CARAVAN businesses and bakers in Skegness are rejoicing after two controversial taxes they feared would decimate their industries were cut by the government.

The Treasury announced on Monday it no longer intended to introduce VAT on hot snacks and that static caravan sales would only be subjected to a five per cent VAT rate, rather than the 20 per cent previously threatened.

Both industries had vehemently opposed the initial proposals set out by the chancellor George Osborne in his March budget, which they feared could have a huge impact on the entire coastal economy.

Now that their lobbying has paid dividends, both sectors are breathing a sigh of relief.

Business manager at Coastfields Leisure, one of the East Coast’s largest caravan operators, has welcomed the news with renewed optimism.

He said: “We are delighted that the government has listened to the views of the industry and it is certainly a victory for those of us who took a stand and lobbied against what would have been an incredibly damaging tax for the entire region.”

MP for Boston and Skegness Mark Simmonds promised the caravan industry that he would do his best to ‘fight their corner’ in opposition to the tax and was praised by the chancellor for his efforts to extend the consultation, which contributed to Monday’s decision.

Mr Simmonds said “I am delighted that the Government has decided to significantly reduce the originally proposed rate of VAT to be applied to new static caravans.

“The caravan industry supports thousands of jobs and I have worked hard to ensure that these are not jeopardised.

“I am pleased to have been able to successfully communicate the objections of many of my constituents to the Treasury, and that they have taken these concerns into consideration.

“The government needs to be credited for listening, hearing and acting upon the concerns.”

The date on which the new rate will come into effect has also been knocked back from October until April, however Mr Honman said he was still unsure of the precise manner in which it would operate.

The jubilant mood of the caravan sector has been echoed by local bakeries whose customers had signed thousands of petitions in opposition to the so called ‘pasty tax’.

Curtis of Lincoln’s director Susan Waite said: “We are delighted that the government has come to its senses and we are really happy that we will be able to supply Skegness with the most delicious pasties in Lincolnshire for a fair price.”

The decision to implement a tax depending on whether a baked product was served above the ‘ambient temperature’ had been widely criticised as unworkable.

And other leading figures from the industry including the National Association of Master Bakers’ chief executive had accused the government of introducing a tax which hit poor consumers the hardest.

l What do you make of the Treasury’s u-turn on these two tax issues?

Email andrew.hirst@jpress.co.uk.