Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I am a big fan of the 9% VAT rate. It was first introduced by the first Government I had the privilege to serve in, under Enda Kenny and Michael Noonan, and helped to reboot the tourism industry. However, it was only ever to be a temporary measure. I think it is €600 million per year in revenue lost to the State. That is a gross rather than a net figure and I appreciate if one factors in other things it might be less of a cost but we need to bear that in mind. The decision of the Government is to extend the 9% rate until the end of February. Members should bear in mind that preferential rate does not just apply to hospitality at the moment as it also applies to some personal services like hairdressing. Furthermore, it applies to electricity and gas. Not going back to 13.5% could be very expensive for the Exchequer. We will have to examine the situation a bit closer to then and see where we stand with respect to the state of the public finances and of the economy. The message to business is that the reduction is being extended to the end of February and they should operate on the assumption it will go back up to 13.5% on 1 March.