Cable to raise caravan tax worries

The plans, announced in last month’s Budget, would extend VAT to classes of caravans previously exempt from the tax and would be keenly felt in East Yorkshire, the UK’s biggest producer of static caravans.

According to the Treasury’s own forecast, the fees could lead to a 30 per cent cut in demand for caravans, which the industry claims would threaten 1,000 jobs.

But speaking on a visit to Hull University yesterday, where he met local business leaders and entrepreneurs, Mr Cable said he was aware of the strength of feeling on the issue and would pass that on to the Chancellor.

He said: “I’m not the Chancellor but I have been listening to concerns and I have just attended a meeting with Hull companies, some of them potentially affected by this, and they made the point very strongly; it isn’t just the VAT itself, it’s the timing and suddenness of the change that is having a potentially big effect on their companies and local jobs and I have undertaken to take back their concerns and report them to the Chancellor.

“There is at the moment a consultation, this is not a done deal, and obviously their concerns will be looked into very seriously.”

Mr Cable also sought to calm fears about the prospect of the introduction of regional pay rates, which could see public sector workers doing the same job in different parts of the country earning different salaries according to where they live.

The issue is highly controversial, particularly in the North where research has suggested that in some areas, like East Yorkshire, those in the public sector can earn up to 20 per cent more than private sector counterparts.

And this week there were calls for “mass resistance” to the proposals at the annual conference of the National Union of Teachers.

However, Mr Cable said: “All that is being considered are kind of limited experiments, or bargaining, based on the model of the courts service which the Labour Government introduced.

“I think there has been a lot of unnecessary alarm about this – there’s certainly no question of people in Hull or anywhere else having lower pay imposed on them across the public sector.”

He added: “All that is happening at the moment is there has been a call for evidence on how this system might work. I’m trying to reassure people this is not an across-the-board attack on public sector pay that some people are imagining.”

The Liberal Democrat Cabinet Minister said he was also hopeful that the party could reassert itself in the local elections next month, particularly in cities like Hull, where it lost control to Labour last year.

He said: “We had a bad time last year, particularly in some of the Northern cities like Hull, primarily because the Labour Party made the local elections into a campaign against the coalition Government. My reading is the public understands rather better what the Government is trying to achieve and I think this time we will get a much better hearing.”

Earlier, Mr Cable weighed into the row over the Chancellor’s controversial cap on tax relief for charitable donations, letting it be known he was “sympathetic” to concerns raised by universities that funding for scholarships and research could be hit.

“Concerns have been raised with Ministers including Vince by universities and he’s sympathetic to those concerns,” a spokeswoman for Mr Cable said. “We will make sure that what we are hearing from universities is fed back to the Treasury.”