15 June 2020
Caravan Industry Debate

Nadhim Zahawi responds on behalf of the Government to an Adjournment Debate on the caravan industry and highlights the Government’s desire to reopen caravan parks.

The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)

I congratulate the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) on securing this evening’s debate, and I congratulate the hon. Member for Kingston upon Hull East (Karl Turner) on his passionate speech. A number of colleagues were ingenious in their interventions, certainly my hon. Friend the Member for North West Durham (Mr Holden), because of Elddis in his constituency, but also the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Waveney (Peter Aldous) and for North Cornwall (Scott Mann). There is also, however, one Member present who cannot speak as he is the Whip in charge, my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson), who has Regal in his constituency. As we can imagine, my constituency of Stratford-on-Avon has some wonderful caravan parks and caravan holidays, and I urge anyone looking for a staycation, which the hon. Member for Kingston upon Hull East rightly reminded us about, to visit Stratford, or at least have it on their schedule.

I would like to take the opportunity to thank the hon. Member for Kingston upon Hull West and Hessle for her work, but also those in the public, private, community and voluntary sectors, and partners across Hull and East Yorkshire for all their outstanding work and support during this difficult time. Hull and East Yorkshire, along with north Lincolnshire on the Humber south bank, is one of the UK’s most significant industrial and manufacturing clusters.

The hon. Member for Kingston upon Hull East rightly reminded us of the capabilities of Siemens Gamesa. Of course, there is Ørsted in the offshore wind sector, RB in health and Wren Kitchens in manufacturing, together with a strong small and medium-sized business base in the region. That has enabled the area to make real strides in improving economic performance.

Since 2010, the employment rate in the Humber has increased by 4.7%. There is undoubtedly a bright and optimistic future for Hull and East Yorkshire and the wider Humber economy. The caravan manufacturing industry, with its long and proud history in Hull and east Yorkshire, can be an important part of that future. That is certainly how the Department sees it.

Thousands of people are employed directly in the caravan manufacturing industry and its associated supply chain, as we heard from the hon. Member for Kingston upon Hull West and Hessle. Theirs are important, skilled jobs, which make a significant contribution to the local and national economy. There is no doubt in my mind that the medium to long-term prospects for the industry are strong. The British public have a long-standing love affair with their caravans, which transformed the holiday habits of generations of families following the post-war boom in the 1950s and up to the present day.

I believe that there are exciting new opportunities for the industry, with the prospect of more families holidaying in the UK. The industry has shown that it can diversify its products to meet the changing demands of a new generation that wants to have that wonderful caravan holiday. There are new, modern luxury caravans and mobile homes that can provide higher-quality, safe-distancing accommodation as we transition out of the current crisis. They can also provide flexible and environmentally friendly leisure experiences, tailored to different tastes and pockets for decades ahead.

The industry is also a major exporter, as we heard from the hon. Lady, and it is well placed to exploit new potential overseas markets. However, I recognise that it faces challenges in the immediate future. I am well aware that large parts of the caravan sector have been furloughed and, regrettably, some people have been forced into redundancies. For caravan workers and their families, along with many others throughout the country who may have been furloughed or made redundant, I recognise that that must be deeply unsettling and worrying. The hon. Lady made a powerful point about the interventions that we are making in the economy.

However, in 2008, the caravan industry in Hull and the East Riding of Yorkshire was severely impacted by the financial crisis, as the hon. Member for Kingston upon Hull East said. It bounced back. Backed by the Government’s determination to do all we can to support the industry and its workers, it can bounce back again. There are early positive signs. Coachman Caravans in Hull recently reopened its factory following a temporary closure due to covid-19. It has followed the Government’s guidelines to restart production while keeping its staff safe. It is not alone. East Yorkshire-based Victory Leisure Homes is investing in immersive visitor experiences as it looks to capitalise on the future staycation.

We are listening to the industry, too. The Chancellor’s decision to take action on the rise in vehicle excise duty on new motor homes in the Budget demonstrated that the Government are determined to maintain a vibrant caravan and motor home industry in the UK. Members of Parliament, including the hon. Member for Kingston upon Hull West and Hessle, should be congratulated on highlighting the impact the proposed increase would have had on the industry.

I would like briefly to set out the Government’s business support package, which already supports the caravan industry and its workers. The Government are committed to doing all we can to support UK business through the current crisis. The Chancellor has announced an unprecedented package of support. To help firms continue to keep people on the payroll, the Government introduced the job retention scheme, more commonly referred to as the furlough scheme. Since it opened on 20 April, it has protected touching on 9 million workers and 1.1 million businesses, including in the caravan industry, through the crisis. On 12 May, the Chancellor announced that the scheme will continue until the end of October. It will continue in its current form until the end of July, and then changes to allow more flexibility, which many colleagues appreciate, will come in from the start of August. That flexibility will help to support furloughed workers as they return to work.

Emma Hardy

As I said in my speech, I am aware of and grateful for the furlough scheme that the Government introduced, but I would really like to know from the Minister whether he will go to the Treasury and ask for the flexible furlough scheme that I mentioned in my speech, with the ability to continue to furlough workers right through until spring 2021 so that the industry can be ready to take off again with the new summer orders.

Nadhim Zahawi

The Chancellor has already announced the plans for the furlough scheme to come to an end in October, but we have designed all our interventions to wrap our arms around the economy and jobs. As we come out of this crisis, the interventions have to be reviewed, which is why the Chancellor reviewed the furlough scheme and why we review the other schemes—whether it is the coronavirus business interruption loan scheme, the coronavirus large business interruption loan scheme or the bounce-back loans scheme—to make sure that the recovery is as robust and dynamic as we can make it.

The Government have also provided extensive financial support to small and medium-sized enterprises through the bounce-back loans scheme that I just mentioned. More than 830,000 loans worth £35 billion have gone out of the door and into the bank accounts of the smallest businesses in our country. We have provided significant grant support to small businesses through the small business grant fund and the retail, hospitality and leisure grant fund. Since the launch of those grant schemes, more than £10 billion has been paid out to businesses throughout the country, and there is more to come. Small businesses across Hull and East Riding have to date benefited from nearly £180 million of grant investment.

On flexible furloughing, I am aware that the hon. Lady, together with her fellow Hull MPs, has written to the Chancellor, as she rightly highlighted in her speech. She is rightly pushing for a sector-focused approach to the job retention scheme; she will be aware that, as I have mentioned already, the Chancellor has extended the furlough scheme until the end of October and it is being made more flexible. From 1 July, employers will be able to bring back to work employees who have previously been furloughed for an amount of time, and on any shift pattern that they like, while still being able to claim the JRS grant for their normal hours not worked. After July, we will introduce more flexibility to the furlough scheme so that we move out of it in a measured and orderly way to protect people’s incomes.

Emma Hardy

I thank the Minister for giving way; he is being very generous—as I remember he was on the Education Committee. I just want him to fully recognise the specifics of the caravan industry. The point at which the furlough scheme is going to end is the point when the caravan manufacturing industry normally goes into a slower period, because it is a seasonally based manufacturing industry. The industry has more orders and does more business through the summer months; the winter months have always been quieter and slower. The reason why we are asking for sector-specific support is that, as things currently stand, the furlough scheme will end just as the caravan manufacturing industry enters its usual period of low orders and less production. That is why it needs to be sector-specific and why the caravan industry needs to be looked at separately from other industries: because it is seasonally based.

Nadhim Zahawi

The hon. Lady repeats powerfully the point that she made in her excellent speech, but the furlough scheme is only one of the interventions that we are making across the economy. As I said, we review all our interventions because, as she will know, the profile of interventions is very different when we are asking people to stay at home, protect the NHS and save lives, and therefore businesses are closing and furloughing people. The profile of interventions as we come out will be different, which is why we have reviewed them all and continue to do so, and why we continue to stay close to the industry as well. I reassure her of that.

On dealerships, which the hon. Lady mentioned in her speech, the House will know that we reopened them on 1 June to support them to get back on their feet. While residential caravan parks have remained open throughout the lockdown period, holiday parks have been closed in line with the wider restrictions on overnight stays for leisure purposes. Our ambition is to reopen caravan parks in step 3 of the Government’s recovery strategy. All decisions on reopening will, of course, be based on the latest scientific evidence and public health assessment. The Government have engaged very closely with the holiday and home parks sector to prepare guidance, as we have done with all other sectors. It was great to see non-essential retail open today, with so many wonderful stores in Stratford-on-Avon and around the country having such wonderful vibrant window displays and, of course, applying all the safe working practices. Hopefully, this will allow the sector to reopen safely and as quickly as possible.

On business rates relief, an important point, the Government have provided enhanced support to the retail, hospitality and leisure sectors through the rate relief system given that covid had such a direct and acute impact on them. It is worth reminding colleagues that it is up to the local authority to determine eligibility for relief, having regard to guidance issued by the Government. Local authorities have the power, therefore, to offer business rates discounts beyond the pre-defined reliefs at their discretion. I have spoken to, I think, 69 chief executives of local authorities. Many of my colleagues in the Department have been making phone calls to talk directly to them about the discretionary funds available to them. Other businesses affected by covid-19 that are not eligible for business rate relief, such as caravan and leisure vehicle manufacturers, will benefit from the wider business and employment support packages that I have set out.

Karl Turner

I am very grateful to the Minister for giving way. I do not expect an answer on the two chief asks immediately, because the Minister will, of course, have to make representations to the Treasury. None the less, will he be prepared to meet the National Caravan Council and perhaps some of the manufacturers to discuss those specific asks?

Nadhim Zahawi

I would be delighted to meet them. I am happy to arrange it as soon as possible. After the debate, I will ask my officials to reach out to the hon. Gentleman to make sure that we get that done. The hon. Member for Kingston upon Hull West and Hessle is equally welcome to join the meeting, as are all colleagues here.

The Government have introduced the business rates holiday for businesses in the retail and leisure sector, irrespective of rateable value, which means that all eligible businesses will pay no business rates for 12 months. That means that properties used by caravan parks and sites are eligible for that relief. This support is worth almost £10 billion to business, and an estimated 350,000 businesses have benefited from it. For the billing authority of Hull and East Riding, this support is worth £82 million to business, and about 3,500 businesses have benefited. I must pay tribute to the leadership of the local authority for getting that money out of the door. They have done a phenomenal job, and I thank all those in the authority for it.

The hon. Lady mentioned a range of other stimuli, and we can look at what is happening in other parts of the world, including perhaps a caravan scrappage scheme, the accelerated capital write-down and the value added tax measures that she mentioned. Those are all interesting proposals, but the hon. Lady will understand that I cannot give any policy commitments now, or indeed speculate on or prejudge any further Budget announcement by the Chancellor. She will, I am sure, agree that that is way above my pay grade.

As we come through the current crisis, as we will, I have no doubt that the caravan industry in Hull and East Yorkshire, and the rest of the United Kingdom, can look to a bright future. It will be important that the sector innovates and responds to customers’ high standards and aspirations, as it has done in the past. It will do so again to fully exploit that market potential. I have no doubt that the industry will rise to that challenge.

Finally, I thank the hon. Lady and other colleagues for engaging in this very important debate on a very important sector.