Tax-fight Tories to meet Osborne

Leading East Yorkshire Tories Graham Stuart and David Davis will meet George Osborne to make their feelings known over his decision to introduce VAT on static caravans for the first time, adding thousands of pounds to the price of each unit sold.

The Government is now facing the possibility of a full-scale rebellion over the measure after an amendment was tabled to the Finance Bill by a group of cross-party MPs calling for the tax to be scrapped.

More than 90 per cent of the UK’s static caravans are built in East Yorkshire, and the impact on the area of the 20 per cent tax rise will be huge if the measure comes in as planned this October. The Treasury’s own estimates suggest sales will drop by a 30 per cent, with industry leaders warning 1,000 jobs could be lost.

Yesterday a delegation of backbench Tories met Treasury Minister David Gauke to ask him to reconsider the measure.

“We had a productive meeting with the Treasury,” Mr Stuart said. “I won’t rest until we have persuaded Ministers that introducing VAT on static caravans would be a mistake.

“Now we are building a large group of MPs from right across England and Wales who can see that the tax will destroy jobs without raising much at all for the taxman. The Government says that it wants to see tax consistency – we said we want to see economic prosperity and a successful manufacturing industry allowed to prosper.”

Yesterday’s meeting followed a major debate in the House of Commons over the controversial measure, which saw politicians from Labour, the Tories and even the Scottish National Party attack the Government for its proposals.

Leading the charge was Hull North’s Labour MP Diana Johnson, who first raised the issue in Parliament during the Budget debate last month.

She told MPs on Monday night: “The VAT on static caravans policy is part of the muddled approach that runs through the Budget.

“The Government are giving mixed messages: they say they want growth, yet they introduce policies that impede growth.

“The caravan industry has spent three years working hard to recover from the problems resulting from the 2008-09 global downturn, when Hull lost more than 1,500 jobs in the industry. Now we have this hammer blow set for October, when thousands more in the caravan sector may lose their jobs.

“Most particularly, this is happening in Yorkshire, and it will have an effect on the entire region. Ministers talk a lot about the need to rebalance the economy in respect of the public and the private sectors and the South East and the rest of the country – yet this measure will have a disproportionately negative impact on the North and Yorkshire.”

She received backing from all sides of the House, including among Scottish MPs concerned about the impact the tax may have on their local tourism industry.

Chief Secretary to the Treasury Danny Alexander said he was prepared to “consider the detail” before the Government consultation ends on May 4, but offered no real suggestion the policy was likely to be changed.

“I know this is a matter of concern to several members, particularly in this part of the country,” Mr Alexander said.

“The change is intended to equalise the system for caravans that are used for leisure purposes.

“There will certainly be an opportunity to consider the detail.”