David Cameron defends George Osborne's 'pasty tax'

David Cameron today defended the "pasty tax" after MPs questioned how fair it was to slap 20% VAT on baked goods while caviar was exempt.

The Prime Minister told the Commons he understood why "feelings in Cornwall run high on this" but insisted it was unfair that other takeaway food was covered by the tax while pasties were not.

His defence comes as Commons officials confirmed a rebel amendment to derail the tax will go before MPs later today.

Lib Dem Stephen Gilbert, one of the MPs behind the proposed Finance Bill clause, raised the issue at Prime Minister's Questions.

"The Prime Minister will be aware that there is no VAT chargeable on caviar yet the Government is proposing to put VAT on the Cornish pasty," he said.

"Can he tell me why that's fair?"

Mr Cameron told the Commons: "What I think is unfair is that products sold in a fish and chip shop which are subject to VAT, those same products can be sold in supermarkets not subject to VAT.

"I don't think that's fair and that's why it's right we redraw the boundaries."

Liberal Democrats and Conservatives from Devon and Cornwall, including Mr Cameron's former press secretary George Eustice, want to block the bid to make pasties and other hot baked foods subject to 20% VAT.

Earlier Downing Street said: "The Budget that was set out was a fair Budget and the Government sticks by it.

"Difficult decisions have to be made, but what has underpinned this is that we want to be fair."

The move comes after hundreds of bakers announced they will march on Downing Street next week in protest over the tax changes.

High street bakery chain Greggs and the National Association of Master Bakers have organised the event on April 26, which will start at Pudding Lane and finish at Downing Street.

Mr Osborne announced the tax in last month's Budget, saying it would bring bakeries and supermarkets selling hot food in line with fast-food outlets which already pay VAT.

PA