The Second Vice President of the Government and Minister of Labour, Yolanda Diaz, has recognized this Wednesday that the VAT reduction on food is not the ideal formula to reduce the shopping basket. “It is true that It is not the measure that we believe can helpbut this is a negotiation and this is the result. The PSOE did not want to freeze rents either,” Díaz explained this Wednesday at a press conference to take stock of a year of labor reform.
The president of the Government, Pedro Sanchezannounced this Tuesday the reduction from 4% to 0% of basic foods and from 10% to 5% for pasta and oil, months after his number two in the coalition government publicly asked supermarkets reduce food prices, after the general rise in recent months. His approach was to promote a shopping basket of basic products at affordable prices, including fresh foods such as meat or fish. But the idea was met with refusal from both the sector and the socialist wing of the Executive and was even worthy of a statement by the competition authority (CNMC) warning that it is prohibited to set price caps of food.
So he People’s Party came out to defend a food VAT reduction but Díaz was opposed to this approach because she defended that the companies would keep the margin. In this sense, the Vice President and Minister of Labor explained that the package of measures approved by the Government is the result of a “intense” negotiation of the two games that occurred until the “last moment”. “This is a negotiation in which two different political spaces are part, the PSOE and Unidas Podemos. It is not that I think the same as two months ago, but that I think the same thing from two days before. The PSOE did not want to freeze the rents and finally we froze the rents, it is negotiated “, he explained.
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However, the vice president wanted to distance the measure from the People’s Party proposal that this same mars reproached the coalition government for “copying late” the measure proposed by Feijoo in September. “I want to take this opportunity to say that the measure incorporated by the Government of Spain is not what the Popular Party wants. The Popular Party and the large distributors wanted a general drop in VAT in food and this does not occur in any way. VAT reduction is from 4% to 0% in some certain products. It is not at all what the Popular Party was asking for,” he defended.
In addition, the number two of the coalition government has emphasized that the great concern of her party was that the companies widen their margins business and that possibility is eliminated with the control of the National Commission for Markets and Competition (CNMC) on food prices. “There was an unequivocal concern in the Government of Spain that the margins not widen, and it has been collected, but it is also true that this is not Feijoo’s proposal that he wanted a drop in VAT on all food,” he insisted.