Wednesday, 11 April 2012

Pasty Tax summit

This afternoon I attended the 'pasty tax summit' organised by John Endacott of the accountants firm Francis Clark in Truro. He had brought together VAT and tax experts, pasty manufacturers and politicians to look for a way forward in the debate about the imposition of VAT on pasties.

The manufacturers told us that they thought the imposition of the pasty tax would lead to a loss in sales of 15-20% and this would have a consequent knock-on effect on jobs and the amount of money in the Cornish economy. Firms which had been planning to open new shops said that this measure would automatically end those plans and others have said that they will have to close shops. They said that this is simply the straw that will break the camel's back with rising raw material and fuel costs already making their life difficult.

There was a general perception that the Chancellor didn't realise what he was doing when he announced the pasty tax. He didn't fully understand the implications (the Office for Budget Responsibility papers are confused as to the impact) and clearly never expected to stir the hornets nest that he has.

Steve Gilbert, the Lib Dem MP for St Austell and Newquay, was present and he set out the options from a parliamentary perspective. Whilst there is a debate called by Labour for next week, this will be on such a wide range of issues that he does not expect it to be a proper study of the pasty tax issues. Steve, together with Dan Rogerson and Andrew George, is also asking the Speaker for a full debate on the pasty tax. Tory MP George Eustice has put forward his own idea for a 40 degree re-definition of 'ambient temperature', but the manufacturers pointed out that the only likely effect of this would be to give everyone food poisoning.

Among the manufacturers, the clear mood is that we will continue to fight this unfair proposal which will damage jobs and businesses. We hope that the Chancellor will see that he has made a mistake and will 'clarify' the proposal so that savouries sold out of the oven in bakeries remain VAT free. As things stand, the proposals are totally unworkable.

The next stage is a meeting with Treasury Ministers which Dan Rogerson MP is organising. But as a first step in the concerted campaign, this was hugely positive.

After the meeting, Steve recorded this short message:

Image shows Mark Muncey of the Cornish Pasty Association, John Endacott of Francis Clark accountants and Steve Gilbert MP.

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