Brian Cowen (Laois-Offaly, Fianna Fail)

——to alternative energy sources. With regard to reducing the lower VAT rate from 13.5% to 12.5%, that would cost approximately €400 million in a year. The likelihood is that any reduction in the VAT rate would be absorbed by retailers and wholesalers and not passed on to consumers. That was the experience of one of my predecessors, as I said earlier, when he reduced the 21% VAT rate to 20% in budget 2001. He subsequently had to reverse that decision. In any event, changes to taxation could only be considered as part of an overall budgetary process which, as people are aware, will be challenging anyway. To consider such proposals outside that overall process could lead to unanticipated difficulties in terms of secondary economic effects as well as the effects on the wider society and the environment.

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