Pasty tax u-turn 'good for retail'

The British Retail Consortium (BRC) has welcomed the government's u-turn on the pasty tax that had been outlined in chancellor of the exchequer George Osborne's Budget statement.

VAT will now only be added to food that is hot because it is in the process of cooling down.

Director-general of the BRC Stephen Robertson said the development is good, but suggested that it does not go far enough.

He acknowledged that it will spare consumers price rises on some products at a time when everyone is struggling with the rising cost of living.

Indeed, the latest High Street Sales Tracker from BDO indicates that consumer spending was down in April.

Mr Robinson asserted that in this context, the government must not be extending the scope of VAT at all.

"I'm pleased our representations to the Treasury have produced results but this saga shows how vital it is that government thinks policy through thoroughly," he remarked.