Caravan tax 'is disastrous for tourism sector'
THE coalition's proposed caravan tax could have a disastrous effect on tourism in the region, Llanelli MP Nia Griffith has warned.
The Coalition Government in London has plans to put up VAT by 20 per cent on new static caravans, in a move tourism bosses fear could have a detrimental impact on a major industry for the region.
County marketing and tourism manager Huw Parsons said: "Caravanning and camping is a huge part of the tourism product in Carmarthenshire which on 2010 figures is worth a third of a billion pounds to the local economy.
"With over 53 graded facilities in the county supporting hundreds of thousands of visitors per annum, any new tax in the sector is of great concern to the Carmarthenshire industry."
And Llanelli MP Nia Griffith has signed a Parliamentary petition, known as an Early Day Motion, calling on the Government to ditch the proposal which was announced as part of the Budget.
The motion, which has so far won the support of a cross-party group of 42 MPs, claims the tax change will have a "devastating effect on jobs, UK tourism, investment and growth".
Ms Griffith said: "Just at a time when tourism and leisure businesses are really suffering, because people are struggling to cope with rocketing food and fuel bills, this is a real blow to caravan manufacturers, caravan parks and all the local businesses here in West Wales who depend on the tourist trade."
The National Caravan Council has estimated that 4,340 jobs could be cut at holiday parks across the country, on top of the 3,000 jobs at risk at caravan manufacturers and in the supply chain.
The council, which released the figures, said the job cuts could include 1,446 at caravan manufacturers, 1,500 at suppliers and 80 at distributors.
The figures are based on the Government's own estimates that the introduction of VAT on static caravans will lead to a 15 per cent retail hike and could reduce demand by 30 per cent.
The Star understands that the total amount raised from the tax change will be around £40 million a year, but the cost in unemployment could be up to £45 million — meaning the caravan tax would actually lose revenue for the Treasury.
A cross-party motion in Parliament, which called on the government to reverse its decision, was defeated by 287 votes to 262, but provoked the second largest rebellion since the vote on tuition fees.
Previously Treasury Minister David Gauke defended the Government's stance.
"Many MPs are concerned about caravan sites, but it is worth bearing in mind that caravan holiday parks have a variety of sources of revenue, most of which will not be affected by the VAT change," he said.