Greggs the Bankers

When they started taxing pasties

It’s strange to me, given the general vitriol aimed at “tax dodgers” lately, that when Greggs the Bakers exploit a legal loophole to avoid paying VAT, everyone in the world springs to their defence.

Here is everything you need to know to understand this story: Fully one sixth of the price of almost anything you buy is passed on to the government as “value added tax” or VAT. Because this is clearly absurd, anything considered essential — books, foods and children’s clothes, for example — is exempt. The exemption for food, though, only applies to food shopping. Eating out or getting a takeaway is considered a luxury and therefore you have to pay VAT on it. In Subway, for example, you can buy a sandwich and take it home and that counts as shopping and is exempt. If you eat it in-store that’s eating out and if you get it toasted then it’s a takeaway so in those cases you have to pay a higher price to cover VAT. Until now, Greggs have avoided this tax by claiming that their food isn’t heated as such; that’s just the temperature food is when it comes out of the oven. The Conservatives want to close this loophole.

According to the Guardian, this is “prompting fears there will be panic buying”. This is stupid: in order to stockpile Cornish pasties, you would have to refrigerate them, and that’s shopping and therefore still exempt from VAT.

Here is how Ed Miliband described the plan:

There is a serious point here which is that the government is hitting people's living standards in every way they can. Not just fuel duty going up, child benefit taken away, tax credits being cut, now even putting 20% on the cost of pasties, sausage rolls – and the chancellor's excuse? Well, he says you can buy them cold and you can avoid the tax.

It’s pathetic. I fully expect tabloid newspapers to report this as some kind of “pie duty” the evil toffs in government have levied on the down-trodden, hard-working masses while subsidising caviar and pâté de fois gras — but anyone who wants to be Prime Minister should have the maturity not to. This is not the first time Miliband has attacked an utterly reasonable coalition policy for some superficial reason like this, and every time he does it I lose a little respect for him: aside from the fact that he’s essentially misleading the public to score points, there are enough genuinely evil coalition policies to attack that indulging in this sort of stupid bullshit is actively dangerous: his bickering about pasties could cost us the NHS.

And “the chancellor’s excuse” Miliband speaks of is not really the chancellor’s excuse at all — it’s Greggs’ excuse. Their claim is that pasties should be VAT exempt because they’re not designed to be eaten hot. If that were true, nobody would care if they were sold cold from now on. The fact that people are so upset that heat is going to cost extra proves that it should. (Obviously I’m setting aside concerns about the appropriateness of VAT itself here.)

The latest non-development in this non-story is that Cameron said his last pasty was from the shop in Leeds train station — but that closed two years ago! Look at it! It thinks it’s investigative journalism!

Greggs are threatening to sue, although not for anything in particular that I can make out.

It’s being treated like some kind of nasty swipe at working people who get a pasty every lunchtime — the Sun are even comparing it to Marie Antoinette’s “let them eat cake” proclamation (because both involve snack foods) — but even without VAT it’s a pricey way to eat. Get yourself a pack of bagels and a tub of cheese on Monday and you can eat all week for the price of a pasty. Getting a hot takeaway every day is a luxury; is it really cause for outrage that it’s being taxed alongside cake instead of a loaf of bread?