11. Whether caravans designed and constructed for continuous occupation will remain zero-rated for VAT purposes under his proposals when used as holiday homes. (104800)
The Government have proposed a new definition of a zero-rated caravan, based on whether it has been designed and constructed for residential purposes. To achieve that, we have proposed a test, based on British Standard 3632, indicating that the caravan has been designed for continuous, all-year-round occupation. We are consulting on whether additional criteria should be added to ensure that the zero rate applies only to caravans intended for residential use, although I know that my hon. Friend argues that such additional criteria would not be desirable.
I am grateful to my hon. Friend for his answer, which demonstrates clearly the need for further consultation. There are 45 holiday caravan parks in Sittingbourne and Sheppey which will be hard hit by the imposition of VAT on static caravans. Will he listen carefully and sympathetically to representations from the holiday industry before making a final decision?
I can assure my hon. Friend that we will listen carefully and sympathetically to the arguments that are put to us. He, indeed, has already made strong representations on this point, and we have of course extended the consultation period to 18 May, as the Chief Secretary to the Treasury pointed out earlier.
Can the Minister explain to my constituents why VAT on ski lifts in the Chief Secretary to the Treasury’s constituency is being reduced, but in my constituency thousands of people are going to lose their jobs with the implementation of the Government’s plans to increase VAT on static caravans?
VAT is chargeable on mobile caravans, camper vans, narrowboats, beach huts and tents, and we are seeking greater consistency in the area.
With regard to ski lifts and other forms of cable-based transport, there is a reduced rate in France, Germany, Austria and Italy, and most areas of public transport are zero-rated.
I thank the Minister for agreeing to extend the period of consultation. During the consultation, however, will he not only reflect on the scope of VAT, but give some thought to the many thousands of people throughout the country who could lose their jobs if the proposals are implemented as originally announced? Will he give some thought to them before he decides whether to phase, delay, amend or withdraw these plans?
Of course, we will listen to the representations that are made, and my right hon. Friend has made representations to me on behalf of his constituents. We are seeking to have a fairer VAT system, but of course we want to listen to those concerns that are raised about the implementation of these matters.