Budget 2012: MPs promise to fight 'pasty tax'

The plight of the humble pasty has been raised in the House of Commons after the chancellor announced plans to slap VAT on the snack.



Mid Cornwall MP Stephen Gilbert said the pasty was "a staple, hearty meal" which brought millions of pounds into his county and must be protected.

His colleague Andrew George said those in Cornwall would "be fighting them on the beaches" to block any "pasty tax".

Ministers say all food sold "above ambient temperature" should carry VAT.

VAT is not charged on most food and drink, but is payable on takeaway food sold to be eaten hot.

Baked goods which are put on display warm and subsequently cool down are currently exempt.

The government says some retailers and bakeries have also argued their food is sold hot to improve its appearance, or to comply with health and safety regulations - not for consumption that way - and therefore should not attract VAT.

Share price fall

Chancellor George Osborne said the changes announced in the Budget - and set out in a consultation document - were designed to fix such "loopholes and anomalies".

If the new rules are passed, all food sold at "above ambient temperature" will attract VAT - although the definition of that temperature has not so far been made clear.

Bread would remain exempt - even if it is still warm when placed on shop shelves.

Bakery chain Greggs has said it will make "strong representations" about the plan and did not believe its "freshly baked savoury products" should be included. Its shares fell by 5% on Thursday, wiping £30 million off their value.

During a debate on the Budget, Mr Gilbert, Lib Dem MP for St Austell and Newquay, said the issue was "exercising my countrymen in Cornwall".

Addressing Business Secretary Vince Cable, he said: "There is some ambiguity about whether the increase to 20% in VAT on hot food will include pasties that are served from bakeries.

"The minister will no doubt be aware that the pasty is not only a staple, hearty meal but, in effect, employs thousands of people and brings millions of pounds into the Cornish economy.

"Will he give some clarity on whether we can avoid a pasty tax?"

Fellow Lib Dem and St Ives MP Mr George said: "On the sublimely fundamental and seriously important issue of pasty taxes in Cornwall, let me reassure the honourable gentleman that we will be fighting them on the beaches."

Mike Hollings, of the National Association of Master Bakers, has said rules based on the temperature of a product would "cause so much confusion".

I think this is possibly the most ridiculous thing to have come out of the budget. How on earth is it going to be 'policed' - are they planning on having inspectors doing spot checks with probes to test the temperature of the said pasty ??? You just couldn't make it up

The price of feshly baked sausage rolls has already soared at Morrison's.

Last week they were 59p each, this week they are 65p. I don't know if that includes the new 20% tax or not?

I stopped buying them myself when they sneaked the price up from 52p to 55p. They thought I wouldn't notice the 2 on the end had been changed to a 5. There's no way I'm paying eleven shillings for a sausage roll let alone thirteen shilling when I can buy them cold for a fraction of the price and warm them up in the oven at home.

Government does U-turn over 'Cornish pasty tax'

The government is to reverse its plans to impose VAT on Cornish pasties, the BBC has learned.

Ministers have also reduced the intended 20% charge which was due to be levied on static caravans to 5%.

The U-turn from Chancellor George Osborne's Budget follows protests by bakers and caravanning enthusiasts.

The government has altered the definition of what is a "hot" pasty to allow the reversal of its plans. Labour said ministers were "incompetent".

After the amendment, food such as sausage rolls or pasties sold on shelves - that is, cooling down, rather than being kept hot in a special cabinet - will not be liable for VAT.

Keiser Report London Special

Max Keiser rants about the Pasty Tax, crooked banks and the theft of people's savings:

A shortened version showing only the interview with Simon Rose of SaveOurSavers.co.uk in the second half of the show is also online:

Pasties, however, weren't the most important issue! It was ANY food that is heated for sale. The boss of Morrisons said that many pensioners and poor people buy their cooked chickens, and it was going to put the price up around £1, which could put them out of reach. In any event, yet again hitting at the most vulnerable in our society. He was clearly very angry about it - and rightly so.

OK, Osborne has now done a U-turn. But what sort of government is this, management by knee-jerk and U-turn? Professional, it is most definitely NOT!! The last Labour government wasn't wonderful, but by any standards this lot are DIRE!