Across the West Country there are thousands of static caravans inholiday parks the length and breadth of the region. The industry is worth onepoint eight billion pounds to the UK but operators say this success story isunder threat because of VAT.
The Government plans to change the tax rules to bring them into line with touring caravans. But holiday park owners say they're not the same and the industry will be devastated.
At Surf Bay Leisure in Winkleigh they're worried that a proposal to levy a twenty per cent sales tax on the purchase of static caravans will be disastrous for business. The Government's own calculations suggest it'll reduce demand by thirty per cent.
– Nigel Angrave, Finance Director
If the demand falls off that will have an impact on us, that will then go up the chain and manufacturers will subsequently cut back production and inevitably that will result in jobs losses more significantly for the manufacturers, but for operators throughout the South West of England.
Caravan park owners say the effects won't only be felt here on the sites themselves but anyone whose income is derived in part from work on a site such as this the electricians, the gas fitters, the plumbers will be impacted by this decision.
This firm also builds its own lodge style static caravans. They say production will have to stop as with VAT added the price will rise to around ninety six thousand pounds.
Patrick Langmaid of Mother Iveys holiday park at Trevose in Cornwall fears that caravan owners will then move into bricks and mortar as stamp duty is much lower than VAT, but that will add to the region's second home owner problems.
– Patrick Langmaid, Holiday Park Owner
The effect of that on the local community will be devastating because they will be consuming real residential property at the expense of the local community who will find it even harder to remain in the area.
Mr Langmaid buys on average twenty new caravans a year for private owners on his holiday park. He expects that market to collapse. A vote on the tax change in the House of Commons last week was won by the Government but with the second biggest rebellion by MP's. The consultation into the tax rise continues.