Jimmy Devins (Sligo-North Leitrim, Fianna Fail)

The development of such sources and technologies is key to lowering our high dependency on fossil fuels and delivering a sustainable energy platform into the future. As the Minister for Finance has pointed out, Ireland has a low burden of taxation in respect of labour and capital, a policy that has stood us well up to now and one which the Government is intent on maintaining. On the indirect taxes side, our broad but balanced application of VAT has served to protect the less well-off by applying, for example, the zero rate of VAT to food, children's clothes and footwear and medicines. In addition, Ireland is one of only eight EU member states which applies the reduced VAT rate to electricity.

It is worth recounting the experience of 2001 when the standard rate of VAT was cut by 1% from 21% to 20%. The outcome of this move clearly demonstrated that the expected benefits for the consumer did not materialise because the reduction in VAT was simply not passed on to the consumer. I recommend the amended motion to the House.

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