GREGGS has warned it will consider legal action if the Government does not back down on plans to introduce "a tax on food".
Chief executive Ken McMeikan said he will be personally lobbying the Treasury to prevent a Budget proposal which will see sausage rolls and pasties hit with VAT.
Currently Greggs avoids VAT on its savoury foods as bakers across the country say the products are kept warm, rather than served as the hot food against which VAT is already charged.
But George Osborne announced in his Budget this week plans to “remove anomalies” from the tax system. His attack on Greggs followed a Prime Minister’s Questions parliamentary session in which David Cameron praised Greggs for its job-creation efforts.
Last night Mr McMeikan accused the Government of looking to tax hardworking families on the snacks they buy, and slammed the VAT changes as unworkable.
In an interview with The Journal, Mr McMeikan said: “This was an announcement which we were not expecting, which will be a tax on food that will impact directly on the UK consumer at a time that they simply cannot afford it.
“We want the Government to accept that this was an ill-thought through move which will harm growth and impact on businesses, individuals and act as counter-productive to the Government’s stated aims of growing the economy.”
His comments follow a terrible week for the firm’s share prices, with £30m wiped off the value over the last two days. Greggs and other bakers will now meet with the Treasury during a consultation period on the changes.
Mr McMeikan said: “We have a six-week period where we will be vehemently putting forward our case that the proposals are wrong and VAT should not apply to freshly baked savories in the pastry industry.
“I will be meeting with David Gauke MP, the Exchequer Secretary to the Treasury, to put across our views very strongly, as well as working with the British Retail Consortium and Association of Master Bakers.”
As The Journal launches a campaign to back the baker, Mr McMeikan called on others to support the firm. A campaign has also been launched in Cornwall to oppose the proposed tax.
He said: “We have had great support from one MP already, we are now looking for more support. I am seeking support not just from consumers and other businesses but also from within the political world to help inform the Government that they are making a wrong decision on this one. If you see the support in Cornwall against this, we need to replicate that here because this will hit people, small business, large businesses, customers, constituents, this will have a big impact.