Working families are struggling ever more with the Government’s cuts and increased living costs. For many families the availability of cheap fast food is a convenient way to grab a quick snack.
However, the Government is now considering introducing a tax on warm pasties. The increase in VAT is justified by the Prime Minister, David Cameron, as putting small business and big supermarkets on an equal footing.
At a press conference Cameron said, “I don't think it's fair, for instance, that the small businessman running the fried chicken takeaway is having to charge his customers VAT, but the big supermarket is isn’t having to pay VAT for their fresh hot chickens.
“I am a pasty-eater myself. I go to Cornwall on holiday. I love a hot pasty.”
Under the proposal, food sold above a certain temperate, yet to be confirmed, will be subjected to VAT.
Many companies are criticising the Government’s proposal. The Chief Executive of Greggs, Ken McMeikan, said that the Government has not fully realised the damaging effects that would follow if the policy was implemented.
“I think to a degree they have lost touch with the issue here - that for ordinary, hard-working families putting 20% on to a product that is freshly baked actually is going to make a severe dent in their pockets when they can ill afford it.”
During a Select Committee hearing, the Government was criticised by the opposition. John Mann, Labour MP, said that the proposal seemed overly complicated. “With the weather as it is today, a lukewarm pasty from Greggs is not VAT-able because the ambient temperature outside is the reference point, whereas if it is the middle of winter and freezing cold it is VAT.
"It is an extraordinarily complex situation when you are having to check with the Meteorological Office on whether or not to add VAT on pasties in Greggs.”
Any increase in product price is being received negatively by the public. The Government insists that it needs to cut the deficit but consumers are being hit hard by raising prices. The current proposal focuses on ensuring that small businesses are not unfairly taxed. However, few consumers will consider that a further hole in their wallet is worth it. Consumer spending is not as high as the Government would wish and with unemployment remaining high many workers are left struggling.
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