Static caravan tax debated in House of Commons

The majority of UK caravans are manufactured in East Yorkshire

The prime minister has said plans announced in the Budget to introduce 20% VAT on static caravans are fair.

David Cameron's comments came as local MPs continued their campaign to get the government to change its mind.

Local Conservative MPs David Davis and Graham Stuart have met with Chancellor George Osbourne to lobby against the introduction of the tax.

A caravan manufacturers' association claimed the change would lead to 2,000 job losses in the industry.

The majority of UK caravans are manufactured in East Yorkshire.

Speaking after the meeting with the chancellor, Graham Stuart, MP for Beverley and Holderness, said: "He listened and seemed to understand the serious threat the proposal to impose VAT on static caravans poses for the East Yorkshire economy.

'Struggling industry'

"He promised that the consultation was a genuine one and that he would listen to representations made by those affected."

The industry's trade association, the National Caravan Council (NCC), said that using the government's projected figures of a 30% decline in sales due to the new tax, it could mean that "in the first year, more than 1,000 jobs could be lost in manufacturing, plus a similar number from suppliers to the industry".

The NCC claimed that East Yorkshire would bear the initial brunt of the job losses.

The Conservative MP for Brigg and Goole MP, Andrew Percy, raised the issue during Prime Minister's Questions in the House of Commons.

Mr Percy asked the prime minister to "think again about this tax that will cripple this already struggling industry".

Mr Cameron said he had listened to representations from the region's MPs but felt the proposed tax was fair.

"This is an issue about how we draw the VAT boundaries fairly," he said. "I don't think it's fair that a mobile caravan pays VAT but a stationary caravan does not."