East Lindsey council leader speaks out against Government’s ‘caravan tax’

VAT will apply on static caravans from October 1, under the new budget.
VAT will apply on static caravans from October 1, under the new budget.

CONCERNS have been raised by East Lindsey District Council’s leader, Coun Doreen Stephenson, on the plans to introduce VAT on static caravans.

As reported in last week’s Leader, Chancellor George Osborne has announced that VAT-exemption on a number of items including static caravans will be revoked from October 1.

CONCERN: Coun Doreen Stephenson.

CONCERN: Coun Doreen Stephenson.

In a letter sent to Mr Osborne on Friday, Coun Stephenson said static caravans play an ‘intrinsic role’ on the local economy’s health.

The concerns echo those covered in the Leader last week when local caravn site owners spoke out against the VAT.

Read the letter in full below:

The Government’s proposal to apply VAT at 20 per cent on static caravans is of great concern to the East Lindsey district where I am the Leader of the District Council.

The district covers the vast proportion of the East Lincolnshire coast, and the tourism economy is absolutely vital to the economic wellbeing of the area; with static caravans playing an intrinsic role.

I would refer you to the consultation document which clearly identifies that there may be a 30 per cent drop in demand for static caravans, and that the ‘overall macroeconomic impacts are expected to be negligible’. That may well be the case across the country, but it needs to be recognised that East Lindsey currently has over 24 000 static caravans, and this proposal will inevitably have a disproportionately negative impact on our area.

The area is very rural, and the coastal area, like many others, has suffered from some significant deprivation over previous years – the visitor economy is our primary economic driver and sustains many jobs. The council has invested time, effort and finance to help develop the tourism offer, in partnership with the private sector; more recently to take advantage of the encouragement given by the Government to holiday at home.

We have heard in the last few days that domestic tourism statistics show that there was a 6 per cent increase in those taking domestic holidays, indicating that the ‘staycation’ trend has continued.

Our own intelligence is showing signs that this year’s bookings are positive – this can only be good for employment, which is in short supply outside of the visitor economy.

However, we are acutely aware that we are still a low value economy and improvements are still fragile.

I am very concerned that introducing this increase over such a short space of time risks damaging the progress that is being made in East Lindsey. We need positive messages about the area, and to be able to promote the UK holiday industry – and it needs to be recognised that the static caravan market helps to sustain our £450 million local visitor economy in quite a significant way.

We will, of course, be responding in more detail to the consultation document, but the inclusion of this VAT application is of such concern for the economy of East Lindsey that I feel we should make an early response direct to yourself.

What do you think? Should the Government scrap the tax or should static caravans be subject to the same VAT as other products? email or Tweet us.