Vol. 435 No. 9
131 Mrs. T. Ahearn asked the Minister for Finance if, in view of the serious downturn in trade resulting from the imposition of 21 per cent VAT on the clothing and footwear industry, he intends to reduce this VAT rate; and if he will make a statement on the matter.
I do not accept that the difficulties of the clothing and footwear industry can be wholly or even largely attributable to the increase in the VAT rate from 16 to 21 per cent on adult clothing and footwear announced in the 1993 Budget.
As regards the volume of retail sales, it is perhaps noteworthy that the data for the five months following the budget compared with the same period last year show an increase in the drapery and apparel sector of about 4 per cent, but a decrease in the footwear area of about 7 per cent.
I am fully aware of the various concerns of the industry, and indeed I have recently received a pre-budget submission from its representative body. I will bear these points in mind in the runup to the forthcoming budget. However, I have indicated on a number of occasions that, for budgetary and other reasons, I do not intend to reverse my decision to place adult clothing and footwer on the standard rate of VAT.
