Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

On the VAT issue, if we reduced VAT temporarily for a couple of months, ultimately we would create higher electricity prices because Ireland would lose its special derogation from the European Union and the rate of VAT on energy products in the new year would rise from 13.5% at present to the standard rate of 23%. I have explained that to the House on a number of occasions but the Opposition keeps coming back suggesting things that cannot happen or that, if they did happen, would be damaging to the country.

Let us go back to the Deputy's broader point. I accept that he acknowledges the international factors. The budget did target low-income families in terms of a range of measures. There was not just the fuel allowance but also the increases in the qualified child payment, the living alone allowance and the income threshold for the working family payment. The total cost of those targeted interventions was approximately €146 million. Some €520 million was the cost of income tax changes and reductions, again to give families some degree of disposable income. Today's measure will help 2.1 million households in respect of a €100-plus reduction on electricity bills. As I said earlier, we have also taken measures on childcare and in respect of the extension of the GP visit card to children up to eight years of age. That will really help families in terms of disposable income.

I accept absolutely the Deputy's right to come in and seek further measures. However, we have to avoid a wages spiral that would just create a further inflationary spiral. We have to think intelligently as a country as to how we protect families and people in terms of the daily necessities of life-----

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