CARAVAN site operators fear for their futures if Government plans to impose VAT on static caravans goes ahead.

The price of static caravans is set to rocket in October when standard VAT of 20 per cent will be placed on them for the first time in 40 years.

It will add £5,000 to the average caravan at Waldegraves and Cosways leisure parks on Mersea Island.

Brett Lord, who runs the sites, says the hike could have a devastating effect on the business.

He said: “We are really worried. There has already been quite a drop in sales and as a business owner I know the sales are not going to shoot up by putting VAT on the vans up to 20 per cent.”

“We are being told to expect a 30 per cent drop in new caravan sales when it comes in, but we think it will be more. We don’t anticipate a recovery for another two to three years.

“That sort of drop is massive for an industry which is already struggling.”

Mr Lord said there would be knock-on effects for tradesmen who would see a cut in the amount of maintenance work carried out, and other businesses that rely on the tourist trade.

He said: “The problem doesn’t just affect us.

“We use concrete firms and electricians and people use local facilities when they come here.

“If we are not selling caravans, then the work isn’t there for them.”

Prices for caravans at Waldegraves range from £15,500 to £38,995.

A spokesman for Seaview Holiday Park, on Mersea Island, said the company was braced for a rush of sales before the October deadline, but a very quiet few years to follow.

The British Holiday and Home Parks Association has backed the operators.

John Boston, a spokesman, said: “Essex will be affected more than most.

“Every owned static caravan contributes £15,300 to the local economy. That shows how important the sites are.”

He also warned if the change went through, it could spell the end of “staycations” – Brits holidaying in Britain.

He said: “People could be pushed to look abroad again and that could have a long-term effect on places like Mersea and Clacton.”

Static caravans have had no VAT on them since 1973.

Holiday cottages and caravans occupied all year round will remain exempt.

The Government estimates the tax will affect about 50,000 people buying static caravans each year and expects to make £45million over the next five years from this tax.

Caravan operators have until Friday, May 4, to let the Government know their views.