John Harris

Journalist & Author

The caravan tax has been cut, but it’s no thanks to the sniggering media | John Harris

The caravan industry is vital to jobs in East Yorkshire and Humberside, but London’s media have paid scant attention

What, then, of George Osborne’s pantomime U-turn on some of the most unpopular elements of March’s budget? Within minutes of its announcement, the story had been largely reduced to that of the “pasty tax”, which allowed those delivering it to make arch reference to sausage rolls, the all-pervading modern whiff of hot pastry, and the arcane complexities of what’s now VAT-able, and what’s not. “Food such as sausage rolls or pasties sold on shelves – that is, cooling down, rather than being kept hot in a special cabinet – will not be liable,” said the BBC; according to the Independent, “hot chickens wrapped in heat-retaining packaging sold in supermarket rotisseries” will still be clobbered.

While a Thick Of It-esque Treasury minister called David Fauke tried to gloss over a self-evident shambles, all was metropolitan mirth. Last night’s newspaper review on Sky News was as good an example as any: one panellist – oh, all right then, the Times’s David Aaronovitch – said the story, and the amount of revenue involved, was “comical”. And, as with just about every other media outlet, Sky relegated the accompanying story of the so-called “caravan tax” to a mere afterthought. They were not alone, and in doing so, they risked overlooking two pretty big points: first, that even if what they sell is somehow hilarious, the British pastry trade accounts for thousands of jobs and millions of pounds (Greggs alone employs 2,500 people, and recently reported pre-tax profits of £53.1m, though the VAT hike saw £30m wiped off its share value); and second, that it was the caravan part of the story that was arguably the more significant.

I know all this because the next instalment of our Anywhere But Westminster series was going to be all about the UK caravan industry, and the great stupidity raining down on it. But anyway: 95% of British caravans are made in East Yorkshire and Humberside, in an industry that employs about 6,000 people – the three biggest firms involved are ABI, Willerby Caravans and Swift.

The surrounding supply chain involves close to 20,000 jobs. We are talking here about one of the most economically blighted parts of the country, and a section of manufacturing industry that has done well to stay in such health, particularly given a huge hiccup in demand in 2008-9, which caused 1,500 lay-offs. Bearing in mind the cash-strapped consumers who form their core market, industry insiders said that imposing VAT on static caravans would have led to a likely fall in demand of about 30%, and the loss of around 1,000 jobs in the industry, with sizable knock-on effects elsewhere. According to a report commissioned by the National Caravan Council and British Holiday and Home Parks Association, the change would have led to about 4,300 jobs being shed around the UK.

The first stirrings of all this were starting to be felt this month. On 22 May, Willerby Holiday Homes announced that it was serving notice of a possible 350 redundancies, while its competitors were still working through the likely consequence of the government’s decision, and campaigning against it. “I don’t think whoever has made this decision has understood the human cost of it,” said Mel Copper, the CEO of ABI caravans. “The £30m 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.”

By way of context, I’ll quote from a recent contribution to the Guardian’s Northerner blog, written by the city’s three MPs: “Most recent official figures showed unemployment up across Hull by around 14% in a year. 32.5 applicants chase each job in Hull East. 12.9% of active 16- to 64-year-olds are out of work in Hull North. Two out of Hull’s three constituencies are in the national top 20 for the highest number of jobseekers chasing each vacancy.”

What was the government thinking? Making its case on the basis of a supposed “anomaly” was thin stuff indeed: a static caravan is a very different thing from the kind you tow around, and in any case, given the parlous state of the region’s economy, the change was completely indefensible. Such, though, is the great gap that separates London’s more elevated postcodes, and the less fortunate parts of the country, for whom the static caravan is a pretty incisive byword – as evidenced by the scores of caravan sites that dot East Yorkshire and Humberside, where the VAT change would have fallen like a hammer. That the imposition of VAT is to be replaced by a new tax of about 5% is proof of what happens when an industry marshals its forces and makes its case. But how long before the government’s idiocy strikes again, and the clueless London media once again look the other way?

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