Why do I think that static holiday caravans should not be subject to a 20% VAT burden which purchasers of touring caravans are obliged to pay? The Government describes the current situation as an “anomaly”. That is why it is proposing to apply VAT to static as well as touring caravans.

But I have a problem with this proposal. Wherever a line is drawn an “anomaly” is usually created. The Government isn’t resolving an anomaly, merely shifting it and creating a new one. It is no surprise that, in these straightened times, a Government tends to iron out anomalies by increasing rather than decreasing the scope of taxation and hence revenue to the Treasury!

The new “anomaly” created by Government is that it will impose a 20% burden on the purchase of static caravans that are used as holiday homes, whereas it applies no taxation on the purchase of static bricks and mortar holiday homes. The impact of this is that static holiday caravans which can only be occupied for a part rather than the whole of the year – i.e. for holiday use – will be discouraged. Therefore those people seeking to purchase a property for their regular holiday use may, as an alternative, purchase from the finite supply of houses and cottages, thus denying their availability to local families in housing need and adding to the inflationary impact this would have on the housing market, thus pricing properties out of the reach of local people.

Static holiday caravan sites are an ideal solution to managing the demand for a permanent location for those regular visitors who wish to have a stake in our area, without denying a local family a home. The last Conservative Government introduced a very significant tax rebate for second home owners which had the opposite effect – a 50% council tax reduction which cost the taxpayer hundreds of millions of pounds and which helped better off people with their second homes when there were thousands of local families who couldn’t afford their first. The Government should be doing the opposite to what it is proposing to do with static holiday caravans.

Apart from that, the static holiday caravan market is a very important sector of the tourism industry in Cornwall. It brings an estimated £104 million each year into the local economy and accounts for 506,000 annual staying trips (figures supplied by Visit Cornwall). Expenditure by domestic and overseas visitors to Cornwall is in excess of £1.6 billion and tourism is estimated to support over 40,000 full time equivalent jobs of which 26,000 are in business directly serving visitors.

The fear in the tourism trade is that, if implemented, these changes will have a detrimental impact on the number of visitors and on employment both in holiday parks and many businesses which are indirectly supported by tourism spend such as local cafes, pubs, restaurants, visitor attractions and shops. Research for the British Holiday and Home Parks Association predicts that the tax will lead to one job loss for every 15 holiday park pitches left vacant.

This week we asked the Government to review its position. Apart from proposing to extend the consultation time on the proposals by a further two weeks, the Government has not indicated that it is prepared to rethink.

It is for that reason that I supported a proposed amendment which sought to delete the Government plan to increase VAT on static holiday caravan purchases and ended up voted against the Government when they refused to budge.

Originally posted June 30th 2010

Andrew George MP has issued the following statement to help those who are trying to follow the debate on the Budget proposal to increase VAT by 2½% in 2011:

“Monday night’s votes (on the seven Budget resolutions) were not critical as far as the VAT rise goes. It was a procedural measure which passed Budget resolutions into the Finance Bill. That Finance Bill will now need to progress, in the coming weeks, through four stages of Parliamentary scrutiny, which will begin next Tuesday.

“My amendment asked for hard evidence to support a tough decision on VAT. It is ludicrous of those spinning the story for other Parties to suggest that I should decide in advance before I had received the very information I had requested!

“It is very important that this significant measure is subjected to proper and calm scrutiny in the coming weeks.

“Britain has endured a one party system for decades. So I understand when some people are not able to distinguish between a genuine debate and intelligent questioning on the one hand and portraying that debate as a rebellion and a rift on the other.

“This Coalition is a coalition of two very distinct parties. This is also a new Parliament. Important issues like VAT rises should be subject to debate. Although some may wish to characterise this as a rebellion, the important job of holding the Government to account is what responsible Parliamentarians should be doing. Watch this space.”

Originally posted July 16th 2010

Local MP Andrew George has welcomed the news that a local company has been given the go-ahead for grant funding after fears that it would lose out on vital European Convergence aid.

Spiral Construction Ltd, a specialist staircase manufacturer based in Helston, had received verbal approval for a grant under ERDF Convergence but the offer letter was withheld when an apparent freeze was placed on Convergence projects in Cornwall.

Mr George called on the Leader of the House of Commons yesterday to urge Ministers to address these concerns.

He asked the Leader, Rt. Hon Sir George Young MP, to call Ministers from the Treasury and Department for Business, Innovation and Skills to the Commons to answer urgent questions on the impact of the decision by the South West Regional Development Agency to halt vital economic development projects under Cornwall’s European Convergence Programme.

Earlier in the week, Mr George also asked the Business Secretary, Rt. Hon Vince Cable MP, to intervene to restore the European Regional Aid.

Spiral Construction Ltd has now been told by the Regional Development Agency that their case has been resolved and that an offer letter will be sent out shortly.

Mr George said: “I am pleased that common sense is prevailing. There is still more to do and I will be hoping to make further progress early next week.”