Motorhome tax controversy pulled into Westminster Hall debate

Motorhome manufacturers and their lobbying MPs have been told  “government are listening” and “hearing the strong messages that people are sending out” as the volume increases on steep vehicle excise duty rises.

A Westminster Hall debate on the impact changes introduced in September are having was attended by Exchequer Secretary to the Treasury, Simon Clarke.

Strong representations from the caravan-sector intensive Humber and other regions were made, after Ruth Jones, (Lab, Newport West) introduced the discussion stating how MPs representing constituencies with impacted employers “were not prepared to let the motorhome industry collapse because of Government miscalculation”.

It was compared to the “omnishambles” Budget of 2012 with static caravans – and pasties – hitting the headlines then. The former was aborted.

As reported, Hull and Humber Chamber of Commerce has written to Chancellor of the Exchequer Sajid Javid, describing it as the changes, which have seen a 700 per cent increase in duty for some, as “poorly judged”.

Job losses have already been attributed to the new regime, which has added to the “demonisation of diesel” and Brexit uncertainty.

Cross-party support for a review was established, with impact on staycation spending and disparity between vehicle mileages expressed. Motorhomes average 3,000 miles a year and just 30 days use, and are often based on a light commercial vehicle.

Mr Clarke said: “The Government use the vehicle excise duty system to encourage the take-up of vehicles with low CO2 emissions to help meet our legally binding climate change targets. The new VED regulations were introduced in September to aid that, as motorhomes with higher emissions are liable to higher rates of VED than those with lower emissions. After all, transport is the largest sector for UK greenhouse gas emissions, accounting for some 27 per cent of the total. Road transport makes up more than 90 per cent of that.

“The Government are listening. Clearly in this context, we can only make announcements at fiscal events. It is important to note that we are hearing the strong messages that people are sending out.

“We really are listening to the remarks of honourable friends and members across the House. We understand the centrality of the sector to ​jobs and the tourism industry, and the pleasure that people derive from going away in caravans and motorhomes. The Government reformed VED because we believe that tax rates should reflect environmental impact.

"Although ultra-low or zero-emissions motorhomes may not yet be available, the Government are seeking to incentivise new motorhome purchasers to make the most rational low-emission choices that they can. However, like all taxes, VED remains under review. Any tax changes are considered and announced by the Chancellor as part of the budget process. As all members know, the Budget will be on March 11.”

Earlier, Emma Hardy, (Lab, Hull West and Hessle) had flagged up Swift Caravans’ redundancies, stating she was aware other companies were consulting. “There is huge cross-party support on this issue. Given that cross-party support and the impact on the industry, does my honourable friend agree that the Government need to take action now?” she aded.

Holly Lynch (Lab, Halifax), listed further firms raising the issue, Richard Baldwin Motorhomes, Bentley’s Caravan and Motorhome Services, and Caravan Guard and Leisuredays, an insurance company that specialises in providing cover to the sector. “Those companies are saying, as my honourable friend has just said, that such jobs will be at risk if we cannot find the fair approach that she is calling for,” she added.

Richard Holden, (Con, North West Durham), said: “I have Elddis, a manufacturer of caravans, and Weardale, an area where many motorhome users go, in my constituency.” He asked if “this policy could have unintended consequences for the environment in terms of more CO2 emissions from foreign travel and for the Government through a hit on taxation with VAT and other duties when money is not spent in the UK?”

David Davis (Con, Haltemprice and Howden), who first raised the issue as the new regime was introduced in September, said: “The Minister has my sympathy. I have a sense of déjà vu from the omnishambles Budget, when the last attempt was made to attack pasties and caravans. At the time, I spoke to a predecessor in his post. I said, “You will lose taxes as a result of the impact on jobs, trade and so on.” He said, “Well, we don’t do calculations that way in the Treasury”, to which my response was, “You ought to.”

“This policy is masquerading as a green policy. It is destroying jobs in my constituency in Haltemprice already. It is hurting the poorest in our society in terms of their natural holidays travelling around the country. As we have heard, it is replacing staycations with trips to Cyprus and so on, which will use more in one trip than these vehicles use in one year. I look forward not to the Minister solving the issue today - I know that that is not within his reach - but to it being solved in the Budget.”

Across the Humber, Martin Vickers (Con, Cleethorpes), raised Auto-Trail’s plight, adding that if the concerns aired are not recognised “otherwise, as other members have said, there will be another omnishambles”.