Willie O'Dea (Limerick City, Fianna Fail)

If the Minister had decided, within the terms of the appropriate European legislation, to reduce the VAT on fuel to 12%, how much would that have added to the cost of the VAT reduction on an annual basis? In view of the pervasive problem of fuel poverty in this country, if it is possible to reduce the 13.5% rate on fuel then serious consideration should be given to it. It is easy to hide behind European law in saying it cannot be done because 12% is the lowest level at which the rate can be set, but something should be done.

A reduction in the VAT rate on fuel from 13.5% to 12% is small in the overall scheme of things, representing a reduction in the cost of a bill from €113.50 to €112, for example. Nevertheless, it would provide some alleviation for hard-pressed consumers, particularly the poorest in our society who are in extreme difficulty. There are many such people in my own constituency, which I share with the Minister, and Members from all parts of the State will be familiar with the difficulties people are experiencing in this regard. There is an expectation that some action would be taken in light of certain commitments made by the Government in regard to alleviating fuel poverty. I accept this would be only a small aspect of an overall strategy, but I would appreciate if the Minister could provide the figure.

Taking into account the additional cost of a reduction in the VAT rate on fuel from 13.5% to 12%, if the Minister wants to retain the revenue neutral character of the budget he might be able to adjust the 9% rate very slightly, perhaps upward to 9.25%, for instance, in order to retain the benefit for the targeted sector while also affording some degree of alleviation for people who are genuinely suffering. We all understand the constraints under European VAT law and so on, but it seems rather perverse that we are substantially reducing costs for people going out to spend €100 or €150 on a meal while nothing is done for people who cannot afford to heat their homes and who look ahead to next winter with great trepidation.

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