Government Urged to Rethink Pasty Tax

Today, a group of MPs from across political parties gathered today to urge the Government to rethink its plans to place 20% VAT on…

Today, a group of MPs from across political parties gathered today to urge the Government to rethink its plans to place 20% VAT on baked goods including hot sausage rolls, pasties and rotisserie chicken.

Chancellor George Osborne was criticised by pasty fans in the industry including UK restaurant insurance providers, bakeries and small businesses after he announced the “pasty tax” in the Budget.

Liberal Democrat Stephen Gilbert told MPs during a Westminster Hall debate on VAT on hot takeaway food, that the plans created fresh anomalies, were unenforceable and undeliverable.

St Austell and Newquay’s MP said, “The Government’s proposals are unenforceable, they’re undeliverable by business, they replace one set of anomalies with another, they are likely to be heavily contested and they will do significant damage to the Cornish economy and high streets across our country.”

He went over concerns in the industry that the plans could put 300 bakeries under the threat of closure and could put 2,000 jobs at risk.

He said, “In short we are seeking to amend the Government’s proposals to include the provision for baked goods to be charged VAT, only if they are kept in heated cabinets or in other paraphernalia that has the effect of keeping them hot for sale in the same way that the battered fish and chips would be kept hot for sale in the cabinet in fish and chip shops across the country.”

He argued that the amendment was, “Clear and consistent, it is enforceable by the revenue, it closes the loopholes exploited by the supermarkets and therefore raises the vast bulk of the revenue that the Treasury is seeking to obtain from this move.

“It creates the level playing field with the fish and chip shops that the Prime Minister rightly demands, it is deliverable and would be publicly welcomed by the baking industry.”

Labour’s John Mann (Bassetlaw) suggested that the proposals were made by an “out of touch, anti-English, inept on detail Treasury team and Government” and urged them to “do the decent thing for England, get rid of this nonsense.”

Simon Danczuk, his party colleague (Rochdale) questions whether the proposal would affect samosas sold by businesses in his area, adding “I get the impression that the Government just doesn’t understand ordinary working people’s lives … I believe there is actually a snobbery with regard to pies, pasties and samosas.”

Lib Dem Dan Rogerson (North Cornwall) mentioned the “cultural element” of eating pasties, saying “There is also in Cornwall a feeling of the Government taxing something which in Cornwall people would eat instead of a sandwich.”

David Gauke, Exchequer Secretary to the Treasury, said it was a complex matter, adding the Government was taking into consideration other ideas put forward and would respond to the extended consultation.

He added that current rules, had been made unfair and complicated by previous legal decisions and was one the Government sought to change to create a level playing field.

He said, “I have of course been listening to the contributions to this debate and will ensure that they are taken into account in the Chancellor’s decisions.”