Break campaign and has been welcomed by officials in an industry worth 6.3bn a year to the region's economy.

Gary Verity, chief executive of Welcome to Yorkshire, said: "A lot of people in the industry will be relieved after a long campaign to point out what the impact of this potential change would be. If it's been consigned to history that has to be a good thing."

Stopping the tax raid, which experts had warned could have left eight out of 10 small holiday businesses at risk of closing because they would no longer be financially viable, was also a key part of this newspaper's Manifesto for Yorkshire which was launched at the start of the election campaign to highlight policies in key areas that could help the region thrive.

Among the possible solutions Treasury officials will consider are better targeting of the tax breaks to benefit those who rent accommodation out for more of the year.

The deal struck between the Tories and Lib Dems delivers several pieces of good news for our manifesto, including a commitment to a high-speed rail network with Transport Secretary Philip Hammond yesterday insisting it would not be difficult to get private funding for the scheme.

There is also backing for four pilot schemes of carbon capture and storage technology, at least one of which is likely to be in Yorkshire, to collect polluting emissions from power and industrial plants and transfer them through pipelines to be stored safely under the seabed.

And businesses in the region have welcomed a pledge to use some of the 6bn of cuts this year to cancel "some of" the backdated demands for business rates which had threatened to put many firms out of business, particularly at the region's ports.

But supporters of Yorkshire Forward will have been concerned to see Eric Pickles, an arch sceptic of regional development agencies (RDAs), installed as Communities and Local Government Secretary where he will play a key role in determining their future along with another sceptic Business Secretary Vince Cable.

Yorkshire Forward, which spends more than 300m a year aiming to boost the region's economy, is thought to be one of the most effective of the nine agencies across England and backers had been buoyed by the fact that while both the Tories and Lib Dems called for major reforms, they said slimmed-down versions would be able to stay where there was local support.

However, they are likely to want rapid reassurance following the arrival of Mr Pickles, a former leader of Bradford Council who has previously said the future for the agencies was "not terribly rosy".

Nick Pontone, policy director of Yorkshire and Humber Chambers of Commerce, said there were positive signs about the coalition deal for businesses but added: "There are still lots of blanks to fill in such as the future of Yorkshire Forward and funding for vital transport schemes which are important to Yorkshire's future economic prospects."