Rose Conway-Walsh urges VAT cuts to save hospitality and SMEs
Rose Conway-Walsh spoke about soaring energy costs, the need to extend the 9 per cent VAT rate on electricity and gas, and the risks those costs pose to households and businesses. She pressed the minister for details on a government energy subsidy and called for a pre-budget VAT reduction for the food-led hospitality sector to protect jobs and communities.
Energy costs and VAT extension
She cited Eurostat figures from October showing the average Irish household energy bill is €500 higher than the EU average, with updated figures due in May. She expressed support for extending the 9 per cent VAT rate on electricity and gas and warned that Ireland now has the highest energy prices in Europe, harming workers, families and competitiveness.
Impact on small businesses
She said high energy prices are crippling small and medium businesses and referenced media reports that SMEs are "going to the wall" because of huge energy costs. She warned that job losses in major sectors would have knock-on effects across the wider economy.
Energy subsidy scheme questioned
She recalled an October announcement of a £170 million energy subsidy intended to provide around €4,000 to €39,000 to hospitality and retail sector businesses. She asked the minister for information on how many businesses have applied for and received support under the scheme.
Tariffs and whole-of-Ireland coordination
She expressed extreme worry about the imposition of US tariffs and their potential effect, noting that the major threats appear to point to the pharma and tech industries. She urged the government to consult with executives in the North so a whole-of-Ireland approach can protect the island economy.
Hospitality VAT and community impact
She urged that the government's pre-budget commitment to lower VAT on the food-led hospitality sector be brought forward, arguing that closures of well-known restaurants and pubs are felt across society. She said the hospitality sector underpins culture and the social fabric of cities, towns and villages and called for measures to protect workers, employers and vibrant communities.
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I think we are all trying to get ready for 9 o'clock tonight and the situation that we are in, so I apologise for being late. But Minister, I understand the absolute necessity to extend the 9 per cent VAT rate on electricity and gas, and as we know the Eurostat figures released in October last year show that the average energy bill for an Irish household is €500 higher than the EU average. The figures are due to be updated in May and I doubt they will make for any less grim reading. We have the highest energy prices in Europe and this is crippling not only our workers and families but also our small and medium businesses. This really speaks to what is happening in terms of our competitiveness here as well and what we need to do to protect ourselves against the tariffs that we are facing. But media reports have indicated that SMEs are going to the wall because of huge energy costs, and in October the Government announced £170 million energy subsidy which was to provide around €4,000 to €39,000 hospitality and retail sector businesses. At the time some in the business sector described the scheme as not worth talking about. Minister, do you have information on how many businesses have applied and received the energy subsidy scheme? There is currently extreme worry in Irish businesses as I said regarding the imposition of US tariffs later today. We simply do not know the extent to which our economy will be affected. Even though the major threats at this point seem to point to the pharma and tech industries, any loss of jobs in these sectors will have a knock-on effect across the entire economy. The Government needs to get to grips with this and to consult with executives in the North so that we have a whole of Ireland approach to protect our island economy. While I welcome any and all of the business supports in light of the challenges facing our small and large firms, I think the elephant in the room at this stage is the Government's pre-budget commitments to lower the VAT rate on the food-led hospitality sector. It was done during the pandemic and a similar measure must be considered afresh, but I do think that must be brought forward. This issue resonates far beyond the employers and the business owners and beyond the many people who work in the sector. When well-known restaurants and pubs close down, it is felt right across society. These businesses make up an important part of our culture and a part of the social fabric of every city, town and village. We cannot have the vibrant communities without viable hospitality sector. I would urge you, Minister, in addition to this extension for electricity and gas that we would consider a VAT reduction on food and catering businesses and other small service businesses. That has been committed to by Government, but I would ask that that would be considered being brought forward at this stage, Government.
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