THE boss of David Cameron’s favourite pasty makers has called for “clarity and leadership” from the Prime Minister in the row over VAT on hot takeaway food.
Gavin Williams of the West Cornwall Pasty Company said the PM did not understand the impact which changes in last week’s Budget would have on consumers and workers in the pasty industry.
Mr Cameron name-checked the firm for its “very good” pasties as he defended VAT reforms proposed by Chancellor George Osborne, which have been branded a “pie tax” by critics.
The Prime Minister said that imposing the 20 per cent tax on hot food served by supermarkets and bakeries would be fair to small businessmen who run burger bars or fish and chip shops and already have to charge VAT on takeaway sales.
The National Federation of Fish Friers backed him, arguing that Mr Osborne’s proposal would help create a “level playing field” between fast-food outlets and supermarkets.
Meanwhile, there was confusion over Mr Cameron’s memories of buying a West Cornwall pasty at Leeds Station, as it emerged that the firm’s outlet there shut down five years ago.
Downing Street aides later said the PM might have been mistaken about the location of his purchase, after it was disclosed that the station’s only pasty outlet had recently closed.
Mr Williams thanked the Prime Minister for his endorsement for the company’s products, but added: “What we really need from Mr Cameron right now is not advertising but clarity and leadership.
“We would have hoped that if he had been rubbing shoulders with our customers he’d better understand the impact that this move will have on them, and our sector and all the great suppliers within it.”
Proposals set out in the Budget would end a 20-year-old tax loophole which means VAT is payable on hot food from takeaway shops but not from general food stores. Supermarkets have taken advantage of the anomaly in recent years by offering hot rotisserie chickens, while bakeries benefit when they sell pies and sausage rolls.
Mr Cameron said: “What the government has to try to do is make sure the VAT rules are fairly applied. I don’t think it is fair that the small businessman running a fried chicken takeaway is having to charge his customers VAT but the big supermarket isn’t having to pay VAT on fresh hot chicken.”
Labour leader Ed Miliband and shadow chancellor Ed Balls sought to capitalise on the government’s difficulties by going to a branch of high-street bakery chain Greggs to buy sausage rolls during a visit to the Midlands.
“The government is hitting people’s living standards in every way they can,” said Mr Miliband.
He met Greggs chief executive Ken McMeikan, who saw millions wiped off his company’s shares after Mr Osborne’s announcement last week.