Caravan jobs saved by VAT victory

A Yorkshire caravan firm will reconsider plans to make half its workforce redundant following the Government’s dramatic U-turn on VAT rules, with industry leaders confirming thousands of jobs have “undoubtedly” been saved across the region.

Willerby Homes in Hull said it was “optimistic” some of the 350 job losses it announced earlier this month will not now be required after the Treasury scaled back plans to slap a 20 per cent tax rate on static holiday caravans.

Deputy Prime Minister Nick Clegg told the Yorkshire Post last night he was delighted at the Treasury’s change of heart, insisting it was “no embarrassment” for the Government to change tack.

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“It’s really great news,” he said. “I was up in Hull recently meeting with caravan manufacturers, and they made it very clear they were worried about the impact this would have. I said then that we would listen, and we have. We didn’t want to create more problems in a part of the country that is facing big challenges already.”

Asked about the political implications of yet another Government U-turn, the Sheffield Hallam MP said: “As long as in the end you do the right thing, that’s the most important thing. I make no apology at all. I feel no sense of embarrassment that we have listened – that’s what good government is all about.”

The Treasury’s decision to slash the new tax rate from 20 per cent to just five per cent and delay its until April 2013 was announced on Monday evening, following widespread concern about the impact on East Yorkshire’s caravan manufacturers and the wider tourism industry.

The Government faced a growing Commons rebellion spearheaded by a cross-party group of Yorkshire MPs, who helped collect tens of thousands of names for a series of protest petitions.

Their opposition forced the Treasury to extend its consultation into the measure, allowing the National Caravan Council (NCC) time to commission a full study of the tax’s impact.

The report by KPMG concluded Ministers had wildly underestimated how hard the industry would be hit and failed to appreciate the knock-on effect on the wider economy. It suggested nearly 4,500 jobs would be lost and the new tax could potentially cost the Treasury more money than it actually recouped.

NCC director general John Lally said the evidence had been “compelling” and Ministers were right to listen.

“Without doubt, this move has saved thousands of jobs – and probably averted many business failures,” he added.

The first direct job losses had looked likely to be at Hull-based Willerby, which announced a 90-day consultation into the possible halving of its 700-strong workforce earlier this month.

Yesterday chief executive Jim Meredith said that decision was now under review following the “positive” announcement from Whitehall. While refusing to be drawn on the number of jobs likely to be saved, he said he was “optimistic” the final total will be fewer than the 350 planned.

“The first thing to say is that we welcome this very positive announcement,” he said. “We have told staff representatives we are now reassessing our restructuring proposals. I’m optimistic there will be fewer (job losses).”

There is some concern, however, that even the new five per cent tax rate will damage an industry already badly hit by the economic crash.

Nigel Wimpenny, managing director of South Lakeland Parks, which owns caravan parks in the North of England including one on the edge of the Yorkshire Dales, said: “This is still only a partial U-turn. It will still have a negative impact on the industry.”