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Tax on Cornish pasties, a savory regional specialty, opens new front in UK's class war
LONDON (AP) ' The British government's intention to tax the humble Cornish pasty, a cheap savory snack much beloved by workers and students, has opened a new front in the country's never-ending class war.
In his U.K. budget last week, Finance Minister George Osborne announced he would close a loophole which allowed some fresh-baked takeaway items ' including pies, sausage rolls and pasties (PASS-tees) ' to escape a 20 percent sales tax.
The move, however, has caused a media storm, with tabloid headlines portraying the new tax as an attack by the Conservative-led government on working class life.
This Tuesday Osborne faced questions from a parliamentary committee on aspects of his budget ' which included such macroeconomic measures as a cut in the top rate of income tax, a lowering in the personal tax allowance for retired people and reduction in corporation tax. But is was the levy on the lowly pasty ' a mixture of meat and vegetables encased in pastry that was first baked for tin miners of 17th century southwest England ' that generated all the headlines.
"I can't remember the last time I bought a pasty in Greggs," Osborne told a parliamentary committee on Tuesday, referring to a low-price snack shop chain.
"That kind of sums it up," responded Labour Party lawmaker John Mann, a former union official.
The storm rolled into Wednesday when at a press conference to discuss London's readiness for the Olympics with International Committee chairman Jacques Rogge, Prime Minister David Cameron was compelled to pledge allegiance to the pasty.
"I am a pasty eater myself," he declared to reporters.
Cameron said he last ate one in Leeds, though not at a Greggs. "I have a feeling I opted for the large one, and very good it was, too," the Oxford-educated prime minister said.
Greggs bakeries, a purveyor of fast-food, including 140 million sausage rolls per year, saw its shares slump 5.5 percent last week on news of the new tax.
Greggs chief executive Ken McMeikan met Treasury officials on Tuesday to plead his case and afterward said the government had "lost touch" on the issue.
"For ordinary, hardworking families, putting 20 percent on to a product that is freshly baked actually is going to make a severe dent in their pockets," he said in a BBC interview.
The opposition Labour Party has often charged Cameron's government with being "out of touch" with the average Briton, a message party leader Ed Miliband repeated while standing outside a Greggs shop.
Even a Conservative legislator, Nadine Dorries, has said Cameron and Osborne "don't know what it's like to go to the supermarket and have to put things back on the shelves because they can't afford it for their children's lunchboxes. What's worse, they don't care either."
The government expects the levy on sausage rolls and pasties, effective Oct. 1, to raise 105 million pounds ($167 million) in the first full year. A Treasury consultation paper drily noted that the change would only hit "individuals and households that purchase products that are affected by this change."
Under current law, shops like Greggs' have to charge sales tax ' called Value Added Tax ' on hot takeaways including soup and hot sandwiches. Pasties and sausage rolls are exempt because after baking they are left to cool in unheated cases.
Extending the tax to rolls and pasties is no simple change. The tax officially applies to food "heated for the purposes of enabling it to be consumed at a temperature above the ambient air temperature and which is above that temperature" when purchased.
So the change could pose difficult issues: do you check the temperature of the inside of the roll or pasty, or the cooler crust? Might the buyer ask to have it cooled to get it tax-free?
Osborne denied that the government would be poking a thermometer into every pie and roll. Tax officials and bakers would simply agree on the portion of total sales which would be affected, he said.
"There are perfectly sensible ways of working this out," Osborne said.