Richard Bruton (Dublin North Central, Fine Gael)

The programme for Government is a national programme, aimed at fixing the banking system, restoring growth and confidence to the economy and supporting the protection and creation of jobs. As Minister with responsibility for jobs, enterprise and innovation, my objective is to create the conditions across all sectors of the economy and in all regions – including the Border region - to facilitate job creation. In this context, and in collaboration with my colleagues in Government, I will identify cross-government actions that can be taken to cut costs to business, remove obstacles to employment creation, and stimulate the domestic economy.

The reference which the Deputy makes to the top rate of VAT is only one aspect of the Government's wider fiscal policy in the programme for Government which seeks to address overall fairness in the tax system for individuals and business alike. The Deputy will know that part of the programme agreed between the previous Government and the EU-IMF was to increase the VAT rate over time. As well as limiting the top rate of VAT at 23%, the programme for Government undertakes to cut the 13.5% rate of VAT to 12% up to the end of 2013, to help labour-intensive economic activity; to maintain the corporate tax rate at 12.5%; to halve the 8.5% rate of employers' PRSI to the end of 2013 on those low-paid jobs paying up to €356 per week; and to implement a number of sectoral initiatives in areas that will create employment in the domestic economy. These include the travel tax and other elements of the Government programme such as improving access to research and development credits, a partial credit guarantee scheme for small business and many other proposals. The programme for Government must, therefore, be seen as an overall package of measures to stimulate growth across the economy and across all regions.

The issue of cross-Border shopping, which was evidenced a number of years ago, was influenced by a variety of factors, including the euro-sterling exchange rate and high inflation in the Republic of Ireland. These factors no longer apply with the same force as the euro is weaker against sterling and inflation is now higher in Northern Ireland than in the Republic.

I would point out to the Deputy that the Programme for Government includes a commitment to work for greater economic co-operation with Northern Ireland to accelerate the process of recovery and the creation of jobs on the island. Businesses in the Border counties, in particular, are well placed to benefit from such co-operation. In this context, my Department supports the work of InterTradeIreland, which assists SMEs across the island to develop North-South trade and business development opportunities. In addition, my Department's agencies, including Enterprise Ireland and the county enterprise boards, will continue to work with companies in the Border region to improve their competitiveness, productivity and viability.

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