Caravan tax u-turn

There had been plans to add 20% VAT on the sale of caravans Photo: Calendar

After complaints it would harm the East Yorkshire economy and cost hundreds of jobs the Government has had a re-think over the so-called "caravan tax". The plan had been to introduce 20% VAT on the sale of static caravans. Instead, this will be reduced to 5%. It is going to be introduced in April 2013.

At the Budget we announced proposals to address anomalies that have built up in the VAT system and have led to similar products being taxed differently. We have now finished the consultation on these proposals and are taking on board the points made, while still making sure we meet the objective of clearer and more consistent system that we set out at the time.

– Treasury spokesperson

This is a really big success. We would have liked it to have been reversed completely, but the Government can still say it’s corrected the anomaly between different caravan types....This is a sign of strength in this Government that it can carry out a genuine consultation and then admit it was a disastrous policy.

Had they levied the tax at 20% they would have killed a very successful manufacturing industry.

To their credit, ministers have stuck their hands up and said “we got it wrong”

– Andrew Percy, MP for Brigg and Goole

George Osborne's Budget has been a total and utter shambles. These partial u-turns, just a few weeks after Ministers were defending the pasty tax and caravan tax, show just how ill thought through the Budget was and how out of touch David Cameron and George Osborne are.....

...With Britain pushed into a double dip recession by this government's mistakes we urgently need a change of course on economic policy.

– Rachel Reeves, MP for Leeds West & shadow Chief Secretary to the Treasury