Budget VAT change attacks defeated
George Osborne's Budget came under attack from coalition MPs in the Commons as backbenchers lined up to attack decisions to slap VAT on pasties, caravans and repairs to churches.
Opposition from Labour to the Chancellor's plans was bolstered by disgruntled Tories and Liberal Democrats who warned the measures could cost jobs and result in historic buildings crumbling into disrepair.
But efforts, led by Cornish Lib Dems and Tories, to prevent the "pasty tax" were seen off by 35 votes and a move to prevent the "caravan tax" was defeated by just 25.
The Government's majority was again cut to 35 as MPs agreed with Mr Osborne's proposals to impose VAT on repairs to listed buildings.
Lib Dem Stephen Gilbert, who led the "Cornish coalition" against VAT being imposed on baked goods, warned the measure could bolster the impression that the Government was out of touch with ordinary people.
The St Austell and Newquay MP said: "This is an unfair tax. It unfortunately plays to the perception that some on these benches don't understand what day-to-day life is like for millions of people in our country."
He warned of the effect the measure would have on the pasty industry, worth £37 million a year to the troubled Cornish economy.
But Treasury Minister David Gauke said the current tax rules on hot food were "complex and unfair" because, while a fish and chip shop would have to charge VAT on a sausage roll, a bakery next door would be tax-exempt for selling the same snack.
East Yorkshire MPs led the assault on the "caravan tax", which will see the 20% purchase tax imposed on static holiday caravans in the same way it applies to towed ones. The area is the home to the caravan-manufacturing industry, but MPs warned jobs could also be lost in the supply chain and at rural resorts.
Beverley and Holderness Tory MP Graham Stuart told the Government: "This will be extremely disruptive to a fantastic British manufacturing success story." At best, he said, it would raise "£45 million a year while damaging the economy in East Yorkshire and damaging rural economies right across the UK".