Mr. Gerard Brady:

I echo the comments by my colleague from the Small Firms Association regarding the retention of the 9% rate of VAT. We really welcome this. Of course there have been increases in hotel prices in Dublin, which reflects a lack of supply in the market. It goes back to some things around development costs, especially land costs, and how attractive it is to build hotels in Dublin. The lack of hotels is driving the costs. I would not characterise it as gouging, it is reflective of the market where there is a lack of supply. The 9% VAT rate is seriously important for certain regions. If we look at the Border region, the north west and the midlands in particular, more than 40% of tourists to those regions come from the UK. Flights from the UK have dropped by 10%, along with visitor numbers year on year in the first half of this year, so the rate is very important for those markets. They already have tight profit margins, some have serious debts, having spent considerable sums on property during the boom, and still have an overhang. That will be a big issue for them. Another factor is insurance costs. This committee and others have talked a lot about the cost for employees and workers and households on motor insurance in particular. We should highlight the cost of insurance for the goods fleet, which has increased by approximately 80% at the same time. It is a major cost in particular for companies that move goods around intensively. In addition, employer and public liability insurance has gone through the roof. I agree with Senator Reilly's comments about our court system, in which awards for minor injuries tend to be much higher than they would be in other European countries and in the UK in particular. The new book of quantum has not done much to solve this and there is an issue within the courts that the levels of awards tend to be used as an underlying benchmark, rather than a ceiling. That is a major factor in insurance costs. Particularly in the context of Brexit, we will see major increases in transport costs and the costs of moving goods and it is particularly an issue for companies in remote areas that are already disadvantaged and companies, especially those which are goods-heavy, which are already facing into the worst impacts of Brexit. The cost of fleet insurance is a major issue.