23/03/2012 10:52 GMT

Pasty Tax Will 'Damage Cornish Economy' George Osborne Warned

A campaign has been launched to oppose a proposed "pasty tax" which could see the cost of Cornwall's favourite food rise by 20%.

In the Budget announcement this week, Chancellor George Osborne said that he was looking at plans to add VAT to hot takeaway food from bakeries and supermarkets.

By closing the anomaly all food sold "above ambient temperature" would carry VAT.

It would mean that the cost of the iconic dish would rise by one-fifth, or add 50p to a £2.50 pasty - and hit the pasty industry in Cornwall hard.

Lib Dem MP Steve Gilbert, who represents St Austell and Newquay, asked for clarification on whether the changes would result in a "pasty tax".

"There is some ambiguity about whether the increase to 20% VAT for hot food will include pasties that are served from bakeries," he told the House of Commons.

"Not only is the pasty a staple, hearty meal, it also employs thousands of people and brings in millions of pounds into the Cornish economy."

Party colleague Andrew George, who represents St Ives, told MPs that "we will be fighting them on the beaches" in opposing a pasty tax.

And Labour backbencher John Mann asked on Friday: "Osborne, why has my cheese pasty gone up 30p?"

Thousands of people have joined a Facebook campaign urging the government to rethink the plans. Cornwall councillor Alex Folkes, who set up the Say No To The Pasty Tax group on Facebook, said: "Plans by the Government to introduce VAT on hot takeaway food from bakeries and supermarkets will actually mean a 'pasty tax' which will cost Cornwall jobs.

"Cornwall is rightly proud of the pasty. But adding 20% VAT to the price will inevitably see a drop in sales with no extra money going to the baker," Mr Folkes, who is deputy Lib Dem leader on Cornwall Council, said.

"Lower sales will mean job losses in areas which cannot afford them.

"The Government has said that they are consulting on this proposal. I hope that they are genuinely going to listen to what people say about the impact on the Cornish economy and that they decide that a pasty tax is a bad idea."

An e-petition calling on people to oppose the move has also been launched on the government's website.

"In the Budget 2012 The Chancellor of the Exchequer announced that VAT would be imposed on hot food. This will mean that Cornish Pasties will also incur 20% VAT. This will severely damage the Cornish economy and could damage employment in Cornwall too," the petition reads.

Rob Simmons, a member of Cornish nationalist party Mebyon Kernow, said: "So if and when this legislation is introduced your £2.50 medium steak pasty will now be £3 and your £3 large steak pasty will be £3.60.

"So that's money out of ordinary decent Cornish folks' pockets, a blow to our bakers and hardly great news for tourism.

"The Government is undertaking a consultation and it will be the test of Cornwall's MPs if for once they put Cornwall and our national cuisine before the desires of their parties."

Takeaway pasties are a central feature of West Country holidays and a staple meal for many workers, stretching back to its origins in the tin mining industry.

Osborne said in his Budget announcement that anomalies in VAT would be scrapped on October 1.

Currently VAT is not charged on most food and drink but is payable on takeaway food sold to be eaten hot.

Baked goods that are put on display warm and subsequently cool down are presently exempt.

The Government has launched a consultation on the proposals, which will end on May 4.