Mr. Micheál O'Connor:

Deputy Joe Higgins asked about energy incentives and the 5% VAT rate. I commend him if he made recommendations on water saving measures in 1997 because he demonstrated foresight. Much has been done in recent years in this area such as the introduction of building energy rating certificates for all residential and commercial buildings. Sustainable Energy Ireland has done considerable work in recent years to promote sustainable building and energy efficiency. Our recommendation on VAT has also been considered in the United Kingdom. The intention is both to incentivise energy conservation in buildings, including energy saving measures, and deter the shadow economy. Concerns have been expressed that some of the renovation and refurbishment work could be done through the shadow economy. We argue that if the VAT rate on such renovations was reduced to 5%, it might bring a larger number of people into the tax regime.