Feargal Quinn (Independent)

I welcome the Minister of State, Deputy Pat Carey, to the House. He was not here when I spoke about this issue on Second Stage. I do not want to repeat what I said earlier. When businesses hit tough times, they have to decide how to cut costs and take in more money. The choice faced by the Government at this time is not dissimilar. If one wants to take in more money, one must consider whether the best way of doing so is to increase one's prices. However, price increases generally lead to reduced receipts when one's customers go somewhere else. In a competitive marketplace, one can take in more money by reducing one's prices. The markets to which Senator Doherty referred are certainly competitive. I know Dundalk better than I know Letterkenny.

When the British Chancellor of the Exchequer wanted to encourage people to spend more and to take in more money, he facilitated price reductions. At the same time, we did the exact opposite. Our decision — that the best way to get more money is to increase prices — is based on the assumption that the marketplace here is not competitive. It would have been possible to do that successfully in the old days, when we had a protectionist society. We have taken a step in the wrong direction. On budget day, we should have decided to encourage people to spend more money. If people spend more, our VAT receipts will increase. I know we are not talking about basic foodstuffs, to which different circumstances apply. VAT is very competitive.

The IKEA store in Belfast is getting a significant amount of business from people south of the Border. The IKEA store in Dublin is ready to open but that is not allowed to happen just yet. I estimate that the Exchequer will lose €20 million this year as a result of people from Dublin and other parts of this jurisdiction going north to buy goods in the IKEA store in Belfast that they could have bought here. Some 600 jobs will be created, and other benefits will accrue, when the Dublin store eventually opens. I believe we should be reducing VAT, in a subtle and clever way that gives us more rather than less income, instead of increasing it.