Pasty Tax U-Turn: 'Does VAT Apply To Humble Pie?' Minister Asked

'Does VAT Apply To Humble Pie?'

"Does VAT apply to humble pie?," ministers were asked this afternoon after George Osborne performed a surprise U-turn on plans to increase tax on hot pasties.

Speaking in the House of Lords on Tuesday afternoon, Labour Treasury spokesman, the appropriately named Lord Eatwell, mocked the government for being forced to back down on yet another policy.

Following a post-Budget consultation on closing VAT loopholes, the Treasury said it would be modifying its plans to charge VAT on hot food and static caravans.

The moves won praise from coalition backbenchers - some of whom rebelled against the Government in the Commons - but were mocked by Labour as U-turns from a shambolic government.

The policy changes will mean food left to cool naturally will not now be subject to VAT, while static caravans will be charged VAT at only 5%, instead of 20%. Combined, the measures are expected to mean about £70 million less in revenue for the Treasury.

Lord Eatwell also turned up the heat on the government for making the announcement to the press before making it to parliament.

"Will the minster first explain why the announcement on VAT was not first made in parliament in contravention of the ministerial code?" he asked.

While the House of Lords is still in session the House of Commons went into recess last week - giving Ed Miliband and Ed Balls fewer opportunities to gloat.

Treasury minister Lord Sassoon defended the U-turn, insisting it showed that the government was prepared to listen.

"We said we would consult, we have consulted, and we have come up with what we believe is the right approach having talked to a range of interested parties," he told peers.


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