Coffee House

Labour’s VAT attack misses the mark – you don’t pay it on food

9 May 2014

Labour has a long, hard slog to win arrest the public’s loss of faith in its economic competence. The party’s latest advert hasn’t helped. It shows David Cameron and Nick Clegg as two peas-in-a-pod whose VAT hike has put £450 on your shopping bill. There’s one big problem with the advert: it makes its claim in front of a whole bunch of foods on which you don’t pay VAT at 20 per cent. You pay it at zero per cent. Even on the chocolate-chip biscuits. There are some 24 products in the picture and 18 of them are exempt:

  • Fresh fruit and vegetables (peas, sweetcorn, mushrooms, tomatoes, peppers, broccoli, red onions, beans, red cabbage, carrots, grapes, apples): all zero-rated. 
  • Chocolate chip biscuits: zero-rated. HMRC’s bizarre rules specifically exclude ‘chocolate chip biscuits where the chips are either included in the dough or pressed into the surface before baking’ from the standard rate – only ‘wholly or partly coated biscuits including biscuits decorated in a pattern with chocolate or some similar product’ are charged that.
  • Take a look at the jar on the left, peeking out from behind the strangely unlabelled tin. The one next to the jar of peppers. Infront of the ketchup. It’s hard to tell, but could it be hardworking people’s favourite white asparagus? Well, that would be exempt too, as would the peppers – canned and preserved vegetables have the same VAT liability as their unprocessed equivalents. 
  • An egg.
  • Two mystery tins – given the nature of the shop, they’re likely to be zero-rated food too. 

So for which of the goods in the picture are you paying George Osborne his extra 20 per cent?

  • Three cleaning products.
  • Cola.
  • Lemonade.
  • Beer – but the Chancellor has cut the rate of duty on beer. Twice.
It doesn’t end there. Labour might be complaining about the VAT rise, but it’s not something they’ll reverse if they win power in 2015. Last year Ed Miliband shelved his plan to do so. And to pay an extra £450 as a result of the VAT increase, you’d need to be spending £21,000 on goods attracting VAT at the full rate – something that would mean you were in the top fifth of income earners – and likely to be spending £40,000 a year on goods and services. 

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  • Peter Stroud

    I assume this poster was not shown to Ed Balls, prior to publication. Or, perhaps it was.

  • ButcombeMan

    The mistake surely, is to believe Labour getting this so wrong is a mistake.

    The political chatterati (people here) will know, most ordinary punters will not.

    Maybe Labour are planning to put VAT on all food?.

  • Greenslime

    Not a peep out of the BBC on this one. Imagine if this had been a Tory poster (beer and bingo) or a UKIP poster (immigrant playing the part of a British worker). Then it would have headed every bulletin for days, probably ahead of an outbreak of Ebola in Chalfont St Giles. Coz it’s their mates, not a peep.

  • Tony Quintus

    Thankyou Ed, yet another case of Labour’s economic incompetence to beat you over the head with.

  • Conway

    Let us not forget that VAT is an EU tax – not all of it goes to the Treasury; part of it goes to Brussels.

  • DrNickelBockle

    What does ‘hardworking Britain better off’ mean? Are we meant to supply our own verb?

  • wycombewanderer

    Are labour stupid , or are labour supporters stupid; and labour know they are stupid?

    • jason green

      As opposed to those who believe, or would have us believe, that national finances are akin to household finances.

    • flaxdoctor

      They’re happy to take us all for morons. And am I the only one that loathes that mindlessly patronising bilgeword ‘hardworking’? I’m also surprised that the vile PC bloodsuckers haven’t made the use of the word ‘working’ some kind of hate crime, since those who are unable/unwilling to work must feel horrible offended by its omnipresence. And what about the self-serving fantasy that they’re working HARD all the time? Are we to believe these people don’t have web browsers?

    • sarah_13

      It’s typical labour, ignore facts and go for the attack on tories, true or false. Labour are and always have been fantasists who are unfit for any part in government.

    • Realpolitik/ fruitcake/ racist

      If labour are stupid what does that make the Tories?

      1. give us a referendum on the EU before 2015.

      2. get rid of all the etonians by 2015


    • 2trueblue

      Or are they too posh to really be aware which items attract VAT?

  • Redrose82

    Labour know what they are doing. This poster is aimed at the people who haven’t got a clue what products attract VAT. They will take that picture as gospel and vote accordingly. Labour is morally bankrupt.

    • flaxdoctor

      And a plastic bottle labelled ‘FRESH’ cola? For goodness’ sakes – FRESH measured precisely how? This chemical brew is simply undead – it will never, ever go off… Lying, incompetent, inept, ignorant, deceitful – anybody would think this c*ck was put out by the Tories to discredit them.

    • sarah_13

      You are right, they don’t actually care about the facts they just want to recruit more fools to their cause.

      • Ingenious Cognomen

        Are we talking about Labour or the Party of Treason (UKIP)???

        • Realpolitik/ fruitcake/ racist

          How are UKIP a party of treason???????????? LIBLABCON are the treasonous ones.

  • con

    labour’s new yankee spin man is obviously right on top of his game.

  • dave244

    Wrong you do pay it on food just not directly one of the biggest cost that a supermarket chain has is fuel with fuel duty and then the v.a.t is added ( in affect a tax on a tax) so who do you think pays for this us the consumer or the supermarket chain to pretend anything else is just smoke and mirrors
    And don’t forget who introduce fuel duty escalator the last labour government and the only reason this government cancelled is because they know they will push the people of this country to braking point not because it was the right thing to do

    • flaxdoctor

      You do know businesses can claim VAT back, don’t you? VAT is charged to the end user – if the product is zero-rated, then nobody in the supply chain has paid it.

    • Ingenious Cognomen

      Yes, if they push them to “braking” point they might come to a complete standstill!

  • Hayek was right

    You do pay VAT on food, McD’s, KFC, Dominos, fish and chips, curries.

    Just not on your fair trade free range organic locally sourced from a farmers market Maris Piper.

    I’d say Labour know what the squeezed middle eats. Just too dim to put the pictures in.

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