Hot Takeaway Food (VAT)

Glyn Davies Excerpts

Wednesday 23rd May 2012 Westminster Hall

[Nigel Mills]

Absolutely. I thank my hon. Friend for the intervention. The last thing that we want to do is to encourage people to buy horrible cheap food with only processed ingredients. That is much less healthy for us than buying proper quality stuff. I therefore have some sympathy for my hon. Friend the Minister in his predicament. It would be useful if he could set out what has tipped the Treasury over the edge into making the change. Was it a case of having to get the train home and thinking, “I’m a bit hungry. It’s been a long day in the Treasury. I can’t face the Chancellor’s bowl of jelly. I’ll have something from the station on my way. If I go to McDonald’s and buy a burger, I pay VAT, but if I go to that nice-looking pasty stand, which seems to be selling only hot pasties, for some reason there is no VAT”? Is that the contrast that tipped him over the edge or is it the fact that supermarkets are selling things that clearly should be VATable but they are manipulating their way around that? Is that what tipped the Treasury over the edge? It would be interesting to know.

[Glyn Davies (Montgomeryshire) (Con)]

I am grateful to my hon. Friend for taking my intervention, particularly as I missed the first part of the debate. He is very generous. Since I have been an MP, I have been approached several times by fish and chip shop owners. Perhaps unusually for an MP, they are the only approaches I have had—and I have had a lot—complaining bitterly about unfair competition, because people are selling pasties and using a microwave to heat them up after they have been sold. I understand exactly why people are concerned, but if we are challenging the whole concept of VAT on pasties, we need an answer—I certainly need one—on that issue.

[Nigel Mills]

I am grateful to my hon. Friend for that intervention. The point I was trying to make was about a craft baker on the high street who is not trying to be a takeaway in disguise for VAT planning, which is in contrast to what looks like something trying to be a takeaway, but is in fact something different. That is perhaps one of the things that has tipped the Treasury over the line. It would be interesting to know what mischief it is trying to fix. Which bad guys are we tackling? I honestly suspect that the bad guys are not the high street craft bakers who will be dragged into this. Their staff will be in a horrible situation.

I went to a couple of bakers in my constituency to see what the measure will mean. The sausage rolls are out of the oven and slowly cooling down in the very much non-heated—I was careful to check—displays in the shop. I guess that if they have been there for 20 minutes, they will still be hot, and therefore there might be VAT. If they have been there for 30 minutes, they might be on the border. If they have been there for 40 minutes, perhaps they are cold enough for no VAT. I have a horrible picture of the member of staff having to poke their finger into my sausage roll to check whether the one they are selling me is cool enough not to charge VAT on or still too hot.

There is a practical issue of how the shops will know day to day that the products sat cooling have cooled long enough for me to get a 20% discount, or have not cooled so the customer has to pay VAT. I suspect that such shops will put VAT on everything and put the prices up by 20%, and they will get a nice windfall for the bits that they can convince the Revenue are not VAT-able. In practice, they will not want to charge separate prices depending on whether someone buys a product marginally above or below the ambient temperature. That would be an unfeasible and rather strange situation for everyone to get into.