Motorhomes and Vehicle Excise Duty

[Sir David Amess in the Chair]

I beg to move,

That this House has considered motorhomes and vehicle excise duty.

It is a pleasure to serve under your chairmanship today, Sir David. It is good to see you in the Chair for this debate, because I know that this is an issue that you have raised at the highest levels of Government and that you take it very seriously indeed. As you cannot contribute to the debate this afternoon, I will speak for both of us in saying that this issue is serious and real, and that we will keep raising it until the Government take the necessary action. We are not prepared to let the motorhome industry collapse because of Government miscalculation.

I thank the National Caravan Council for bringing this matter to the attention of Parliament, and I am very grateful to have secured this important debate today. The impact of vehicle excise duty on motorhomes and campervans is a niche topic but an important one. The industry and many motorhome users are calling for motorhomes to be removed from the car vehicle excise duty regime, and for motorhomes to be taxed as private light goods vehicles or private heavy goods vehicles, until they can be added to the forthcoming graduated vehicle excise duty regime for commercial vans, from which they are originally derived.

The calls for action are more obvious than many may think. After all, a motorhome is not a car, as motorhomes are designed to perform a function other than general transport of people or goods. They are derived from the chassis of a heavy commercial vehicle, such as a van or a truck, and they have large engines, so motorhomes should not be taxed as cars, when they are clearly not built to be cars or used as such.

So I am pleased to have the opportunity to raise this issue today and it is good that the Exchequer Secretary to the Treasury is here to listen to the arguments, understand the concerns and—hopefully—update the House on what measures the Treasury will take to ensure that this anomaly can be addressed and solved at the earliest opportunity that the Government can find.

To be clear, I am calling for a fair approach when it comes to the taxation of motorhomes and campervans. This is a cross-party call for action, both politically and geographically.

In my area, Swift Caravans has already announced redundancies and I am aware that other companies are currently consulting on making more people redundant. There is huge cross-party support on this issue, as shown by the event that we held in October, the joint letter that we sent to the Minister and the event that we will hold in February. Given that cross-party support and the impact on the industry, does my hon. Friend agree that the Government need to take action now?

Obviously I agree, and I thank my hon. Friend for intervening to make a powerful point. Yes, there is cross-party support, and she has highlighted both what has been done so far and what we will do in the future. I know that many right hon. and hon. Members who could not be here in Westminster Hall today also support this call for action.

The vehicle excise duty payable for new-generation motorhomes and campervans first registered after 1 September 2019 increased from £265 per year, going up to £2,135 in the first year; it will then be £465 a year for the next five years. That is a huge increase in costs for those people who choose to buy a motorhome and who enjoy using it, and I hope that the Government will reflect on the impact of this massive rise.

The increase in the level of taxation has been applied to all motorhome vehicles, including those fitted with new-generation greener and more energy-efficient engines. If the Government are serious about their climate change targets, why are they not treating light commercial vehicles as cars for the purposes of taxation? Instead of generating an additional £28 million—approximately—from the relatively small number of new-generation motorhomes, they could generate almost £700 million from vans alone.

Let me be clear that that projected £28 million will be raised only if motorhomes continue to sell at rates similar to those in the past. However, I have been informed by the industry that, as my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has already mentioned, registration rates are declining rapidly because of this tax.

I am eternally grateful to my hon. Friend for securing this debate and for the powerful speech that she is making. Further to the point that she has just made, I will point out that businesses such as Richard Baldwin Motorhomes, which is located in my constituency, Bentley’s Caravan and Motorhome Services, and Caravan Guard and Leisuredays, which is an insurance company that specialises in providing insurance cover for motorhomes, directly employ 60 people in my constituency. Those companies are saying, as my hon. Friend has just said, that such jobs will be at risk if we cannot find the fair approach that she is calling for.

Absolutely—I thank my hon. Friend for making another powerful point. Jobs in this industry are being lost. That is not right and we must do everything we can to protect those jobs.

Ministers repeatedly refer to the importance of incentivising drivers and vehicle owners to choose low-emission alternatives. However, if someone wants to buy a new motorhome, or if someone wants to manufacture one, there are no alternative engines. So, where is the incentive? There is not one, which is why it is so wrong that motorhome owners are being disadvantaged by having their vehicles taxed as if they were cars. Motorhomes are not cars.

It is important that we regulate emissions and do what we can to preserve our environment, and it is right that owners of new vehicles are encouraged to choose cleaner and more efficient engines. Indeed, the car and light commercial van industries have been consulted on the impact of the worldwide harmonised light vehicle test procedure and the implementation dates have been delayed. It is regrettable that the motorhome industry has had no such assistance from the Government.

We must also remember that, unlike cars and light commercial vehicles, motorhomes are the smallest group of vehicles, travelling just 3,000 miles per annum on average and contributing just 0.22% of all emissions. The Government should encourage people to stay here in the UK and holiday at home. I know from my many staycations in Wales that there are some wonderful beaches, and places for people to rest and enjoy themselves, so that they can spend their money within the UK.

The hon. Lady is making a very powerful speech. Does she agree that there are clear parallels between this tax and the aborted static caravan tax in 2012, with disproportionate impacts on those areas where these vehicles are manufactured and indeed on the holiday areas that she has just talked about?

Absolutely, and the hon. Gentleman makes that point very clearly. I will come on to the importance of staycations in this country now.

Does the hon. Lady agree that because motorhomes are used on average for only 31 days each year, a tax of £70 a day is not likely to produce the kind of result that she is talking about?

Absolutely, and the right hon. Gentleman must have read my speech because I will come on to that very point later.

What happens to staycationing locations across the UK that will lose income and tax revenue because of these proposals? Have the Government completed any studies on this issue? What do they propose to do for people who lose their jobs in the tourism sector because of this arrangement?

We know that staycations stop people from getting on planes, which damage our air, or taking cruises, which damage our marine ecosystems and pollute our waters. So, by holidaying at home, we see lower levels of greenhouse gas emissions and thus less pressure is put on our environment.

The increase in taxation is already having a significant impact on the staycation industry. Unlike the car industry, the motorhome sector saw modest growth year on year up to September 2019, when it recorded a fall of over 7%. That was the very month that the increase came into effect.

I would like the Minister to explain why the Government are penalising 15,000 motorhome-owners, who all contribute to our domestic tourism industry and only use their motorhomes for leisure purposes for about 30-odd days a year, as we have already heard. The policy cannot be about reducing air pollution levels, because if it was, the Government would have a more thought-through and logical approach.

The hon. Lady is making an excellent speech, and I agree with her. There is a disparity between motorhomes, which on average do about 3,000 miles a year, and light vehicles and vans, which do 12,800 miles a year on average with exactly the same carbon dioxide emissions per mile. Does she agree that if we are trying to tackle climate change, motorhomes are not the area on which to focus?

I agree with the hon. Member entirely. She has made a powerful point.

I want us to think about the people we are talking about. There are people across the UK who use motorhomes and there are manufacturers, as we have already heard, in Hull and other areas. Many committed holidaymakers are using their vehicles to holiday at home in the UK. Those UK-based holidays are a much-needed boost to our regional economies and our coastal and rural communities. Indeed, motorhome and caravan owners make a key contribution of some £9.3 billion every year to the tourism industry and the economy, according to recent UK Caravan and Camping Alliance impact reports.

The days and months ahead as we leave the European Union remain uncertain and a little unclear. We do not know what economic winds may sweep us up or what global shocks may hit us, so the Government must focus on all measures to make life easier and our economy stronger—not weaker. One way to do that would be to tackle the problems associated with the vehicle excise duty for motorhomes. Let us think about the people who will be affected. There are almost a quarter of a million motorhome owners in the UK today. According to figures from the NCC, 81% are over 55 years old, and more than 50% are retired.

Motorhome and campervan purchasers are often older people who have saved for much of their lives to purchase these leisure vehicles. I do not think the Government want to be accused of making such lifestyle choices unattainable or of taking away the means for ordinary people to enjoy such holidays.

I have Elddis, a manufacturer of caravans, and Weardale, an area where many motorhome users go, in my constituency. Does the hon. Lady agree that this policy could have unintended consequences for the environment in terms of more CO₂ emissions from foreign travel and for the Government through a hit on taxation with VAT and other duties when money is not spent in the UK?

I thank the hon. Gentleman for making that succinct and clear point. He does it so much better than I could. Why are we penalising those who will not see their incomes grow or those who have stable incomes and have planned accordingly for their futures? They are entitled to holidays, and the Government should not make it difficult for them. I note that my hon. Friends the Members for Kingston upon Hull West and Hessle (Emma Hardy) and for Kingston upon Hull East (Karl Turner) take that point seriously and have made it over recent months. We now have a Government with a solid majority who are looking to their first post-election Budget. I am sure the Chancellor is busy across the road as we approach 11 March, but I remind the Government that they have no more excuses for inaction. They have a clear majority in this House, so they can act if they want to.

I thank the hon. Lady for securing this powerful and important debate. She has made the point that it is often elderly, retired people who enjoy such vehicles, but quite a big lump of younger families also enjoy motorhomes. The clear point is surely that these are not vehicles for personal transport, but leisure vehicles. Has she ever seen such a vehicle in a supermarket car park? I never have.

The hon. Gentleman makes a powerful point. As I said earlier, these vehicles are not designed to be used as cars because they are not used to transport goods and people as cars are. He is quite correct in that.

I urge the Minister to listen to the industry, to Members from all parts of the House and to the thousands who enjoy using their motorhomes, and to get this mess sorted out.