Robbie Gallagher (Fianna Fail) | Oireachtas source

I echo the comments of my learned colleague from County Louth about how a decision made by his party might not have been the wisest. I acknowledge his acceptance of that and the need to consider restoring town councils. They should never have been abolished in the first place. I would encourage such a debate.

I refer to the ongoing discussions about possibly restoring the 9% VAT rate to 13.5%. The Government introduced the lower rate in November 2020 as a worthwhile measure to address the challenges the hospitality sector was experiencing during Covid. It was a wise decision that I welcomed at the time. Now there is talk that perhaps the time has come to restore the rate to 13.5%. I would caution against such a decision as 13.5% would make ours the third or fourth highest rate in Europe. At a time when the number of visitors from the UK is down, we must ensure we do not put ourselves at a competitive disadvantage.

Some have proposed it might be time to split the VAT rate, with the 9% rate retained for food and drink while VAT on beds and accommodation is increased to 13.5%. I am open to that suggestion, but there are many small pubs, coffee shops and restaurants that are just about keeping their heads above water. Times are difficult, given the increase in energy costs and so forth. Now is not the time to think about increasing the rate. I would welcome a debate on this matter. I understand the Cabinet committee will meet this week and that this will be one of the issues on the agenda, as will cost-of-living measures. The time is right for the Seanad to debate this subject, which is of particular importance to rural parts of the country like mine.