Maurice Quinlivan (Limerick City, Sinn Fein)
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34. To ask the Minister for Jobs, Enterprise and Innovation if she will make retention of the 9% value added tax rate to the hospitality sector conditional on its engagement with the Labour Relations Commission and acceptance of registered employment agreements, given that this sector has an embedded culture of widespread low pay; and if she will make a statement on the matter. [16247/16]

Maurice Quinlivan (Limerick City, Sinn Fein)
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The hospitality sector has always been an important part of the economy. The sector is experiencing a period of growth and employs more than 137,000 people. More than 23,000 jobs have been created in hospitality since 2011, largely supported by lower VAT rates. According to the Irish Hotels Federation, the national hotel occupancy rate is at a ten-year high and 82% of hoteliers across the State have benefited from this. However, while business is booming, which is welcome, the 9% VAT costs the State an estimated €350 million per annum.

Bernard Durkan (Kildare North, Fine Gael)
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The Deputy should conclude. He is eroding the time for the question, on which he may contribute again.

Pat Breen (Clare, Fine Gael)
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I thank Deputy Quinlivan for his question.

The setting of VAT rates is a matter for the Minister for Finance. In July 2011, the VAT rate for tourism related goods and services was reduced from 13.5% to 9% by the Government as part of a measure to promote job creation. This incentive for job creation was due to expire at the end of 2013 but the measure was retained in budgets 2014 and 2015 owing to its positive impact on the sector.

Between the second quarter of 2011 and first quarter of 2016, direct employment in the accommodation and food services sector increased by 28,000, from 114,400 to 142,400. While it cannot be claimed that the reduction in the VAT rate has been the only factor driving employment in the sector, it has made a significant contribution and has had a very positive impact on the competitiveness of the tourism product.

Ireland has a robust suite of employment rights legislation to protect all workers, including minimum wage legislation. These rights apply across all sectors. Other wage setting frameworks include joint labour committees, registered employment agreements and sectoral employment orders which are underpinned by recent legislation. Engagement in these frameworks is voluntary on the part of the stakeholders concerned.

Maurice Quinlivan (Limerick City, Sinn Fein)
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The reality for workers in the hospitality sector is that more than 50% of the 130,000 people working in accommodation and food services earn less than €400 per week. In addition, 17% of all other employees in the sector earn only the national minimum hourly wage and 41% of employees in the sector work part-time. While the average wage is €697.52, in the hospitality sector it is €324.86. Recent research by TASC, the Think-tank for Action on Social Change, describes the sector as characterised by what are effectively zero-hour contracts. The Mandate and SIPTU trade unions, which represent workers in the hospitality sector, and the Irish Congress of Trade Unions have all condemned the outrageous campaign of misinformation waged by employer interest groups in the hotels, restaurants and service sectors against the decency threshold, namely, the joint labour committee system. The Irish Hotels Federation and the Restaurants Association of Ireland have falsely portrayed workers in the sector as a privileged group receiving vast earnings which make businesses unsustainable and result in job losses.

Bernard Durkan (Kildare North, Fine Gael)
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Thank you, Deputy.

Maurice Quinlivan (Limerick City, Sinn Fein)
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Ireland is a deeply unequal society in which service workers, predominately women, are undervalued and underpaid.

Bernard Durkan (Kildare North, Fine Gael)
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I call the Minister of State.

Maurice Quinlivan (Limerick City, Sinn Fein)
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I suggest that the retention of the lower VAT rate be conditional on the hospitality industry engaging with trade unions.

Pat Breen (Clare, Fine Gael)
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Deputy Quinlivan, as a representative of Limerick, will be aware of the importance of tourism to the mid-west region. As a Deputy from County Clare, I know how many people visit King John's Castle alone.

The Deputy referred to the Irish Hotels Federation and the judicial review of May 2014 pertaining to the payment of workers outside Dublin and Cork. As I stated, the setting of VAT rates is a matter for the Minister for Finance. The purpose of the reduced VAT rate for the hospitality sector was to support employment creation. As I indicated, the number of jobs created in tourism since the introduction of the lower VAT rate far exceeded expectations. The partnership for Government includes an ambitious project to create 200,000 jobs by 2020, including 135,000 jobs outside Dublin. With 50,000 jobs created this year, we are on track to achieve our target of reducing the unemployment rate to 6%.

While I understand the Deputy's position on this issue, a balance must be struck between work and decent pay for workers. The Low Pay Commission is addressing the issue of the minimum wage and will publish its report in the third week of July.

Maurice Quinlivan (Limerick City, Sinn Fein)
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The refusal by employers in the hospitality sector to participate in the joint labour committees structure and agree on the terms, pay and conditions of employment is not acceptable, particularly when the same sector is in receipt of significant public moneys.

Pat Breen (Clare, Fine Gael)
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Recent correspondence indicates that an accommodation has been reached with the parties in the hotel sector on terms that are agreeable to both sides. As the Deputy will be aware, the case has been adjourned and the parties are at liberty to re-enter it.

We have to be very careful with this. It is important to ensure that people have a decent wage. The Low Pay Commission was set up to look at that. The hospitality sector has been targeted in respect of low pay. As far as I am concerned, we will review this when the Low Pay Commission produces its report.