Omnishambles returns: Government U-turns on pasty tax

By Ian Dunt

The government is staging a humiliating U-turn on the pasty tax after encountering widespread opposition to the plan.

Pasties and other baked products were set to be hit by VAT if they were served above ambient temperature.

Under the U-turn they will only be taxed if heated after being taken out the oven or if kept in heat-preserving containers. Pasties which are cooling down after being taken out the oven will not be taxed.

Supermarkets selling rotisserie chickens will still be hit by the VAT however.

Plans to impose a tax on static caravans will be reduced from 20% to just five per cent.

The climb-down comes after months of well-orchestrated opposition to the move from bakeries, west country MPs and sections of the press.

Many commentators highlighted the timing of the announcement – during recess and when most journalists were busy covering the Leveson inquiry – as evidence the government was trying to bury bad news.

Some analysts suggested the U-turn was another example of incompetent media management, with the announcement serving to resuscitate an issue that had almost been put to bed.

The pasty tax idea, which was announced in George Osborne's Budget, prompted several spectacular own-goals from the government.

Mr Osborne admitted he "couldn't remember the last time" he ate at a Greggs bakery, while David Cameron said he ate his last pasty at an outlet in Leeds which had not existed for several years.

Both instances prompted accusations that the coalition was out-of-touch with the lives of ordinary people.