April 26, 2012 / 2:33 PM / in 6 years

British bakers turn up heat on government over tax

LONDON (Reuters) - Hundreds of British bakers wearing chefs hats and carrying placards converged on Prime Minister David Cameron’s official residence on Thursday to say his plan for higher sales tax on their products was half baked.

Bakers and their supporters hold a giant sausage roll as they protest opposite Downing Street in central London April 26, 2012. REUTERS/Luke MacGregor

Waving placards emblazoned with “Save our savories. Say no to VAT”, the bakers stepped up the battle against a proposed “pasty tax” by bringing with them petitions signed by nearly half a million Britons demanding the government scrap plans to slap a 20 percent sales tax on fresh-baked foods that are sold warm, and are popular everyday quick meals for workers.

The proposed tax has been derided publicly and by the media as showing how out of touch Cameron’s Conservative-led government is, especially after an attempt by Cameron to portray himself as a pasty-eating man of the people backfired last month.

The tax, proposed in finance minister George Osborne’s Budget speech last month, would be levied from October 1 on products currently zero-rated, such as sausage rolls, pies and pasties - pastry pockets with a savory filling - that are sold at “above ambient air temperature”.

“If the government think that this is a sensible thing to do they are completely out of touch,” Ken McMeikan, chief executive of Greggs, Britain’s largest food-on-the-go retailer with 1,550 stores, told Reuters.

“I cannot think of a worse time for the government to consider forcing ordinary, hard-working people to pay 20 percent more for popular, everyday food, especially with the news yesterday that the country is now officially in a double dip recession,” he said.

“We are fighting and we will go down to the bitter end on this,” added McMeikan, a former Tesco and Sainsbury’s executive and Royal Navy veteran of the Falklands War.

Bakers and their supporters protest opposite Downing Street in central London April 26, 2012. REUTERS/Luke MacGregor

The National Association of Master Bakers fears the proposed levy will cause job losses, particularly in Cornwall, southwest England, where the “Cornish pasty” industry is worth more than 150 million pounds ($242 million) a year.

With consumers enduring meager wage growth, government austerity measures and growing job insecurity, opposition to the “pasty tax” has galvanized, even prompting media tycoon Rupert Murdoch to tweet on the matter ahead of his appearance at a media inquiry this week.

Ken McMeikan and Richard Hutton from Greggs the baker pose for a photograph as they deliver a petition outside 10 Downing Street in central London April 26, 2012. REUTERS/Luke MacGregor

Last week the proposed VAT hike was approved by a parliamentary vote despite a sizeable rebellion of the coalition government.

However, the Treasury has extended a consultation period on the tax to May 18, raising opponents’ hopes of a U-turn or possible concessions.

“There is still a chance. They (the Treasury) still have plenty of time to come up with a solution,” said McMeikan, who plans to seek a meeting with Osborne and Cameron.

If the Treasury does stick to its guns he fears the levy will be unenforceable, create more anomalies rather than resolving them, and lead to years of costly litigation.

“What they (the Treasury) haven’t been able to explain is what is ambient air temperature? How do we enforce this? How do we charge customers fairly? And equally how do the Treasury know we are charging it accurately and fairly?,” he said. ($1 = 0.6206 British pounds)

Reporting by James Davey; Editing by Michael Roddy

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