Michael McGrath (Cork South Central, Fianna Fail)

A 2% increase in VAT is a mistake at this time. I accept it is included in the EU-IMF deal for 2013 and 2014 but the Government has chosen to front-load it at a time when the domestic economy is at its weakest. At a time when exports are facing a challenging environment, there was a need for positive emphasis on the domestic economy but the Government decided to do the opposite.

The Minister for Finance, in a reply to me last week, stated that the VAT increase would yield €670 million. I note that figure is again confirmed in the budget document.

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