Joe Costello (Dublin Central, Labour)

I am not sure that Deputy Gogarty's arithmetic is correct on the DVD and the electronic goods. I would not like to discuss the wedding. This is a fairly modest proposal of half a percentage point and it is not going to dramatically change the cost of any item. It is symbolic in the sense that when it was introduced last year it had a deadening effect as it increased the differential between VAT rates in the UK and Northern Ireland and the VAT rate here in the Republic. It almost symbolically seemed to increase it more and it led to increased numbers of people crossing the Border because they believed they were being penalised unduly in the last budget. While this is a modest change it is welcome and it would have a beneficial effect.

As other speakers have said, it is very strange that it will not be introduced until after the winter sales instead of being introduced immediately. It will be introduced on 1 January 2010. If it is designed to influence people's behaviour then the benefit of having the reduction will be lost by waiting until the new year because people will see no change over Christmas and they will have forgotten about it in the new year. The momentum will be lost that might have been gained and it will put pressure on retailers in the Republic. It would have been advantageous from the Government's point of view to amend its own proposal with a view to implementing it immediately. It is a very modest redress of the situation.

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