Damien English (Meath West, Fine Gael)

While I welcome the reduction in the VAT rate, let us not kid ourselves that it will make a major difference. I accept the reduction will go some way towards repairing the damage done last year when VAT was increased. Given the widespread perception that taxes increased significantly last year, the reduction marks a step in the right direction.

Is the reduction in VAT part of a strategy by the Department of Enterprise, Trade and Employment to tackle retail problems or a knee-jerk reaction to the comment by the Minister for Defence on radio at the weekend that such a measure could be introduced? When we asked officials of the Department what plan they had for the retail sector we learned the Department does not have any such plan.

If we are to tackle the problem of cross-Border shopping, we must address the costs of doing business, of which VAT is one. The Fine Gael Party has proposed to change PRSI, a massive cost for business. Other Government controlled costs, including energy, waste, water and council rates, must also be tackled.

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