Gavin Williams, the chief executive of the West Cornwall Pasty Company, has written a letter to Chancellor George Osborne warning that proposals to close a loophole on VAT exemptions for hot take-away food - the so-called pasty tax - could damage the Cornish economy.
The Cornish pasty retailer, which has more than 80 sites and employs 400 people, told Osborne that businesses would be unable to restructure themselves in time, and that consumers were confused about the new proposals.
The letter came after Williams met MPs Stephen Gilbert and George Eustice to discuss the issue, as well as attending a Whitehall protest over the "pasty tax".
In his letter, Williams said: "Although I fully accept and support that the introduction of this tax will affect the baked goods category as a whole, I believe there is no doubt that it will be top-quality authentic Cornish pasties and the supporting businesses that will suffer the most."
"You will be aware of the relatively recent awarding of Protected Geographical Indication (PGI) to the Cornish pasty and the economic benefits this brought to the area, but this instantly reverse that success."
"Our research has shown that we cannot expect customers to continue purchasing if they are hit with a 20% increase, we estimate that this scenario would see us lose around a quarter of them - leaving us in an impossible position."
Stephen Gilbert, MP for St Austell & Newquay, said: "I urge the Government to listen to the strength of feeling being demonstrated today and review their unworkable and damaging proposal.
"This could result in 400 job cuts and losses to the Cornish economy of £7.5m."
By Lisa Jenkins
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