Thursday, 8 February 2024
Ceisteanna ó Cheannairí - Leaders' Questions
Tá tuarascáil eile foilsithe inniu a thaispeánann an teip iomlán ar pholasaí tithíochta an Rialtais. Taispeánann sé go gcaithfidh an Rialtas cosc a chur ar arduithe cíosa, cíos míosa a chur ar ais i bpócaí íocóirí cíosa na tíre seo agus tithe sóisialta agus tithe ar phraghas réasúnta a thógáil ar scála.
Today there is another report that shows the disaster of the housing plan. It is a plan that now lies in tatters, with renters being fleeced and rents double-digit increases in counties right across the State. In case the Minister is not aware, since he took office and in the last four years, rents have increased by 30%. What does that mean for the average renter? It means that the average new renter has to fork out an additional €4,500 to the landlord each year, compared to when the Minister took office. It is not just new tenants who are seeing massive hikes in rent. It is also existing tenants.
The crisis is impacting renters in every county across the State. In Donegal, rents for new tenancies have gone up by a staggering 23% in a single year. In County Clare, they have gone up by 19%. In Wexford, there has been a shocking 24% increase in the past year for new rents. Today's report from the Residential Tenancies Board, RTB, shows that rents are continuing to spiral out of control, with new rents increasing by an average of 11% across the State. Is it any wonder that so many of our young people have to leave their homes and families for better opportunities elsewhere? The Government’s housing crisis is putting huge pressure on workers, families and young people. The rental sector is clearly in a crisis and the renters are the victims. This is happening under the watch of the Minister and the Government.
The Minister continues to say, and we have heard Members of Government tell us, they have turned a corner in relation to the housing crisis, but renters have reached a dead end. Renters have reached a dead end. In these reports, we can see the real lived experience year after year in relation to what is happening. Things are going from bad to worse.
I am sure that in his response the Minister will speak about the 2% cap on rents in rent pressure zones, but existing rents have increased by more than 5% in 19 counties, including in Dublin where they are more than 4%. This sharp increase provides growing evidence that landlords are breaching the 2% cap on rent increases.
Does the Minister believe that landlords are breaching the 2% cap on rent pressure zones? If so, what is he going to do about it? He has done nothing so far. Workers and families desperately need relief. Those who are renting are trapped in an unaffordable rental system, while workers and families should qualify for social and affordable housing. However, those supports are also stuck in the private rental sector, putting more pressure on the system.
Sinn Féin’s solutions are twofold. First, we would protect renters by banning further rent increases for a period of at least three years, while putting one month’s rent back into renters’ pockets. Second, we would dramatically increase the supply of social, affordable and cost-rental homes. The fact is that the Government is not meeting its own abysmally low targets for council houses, cost-rental homes and affordable homes and these are targets that everybody knows are far too low to begin with.
I ask the Minister if the penny has finally dropped in Government Buildings? There has been yet another damning report from the RTB that the Government’s housing plan is failing renters. Does the Minister agree that we need to protect renters and ban further rent increases for a period of at least three years? Does he agree that the Government is failing to meet its housing targets for social, affordable and cost-rental homes, and that those targets need to be significantly increased and delivered on? Will he support Sinn Féin’s solution to protect renters and increase supply? Will he ban rent increases for the next three years?
I thank Deputy Doherty very much for raising this issue. The report to which the Deputy refers from the RTB is just the second such report it has published. It is the rent index report. It is good to have definitive data from the RTB in relation to rents associated with actual tenancies. That gives us some very valuable information as a Government and Oireachtas in terms of the policy framework and the decisions that we make on an ongoing basis.
On the point of the RPZs, this report is very clear. The Deputy will know that the report itself is not a barometer of compliance with the RPZ legislation, because it captures all tenancies. Tenancies that are outside of the RPZ restrictions across the country are also accounted for within this report, so it was never designed to be a measure of that.
However, what it does show is that rent levels for the existing tenancies are approximately 18% below rent levels for new tenancies. Existing tenancies that are being renewed on an ongoing basis represent the bulk of the market. In this particular report, approximately 47,000 existing tenancies are captured that were renewed in the third quarter of last year compared to 14,000 new tenancies that were registered within the data set. Therefore, the vast bulk of the tenancies that are recorded here as part of this report represent the renewal of existing tenancies. That shows a much lower level of increase in the actual level of rent for those existing tenancies that are being renewed. Again, I repeat that this is not a report that is measuring the effectiveness of the RPZ legislation. That is very clear when you read the report itself.
On the question of compliance with the RPZ legislation, that is a statutory function of the RTB and they are active in that regard. There have been, if you look through their website, approximately 160 sanctions over the last number of years and approximately 80% of those relate to breaches of the RPZ rules. Where breaches are taking place, that should be reported to the RTB, which will carry out its enforcement work in the normal way.
Fundamentally, rents are continuing to rise because there is a mismatch between supply and demand. That is the reality. Yet, when you look at the activity rate, we are now unquestionably making very significant progress. There is real momentum in home building across the country. Some 32,700 homes were built last year. That was a 10% improvement on 2022 and it was well ahead of the Housing for All target.
Let us look at the construction commencements that took place last year. Last year, there were approximately 32,800 new homes where construction commenced. This figure is up 22% on the number of commencements in 2022. There was a particularly strong finish to last year; there were almost 9,000 commencements in the fourth quarter of last year. This figure was up by approximately 50% compared with the same quarter in 2022.
I refer to the Deputy’s question and proposal to freeze rents for a number of years. When I look at the data, of the 32,700 homes that were built last year, there were more than 11,600 apartments, most of which are for the rental sector. That funding is primarily private capital. The State is playing a role, but much of it is private capital and institutional capital. I have no doubt that if we were to adopt Sinn Féin’s policy, it would impact the supply of new homes, in particular, the supply of rental accommodation across the country, and most particularly here in the city of Dublin where those apartments and that supply is most acutely needed.
I genuinely feel for the Minister in his trying to spin what is a terrible, terrible report. This report spells out in clear evidence to all of us that the Government’s housing policy is completely in tatters. New rents have gone up by 11% In the last year. That means that new rents, compared to the last time the RTB did this report, which was a year ago, are up by €1,960. This is on the Minister’s watch.
The Minister speaks of existing rents, but in some cases in many counties existing rents have gone up by the double digits. Cavan has gone up by 12.5%. Leitrim has gone up by 7.4%. Longford has gone up by more than 10%. Roscommon has gone up by 9.5%. Waterford has gone up by 9.4%. It is not just new rents, but existing rents. Renters are being fleeced and this is on the Minister’s watch. He continues to spin. He speaks of supply. Supply is part of the answer, but the Government has failed to deliver on its own targets for affordable and cost-rental houses.
That is a blatant fact. Supply is not the only answer. The Government also needs to ban rent increases for the next number of years. It needs to make a decision on whose side it is on. We are very clear in Sinn Féin that we are on the side of renters. We do not stand by these runaway rents and a Government that is allowing this to happen while families are being crucified and renters are being locked into an unaffordable system.
If we adopt Sinn Féin policy, the supply of new homes will fall. At the moment, we need at least €13 billion to €14 billion of capital to build in excess of 30,000 homes a year. The State is providing €4 billion to €5 billion of that. We are likely, over the period ahead, to revise upwards the housing targets in Housing For All. That will mean much more capital is needed, perhaps up to €20 billion a year, on average, over the next number of years to build the homes that we need. Sinn Féin is seeking to create an environment that is unfriendly to that investment, that will result in that investment stalling, and that will, ultimately, impact on the supply of homes.
Ireland is an outlier in that construction is increasing. Looking across the EU, in most countries construction is falling but in Ireland it is increasing because the demand is there and because the Government is working collaboratively with the private sector to create the right conditions to inject real momentum into home building, both houses and apartments, throughout this country. We will continue to do that until we bring supply more closely into alignment with demand. Ultimately, that is how we will deal with the issue of rising rents.
I want to return to the issue of renters' rights because today sees another damning report confirming the Government's failure in its basic duty to ensure all citizens and residents have a secure and affordable home. Today’s bad news comes from the latest report of the Residential Tenancies Board, and there is no explaining away the stark figures it presents. The report shows that renters are now being hit with rent hikes of more than double the legal caps in some rent pressure zones. Between quarter 3 of 2022 and quarter 3 of 2023, we see existing tenants suffering averages rises of 5.2% and new tenants seeing rental cost rises of more than five times the legal limits in rent pressure zones. In Dublin, my own constituency has a much higher than average proportion of households in rental so this is something that affects people across my constituency. Across Dublin as a whole, the average rent for new tenancies is now €2,113 per month, an increase of 10% year on year between quarter 3 of 2022 and the same quarter in 2023, and 18% more than the average rent for existing tenants in Dublin. Existing tenants pay, on average, €1,788 per month in Dublin, up 4.3% year on year. In Cork, the Minister's own area, new tenants now pay an average of €1,386 per month, an increase of 8.8% year on year, while existing tenants pay an average of €1,170 per month, an increase of 4.5%. Give that rent pressure zones cover so much of the country now, these figures show clearly that there is an issue with flagrant breaches of renting law. Rents should not increase in rent pressure zones by more than the legal cap and yet they are doing so.
A home is a basic right. The Government has a duty to ensure people are housed in secure and affordable housing, but these figures tell us the Government has failed in this duty. This failure is having devastating consequences. We are all well aware of this because we all hear from our own constituents about the serious effects of housing distress and the housing crisis. They are plunging people into poverty, harming their health and paralysing their ability to progress their careers or get on with their lives. So often people use words like "despair", "broken" and "frightened" to describe how high rents and a lack of housing security impact their lives. The Minister mentioned that Ireland is an outlier. We are an outlier in the lack of protections we give to renters and that is what is clear from the latest report from the RTB.When will these endless reports and the correspondence we get from so many people in housing distress cause a change in Government policy? When will the Government start building homes at the scale we need? I listened carefully to the Minister who said "We are likely ... to revise upwards the housing targets". We in the Labour Party, more than a year ago, called for a target of 50,000 new builds per year to be set. Where is that realistic target from the Government? The Government keeps threatening and promising but we do not see it. When will the Government pass the Labour Party's Residential Tenancies (Tenants’ Rights) Bill, a constructive solution we proposed more than a year ago that would provide meaningful protections for renters stuck in unaffordable, insecure housing and that would mean Ireland would no longer be an outlier when it comes to real protections for renters?
The supply numbers are real numbers. Since 2020, more than 100,000 new homes have been built. More homes were delivered in four years than in the previous nine years combined, and that is the reality. Almost 33,000 homes were built in 2023.
The RTB has the statutory powers it needs in the enforcement of the rent pressure zone rules. It has the powers of investigation and has been given additional resources by the Government to carry out that work. It is active in ensuring compliance with the RPZ legislation. The report itself is very clear that it is not a measure of compliance with the RPZ rules. That is referenced multiple times in the report published this morning, which I read.
We are increasing the supply of all types of homes. At the end of quarter 3 last year, almost 4,000 affordable homes had been delivered, supported by the affordable housing fund, the cost-rental equity loan, project Tosaigh and the first home scheme. We directly supported renters in the budget by increasing the rent tax credit by 50% to €750 per renter this year, and for a couple the credit is twice that amount. We have made significant changes to the housing assistance payment which will secure and expand more tenancies. We have increased the discretionary rate from 20% to 35%, and single applicants will get the couples rate. We acquired about 1,700 properties last year, the vast majority of them tenants in situ. Again, this scheme is designed to support tenants who are at risk of being evicted.
I go back to the fundamental point, which is that rents are rising because demand is outstripping supply. We have a population that is growing. We also have a young population and we are continuing to attract international labour. People are coming here because of the employment opportunities and the quality of life in Ireland. As a Government we are doing the single most important thing that will make a difference, which is increasing the supply of homes.
Just last week I attended the annual conference of Home Building Finance Ireland, which was set up back in 2019. It has exceeded all of its targets and has provided funding approval of around €1.25 billion, supporting the construction of around 8,500 homes in 22 counties across Ireland. That is the kind of practical initiative that will actually make a difference, because for many builders and developers, access to funding is a key constraint. We will continue to work with them to increase the supply of homes. The State is now the principal actor in the housing market through all of the interventions we have made, including the LDA, Croí Cónaithe, and the various grants. We will continue to do more in that regard because we recognise the responsibility we have to increase supply and we are making progress.
The measures the Minister has described are simply not enough and I do not think anyone in government would dispute that. They are simply not enough to deal with the real levels of housing distress. The Minister speaks in the passive tense and refers to demand outstripping supply, but it is up to the Government to do something about that.
This Government has been in office since 2020. We need to see action on this. Week in, week out, we hear the Government dismissing constructive proposals from the Opposition. It dismissed restricting no-fault evictions, freezing rents, and the idea of linking increases to inflation. It dismissed increasing the new-build target to 50,000 homes per year years, but it has never explained why it was dismissing these constructive proposals that could make a difference. Instead, it resorts to explaining and re-explaining plans. It refers to ineffective measures like the renters' tax credit, which is only a drop in the ocean when we see the real figures on average rents. With respect, the plans the Minister has outlined are not working. The Government needs to take more urgent and ambitious action. I ask again; when will the Government increase the target to the necessary figure of 50,000 new builds per year? The Government has been promising to do this for months. When will the Government enact renters' rights legislation that will provide really meaningful protections for renters?
We are not going to dismiss constructive suggestions, wherever they come from across the House because we recognise that this is a challenge. We believe we are making progress as a Government and as a country in increasing the supply of homes but we have more to do. We are never going to deny that and we are open to constructive ideas and proposals from right across the House.
It is important to make the point that the targets are not a limit. The targets do not limit the amount of construction, either by the State or the private sector. The progress we are making is evidenced, not least in the mortgage market.
In 2023, first-time buyers accounted for 25,600 mortgage drawdowns, the highest level since 2007. I pointed to the momentum, which is actually accelerating. Nearly 9,000 units commenced construction in the last quarter of last year, almost 50% higher than the same quarter in the previous year. That gives an indication that homes are being built and homes are coming. That is ultimately the most sustainable way of bringing supply more into line with the demand that is growing.
Yesterday, a house in Leixlip was burned down after false rumours circulated suggesting that it was going to be used for people seeking asylum. Four days ago, the old Crooksling nursing home in Brittas was burned down. On New Year's Eve, the old Shipwright Pub in Ringsend was burned down. It was due to house homeless people. We have seen 26 arson attacks in the past five years against premises rumoured to be used for asylum seekers. The pattern is very clear. A rumour starts, true or false, suggesting a property is going to be used. Far-right activists, people like Philip Dwyer, Gavin Pepper and Fergus Power, are quick to the scene. A few days later it is burned down.
We should call what we are seeing what it is. We are witnessing a campaign of far-right terrorism in this State. What has been the response? Almost nothing; nobody charged, fiddling while the country burns. We have finally had three arrests this morning for the arson in Ringsend. However, that can be contrasted with the State's approach to Debenhams workers, anti-water charges protesters and pro-Palestine protesters. Just a couple of weeks ago, seven special branch officers turned up at the home of a young Palestinian solidarity activist at 7.30 in the morning and arrested her. She was held for ten hours and charged with criminal damage, not for burning down a building but for allegedly putting some washable red paint on the Department of Foreign Affairs.
Look at how the political establishment is dancing to the tune of the arsonists, however, by cutting financial support and accommodation for Ukrainians, chartering flights for more deportations and forcing vulnerable asylum seekers to sleep on the streets. Some 750 of them are now living in fear of violent racist attacks. The BBC reports that this now includes women and children. Evelyn said she was threatened with a knife and given five minutes to leave before those threatening her would come back and stab her and her husband. The local Fianna Fáil councillor shamefully made excuses for the arsonists, refusing to co-operate with the Garda. The Government is going along with the lie that immigration is the cause of many problems facing our society. It cedes more and more ground to the far right and it legitimises its arguments. Of course, it would be politically uncomfortable for the Government to tell the truth that the reason we have a housing crisis is not because of immigration but because it puts the profits of big developers and landlords ahead of people's need for a home. We have a health crisis because the Government puts the private hospitals and insurance companies first.
We have deep inequality. We have neglected communities because of Fianna Fáil and Fine Gael which have run the State since its foundation. That is why ordinary people need to take a stand against the terrorism of the far right, against the racism, homophobia, sexism and hate that it tries to spread, and against the housing crisis and inequality that the Government has created. It is why they will stand together at 1.30 p.m. on Saturday, 2 March in Parnell Square.
The Deputy has named three individuals who are frequently named in the public media and that is fine. However, he has named them more or less in the context of suggesting possible involvement in nefarious activity, in other words the burning down of buildings. That is not in order if that is what he was suggesting.
Only Deputy Murphy could come into the House and seek to blame the Government for people burning down buildings. That was an outrageous contribution. He has actually made it more difficult for the Garda and our criminal justice system to secure successful prosecutions of people who are conducting criminal acts. He has not done anyone any service with the contribution he just made in that regard. We ultimately condemn any criminal act. Where properties are being deliberately set on fire, it is arson. It is a criminal act and the Garda is investigating.
The Deputy acknowledged that arrests have been made today in one particular case. The best thing we can do is to reaffirm our support for the work of An Garda Síochána and that we will give it the necessary resources and whatever support it needs to do its work. Let us be honest, these are difficult crimes to solve but the Garda will do everything it possibly can to solve them, send files to the DPP and ultimately achieve convictions. It is important we stand together and provide our support. These are heinous crimes that could not just end up damaging or destroying property but could end up taking human life. That is the real risk we are very concerned about and I know the Deputy is concerned about.
As a Government and with the support of the people, we have responded as comprehensively as we can to a wave of migration we have had to respond to, primarily because of the war in Ukraine. About 100,000 people from Ukraine have come to Ireland over the past two years because of Putin's invasion of that country. Our country has responded generously, as befits the people we are and which shows the generosity of our nation. About 75,000 of these arrivals are currently being accommodated in State-provided accommodation. In addition, last year we had in excess of 13,000 applications for international protection here in Ireland, which was an increase of about 177% on the 2019 level, the most comparable year recently. Nearly 27,000 people are being accommodated the IPAS system compared with just over 19,000 at this time last year. There is pressure on the system and we acknowledge that. Our population is growing. People are coming here, not just seeking international protection or seeking shelter from the war in Ukraine but seeking to avail of employment opportunities in Ireland and indeed the quality of life here.
The Government is working together to respond to what is a very significant challenge. The Minister, Deputy O'Gorman, and his team have done a remarkable job in the teeth of the most difficult migration challenge we have faced, coming at a time when there has been a shortage of accommodation. However, we are working together and we will continue to support the Minister, IPAS and all of those involved in the State's response, which has been generous. We will continue to support people who come legally to Ireland within the rules-based system we have.
I am not blaming the Government for the burning down of these buildings. I am not sure where the Minister got that impression. Those who are responsible for burning down the buildings are those who burned down the buildings and the far right, which is whipping up false fears, spreading hatred, spreading division and creating an environment where this can happen. However, after five years of a terrorist campaign by the far right in this country, why has there not been a single charge of arson? I am asking that.
The Minister is saying it is a very difficult crime to solve and so on. I can tell him now that any building with the potential to be used for asylum seekers is under threat of being burned down. The State needs to be present to protect the buildings. Whatever about solving the crimes that have taken place, will the Minister please give a commitment that gardaí will be present to stop these buildings being burned down? Will the Government take people off the streets? They are in danger. This applies to both Irish rough sleepers, who are faced with inappropriate emergency accommodation, who are forced onto the streets and who should not be on the streets, and asylum seekers. The Government should not allow people to be in danger on the street.
I am blaming the Government for the inequality in our society, for the housing crisis in our society and for the health crisis in our society which are exploited by those on the far right, who, instead of pointing their anger upwards at the people the Government represents, falsely blame the vulnerable in our society. That is what I am blaming the Government for.
He is drawing a correlation which is completely unjustified and is not defensible.
If that is the way the Deputy wants to represent himself and his views in the House, so be it. I am not sure if he is suggesting that the State should provide security at every vacant building in the country. I ask him to bear in mind that some of the buildings that have been burnt down were not earmarked for international protection or for Ukrainians. The spread of misinformation and disinformation, with a small number of people seizing on this issue to spread hate and fear, ultimately results in criminal acts. The answer is not just a security response, although that plays a part. We will do all we can to support communities that are pushing back against the negativity and fear being spread. The most important thing we can do is to reaffirm and underline our fulsome support for the work of the Garda and our criminal justice system. They are doing everything they can to bring those responsible for these crimes to justice.
It is no exaggeration to say that smaller businesses are the lifeblood of the country. Micro, small and medium-sized enterprises provide employment for more than 1.2 million people. They are at the heart of every city and town, down to the smallest village. Every one of them supports employment in other enterprises which are their suppliers. Today, they are struggling. Their viability is threatened. Who in this House cannot list the names of a dozen or more enterprises in their constituencies that have closed in recent years because they just could not remain economically viable? Dozens more are struggling to keep their doors open in the hope that something will change to help them to survive. These are not just faceless businesses but enterprises at the very heart of our communities. Businesses like the local shop, hairdresser and café offer vital employment to hundreds of thousands of people, often in areas where there is no major source of employment and the nearest large employer is many miles away. These people are keeping our communities alive. They are keeping our little villages and towns vibrant, and not just a collection of buildings.
I have to acknowledge the supports the Government put in place during the Covid pandemic. Without that support, many businesses would not have survived. They need Government support again now. That is why I will expect the Minister's support on Wednesday, 14 February for a Private Members' motion tabled by Deputy Shanahan and my colleagues in the Regional Group for the establishment of a special task force, to include representatives of micro and small businesses and Government Departments and agencies, which will be asked to review all government-controlled charges, remove unnecessary red tape, reduce the cost of doing business and be involved in the drawing up of future Government policy impacting this sector. We will also seek immediate measures such as reducing the VAT rate for food businesses in the hospitality sector, adjusting the employers' PRSI higher rate threshold to reflect the increase in the national minimum wage and speeding up the work permit process. Will the Minister and the Government support and implement our Private Members' motion coming before the house on Wednesday, in which we will call on the Government to reduce VAT from 13.5% to 9% and to cut PRSI rates for struggling SMEs by Easter?
I thank the Deputy for raising this issue. I acknowledge that he had a Private Members' motion on this issue on the Order Paper this week. I understand it will now be taken next week. The Government will respond to that motion. I agree with the Deputy that SMEs are the lifeblood of towns, villages and communities. The Government values them. As the Deputy has acknowledged, the Government supported small businesses in particular to a great extent over the past number of years. We provided Government support through wage subsidy schemes of more than €10 billion to support wages in the private sector because it was the right thing to do. Approximately €1.5 billion of commercial rates were waived. A range of other support schemes, including restart schemes, were administered by the Department of Enterprise, Trade and Employment. We want to support viable businesses. Nobody wants to see any business close. It should be acknowledged that new businesses are opening all the time. In the most recent budget, we provided extensive support to our economy to help the customers of those businesses. Those supports included a cost-of-living package of around €2.7 billion, a full-year income tax package of €1.3 billion and a social welfare permanent package of more than €1 billion. That is more than €5 billion of measures to help to put money in the pockets of the customers of those businesses.
That said, we acknowledge that policy decisions made by the Government, which individually are all very good, have contributed to a challenging environment for many businesses. I refer in particular to the increase in the minimum wage, changes to sick pay and PRSI, and further planned changes for auto-enrolment and so on. The Government acknowledges that, which is why the Minister, Deputy Coveney, and the Ministers of State, Deputies Calleary and Richmond, have been doing work to assess the cumulative impact of changes in policy and other changes that have resulted in the cost base of businesses increasing significantly. My focus has been on making changes to the tax debt warehousing regime, which I announced at the beginning of this week, essentially eliminating interest on tax debt that has been warehoused. That will be of benefit to tens of thousands of businesses. Any business that has already paid interest on the warehoused tax debt will have it refunded by the Revenue Commissioners. The Revenue Commissioners have confirmed that they will be as flexible as possible in agreeing phased payment arrangements for the clearing of the tax debt over a period. The standard period is three to five years but they have the discretion to go beyond that in individual cases.
In addition, the Department of Enterprise, Trade and Employment is working with local authorities to finalise arrangements for the payment of the increased cost-of-doing-business grant. It is expected that businesses will be corresponded with in the next couple of weeks in regard to those arrangements.
I thank the Minister for his reply. The Regional Group met Adrian Cummins and Adam Hallissey of the Restaurants Association of Ireland yesterday. They outlined the serious crisis facing the hospitality sector. They told us that the 50% increase in the VAT rate from 9% to 13.5% has resulted in more than 300 businesses closing since it came into effect, with most of the remaining businesses having to absorb this VAT increase as they could not pass on the increased costs to their customers. Most restaurants operate at a 5% to 7% margin. The increased VAT has come on top of the minimum wage increase of 12.4%, sky-high energy costs, inflated food costs and upcoming pension auto-enrolment costs. We ask the Minister to split the VAT rate, which is the norm in many EU countries, and reduce it from 13.5% back to 9% for the restaurant sector in particular. This is what we in the Regional Group will look for in our Private Members' motion on Wednesday. If it does not happen, there will be further major closures in the hospitality sector in the months ahead.
We regret any closures. We do not want to see any viable business close down. It is important to recall the context of the reduction in the VAT rate. When it first happened, it was to stimulate demand by reducing prices to drive footfall into businesses. It was continued during Covid. It was also extended in the context of the war in Ukraine and the cost-of-living pressures so many are facing. Some 14 of the 27 EU member states have a VAT rate on food services of 12% or higher. Ireland is eighth overall in that context. The main issues raised by many businesses with me are the availability of labour and the cost of doing business. We hear that message and are conscious of it.
I have no plans to change the VAT rate. If I were to propose to change one particular tax rate, I would immediately face calls, which are already being made, from retailers to change the standard rate of VAT. The vintners are looking for a reduction in excise. We would essentially be into another budget. That is not going to happen. We will work with our colleagues in the Department of enterprise on the administration of the grant scheme. The tax debt warehousing initiative has been announced. The Department is examining the combined effect. We will discuss that across government. I want to be clear in setting expectations so that businesses can plan. The Government has no plans to introduce a further budget this side of October.