The British Retail Consortium (BRC) has backed an amendment to the Finance Bill that would scrap the government’s planned £50m ‘pasty tax’.
The amendment is due to be debated in the House of Commons this evening (Wednesday).
BRC evidence, submitted to MPs ahead of the debate, shows that the proposed tax would hit people who can least afford it hardest. It would cost jobs, further harm the high street and – rather than removing ‘anomalies’ – create new ones, claimed the BRC.
The BRC said the costs of the proposed tax – most of which will be borne by the cash-strapped consumer – will rise to a staggering £120m next year, according to Treasury figures.
The organisation added the tax would lead to an average 18p increase in the cost of a sausage roll, put 50p on a medium-sized Cornish pasty and £1 on a supermarket rotisserie chicken.
In a letter to MPs Stephen Robertson, BRC director general, said: “Far from removing borderline anomalies, these proposals would result in greater uncertainty for retailers and added costs for consumers. This will deter investment in already struggling high streets, undermine the government’s Portas response and damage job creation.”
The BRC said its evidence showed people will switch from hot pasties and sausage rolls to cheaper, zero-rated products.
Robertson’s letter goes on to say that the proposals “will merely create new anomalies that will, no doubt, be tested in the courts”. He added: “While the concept of ‘ambient temperature’ may be well understood, a precise and legally reliable definition is impossible.”