Brian Lenihan Jnr (Dublin West, Fianna Fail)

All of the matters referred to by Deputy Burton are being taken into account in the context of preparing the budget. First, as regards the statistics and the projection for those who will be out of work next year, in light of the general economic data available to my Department, a final forecast in that regard will be made on budget day. Conditions in the labour market remain poor, as labour intensive areas, such as construction and the retail sector, have been worst affected by the recession. Employment is expected to fall by 7.75% this year. In recent months, the pace of increase in unemployment has slowed significantly with the underlying unemployment trend falling for the first time in two and a half years. Nevertheless, the rate of unemployment has doubled over the past year. This is a very serious problem and, clearly, measures have to be taken by the Government to ensure that people go back to work. People will go back to work when this country is placed on the road to economic recovery. It will be placed on this road by making the necessary adjustments that must be made in this budget to secure the viability of the economy.

The Deputy referred to shopping in Northern Ireland and the 0.5% VAT rate, but I do not accept her suggestion in that regard. It is interesting to note that the general consensus among United Kingdom commentators is that the decision of the UK authorities to reduce VAT has been an economic failure. I do not believe that the sum of 0.5% in the context of an underlying rate of 21% - which remained constant for many years, with one notable exception in the earlier part of this decade - had much of an impact on shopping in Northern Ireland. This is borne out by the Revenue Commissioners' own investigation of this matter. As I have pointed out many times in this House, the single biggest attraction in Northern Ireland has been the relative price of alcohol compared to the price that obtains in this State. That is as far as I can help the Deputy at this stage.

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