‘Caravan tax’ blamed for 350 job losses at city firm

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WORKERS in Yorkshire’s caravan industry have begun paying the price of proposed new VAT charges on static caravans after one of the region’s biggest employers announced plans to axe more than half its workforce.

Extended consultations on the so-called caravan tax only ended on Friday, but Willerby Holiday Homes, which employs about 690 people at its factory in Hull, confirmed yesterday that the charges had played a significant part in its decision to slash 350 jobs.

A 90-day consultation over the redundancies began on Monday.

The company said in a statement: “Following the Government’s announcement to align VAT on the sale of new and static caravans / holiday homes and a period of planning for the review, the management of Willerby Holiday Homes had to regrettably announce notice of potential redundancies to its employees. We believe this is a prudent and responsible measure reflecting the current economic environment, proposed VAT changes and consumer confidence levels.

“As yet the scale of any structural changes are not certain given the range of likely impacts on the market for our products. Willerby Holiday Homes will do all in its power to minimise the negative impact on any changes to its employees and broader stakeholders.

“Giving clear and early notice of potential changes was believed to be the most appropriate way to allow all concerned as much latitude as possible to adjust to new market conditions.”

The announcement coincided with the publication of a report which warned the fees would cost more than 4,000 jobs and see the industry lose more than £1bn in sales over the next five years.

Reacting to the job losses in Hull, a union called the tax a “hammer blow” for industry.

However, pressure on Ministers for a rethink was growing last night as cross-party groups of MPs were due to hand in 32 separate petitions to Parliament calling for the plans to be ditched.

They are understood to contain “tens of thousands” of signatures and include one of 3,429 names being presented by Hull North Labour MP Diana Johnson.

She said: “This worrying news of 350 jobs at risk at Willerby Holiday Homes just confirms the predictions about the effects of the caravan tax. It shows how futile and damaging it is to make an obscure VAT reform that few think important, while being oblivious to the effects on jobs and the fact that the tax will actually lose the Government revenue overall.”

The TaxPayers’ Alliance has weighed into the row, also claiming the tax would be counter-productive in terms of the revenue it may raise.

Andrew Allison, Hull-based national grassroots co-ordinator of the alliance, said: “This is what happens when the Government use tax simplification as an excuse to raise taxes. There’s likely to be so many job losses, not only in Hull and East Yorkshire but across the country, that this will not raise any extra cash; it will end up costing tax payers more.”

Dave Oglesby, East Coast and regional organiser for the GMB union, which has more than 100 members at the factory in Hedon Road, said the timing of the proposed tax “could not have come at a worse time”.

He said: “We all know the state of the economy and what we are looking at and to bring this VAT in now, it’s a hammer blow for the industry. It could not have come at a worse time.

“It’s one thing when we think we are bouncing along and the Government likes to say here’s an opportunity to get more money in, but they are doing it at a time when the industry and economy are struggling. It’s going to backfire and it doesn’t make sense.”