Iain Stewart (Milton Keynes South) (Con): I, too, congratulate the Government on their revisions to the NPPF; they have genuinely listened to the real concerns that I and a good number of my hon. Friends put to the Minister. In particular, I thank him personally for the

26 Apr 2012 : Column 1200

gracious way he listened to our concerns and for giving them a lot of time. I am pleased that he has taken them on board. I think that the document now strikes a good balance between the need to speed up the house building process and the need to protect our green spaces, which is what we all want to see.

Together with the other elements of the Localism Act 2011, the measures are very welcome in my area of Milton Keynes. We want to grow. There is no nimbyism in Milton Keynes, but we want to be in charge of our own destiny. Instead of having the top-down targets that were imposed on us before, which led to the wrong type of development, as other hon. Members have said, we can now shape our future and our destiny and build the new city we want to see.

I would like to challenge one of the comments the hon. Member for City of Durham (Roberta Blackman-Woods) made on the abolition of regional and national targets, which was that that somehow meant that local areas cannot co-operate with each other to develop infrastructure plans. I draw the House’s attention to an example in my constituency: the building of the east-west rail link. That involves co-operation between many local authorities on not only the railway line itself, but housing and economic growth projects. We are all working together exceptionally hard on that, so I reject her assertion.

Roberta Blackman-Woods: Will the hon. Gentleman give way?

Iain Stewart: If the hon. Lady will forgive me, I will not take any interventions, in order to leave time for other hon. Friends who wish to speak.

My one specific point, picking up on the good point my hon. Friend the Member for Loughborough (Nicky Morgan) made, is on the time scale for abolishing the regional spatial strategies. For reasons I will not go into, we all welcome that, but there is an issue in Milton Keynes about the timing of abolition. Our core strategy will be examined in July, and there is concern that, if the RSS is still in place during that examination, it might undermine the progress we are seeing on the localism agenda. I simply urge my right hon. Friend the Minister to do all he can to get the RSS finally abolished as quickly as we can. Apart from that small, specific point, I repeat my congratulations for what the Government have achieved. They have listened and had a genuine consultation, and I heartily support the new document.

Mr Raynsford: On a point of order, Mr Deputy Speaker. In slimming down my speech to meet the four-minute time limit, I involuntarily forgot to mention my interests, which I normally declare at the start of a speech, so I would just like to put the record straight.

Mr Deputy Speaker (Mr Nigel Evans): Thank you very much. That is properly noted.

5.34 pm

Chris Heaton-Harris (Daventry) (Con): I am going to whizz through my speech and, I hope, leave plenty of time for my hon. Friend the Member for Rugby (Mark Pawsey) to make his comments.

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I welcome the NPPF and many of its changes, because I was not happy with the original draft document, as the Minister well knows. The Minister knows also that in Daventry we are part of a joint planning unit, with South Northamptonshire council and Northampton borough council, and, although we might struggle to have a local plan in place in 12 months, we have an emerging joint core strategy across the area. If it were to be adopted as a local plan post consultation, I wonder whether it could be treated as a local plan, because it would afford those areas the protection that they would like.

I associate myself with the comments on the abolition of the regional spatial strategies and would very much like to be copied into the note—or if there is an answer today, even better—about the timing.

The Minister knows my concerns about the Planning Inspectorate, and I understand that he has written to a constituent of mine, saying that there is a chance of its duties, or the inspectorate itself, being reviewed soon, so I should like to hear something about that.

I would like a quick moment on renewable energy, my favourite subject. In previous answers to me, the Minister said that criteria can be set for renewable energy locally, but will he confirm that that could include the efficiency of such projects?

I have one point about wind farms, because, owing to the confusion in previous advice, noise has become an issue in planning. The night-time limit on mining is 42 dB, but using the same metric, we are going to allow wind farms to be noisier, at 45 dB, so could the Secretary of State confirm that the list of revoked planning policies in the NPPF includes by implication the annexes and companion guides to all previously revoked policies?

Mr Deputy Speaker (Mr Nigel Evans): To resume his seat at 5.40 pm, I call Mark Pawsey.

5.36 pm

Mark Pawsey (Rugby) (Con): I express my gratitude to my hon. Friends for their courtesy. I speak as a member of the Select Committee on Communities and Local Government, which undertook an inquiry into the draft NPPF that came out in July last year.

It is important to understand the reasons for change, as people were not involved in the planning system. Many Members were councillors previously, and, of all the issues in which district councils were involved, the one that people understood least was planning. The system was very technical, with thousands of pages of guidance; house building was at very low levels, with 230,000 houses needed a year, and fewer than 100,000 delivered over an extensive period; the planning costs on businesses were significantly higher in Britain than throughout Europe; and the time taken to gain consent for planning was much longer here than elsewhere.

The hon. Member for City of Durham (Roberta Blackman-Woods) was rather uncharitable in her remarks about the draft NPPF, because it was precisely that, a draft and for discussion, but in 2011 it led to an alarmist response. People talked about it destroying the countryside, concreting over the green belt and being a developers’ charter. There was even criticism of its very brevity—something that was a real benefit of the proposals to condense planning issues.

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The Government have listened, and it is pleasing for the Committee that 30 of its 35 proposals have been adopted. I was delighted that the Minister was able a couple of days ago to catalogue the many bodies whose attitudes have changed, not least those sporting bodies and, in particular, the Sport and Recreation Alliance.

I shall deal with two or three key provisions, the first being enshrining the community role. I am delighted that my constituency has one of the neighbourhood planning frontrunners, in Coton Park. It was believed that the measure would be a charter for nimbys, but that is not at all the case, because people’s attitude towards development depends on how the question is posed. If they are asked, “Do you want to see a field built on?” their answer will be very different from the answer to the question, “Do you think that we need to provide housing in this community and somewhere for young people to get a start on the housing ladder?” I am very pleased that the first neighbourhood plan to be brought forward, in Dawlish, supports the development of housing. It shows that the fears of many people have been allayed.

The NPPF enshrines also the importance of the local plan. In a Select Committee hearing, I asked the Minister, “What took precedence? The presumption in favour of sustainable development or the local plan?” and his response was categorical: decisions must be made in accordance with the local plan. The local plan is supreme, and I am delighted that my local authority has had its local plan in place for a number years. I fail to understand why so many authorities have been tardy in putting their local plans in place. When development proposals come forward under the new regime, the first criterion will be how they stack up against the local plan. Authorities must make plan making a greater priority, rather than trying to manage the development of their area by development control.

Not only does the NPPF maintain existing provisions, but in many respects it enhances them. We now have additional protection for gardens, which recognises that gardens are green. That will do away with a lot of the garden grabbing. I am pleased that the proposals—

Mr Deputy Speaker (Mr Nigel Evans): Order. I apologise to the hon. Gentleman. I call Mr Jack Dromey.

5.40 pm

Jack Dromey (Birmingham, Erdington) (Lab): On Tuesday, the Chamber resounded to paeans of praise to the Minister from the Minister. It would be churlish not to acknowledge that a decent man with an open mind has listened to the powerful case that was made by Labour, the countryside, heritage representatives, the business community and the Select Committees.

There have been moves on brownfield development, albeit that they do not go far enough. Under Labour, brownfield development went from making up 50% of development to more than 70%. It is a mistake for the word “prioritising” not to be used. There has been progress on the intrinsic value of our green and pleasant countryside, on garden grabbing, on the sequential test and in the strengthening of the duty to co-operate.

In our debates on the Localism Act 2010, the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge

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Wells (Greg Clark), listened and acknowledged that we needed “larger than local” decisions. He could not use the phrases “regional” or “sub-regional” because he would have been sat upon by the Secretary of State. Nevertheless, moves there were.

This is no way to conduct a campaign—[ Laughter. ] Ours was a very good campaign. This is no way to conduct a debate on matters as important as this. Concerns remain about how the NPPF will work at the worst possible time, and significant weaknesses remain within it.

The hon. Member for City of Chester (Stephen Mosley) was right to celebrate the purpose of planning. I thought that he was going to go on to celebrate one of Labour’s greatest achievements, when in 1947 it introduced the post-war planning system that sought to reconcile the need for growth with a say for local people and protection for the natural environment.

The planning system was not the problem that the Prime Minister pretended it was. It was preposterous of him to stand at the Dispatch Box and say that the problem with housing was the planning system. It was nothing of the kind. Planning applications were overwhelmingly granted speedily and there was development land with planning permission sufficient to build 300,000 homes. The fact that homes are not being built is nothing to do with the planning system; the principal problem is the failed economic and housing policies of this Government.

This has been a master class in how not to conduct a debate, with polarisation and the demonising of critics. Even the usually sane Macmillanite Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), engaged in absurd hyperbole, criticising the National Trust as being akin to “Trots”.

I have acknowledged that progress has been made. I will now turn to the problems. There is no vision for England—no spatial plan that brings together housing, economic development and infrastructure to ensure that if there is growth, all parts of England will grow.

There are no longer any strategic planning mechanisms capable of dealing with the problems that exist. I will give one example. Stevenage badly needs to build thousands of homes, but it cannot meet the demand in Stevenage. It will have to build outwith Stevenage in Hertfordshire. The chances of Hertfordshire co-operating with Stevenage to ensure that its housing need is met are remote in the extreme.

My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) was right to say that we have witnessed a remarkable collapse in the building of affordable housing—a 99% collapse in the figures for the past six months. We now see in the NPPF the potential downgrading of the importance of affordable housing. The Wolfson paragraph, as I have come to call paragraph 173, allows affordable housing to be traded off in the development process. Lord Wolfson complained on “Newsnight” about how a friend of his, a developer, hoped to develop a major site in Clerkenwell but was unable so to do because the council insisted on affordable housing. The council was absolutely right to do so, and it is wrong to downgrade its importance in development.

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Anna Soubry: It is kind and generous of the hon. Gentleman to give way. Does he agree that it is imperative, as well as Labour party policy, to protect our green belt? Will he join me in urging Labour-controlled councils not to allow the development of thousands of homes on our precious green land?

Jack Dromey: Labour, as the champion of the countryside and the green belt, strongly believes in a brownfield-first presumption.

On the subject of housing and more generally, our fear is that the planning system will be thrown into chaos at the worst possible time. Growth is key, but all the predictions from all those to whom we talk suggest that we run the risk of hiatus, confusion and planning by appeal. That is what the planners themselves believe. In a poll, 86% said that they predicted with certainty that there would be potentially years of such problems as the system bedded down.

The Communities and Local Government Committee was right to say that brevity is not necessarily clarity. I am surprised that among the tributes read out on Tuesday there was not one from planning lawyers, because Ministers are the toast of planning lawyers. They believe that homes will be built as a consequence of the new NPPF, but they will be homes in Marbella—second homes for planning lawyers who make a killing on the back of the confusion and uncertainty that the Government are creating.

Andrea Leadsom (South Northamptonshire) (Con): My father-in-law, who has been a listed buildings expert for his entire career, is delighted with the Government’s latest iteration of the NPPF and thinks it will add significantly to house building in this country.

Jack Dromey: I ask the hon. Lady to give my best regards to her father-in-law, even if his judgment is profoundly suspect.

There are two problems with the transitional period. We agree with a plan-led approach without hesitation, but cash-strapped local authorities will struggle in the time available to develop plans that are crucial to protecting the interests of local communities, with those communities being at the heart of developing those plans. The neighbourhood planning process, on the other hand, is ill resourced by the Government, and we fear that it might well become the preserve of the better-off. We want neighbourhood planning and a real say for people in developing their localities, but that cannot be simply for those who can afford it.

Has progress been made on the high street? Yes, it has. Labour, as the champion of the high street, was the first party to table amendments to the Localism Bill, and eventually the Portas review was announced. There is no question but that there is all-party support for the fact that the high street is now centre-stage. Although the Portas review takes us a long way in the right direction, the Government were wrong to reject some of Labour’s proposals that should have been included, for example in respect of retail diversity, to give local planning authorities real powers to ensure that our high street is protected, including from the flight to out-of-town retail centres.

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I say this in confusion—[Laughter.] That is what happens if you are sprinting. I say this in conclusion about the confusion on the Government Benches. Better the NPPF certainly is; flawed it remains. Will it work? Our fear is that, no, it will not.

5.49 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): The Government welcome the opportunity to debate this subject both today and the day before yesterday. It is one of a series of parliamentary debates on national planning policy and demonstrates very clearly our commitment to ensuring that hon. Members have a full opportunity to discuss such important matters. Perhaps I can underline a point made clearly by my right hon. Friend the Minister on Tuesday: our view is that it would be right for the House to have an annual debate on the progress of the planning reforms and our planning system in general.

The content of the final framework shows the seriousness with which we take the issue of consultation. The debate, in which we have heard 15 speakers, has yet again demonstrated how important it is to get these things right. Planning is how we create communities that work, how we create places that we can be proud to live in, and how we lay the foundations for businesses to grow to develop a prosperous country.

All hon. Members want to protect and enhance our green spaces and our countryside, making both available for our enjoyment today and for generations to come. As has frequently been said, we have produced a document that is some 50 pages long, replacing 1,000 pages. The hon. Member for Birmingham, Erdington (Jack Dromey) said that simpler and shorter is not always better, but I have found it difficult to find anybody who believes that producing the guidance in the NPPF in the way that we have has not made it much more accessible and transparent. It has taken the mystification out of the planning process and means for the first time that ordinary members of the public have a realistic chance of understanding the decisions that are taken around about them, and of playing an active part in those decision-making processes without the need first to resort to people with two degrees in planning.

The NPPF is a very important step towards localising the planning process. There have been plenty of references to neighbourhood plans, which are an integral part of the planning reforms we have introduced. No hon. Member has mentioned neighbourhood development orders, but they are another significant step forward, because local communities can take charge of their future and their area. Of course, that fits together with the local development framework of all planning authorities.

Mrs Helen Grant (Maidstone and The Weald) (Con): The NPPF is a good and thoughtful document, but a couple of my constituents have raised concerns about the community infrastructure levy and said it might be a disincentive. I would be grateful if the Minister could provide some reassurance on that.

Andrew Stunell: I entirely agree that the community infrastructure levy is an important part of the planning architecture, and we will publish our proposals on it in due course.

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It is also right—this was reflected in the debate—that the planning process is not about creating a fictitious Disney World; it is about resolving tensions, and competing interests and goods. Hon. Members have acknowledged that we neither have the free-for-all, wild west scenario that some of our sternest critics predicted in July last year, nor are we retaining the top-down, lock-down alienating system we inherited in 2010. This balanced document is part of a balanced framework.

Anna Soubry: I know time is running out, but does the Minister agree that it is imperative that councils set their housing targets now and do everything they can to avoid building on our green belt, particularly in Broxtowe, where, unfortunately, Lib Dem councillors seem to think that it is a good idea?

Andrew Stunell: I thank the hon. Lady for her helpful contribution. It is one of a large number of well informed and important points that have been made during this debate, not least of course by my right hon. Friend the Minister when he said that the local plan is the keystone to our reform process. The local plan of the planning authority will be the guideline for development decisions in an area, with the neighbourhood plan of course forming an important statutory part in those areas that have plans in place.

Mr Betts: The Minister is talking about an improved system. When we add up the sum total of the planning approvals given for housing as part of the planning system that is being created, does he expect that number to be up or down on those given before the new system is put in place?

Andrew Stunell: The Chair of the Committee—incidentally, it made an extremely important contribution to our consideration of these matters—makes an important point. I say to him and to the right hon. Member for Greenwich and Woolwich (Mr Raynsford) that as the targets went up under the last Government so the performance of housing went down. The idea that there is some connection between top-down, top-driven targets and performance on the ground is not supported by the evidence. What we maintain—and as we have heard from my hon. Friend the Member for Milton Keynes South (Iain Stewart) and others—is that there is clear evidence that when local communities are put in the driving seat they fully understand the need for homes and jobs for their children and grandchildren, as well as parks and recreation spaces.

Jack Dromey: On the figures, and comparing the record of the Labour Government and this Government, can the Minister confirm that in the first 18 months of this Government house building is down by 11% compared with the last 18 months of our Government?

Andrew Stunell: The hon. Gentleman was honest enough to say that housing did not have centrality under the last Government—his words, not mine. The number of housing starts in 2011, the first complete year of the coalition Government, is higher than the housing starts in 2009, the last complete year of the Labour Government. We have a programme that has 170,000 social and affordable homes in it, and more

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than 112 contracts have now been signed with the Homes and Community Agency and various partners to make those homes a reality.

In the limited time left, I shall address the points made by the hon. Member for City of Durham (Roberta Blackman-Woods). If I do not respond to Members’ questions, I am more than ready to follow them up after the debate. The transition arrangements have been agreed with the Local Government Association, so it is somewhat petulant for it to complain. It is also absurd for it to complain that this document contains obscure language, when it is responsible for the 1,000 pages and obscure and impenetrable language, which only people with PhDs in planning can understand, of the planning policy guidance document.

Some contributions to the debate demonstrated that local authorities are already getting to grips with the duty to co-operate. Indeed, my hon. Friend the Member for Daventry (Chris Heaton-Harris) asked whether joint plans would be acceptable.

I could talk at length, but I have run out of time. I look forward to hearing what Members’ queries I need to follow up on.

Question put and agreed to .

Resolved ,

That this House has considered the matter of the National Planning Policy Framework.


Value Added Tax on Savoury Products

5.59 pm

Mrs Mary Glindon (North Tyneside) (Lab): I rise to present the petition of Greggs plc and other businesses signed by 306,773 people from across the north-east and the whole country. It asks that the Government’s Budget proposals to put VAT on freshly baked savouries be reversed.

The petition states:

The Petition of customers and staff of Greggs plc and other businesses,

Declares that the Chancellor of the Exchequer's budget proposals to introduce 20% VAT on savoury products served above ambient temperature will adversely impact the public at a time when they can least afford it; and that savouries that are not held hot should not be considered as hot takeaway food and should be zero rated for VAT.

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The Petitioners therefore request that the House of Commons urges the Government to reconsider its proposals to levy VAT on freshly baked savouries which are cooling down in an ambient counter.

And the Petitioners remain, etc.


M4 Link Road (Kingswood)

6 pm

Chris Skidmore (Kingswood) (Con): I rise to present the petition of 1,543 residents of the Kingswood constituency.

The petition states:

The Petition of residents of the Kingswood constituency,

Declares that an ‘M4 link road’ near Emersons Green would help to reduce congestion on the M4 from the Kingswood area; that such a road would reduce journey distances by residents by a significant distance and thereby reduce pollution; and that a link road would also help to boost the local economy and help to create local jobs.

The Petitioners therefore request that the House of Commons urges the Government to consider the construction of a link road between the M4 and the Avon ring road (A4174).

And the Petitioners remain, etc.


Biometric Centre, Leicester

6.1 pm

Keith Vaz (Leicester East) (Lab): I am delighted that more than 34 Members, including a former Home Secretary and a Minister, are present to hear the presentation of my petition. The petition is from the residents of Leicester who wish to have their own biometric centre. The Government have established local centres all over the United Kingdom. For the people of Leicester to get to their nearest biometric centre to provide biometrics, they have to cross the county border into either Nottinghamshire or Derbyshire. There are 945 petitioners.

The petition states:

The Petition of residents of Leicester,

Declares that the Petitioners believe that there are inadequate facilities for foreign nationals wishing to register biometric data for the purposes of residence permits in Leicester, with the nearest facilities located in Beeston, Nottingham or Derby.

The Petitioners therefore request that the House of Commons urges the Government to consider establishing a centre for the registration of biometric data in Leicester.

And the Petitioners remain, etc.


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Static Caravans (VAT)

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

6.3 pm

Mr Graham Stuart (Beverley and Holderness) (Con): It is a pleasure to be on my feet again in the Chamber with an opportunity to talk about an issue that is so important to the people of east Yorkshire and coastal and rural communities around the land.

East Yorkshire is at the heart of the caravan industry. I have a major manufacturer, ABI, in the centre of Beverley, suppliers to the manufacturers scattered around my constituency and parks dotted down the Holderness coast. For us, static holiday homes are a big deal. The presence of so many Members, despite the fact that it is a Thursday evening, when Members are normally thinking of moving back to their constituencies, demonstrates the depth and breadth of concern about this issue, not least among Government Members.

Brandon Lewis (Great Yarmouth) (Con) rose

Mr Stuart: Before I give way to my hon. Friend, I should point out that I shall be the only person making a speech before the Minister responds, but because there has been so much interest in the debate, I shall give way to as many hon. Friends on both sides of the Chamber as I possibly can as we work together to persuade the Treasury to think again.

Brandon Lewis: I thank my hon. Friend for giving way and for outlining how generous he intends to be. He mentioned the depth and breadth of concern about this issue. In Great Yarmouth, the tourism industry is worth about £500 million, and an estimated 50% of our bed space is in static caravans. Over the years, they have come to have more in common with park homes than with mobile caravans. Does my hon. Friend agree that that might be a better way for them to be assessed?

Mr Stuart: My hon. Friend is absolutely right, and I shall address that point in my speech.

I ran a street surgery in Withernsea, a coastal town in my constituency, on Saturday. As I stood talking to people and handing out leaflets, perhaps as many as three out of 10 people said to me, “I’m not from round here, mate.” They were not staying in bed and breakfasts or hotels, because we have hardly any in the area; they were staying in static caravans. Two or three out of every 10 people going into Aldi, or into the bakery down the road, or spending money in the pubs were staying in static caravans. In addition to those directly employed in the manufacture of the caravans and in addition to the parks, however important they all are, the importance of visitors to the rural economy is immense. That is why there has been such a groundswell of feeling that this issue should be reconsidered.

Heather Wheeler (South Derbyshire) (Con): I have two firms in South Derbyshire that are particularly concerned about the new tax. One is Mercia Marina, and the other is Truma, which makes fittings for static and other caravans. They both believe that 20% of their business could be wiped out overnight, should the tax

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come into force. Would the Treasury be kind enough to look again at the cost-benefit analysis for this measure? It will find that wider areas, including tourism and jobs, will be greatly affected.

Mr Stuart: My hon. Friend is absolutely right.

I have good news, as I am sure the Minister will confirm later, in that the Government have listened to us. Hon. Friends on both sides of the House who represent East Yorkshire constituencies came together immediately after the Budget and we met the manufacturers. What we heard from them was chilling. The industry employs thousands in the manufacturing sector and tens of thousands in the parks. The Government estimate a 30% drop in demand, and that can only mean that thousands of jobs will be lost and that an industry that is struggling to recover from the credit crunch will be knocked backwards.

Mr David Davis (Haltemprice and Howden) (Con): I congratulate my hon. Friend on securing this important debate. He has raised the central point. The aim of the Budget was, quite rightly, to encourage growth and jobs and to pay off the deficit. Is it not the case, however, that this particular measure is likely to destroy jobs and raise less money than we currently raise? It would therefore meet none of those objectives, and the Treasury ought to retract the measure in total.

Mr Stuart: My right hon. Friend is absolutely right. He and I have discussed this matter with the Chancellor, who has spoken to us about it separately on a number of other occasions. We also went in a group of 11 colleagues to see the Exchequer Secretary to the Treasury, my hon. Friend the Member for South West Hertfordshire (Mr Gauke). The reason for our only being 11 was that we did not think that there would be room for more around the table; it was not due to lack of interest. There is enormous concern about this issue.

I am delighted to say that, when we debated the matter last week, the Minister agreed to extend the consultation. The Chancellor confirmed that it was a genuine consultation and that the Government would look at the evidence from us and from those out there in the industry—everyone should get involved in that—and would be prepared to look at the matter in the light of the impact that the measure will have.

Mr Greg Knight (East Yorkshire) (Con): During the extended consultation, which we welcome, it has come to light that Britain is now in the throes of the worst economic slump for more than a century. Is that not a compelling reason on its own for the Minister to say, “I have reflected on this matter. I have decided that this is the wrong tax at the wrong time, and I am dropping it”?

Mr Stuart: My right hon. Friend is right. He and many other Members on the Government Benches who would not dream of opposing the Government’s general strategy, or even most of the specifics, have such profound doubts about this one policy that they are asking the Treasury to think again.

Lisa Nandy (Wigan) (Lab): Does the hon. Gentleman agree with the point made to me by Pemberton Leisure Homes in my constituency that the measure will also

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have a profoundly damaging effect on apprenticeships? That firm employs 160 people, but it also has many apprentices. I know that the Government are keen to boost the number of apprenticeships. Does the hon. Gentleman agree that this measure could be problematic for that policy objective too?

Mr Stuart: The hon. Lady is right. I may have a chance to get to that issue later in my speech.

Mr John Whittingdale (Maldon) (Con): My hon. Friend referred to the Treasury’s own estimate that the measure may lead to a 30% reduction in demand. If that figure is correct, the measure will have a devastating effect on the parks in my constituency. However, I do not know whether my hon. Friend’s experience is the same as mine, but all my park owners are saying that they regard the 30% reduction as a gross underestimate. Osea leisure park, just one of those park owners, has told me that it believes that there could be a 60% reduction in demand for new homes.

Mr Stuart: My hon. Friend is absolutely right. Of course, many parks have made major investments, some of them—I hate to say it, as one hates to talk about vulnerable businesses—are highly geared, and if there is a chilling impact and eddies of demand, notwithstanding a little additional demand before 1 October, we could subsequently see more than a 30% reduction, which could result in the closure of manufacturers and park businesses that have invested for the longer term in this excellent British tourism industry.

Anne Marie Morris (Newton Abbot) (Con): Tourism is key to my constituency, and Dawlish Warren has a huge number of static caravans. Chilling figures given to me from Peppermint park in Dawlish Warren suggest a loss of 4,300 jobs just from the parks, with the loss of 1,500 jobs in the supply industry, 80 caravan distribution jobs and 1,400 from holiday homes manufacturers. If my maths is right, that is about 8,000 jobs lost.

Mr Stuart: My hon. Friend makes a powerful point, which I know will have been heard by Ministers.

Simon Hart (Carmarthen West and South Pembrokeshire) (Con): Does my hon. Friend understand the sense of bemusement among more than 20 firms in Pembrokeshire and Carmarthenshire that were looking to the Budget for some form of stimulus but have ended up getting stifled? Will he put as much pressure as possible on the Treasury through his good offices to look at this issue again and to take the views of the House into account?

Mr Stuart: My hon. Friend is absolutely right.

Roberta Blackman-Woods (City of Durham) (Lab): I thank the hon. Gentleman for giving way and for securing this important debate. Does he agree with Mr Ballantine, who runs Ideal Caravans in Langley Moor in my constituency, that the Treasury must look at this issue again if jobs are not to be lost in an area that is already experiencing high levels of unemployment?

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Mr Stuart: The hon. Lady is right, and the Treasury is looking at it again and has extended the consultation.

Mark Menzies (Fylde) (Con): I thank my hon. Friend for securing this debate. Three caravan park owners saw me at my surgery on Friday. The people staying at their caravans visit Blackpool and the sort of areas that the hon. Member for City of Durham (Roberta Blackman-Woods) talks about—areas that are struggling and need support. I ask the Minister to think again about this tax.

Mr Stuart: I am grateful to my hon. Friend. I know that the hon. Member for Scarborough and Whitby (Mr Goodwill), who I see on the Front Bench, has organised a meeting with his local park businesses in order to hear their concerns this coming Friday. Again, that shows how close this issue is to all of us.

Stuart Andrew (Pudsey) (Con): This debate is fast turning into a tour of the country, so I welcome my hon. Friend to Pudsey, where the manufacturing company, Ellbee, saw the downturn coming and made the difficult decisions at the time to lay people off, going right down to the bare knuckle. With this proposal, the company will almost inevitably have to close. That will mean the loss of more jobs in an area that can ill afford to lose them.

Mr Stuart: According to the National Caravan Council, if we take Her Majesty’s Revenue and Customs forecast of a 30% reduction in demand, home production will reduce to 10,689 units—the lowest production level on record—with inevitable consequences for manufacturers, suppliers and parks.

Dr Thérèse Coffey (Suffolk Coastal) (Con): I suggest that there has been a misunderstanding in the Treasury about the proportion of people who own such homes and stay in them for long periods at a time as against regular weekly letting. Does my hon. Friend know that if people stay in a hotel for more than 28 days, VAT does not have to be paid? Some parallels could be drawn.

Mr Stuart: My hon. Friend is right. I am not sure that I am ever going to get on to the issue of the non-anomaly that this measure is tackling. We are fortunate that Roger Tym & Partners produced a report on the economic impact of UK holiday parks in January this year, showing that 85% of static units are privately owned and that the remaining 15% are rented out as part of a park’s letting fleet. The market that will be most hit is the one that drives profits on these parks and drives investment. I do not think that the Treasury factored that into its calculations properly.

Alan Johnson (Kingston upon Hull West and Hessle) (Lab): I am grateful to the hon. Gentleman for arranging this serial intervention event.

This afternoon I spoke to Lord Haskins, who is the chair of our local enterprise partnership and the business leader in Hull. He believes that the damage resulting from this measure will, at a stroke, remove all the advantages of our two enterprise zones and local enterprise partnership. Should not the voice of business take precedence in this debate?

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Mr Stuart: The right hon. Gentleman is right. He may not entirely share my sentiments when I say that the coalition has a great story to tell for east Yorkshire—the Humber bridge tolls have come down, and investments have been made in the A164, the Beverley relief road and the coastal communities fund—but I agree with him that this measure could have a devastating impact.

Peter Aldous (Waveney) (Con): Does my hon. Friend agree that the Treasury has failed to take full account of the impact of the proposal on jobs, which will cascade all the way down from manufacturers to small and medium-sized enterprises? Moreover, it will be concentrated in particular parts of the country, such as his constituency and mine, which will not be able to take that extra impact.

Mr Stuart: There is great fragility in isolated, sparsely populated rural areas. How many other jobs are there in such areas? Indeed, what other jobs could there be? The truth is that often there are none.

Tessa Munt (Wells) (LD): The caravans that are made in the hon. Gentleman’s constituency end up in the 79 caravan parks in my part of the south-west, which contains the second largest conglomeration of holidays of that kind. More than 6,000 people in my constituency own their caravans, but 900 of the caravans are part of a letting arrangement. Does my hon. Friend agree that this measure would have a catastrophic effect on the 26,000 people who have jobs in tourism—carpenters, plumbers, electricians, gardeners and cleaners? Many of them are part-time and seasonal workers.

Holidays of this kind are provided for people with low incomes. Should we not reward them for their loyalty in holidaying in the United Kingdom? Moreover, many of them eventually move into bricks and mortar in my constituency because they have enjoyed their holidays there so much.

Mr Stuart: My hon. Friend is right.

Guto Bebb (Aberconwy) (Con): According to the Treasury impact assessment, 750 businesses will be affected, but we estimate that 400 holiday parks will be affected in Wales alone, which would be a devastating blow for the economy of north Wales.

Mr Stuart: That is why I am grateful to Ministers for agreeing to listen to the evidence before reaching any definitive decision. Such a definitive decision has not been made, and I hope that when it is, it will be made in the right way.

Eric Ollerenshaw (Lancaster and Fleetwood) (Con): Caravan park owners in my constituency want to know why, after 39 years of VAT, there should suddenly be an anomaly, given that there is a clear distinction in law between a travelling caravan, a residential caravan and a static caravan.

Several hon. Members rose

Mr Stuart: I will give way to my other colleagues shortly, but let me first respond to my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw).

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The Finance Act 1972 introduced zero rating of certain caravans. The notes on clauses relating to what was then group 10 of schedule 4 referred to relief for

“houses and other domestic accommodation”,

and stated:

“The caravans in the Group are akin to houses; they are too large to be towed on the road, and are usually permanently attached to the land.”

The deliberate intention of the law, which was debated in the House—with no anomaly, no forgotten section, and no category of products that had been missed—was to treat caravans, other than those towed by cars, as “other domestic accommodation” in the same way as houses.

Mark Garnier (Wyre Forest) (Con): In my constituency, many people view static caravans as second homes. Is there not a case for the Treasury to treat them as second homes, subject to stamp duty, rather than making them subject to VAT like mobile caravans?

Mr Stuart: That would be consistent, because the qualities of a mobile caravan are completely different from those of a static caravan or a house. What are static caravans used for? They are second homes. Someone who buys a £240,000 cottage in one of the rural areas represented by my colleagues, which often means pricing out local workers, will pay tax of 1%, whereas it is proposed that someone who buys a static caravan for £24,000, a tenth of that amount, should pay 20%— 20 times as much—on a home that is used for precisely the same purposes. That is not getting rid of an anomaly, as Treasury civil servants originally suggested; it is creating an anomaly.

Craig Whittaker (Calder Valley) (Con): BCA Leisure is a large company in the Calder valley. It does not employ thousands of people, but it does employ a couple of hundred. It does not own caravan parks or manufacture caravans; it produces parts that supply the caravan trade. The chief executive officer tells me that the proposed measure will deal a huge blow to his company and to other employers in the Calder valley. Does my hon. Friend agree that it will be devastating not only to the tourism industry, but to manufacturing?

Mr Stuart: My hon. Friend is right.

Simon Reevell (Dewsbury) (Con) rose—

Mr Stuart: I give way to my hon. Friend, who I know has similar concerns.

Simon Reevell: Jay-Be in my constituency is a company that took on workers when Silentnight had to close. It took them on to make beds and soft furnishings for the caravan industry. Does my hon. Friend agree that it is absurd that it now faces having to sack one fifth of its work force because of a provision contained in a Budget for growth?

Mr Stuart: My hon. Friend is right. All Government Members are committed to the aims and objectives set out in the Budget. We wanted a Budget for growth. We support lifting people out of tax; we support lowering corporation tax; we want investment; we want British

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industry to be supported. May of us are therefore gently but firmly—and, I hope, powerfully—saying to the Government this evening that this measure should be looked at again, and, as I have said, they have agreed to do so.

Terence Higgins, then Financial Secretary to the Treasury, said in March 1973:

“We have already distinguished between two kinds of caravan; the kind of caravan which is a home or a residence, and not normally the kind that one tows around—because even outside the West Country it would be too large to tow conveniently—and that which is not regarded as a home. Because of the general provision in legislation for relief from VAT for housing it was thought appropriate to include large caravans within the scope of relief.”—[Official Report, 20 March 1973; Vol. 853, c. 393.]

Therefore, any suggestion that that was not considered by this House is false. I hope that will be reflected on.

In June 1989, when my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) was Economic Secretary to the Treasury, he said that there was no question of withdrawing zero rating from the purchase of static caravans. He was right then, and we should stick with that view now.

I want to give the Minister 10 minutes in which to reply, if no other colleagues wish to intervene on me. [Interruption.] Give him eight minutes? Okay, fair enough. Finally therefore, let me pass on to the Minister some comments from a constituent of mine.

Aaron Cambridge and I live in the same town, Beverley in east Yorkshire. He works at Willerby Holiday Homes, which in the most recent industry returns at the end of last year was listed as having more than 800 employees. It is based in the constituency of the hon. Member for Kingston upon Hull East (Karl Turner), whom I am delighted to see in his place. Even without this proposed VAT increase, Aaron has been on a reduced work schedule of three-and-a-half days a week for the past six months. He told me that he has worked in the caravan industry for 24 years and can never remember such hard times for the industry. That is the situation the industry is in now, before this possible VAT increase. There are 800 staff just at Willerby, which is a manufacturer, and we know that there tend to be many more associated jobs in supplier firms and others around a manufacturing centre.

Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op) rose—

Mr Deputy Speaker (Mr Nigel Evans): Order. The hon. Lady rises to speak from the Opposition Dispatch Box. As that cannot be done in an Adjournment debate, may I ask her to make her intervention from the Bench behind?

Cathy Jamieson: I apologise, Mr Deputy Speaker. I still find the conventions of the House somewhat confusing.

Mr Deputy Speaker: So do I!

Cathy Jamieson: Does the hon. Gentleman agree that the Treasury should look again at the impact assessment? It estimates that it will take in some £35 million in 2013-14 as a result of this measure, but it should look

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again at the impact assessment to compare that with the amount of money that will be lost in the wider economy.

Mr Stuart: The hon. Lady is right. I have many more examples, including that of Laura Goldspink, who lives in my constituency and also works at Willerby Holiday Homes. Charles Gillett, who runs a business that is 100% reliant on the caravan industry, has talked of

“an industry on a knife edge, struggling to emerge from the ravages of the recent recession.”

He, too, pointed out that it is not 750 companies affected, but well over 2,000. Peter Smith, the chairman of the Swift Group—one of the leading employers in east Yorkshire, with 800 staff and a turnover of £200 million —has said:

“A very conservative HMRC prediction is a reduction in demand of 30% which would lead to the lowest market figure for over a decade of around 11,000 units,”

as we have discussed. He continued:

“Such a reduction is likely to increase the cost of materials (due to economies of scale), make credit harder to come by and jeopardise the viability of manufacturers and suppliers.”

I have said enough. Peter Smith put his finger on it, as have all the other Members who have spoken. The Budget is all about creating jobs, but if this measure is implemented, it would have exactly the opposite effect. What we ask, from both sides of the House, but particularly the Government Benches, is for the Minister to listen to the contributions to the consultation and reconsider.

Mr Deputy Speaker: I am sorry that we did not have time in this relatively short debate to hear most of the speech that the hon. Gentleman was holding in his hands.

6.25 pm

The Exchequer Secretary to the Treasury (Mr David Gauke): I congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on securing this debate. He has already made his case to me, leading a delegation of MPs to see me on 17 April, as he said, and I know that he has also made representations to my right hon. Friend the Chancellor. He also spoke passionately about the proposal in our debate on the Finance Bill on 18 April. I am pleased to have the opportunity in the time available to respond in more detail to the concerns that he and other Members have raised.

Let me begin with some general points to put the measure in context. Removing the zero rate of VAT from static holiday caravans is one of a series of VAT measures announced in the Budget that are designed to make the VAT system fairer to all traders and easier to administer and comply with. It will help to create a level playing field by ensuring that all holiday caravans are taxed in line with the sale of other forms of holiday accommodation that have restrictions on permanent occupation, such as touring caravans, camper vans, narrowboats, timeshares and new holiday homes.

Let me address two issues that were raised in my hon. Friend’s speech and in interventions. The first relates to revenue and costings, the second to the impact on businesses. First, the conventions used in the Treasury’s policy costings were set out in the 2010 Budget policy costings document. In brief, policy costings take account

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of direct effects on the tax base, but do not include indirect behavioural effects—for example, on employment, wages and salaries, or general consumption. However, the indirect economic effects are not ignored; instead, they are captured in the Office for Budget Responsibility’s economic forecast, taking into account, for example, the changes on the relevant sectors.

Diana Johnson (Kingston upon Hull North) (Lab): I am listening carefully to the Minister. There are 43 people chasing every job vacancy in my constituency this month. The Treasury is not going to make any money from introducing VAT on static caravans, as it has failed to take into account the undoubted unemployment that will result from this measure.

Mr Gauke: As I have said, the Office for Budget Responsibility takes into account the second-round effects of all measures in the Budget.

Time is short, so let me turn to the demand reduction estimates and the figure of 30% that a number of hon. Members have quoted. HMRC has estimated that, as with what are described as “discretionary leisure durables”, expenditure on static holiday caravans will be impacted by the measure, with a 1.5% fall for every 1% increase in price. However, we should all be clear that this reduction in expenditure will apply only to static holiday caravans sold to the final consumer, and only to the proportion of the price of such caravans not already subject to VAT. The reduction in expenditure does not, therefore, apply to the approximately one third of caravans sold to caravan sites for rental. Their price should not change, as the caravan site will normally be able to reclaim the VAT in the usual way. That part of the static caravan market will not be affected by the measure. Neither will the measure affect the 20% of the price of a static holiday caravan that is already subject to VAT in respect of its removable contents.

Taking account of those factors, the overall fall in expenditure should be less than the 30% reduction indicated in the impact assessment. That is because the estimated 30% reduction refers only to the specific parts of the market that will be impacted by the measure: sales to private individuals who cannot reclaim the VAT.

Mr Stuart: Can my hon. Friend confirm that the Treasury did not do that much work on this? Where did it get the one third figure from? It is not one that I have heard from anybody. The Tym & Partners report, which is available and has been since January, talks about 277,760 owned statics and 49,600 rented statics. By no means is 49,000 one third of 277,000. It has been suggested that 750 companies will be affected, but the

26 Apr 2012 : Column 1218

real figure is more than 2,000. The Treasury did not do its homework and Ministers are in a tough spot because they did not spot that.

Mr Gauke: That estimate was made on the basis of the evidence that the Treasury and Her Majesty’s Revenue and Customs had before them. The point I wish to make is that a genuine consultation is taking place and we look forward to receiving evidence that my hon. Friend has and others have, so that we can make a further assessment of those costings.

Let me now discuss the impact on caravan manufacturers. We recognise that the impact on static holiday caravan manufacturers will not be trivial. The level of the impact will, of course, depend on the variety of products produced by those manufacturers. Many hon. Members 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. Such sources include: charging a siting fee; running a shop; group insurance scheme commission; commission on the resale of used holiday caravans; and commission on letting on behalf of the owners—sub-letting—and so on.

I recognise that applying VAT to the sale of new holiday caravans will not be welcome, as this has been a significant income stream for many parks. However, there is a good deal of flexibility within the range of products and services that caravan holiday parks offer to allow them to adapt their mix of business to the new VAT treatment of holiday caravans. I recognise that there are challenges involved in adapting to these changes in the tax regime, but there is scope for adaptation.

The main point I wish to make today is that we would welcome any evidence provided through the consultation, which, as my hon. Friend has pointed out, has been extended, be it evidence on the costing or on other matters.

Karl Turner (Kingston upon Hull East) (Lab) rose

Mr Gauke: I have only one minute left, and I just wish to complete this point. We have listened to earlier representations, and we have extended the consultation period until 18 May to allow HMRC to engage further with representative bodies in order to better understand the implementation issues and how best to define a “holiday caravan” for VAT purposes. We are particularly keen to use the consultation to ensure that the new rules are workable and simple for businesses to administer. We understand the strength of feeling on this matter and genuinely want to listen to the concerns—

6.33 pm

House adjourned without Question put (Standing Order No. 9(7)).