Michael McGrath (Cork South Central, Fianna Fail)

In regard to the amendments ruled out of order, I hope I will learn by experience which types of proposals conform with the rules. The Government's promise to reduce the lower VAT rate from 13.5% to 12% was welcomed not least because it would be applicable to the VAT payable on electricity, gas and fuel. The Government has since changed its mind, however, and decided instead to target a particular sector of the economy by reducing the lower rate of VAT for that sector only by 4.5%.

Under EU VAT rules, as I understand it, fuel, electricity and gas are categorised as "parked items" in respect of which the VAT rate can be reduced no lower than 12%. Moreover, under EU regulations, it is not permissible to have more than two lower VAT rates, so there is a difficulty in reducing VAT on fuel under the existing arrangement. This is a disappointment for many people who, on the basis of the promise to reduce the lower VAT rate to 12%, had expected a modest but welcome reduction in their household utility bills. I accept that the Minister is constrained by the EU VAT rules, but does he intend to revisit this issue in order to devise some mechanism for providing additional supports to people who are experiencing fuel poverty?

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