Employment fears for the caravan industry in East Yorkshire

April 18, 2012 No Comments
3,000 jobs face axe under caravan tax: East Yorkshire workers would bear brunt of cuts.
 
More than 3,000 jobs will be lost in the caravan industry over the next year under plans to impose VAT on the sale of static vans, according to a new report.

East Yorkshire, where 95 per cent of the industry is based, is set to suffer most of the job losses if the tax is introduced.

The National Caravan Council (NCC) has compiled a report showing 3,116 jobs in the industry will be lost if the tax change comes into force in October.

Job losses include 1,200 in the caravan manufacturing industry, 1,500 in the supply chain and 416 at caravan parks.

An NCC spokesman said: “Initial research suggests that, in the first year after the VAT rise, 3,000 jobs could be lost from manufacturers and suppliers to the industry.

“The brunt of these losses will be borne by East Yorkshire, where over 90 per cent of caravan holiday homes are made. “

The figures are based on the Government’s own estimates that the introduction of VAT will lead to a 15 per cent retail price hike and could reduce demand by 30 per cent.

Beverley and Holderness MP Graham Stuart and Haltemprice and Howden MP David Davis prepare to meet the Chancellor today to discuss the impact on the industry.

Mr Davis said: “What is very clear is that, even based on the Treasury figures, which many believe underestimate the impact of the changes, the majority of the money received from the increased VAT will be taken up on lost income tax, national insurance and the cost of unemployment benefit.

“The research carried out by the NCC clearly demonstrates this policy will not break-even for the Treasury, even before you take into account the misery caused by the job losses in a part of the country that has already been heavily damaged by the recession.”

The Mail understands the total amount raised from the tax change will be £40 million a year, but the cost in unemployment will be up to £45 million – meaning the caravan tax would actually lose revenue for the Treasury.

Mr Stuart said: “You only change things by campaigning and campaigning hard.

“The Government needs to rethink this VAT imposition.

“Static caravans are built in the UK, the supply chain for the manufacturers is overwhelmingly in the UK and then the sales channels and eventual use of the products are all in the UK.

“Slashing sales by 30 per cent won’t raise money for the Treasury, it will reduce it. “

Nationally, more than 90,000 people are employed by the caravan industry, including almost 80,000 working in caravan parks, 9,000 suppliers and 3,700 in manufacturing, of which almost 2,000 are in East Yorkshire.

NCC Director General John Lally said: “We are convinced the Government has underestimated the impact and overestimated the revenue this tax hike will bring.”

Gary Cooper, Managing Director of Normandy Holiday Homes, Bontoft Avenue, Hull, which employs 40 people, said: “If this goes ahead, it would be an absolute disaster. I can’t think of any other way to describe it.

“Having struggled through the credit crunch and recessionary years and still being in a recovery phase, this could be a death knell for the industry and something we may not be able to come back from.

“The impact on the industry would be absolutely catastrophic.”

Based on a potential pitch vacancy rate of 6,240 in the first year alone, the NCC predicts £24.3 million will be lost in tourism spending.

Sand Le Mere Holiday Village, in Tunstall, is in the process of investing £5 million in developing an indoor swimming pool, an entertainment complex and an amusement arcade, as well as new caravan pitches.

Andrew Howe, chief executive of Bridge Leisure, which owns Sand Le Mere, said: “I’m disappointed. We have invested a lot of money in developing the business and then been thrown this hurdle – a big hurdle at that.

“It has also been done without any consultation. It will have a negative impact on a key revenue profit line. In my opinion, the research by the Government is badly flawed.”

 

*Source thisishullandeastriding.co.uk*