Hundreds of bakers have protested against Government plans to add VAT to freshly baked goods such as pasties, pies and sausage rolls, as Robert Powell reports.
Around 300 bakers from across the country have protested at Downing Street against the so-called ‘pasty tax’.
Dressed mainly in white hats and chef coats, the bakers delivered a petition to Downing Street containing, they claim, over half a million signatures.
They want the Government to scrap proposals to add VAT at 20% to freshly baked goods such as pasties, pies and sausage rolls, saying the change is unfair on customers and will be impossible to enforce.
The demonstration was organised by the National Association of Master Bakers and the high street bakery Greggs, with the petition signatures collected in regional branches of the chain.
Ken McMeikan, chief executive of Greggs, said that the proposed change was the wrong tax at the wrong time.
“This is a time when the Government really needs to be stimulating growth. So we don’t want prices of everyday food going up. We want to give the consumer confidence that they should be spending again. We want to get more jobs created and more shops opening on the high street,” he said.
Redraw the boundaries
The Government has so far refused to change course on the plans that were tabled last month in the Budget.
Prime Minister David Cameron told the Commons that he understood why “feeling in Cornwall runs high on this” but still insisted that the change was a fair one.
Chancellor George Osborne added, in a Treasury Select Committee session: "I am seeking to just stick with the position that hot, takeaway food has VAT on it. If you buy your pasty in a fish and chip shop, it almost certainly has VAT on it. If the pasty is heated up in a microwave it has VAT on it".
Ambient temperature
Former Chancellor Nigel Lawson introduced VAT on hot food in the 1980s. However still-warm, freshly-baked goods were declared exempt.
The proposed changes would make any product that is sold “above ambient temperature” subject to VAT, while products served “below ambient air temperature” would remain exempt.
Arthur Harris, CEO of the North-Yorkshire based bakery The Pie People, thinks that the proposed changes would prove impossible to police.
“If we sold pasties two weeks ago in Scarborough, when Scarborough was 17 degrees, we would have been ok selling them without VAT. But if we had sold the same product in Newcastle – where the ambient temperature that day was 16 degrees - we would have had to charge VAT,” he said.
The Government consultation period on the new tax runs until 18 May with the proposed changes due to come in from October.
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