Timmy Dooley (Clare, Fianna Fail)

I welcome the opportunity to conclude this debate and I thank all who contributed. The majority of those who contributed, from all sides, made constructive suggestions. They recognised what I and the Fianna Fáil party are trying to achieve through this Bill. Some people sought to score political points and that is understandable.

We have all been contacted by motorists in recent weeks about the change in the price of oil and the continued increases. There are grave concerns in that regard and we recognise the impact the increases have on small businesses, the haulage sector and on hard pressed motorists, many of whom are put to the pin of their collar and many of whom find it difficult to put food on the table. It is not appropriate for a government to cast the issue aside and say it cannot look at it. Nor is it appropriate to say that it is on account of a spike in international oil prices and that people should suck it up and get on with it and that they have no choice but to accept it because we signed up to a protocol. I accept that previous governments signed up to the Manchester protocol. This was reaffirmed by the Minister. That was done when oil prices were much lower, when the economy had an element of growth and when things were going reasonably well.

People's backs are to the wall now and unless we are prepared to accept that and to recognise the impact the continued increase in international oil prices is having on them, we are learning nothing. The Minister said yesterday that Fianna Fáil was living with dreamland economics. I was somewhat chuffed by that, because the Minister reserves such comments for times when he is cornered on an issue to help him move beyond the situation. Notwithstanding that, if the Minister believes that, I suggest he was somewhat in dreamland last week when he came into the House and explained on a Topical Issue matter that the increased VAT yield was somewhat of a misnomer. When speaking about the yield from VAT per litre of fuel, he said that VAT is set as a percentage of the price increase as the price of fuel increases. However, he went on to say that in this regard it should be borne in mind that to the extent that spending in the economy is reallocated to petrol and other oil products and away from other VAT spending, and to the extent that the overall level of economic activity is reduced by higher oil prices, there may be little or no net gain to the Exchequer.

The Minister studied mathematics and surely the converse is also true, that a reduction in tax on oil will increase the spend in other areas of the economy, with little or no reduction in the take to the State. I believe a reduction in tax would generate income in a more labour intensive area of the economy, particularly in the retail sector, and that it would have a much greater benefit to the economy. This belief is not just based on the converse argument. The Minister may be familiar with a study carried out in the United Kingdom by the Fair Fuel Campaign. That study indicated that a 2.5 p reduction in the price of a litre of oil would see an increase of 0.32% in GDP in the first year and 0.34% over five years.

I am not suggesting there is a direct correlation between the two economies as they are somewhat different in character but when those figures are extrapolated it shows a gain of €750 million in GDP. A few people in this House were confused as to how we might pay for it. In my view, that would pay for it as there is a stimulus component as well as the increase in VAT which the Minister of State, Deputy John Perry, last night, seemed to indicate that there was no potential increase in the VAT based on the increase in the base price. However, he said in the House the previous week that the gain is in excess of €1 million per week, due to the increase in VAT. Last night he tried to wriggle out by saying it was said in response to a remark from the other side of the House. He is good at telling people what they want to hear. These were his own words and I wish to correct the record of the House so that we are all clear.

I am disappointed that Deputy Tom Hayes is not in the House because he accused me of having a brass neck and he proposed me for an end of the year award. Deputy Hayes has some brass neck himself because he fails to recognise what my good friend, Deputy Michael Healy-Rae had said, that the Taoiseach when he was on this side of the House said he was disappointed that the then Taoiseach, Brian Cowen, did not have an initiative with regard to the mix of excise duties and VAT to ensure that they are not used as a further battering ram against the hard-pressed motorist. Deputy Hayes seems to have changed his mind so I am not really sure where he stands on what the Taoiseach said when in opposition. I am not really sure where he stood during a debate between Deputy Richard Bruton and Deputy Enda Kenny either but maybe it is obvious now.

I acknowledge the good support my Bill has received from most of the Sinn Féin Deputies who spoke last night and who clearly understood the issue-----

See this speech in context