Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million

Pasty makers celebrate today following chancellor George Osborne’s pasty tax U-turn - but how will he make up the £35 million lost?

E-mail-sign-up Donate

 

.

Pasty makers are celebrating today following the government’s U-turn on the infamous pasty tax, but how will the Treasury make up the £35 million that today’s reversal has cost?

George-Osborne-pastyPasties, sausage rolls and rotisserie chickens filled the headlines in March, after the 2012 Budget targeted hot food with VAT increases in order to ‘correct anomalies and loopholes’.

The move enraged the baking industry, forcing them to start the Say NO to the 20% Pie Tax campaign and popular high street baker Greggs also saw its shares drop significantly, leading them to claim they may have to “sack staff and shut stores”.

Continual lobbying from MPs and industry members has forced George Osborne to back down on his intended VAT changes to hot food and caravans. The U-turns do very little for a government that was already suffering from poor credibility.

Having to admit the £35 million loss to the BBC, treasury minister David Gauke claims the budget is still fiscally neutral:

“The cost of this is around about £35 million.

“But in the great scheme of things, if you look at all the changes we have announced, with the two changes we have made today, we have still got a fiscally neutral budget – we are not borrowing any more than we previously planned.”

Shadow Chief Secretary to the Treasury Rachel Reeves MP described the U-turn as a “total and utter shambles”:

“These partial U-turns, just a few weeks after ministers were defending the pasty tax and caravan tax, show just how ill-thought through the Budget was and how out of touch David Cameron and George Osborne are.”

The comical ‘pasty tax’ is now a thing of the past but the more serious ‘granny tax’ is still planned to go ahead, with 4.4 million tax-paying pensioners expected to lose out by £84 a year.

 


See also:

More than 70% of public want Osborne to U-turn on cuts and adopt a Plan B 29 May 2012

Osborne’s ‘granny tax’ will sting those on a personal pension of just £67 a week 19 Apr 2012

Pasty tax, granny tax, church tax, caravan tax… Just how out of touch is Gideon? 27 Mar 2012


 

Although today’s announcement will be treated as a victory for some, the two-month saga over a relatively pointless tax has drawn focus from the stagnant growth and unemployment crisis that this country is suffering from. Your local baker is now better off but the country as a whole would have been a lot better off had this time-wasting tax not been dreamt up by this arrogant and out of touch chancellor in the first place.

 


Sign-up to our weekly email • Donate to Left Foot Forward

11 Responses to “Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million”

  1. Lanie Ingram

    Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million, writes @KatieDagger: http://t.co/eL0zPXlU #PastyTax

  2. Pulp Ark

    Osborne’s inevitable pasty tax U-turn set to cost… http://t.co/9rsiEfjs #SustainableEconomy #budget2012 #GeorgeOsborne #muslim #tcot #sioa

  3. Shifting Grounds

    Very good piece from @KatieDagger for @leftfootfwd on the budget black hole caused by the pasty tax U-turn http://t.co/nS1EcOqV

  4. Political Planet

    Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million: Pasty makers celebrate today following c… http://t.co/a1WknwjS

  5. leftlinks

    Left Foot Forward – Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million http://t.co/QFiw4vro

  6. Alex Braithwaite

    RT @leftfootfwd: Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million http://t.co/XgICprZG

  7. jeff latham

    Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million, writes @KatieDagger: http://t.co/eL0zPXlU #PastyTax

  8. Kevin Richards

    Who will make up this shortfall – disabled? #Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million http://t.co/9ZXHgBIf

  9. JC

    Another victory for special interest groups against the people. What was it that Adam Smith said about tradespeople meeting together to conspire against the people?

    Why shouldn’t VAT be a more simple tax paid on most items? When it was introduced, it was a tax on added value, and as far as I can see, selling a hot pasty is adding value in the same way as selling a hot chicken. I’m sure someone can speak up for these large companies (Gregs is Welsh, not from Devon or even Cornwall) and defend their points of view as to why they shouldn’t be subject to the same taxes as a fish and chip shop, but I think they’s be struggling to make sense.

  10. Krugman: Government deficits are a consequence of the crisis, not a cause. | Left Foot Forward

    […] how badly the Treasury has been coming across recently, perhaps the government should start taking […]

  11. Balls calls for "three more u-turns" – on a bankers' bonus tax, 50p and the 'granny tax' | Left Foot Forward

    […] Osborne’s inevitable pasty tax U-turn set to cost Treasury £35 million 29 May […]

Leave a Reply