Job fears for up to 1,000 caravan workers in East Yorkshire after VAT hike
JOBS are at risk in East Yorkshire's caravan industry after tax was added to the sales of static vans.
Tax breaks for static caravan manufacturers are to be scrapped in October, the Chancellor George Osborne revealed in the Budget.
This will lead to a 15 per cent price hike for customers, which may reduce demand by 30 per cent, according to the Government's consultation document.
Industry leaders claim this will lead to at least 1,000 job losses in East Yorkshire as sales plummet below the levels seen in 2008 to 2009, when caravan-makers were forced to lay off more than 1,500 staff in just six months.
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Mel Copper, chief executive of Beverley's ABI (UK), said: "Looking at the effect it will have on us and our clients, and bearing in mind we make up about 25 per cent of the UK market, this will lead to about 1,000 job losses.
"The retail consumer is going to be asked to pay 15 per cent more, which in the current economic climate is a major worry."
About 6,000 people are currently employed at caravan manufacturing firms across East Yorkshire.
Between 15,000 and 20,000 are understood to have jobs related to the industry – which is one of the biggest in the region.
As the recession gripped in 2008 to 2009, sales of static caravans dropped to 12,800 units.
It is now back up to 16,000 but, if the VAT change causes the predicted 30 per cent reduction in demand, it will see levels fall to just 11,000.
The UK's three biggest static caravan manufacturers, ABI, Willerby Caravans and Swift, are all based in East Yorkshire.
They are holding a meeting with their industry lobbying body, the National Caravan Council today, to discuss the change and decide how best to challenge it.
Mr Copper said: "I don't think whoever has made this decision has understood the human cost of it.
"The £30 million they claim will be generated by the extra VAT will be neutralised by the cost of job losses and people being unemployed, facing uncertain futures.
"Hull and the surrounding area is where most of the key manufacturers and suppliers are, so it will be particularly badly hit."
Hull North MP Diana Johnson yesterday demanded a Commons debate on the threat to the caravan industry.
In response to the Budget announcements, she said: "This will have a real impact on the economy in Hull because we manufacture a great deal of the caravans in this country.
"I understand it could almost reduce demand by 30 per cent – another hammer blow."
Since the recession, the industry has seen a fragile recovery but recent sales successes at Swift Group, Coachman Caravans and Victory Leisure Homes has bought renewed confidence.
Mr Copper is concerned the VAT change will reverse three years of progress.
He said: "We have always tried to keep a core number of staff in the belief the market would come back, which it did.
"This will dent customer confidence and makes it unaffordable for a lot of people."
Comments
by doch25
Saturday, March 24 2012, 1:40AM
“With this and the recent report from PSG that Hull is the worst place in the country to invest is this the end for Hull as a city?”
by thesnooper
Friday, March 23 2012, 10:29PM
“@smartguy 1
you are right VAT is charged on fuel duty
at work i deal with fuel duty and received a letter 2 or 3 weeks back stating the amount of fuel duty that could be reclaimed has been reduced, also anyone that has just MOT'd a vehicle will also notice that all you get now is a piece of printed A4 for the certificate.
talk about penny pinching what will be next
its pure and simple ripp off britain”
by Worker111
Friday, March 23 2012, 9:43PM
“The best only thing you can do for your children, is ensure they have the best education they can possibly achieve.
Which in Hull is somewhat of a problem.
P.S. My P and B keys are not working as well as they could be”
by Worker111
Friday, March 23 2012, 9:20PM
“Cuts will happen who ever is in power, and will continue for the forseable future.
This is without any major economic shocks, Isreal attacking Iran, downturn in China.
You will also see the price of raw materials increasing for the forseale future.
No one's jo is safe, the age of western dominence is gone forever, for every barrel of oil, every tonne of steel or wheat we now have to compete with over 3 billion peole in the developing world.
Anyone who thinks this is going to e different if Labaour where in power are living in cuckoo land.
You should e asking what you can do to protevt your family from these events.
Pay off as much det as you can, get the smallest engined car you can, and get used to a significantly reduced standard of living.
This is art of the problem, people where desperate to believe such nonsense as 'ending boom and bust'
People don't like the truth, so voted for who ever promised them the most, with the least amount of work.
Well the old saying is 'the truth will out' and so it will.”
by smartguy1
Friday, March 23 2012, 8:12PM
“Bythesnooper, I used to think the people in government were very stupid too but they are actually very clever. It's only the people in our local government who are idiots. You never see a poor MP do you even though they do only earn 70k a year + expenses.
What they are doing is quite clever in a way regarding fuel. Fuel rises either with duty or by oil prices then the last item to be added is vat so tax on tax. Prices go up in the shop due to higher fuel prices. You then get higher shop prices meaning more VAT for the country. The only downfall here is we all then start to cut back generating less revenue which increases tax. Vicious circle. It would be interesting to see what would happen with a drastic cut in tax to see if it actually generated more income. Look how busy the pound shops are. We need a total reform in this country. One person is all it will take with others to follow but peacefully please. We don't want riots and mayhem. We want a fair tax system for all without stealth taxes. We want investment in people and jobs for all. It will not happen with rising prices as we all just tighten our belt more. Mine is so tight it hurts !!”
by Zola1984
Friday, March 23 2012, 7:34PM
“It was only because house prices went through the roof during the boom years of 1997-2007 that the caravan industry morphed into a bit of a monster, people had more money and could afford a caravan thus sending production through the roof year round, before this it was very much a cottage industry dictated by the seasons, it sounds like the industry is getting cut back down to size.”
by thesnooper
Friday, March 23 2012, 7:11PM
“@Worker111
you cant blame labour for the woring tax credit fiasco what set of idiots stop people earning a percentage of their own income, only the condems they probably said something like
ive got a great idea lets make most people that work 16 hours and claiming working tax credit unemployed then we can pay out even more benefit to those people then we currently do under the current system.
also they keep on putting fuel duty up, how thick are they once you increase fuel costs everything increases in price and becomes a vicious circle.
total idiots”
by pcrowan
Friday, March 23 2012, 7:08PM
“Willerby caravans already on 3 1/2 day week”
by smartguy1
Friday, March 23 2012, 5:45PM
“About time for a referendum on should we have a general election now and a vote of no confidence in the present government or at least with the prime minister and his cabinet of millionaires. Rich boys who have never had a proper job should never be allowed to be leader in government. OK so labour may have borrowed too much money but at what expense are the conservatives going to put it right. Earn our way out of trouble they say. Well how are we going to do that with their constant cuts causing 1,000's of jobs losses. Bear in mind that it is the masses who earn it for the boys at the top but with masses being laid off or made redundant then it will fail as the more cuts the government make the more they will be forking out in unemployment benefit. So things weren't much better under labour but they were better. Fuel has increased more than 40% since December 2008.
I am not pro labour but I am certainly less favourable of the condems. Time for an Independant party and a political revolution.”
by GarethC2010
Friday, March 23 2012, 4:49PM
“Employing large numbers people should not absolve a product from being exempt from VAT. 9/10 static caravans are for holiday and recreational rental use. Why should this product be exempt ? there is no reason whatsoever why VAT should not be applicable to the sales of the units. This has nothing to do with jobs in Hull or anything else it is just about fairness across the board. If I had a firm manufacturing televisions employing 1000 I would not expect TV's be become VAT exampt in case people lose their jobs.
This is a sensationalist non-story as is quite common with HDM.
Anyone who can afford a £40,000 holiday caravan CAN and SHOULD be paying VAT.
How they have got away with not paying it to date is a joke.
You pay VAT on new cars, household electrical applicances, and virtually everything else that we buy so if anyone can give a logical reason why static caravans should not be charged at the normal VAT rates I would love to hear it. PS. Jobs is not a logical reason by the way.”