Finance Bill, 1985: Committee Stage (Resumed) and Final Stages.

Question again proposed: "That section 42 stand part of the Bill".

I was referring to the building industry and the lack of interest which the Government have displayed towards that industry by the penal doubling of VAT to 10 per cent. It will put thousands of skilled, dedicated and committed people out of work and lower the living standard of their families. There will also be less money in circulation and more people will be forced on to unemployment assistance, which is causing so many problems at present. In Cork one of the major problems is in relation to unemployment assistance — people who lost their jobs in the building and other industries and who are now assessed for the payment of unemployment assistance have their superannuation payments taken into account. This is a penal imposition on people whose standards of living have been eroded through no fault of their own.

I said that the building industry is a barometer of the economy and is normally taken as such. I do not agree with what the Minister said in that regard. We should try to relieve the situation no matter what caused it — bad weather, bad Government or bad decisions. The Minister has a duty to help and one way would be to leave the VAT rate at 5 per cent.

This Government are as powerless to deal with the economy as the person who owns the barometer is to control the weather.

The Committee divided: Tá, 72; Níl, 63.

  • Allen, Bernard.
  • Barnes, Monica.
  • Barrett, Seán.
  • Barry, Peter.
  • Begley, Michael.
  • Bell, Michael.
  • Bermingham, Joe.
  • Birmingham, George Martin.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Carey, Donal.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlon, John F.
  • Connaughton, Paul.
  • Coogan, Fintan.
  • Cooney, Patrick Mark.
  • Cosgrave, Liam T.
  • Coveney, Hugh.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John.
  • Dowling, Dick.
  • Doyle, Avril.
  • Doyle, Joe.
  • Dukes, Alan.
  • Durkan, Bernard J.
  • Farrelly, John V.
  • Fennell, Nuala.
  • FitzGerald, Garret.
  • Skelly, Liam.
  • Spring, Dick.
  • Taylor-Quinn, Madeline.
  • Flaherty, Mary.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McLoughlin, Frank.
  • Manning, Maurice.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Naughten, Liam.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East)
  • O'Brien, Fergus.
  • O'Brien, Willie.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Prendergast, Frank.
  • Quinn, Ruairí.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick Joseph.
  • Timmins, Godfrey.
  • Yates, Ivan.

Níl

  • Ahern, Bertie.
  • Ahern, Michael.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Paudge.
  • Briscoe, Ben.
  • Browne, John.
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Byrne, Seán.
  • Calleary, Seán.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Coughlan, Cathal Seán.
  • Cowen, Brian.
  • Daly, Brendan.
  • Fahey, Francis.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • FitzGerald, Liam Joseph.
  • Flynn, Pádraig.
  • Foley, Denis.
  • Gallagher, Denis.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Kirk, Séamus.
  • Kitt, Michael.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leonard, Tom.
  • Leyden, Terry.
  • Lyons, Denis.
  • McCarthy, Seán.
  • McCreevy, Charlie.
  • McEllistrim, Tom.
  • Molloy, Robert.
  • Morley, P. J.
  • Moynihan, Donal.
  • Nolan, M. J.
  • Noonan, Michael J.
  • (Limerick West)
  • O'Connall, John.
  • O'Dea, William.
  • O'Hanlon, Rory.
  • O'Keeffe, Edmond.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • Ormonde, Donal.
  • O'Rourke, Mary.
  • Power, Paddy.
  • Power, Paddy.
  • Reynolds, Albert.
  • Treacy, Noel.
  • Tunney, Jim.
  • Wallace, Dan.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and McLoughlin; Níl, Deputies V. Brady and Browne.
Question declared carried.
Sections 43 to 47, inclusive, agreed to.
SECTION 48
Amendment No. 46 not moved.
Question proposed: "That section 48 stand part of the Bill."

This is the section which relates to the promoting of and admission to live theatrical performances. I wish to say a word on behalf of cinemas within the terms of the section. The first point is that most cinemas throughout the country and in the cities also are family owned businesses. Secondly, in addition to the showing of films, cinemas have a social context in rural Ireland. When a cinema closes, very often there is no other cinema in the town and this means that there is no other outlet in terms of social contact for young people apart from discos which do not open until late in the evening, or perhaps gaming saloons which do not always enhance the character of an area but which sometimes give rise to problems of one kind or another. There are public houses but the law requires that people under 18 must not be served with alcoholic drink in these premises. However, in many instances it is difficult to know by looking at a young person nowadays whether he has reached 18.

For those reasons we should ensure that in everything we do here which does not involve major revenue implications, we should encourage the maintenance of what one might refer to as the family cinemas. Perhaps I should declare in this regard an interest, albeit a historic interest. My late father was the proprietor of a family cinema. Young people congregated regularly at the cinema. Sometimes they would have a certain understanding as to when they would pay and when payment was made it was not always by way of what might be called coins of the Realm. It could be by way of anything from jam jars to any other commodity. However, a tradition grew up around those cinemas. Parents could rest assured when their children had gone to the cinema that they were in a secure environment.

I have received representations from the cinema proprietors regarding that exemption and pointing out that the Minister must be aware of so many family cinemas having to close. The Minister will appreciate that I am not making a political case in this instance. If he tells me that the change being sought would involve revenue implications, I shall be prepared to listen but I am presenting the case as it has been presented to me and I have been impressed by that case. There is no cinema to be found in many towns but where cinemas are maintained they make a major contribution to the healthy social climate of the area. At least they have the effect of keeping young people out of harm's way though I am not one who subscribes to the view that young people have a natural tendency to put themselves in the way of harm. It may be good in some cases that numbers of young people congregate at the cinema.

The employment factor in regard to cinemas is a matter also of considerable importance. In particular the family firms who are engaged in the promotion of the independent cinemas should be encouraged. Deputy Mitchell made the point today that where there is a place of social, cultural or entertainment value in the centre of a community, even in the city, that facility tends to maintain, if not renew, the social and cultural character of the place. I acknowledge that I have no amendment tabled in this respect but in the circumstances I have outlined I am making a special case to the Minister, having regard to revenue implications, to consider granting the same facility to the cinemas in respect of VAT as apply to theatrical performances.

Are we on the section and, if so, does that mean that the amendment cannot be moved?

We are on the section but I am sure the Deputy may say at this stage most of what he would have said had the amendment been moved.

In any case the amendment did not give much indication of what it is about. It is technical. I made the main argument on section 42 when I argued for a zero VAT rate on theatrical performances instead of the exemption rate. I was thinking of the theatres as distinct merely from performances in the sense of the purchase or the refurbishing and so on of the buildings. I was asking that the VAT in such cases be zero rated but by way of reply the Minister said that because of the EC position in this regard, there is no scope for further zero rating, that the EC restricted the amount of zero rating.

Would the Minister explain how there is no scope for exemption from VAT if there is no scope for zero rating? What is the specific EC position on this? Why do they allow unlimited exemptions but have restrictions on zero rating? If the Minister has some other way of overcoming the problem of theatres that actually lose by virtue of the Minister eliminating the 5 per cent VAT, I should like to hear about it. I do not believe that the Minister would have intended that, when, rather than raising it to 10 per cent, he decided to cut the 5 per cent altogether.

According to the sixth VAT directive of the EC, member states were allowed to keep in place virtually all the zero rates that they had in operation at the time the directive was passed, but they were not allowed subsequently to introduce new zero rates. That is, they were not allowed subsequently to extend zero rating to other areas which had not been zero rated at the time. The general thrust of Community policy, particularly as the Commission would interpret it and apply it in these cases, is to restrict as far as possible the application of zero rates. I think I mentioned earlier that the Commission are now looking rather critically at some of our zero rates on other products, following a line which I am not disposed to accept too readily. However, that is the situation at the moment. The essential point as far as this section and Deputy Mac Giolla's question are concerned is that there is an undoubted limit to our ability to introduce new zero rates or extend zero rating to cover products or activities that are now subject to a positive VAT rate.

Deputy Mac Giolla asked how we could exempt theatres and not exempt cinemas.

I did not ask that.

I was asking that question.

I was asking why there was no restriction on exemptions.

In the case of cultural and artistic activities, the EC law allows scope for exempting those from coverage of VAT. That addresses one of the questions put by Deputy O'Kennedy. In the interpretation or application of that, theatrical performances are regarded as artistic and cultural activities and cinemas are not.

Is this an EC interpretation?

Yes. That is basically the difference between the two. I am familiar with the case that Deputy O'Kennedy was making about the cinemas. I have over the last couple of years had a number of meetings with representatives of cinema owners as a group and with numbers of them individually. I have had representations about their position from individuals in the trade and from a number of Members of the House. If we were to exempt cinemas, the reduction in revenue would be about £8 million in a full year.

I have said to various people who have talked to me about the position of the cinemas that I do not think it can validly be claimed that the difficulties that cinemas are now experiencing can be attributed either wholly, or even mainly, to value-added tax on cinema tickets. There are quite a number of other factors which have affected the position of cinemas and attendances at them. We could mention just a few. Television has been one. The growth of the use of large screen videos in public houses has been another. It seems that when people are faced with a choice of going to a cinema and seeing a film on the one hand or going to a public house and seeing a film and having a drink at the same time, on the other hand, they tend to go for the pub.

That practice is dying out. They do not drink enough. That is being cut out now.

From conversations that I have had with quite a number of people in the business and connected with the business, it seems that it is one of the most important factors affecting cinemas over the last few years. Since, therefore, it appears that the reduction in or elimination of VAT on cinema tickets would not deal with the main part of the problem, other adjustments in the VAT system would have priority over that, as far as I am concerned.

Is the application of the EC directive absolute, or does it allow any degree of discretion to the member state? My impression is that the member state is allowed discretion, which must be subject to confirmation by the EC.

It is not a discretion.

It is in this sense. Obviously, the European Community have a special interest in VAT revenue, having regard to the manner in which the European Community are funded by a percentage of VAT — which was up to recently 1 per cent but is now proposed to be 1.4 per cent. They are interested in total VAT revenue. Where products or articles which hitherto were zero rated — and I mention, for instance, clothes, which are now liable to VAT —one could make a case which would have to be considered favourably by the European Community. Where you are bringing more into the tax net from what was previously zero rated there should be some accommodation, I would have thought, for introducing some small element into a zero category which would still ensure that VAT revenue would be greater than it was before the original change took place. I think there is some scope for discussion with the European Community in this context. Even if the Minister does not feel disposed to meeting our case, I should like clarification on that point.

As far as the application of the EC VAT directive is concerned, VAT revenue and its effects on the EC budgetary situation are not considerations. As the Deputy will recall, the contribution raised from each member state is based on the application of 1 per cent, soon to be 1.4 per cent——

Total VAT.

——on the total defined assiette, as they call it, of VAT. Whether you are actually collecting the VAT or not is not a consideration as far as revenue is concerned. I take the point that Deputy O'Kennedy is making in a political sense. That is, if we are bringing new things into VAT which were previously zero rated, there is an argument, in terms of a political discussion, for having some leeway elsewhere. I am very conscious of that fact and have been giving effect to that line of thinking in discussions that I am already having about pressure on me about zero rates. To an extent, some of the credit is already used up.

Let me revert for a moment to another point raised by Deputy Mac Giolla which I overlooked a moment ago. It is in relation to the theatres. There was a feeling that in one or two particular cases exemption would produce a situation less beneficial than the application of the 5 per cent VAT rates. I am a little constrained in talking about this because I do not like speaking, even in the House, about the affairs of individual taxpayers. There are two cases in relation to theatres where a difficulty would tend to arise. One of them should be dealt with in a different way. In the other case it was felt at the beginning there was a problem, that the theatre would lose out as a result of exemption rather than the 5 per cent rate, but on examination that proved not to be the case.

Section 48 (viii) (b) states as follows:

Performances in conjunction with which facilities are available for the consumption of food or drink during all or part of the performance of persons attending the performance.

I presume the section has in mind not to allow this exemption to cabaret lounges and so on. In most theatres there are at least bar facilities during the interval. Practically every function nowadays has bar facilities, otherwise the attendance suffers. I am not sure if it is necessary for the Minister to insert that clause. I could imagine an inspector of taxes telling the theatre management that as there were bar facilities available during part of a performance they would not get the exemption.

The section also refers to live theatrical or musical performances. There will be a major musical performance at Slane in the near future. I am referring to the Springsteen concert at which at least £1 million will be collected at the gate. Will this section mean that live performance will be exempt?

With regard to the first part of the Deputy's question, this section exempts from VAT the activities that up to now have been subject to 5 per cent. The terminology to which the Deputy has referred is designed to exclude from the benefit of the exemption cabaret performances because the intention was to give this specific treatment to the theatrical or live performing arts. For example, the fact that a theatre would have a bar or a coffee bar to which people could go during the interval would not defer it from the benefit of this exemption. The language here is intended to exclude from benefit places where food and drink are available during a performance to people while they are watching a performance.

With regard to the second part of the question, concerts such as the one at Slane would benefit from this exemption.

Question put and agreed to.
SECTION 49.
Amendment No. 47 not moved.

Amendment No. 48 is in the name of Deputy O'Kennedy. Amendment No. 51 is related and, therefore, amendment Nos. 48 and 51 may be discussed together by agreement.

I move amendment No. 48:

In page 39, between lines 14 and 15, to insert the following:

"(b) by the insertion after paragraph (xvi) of the following paragraphs:—

‘(xvia) services consisting of the development of immovable goods, and the maintenance and repair of immovable goods including the installation of fixtures, where the value of moveable goods (if any) provided in pursuance of an agreement in relation to such services does not exceed two-thirds of the total amount on which tax is chargeable in respect of the agreement;

(xviaa) concrete ready to pour;

(xviaaa) blocks, of concrete, of a kind which comply with the specification contained in the Standard Specification (Concrete Building Blocks) Declaration, 1974 (Irish Standard 20: 1974);'.".

There was some merit in the case put forward by Deputy Mitchell in so far as the effect would be to exempt from VAT security alarms for senior citizens. Perhaps the Minister would consider that case. We are now coming to the end of Committee Stage and the Minister is about to achieve the distinction of not accepting one amendment put down during the debate. Probably he would be more disposed towards accepting an amendment in the name of one of his own Deputies rather than an amendment put down by me or my colleagues. Perhaps this is the time to break the duck, and even though Deputy Mitchell is not present at the moment, perhaps the Minister will tell him he accepts that amendment.

My amendment deals with the issue we have raised during the main part of the debate on the new categories of VAT. I was speaking about the new rate of VAT on building services and the distortion that will occur as a result of what is proposed with regard to concrete blocks. The Minister will be encouraging some people who are not within the bona fide trade to stay outside that trade. Secondly, the consequence will be that builders who are already under severe pressure may tend to go outside the normal regulated economy. If there is anything we should have in common here I should have thought it would be a common determination to ensure that we so do not encourage the black economy. This is becoming a problem not just for revenue but for the whole social environment and the law and the stability of the country. I will not overstate its significance at this point. We have argued this on many occasions and in view of the time constraints now I do not intend to repeat the arguments at length.

The case we have made with regard to the building trade is unanswerable. When the Minister indicated he expected to raise an extra £40 million as a consequence of this adjustment, that was the most cogent, telling argument in favour of our proposal. To put that extra burden on the backs of any sector is more than they can sustain. Not all of them will have the same physical capacity as the Taoiseach. Today he boasted he has a duck's back — I did not think I would ever hear a Taoiseach make such a boast——

That is a very poor quack.

That may be, but the Taoiseach said that today. The building industry has taken too much and it cannot sustain the burden being placed on it. The Minister has imposed an extra burden amounting to more than £46 million on that sector and that speaks for itself. That is too big a burden to impose on an industry that needs so much and is now experiencing unemployment at a level of 50,000. That is close enough to one quarter of the total number unemployed in this economy, and that is going on the live register only. That constitutes a huge element of the unemployment problem and an indication of the significance of the building industry to our economy.

I want to take issue with the Minister when he says that we have offered no alternative in terms of saving on expenditure. If the figure for unemployment benefit for those in the industry is of the order of £158 million or £150 million, which is almost exactly the figure the Minister gave of the cost of accepting all the amendments we propose, then I would have thought the likelihood was that if unemployment benefit for 50,000 people would cost an amount of that order and if he looked at the credit side and what he would save in respect of social welfare payments, then on pure economic terms alone, leaving aside the social argument altogether, which I believe is a very cogent one, the Minister should reconsider his position. Of course, the figure the Minister has quoted is a gross one in terms of the revenue. Having regard to what would be yielded in indirect tax, the net cost would probably be closer to £30 million than £45 million or £46 million.

For all those reasons the Minister should, if not immediately respond to the case we have effectively made, then at least show a readiness to consider it on Report Stage. I plead with him, in the interests of the overall economy and not just of the building industry, to reconsider his position.

I want to support as strongly as possible the case made by Deputy O'Kennedy. The reality here is that VAT on the supply of immovable goods, namely houses, on or after 30 April 1985 is increased from 5 per cent to 10 per cent. As Deputy O'Kennedy has pointed out in great detail the building industry is an extremely depressed one at present and is perhaps our most labour-intensive industry. Therefore, from an economic point of view it does not make any sense at all to increase VAT by 100 per cent on that industry.

The Minister and various Government spokesmen have argued that the balance is corrected to some extent on the other side by two factors — first, that the £1,000 new house grant has been doubled and that VAT on cement blocks has been reduced. In no way can those factors compensate for the devastating blow delivered to the building industry by increasing the rate of VAT on them by 100 per cent. The Minister will be well aware that the £2,000 new house grant now applies to first time purchasers of new houses only. It does not apply to people who purchase secondhand houses or that category of people purchasing new houses who are already house owners. My information from the Construction Industry Federation is that that category constitute approximately 40 per cent of purchasers of new houses.

With regard to the question of the reduction of VAT on cement blocks, I should say that not alone will that not compensate for what the Minister has done in regard to the main increase but will have detrimental effects via-a-vis the black economy. It must be remembered that its effect is two-fold. First, it makes materials cheaper for a builder who has not registered for VAT. Second, it places a builder who has not registered for VAT and who is selling a house in a better and more competitive position vis-a-vis his registered counterpart. This means that, whereas heretofore he could sell that house for 5 per cent less, he can now sell it for 10 per cent less because he does not have to collect any VAT.

There have been some arguments about a cash flow advantage that might arise for builders from the reduction in VAT on cement blocks. My information is that there will be no such cash flow advantage because the refunding of VAT charged is normally effected within the credit period operating within the building industry generally. In those circumstances we on this side of the House have no doubt but that the blow delivered by the Minister to the building industry in relation to the increases in VAT from 5 per cent to 10 per cent on the supply of immovable goods constitutes a truly devastating blow with profound implications for employment in that industry. Certainly its effect will be that no new employment will be created in the next 12 months.

The Minister should take cognisance of the fact that new houses will now be taxed at 10 per cent whereas secondhand houses are taxed at between 4 per cent and 6 per cent only. By that I mean that stamp duty applying to secondhand houses valued between £20,000 and £50,000 is at a rate of 4 per cent and on houses whose value is in excess of £50,000 the rate goes up to 6 per cent. That means there is a distinct bias in favour of secondhand houses. In the case of non-grant aided houses, which constitute 40 per cent of new houses, the bias will be particularly severe and the situation badly out of balance.

I would ask the Minister to consider this amendment very seriously. He should look first at the implications of what he has done by increasing VAT on the building industry by 100 per cent, at the reaction that has caused throughout that industry and the building unions. Nobody will fault the Minister in any way if he stands up and admits that he has made a genuine error and accepts Deputy O'Kennedy's amendment. In fact people would praise him all the more.

There is one technical question I want to pose to the Minister, something which has given rise to a certain amount of dispute and correspondence in the media. Is the 10 per cent VAT rate on new houses inclusive or exclusive of the £2,000 new house grant? I want the Minister to give me a clear and definitive answer to that.

I might point out one other matter to the Minister, which is that this extra imposition of 5 per cent will cost the Exchequer on the provision of local authority houses, which we are told will run at approximately 6,500 this year, something in the region of £750,000. Therefore, bearing in mind the sum set aside in the Government programme, the imposition of the extra 5 per cent will considerably cut into the number of houses the Minister and his colleagues would hope to have constructed under that programme. We should remember that that figure has risen 8 per cent over the last two years and has dealt a devastating blow to the building industry. Unless something drastic is done, such as what is proposed in Deputy O'Kennedys amendment, what will happen is that more and more people will operate within the black economy, will start to build for themselves, will start to build houses not up to standard.

I cannot see how people building houses for themselves will be able to comply with the building regulations which the Minister for the Environment has before the House. This will lead to the erection of many houses of inferior standard.

I add my voice to the pleas of other Deputies, as one who was associated with the building industry for many years. I would ask the Minister to change his mind on this most important issue. It should be remembered that, in addition to the amount of unemployment assistance being paid to the unemployed in the building industry a boost to the industry in the form of a reduction of 5 per cent would give the industry confidence. It would also result in more people being employed in building construction and more revenue for the Minister because quite a number of people involved in building at present are not paying taxes. Those people are operating in the black economy. If the Minister gives registered contractors the reduction sought in Deputy O'Kennedy's amendment he will be doing something positive for an industry that can make such a tremendous difference to the economy.

I should like to ask the Minister to give serious consideration to Deputy O'Kennedy's amendment. We are all aware that the proposal to increase the VAT rate from 5 per cent to 10 per cent will have a devastating effect on the construction industry. It will add from £1,750 to £2,000 to the price of a new house costing £30,000. I do not think the £2,000 new house grant will compensate buyers because builders will pass on the increased VAT rate to purchasers. It is an injustice that secondhand houses are not grant aided. In the area of new houses purchasers can avail of the £2,000 grant, the £3,000 mortgage subsidy and, if they give up a council house, a further grant of £5,000. Unfortunately, it appears that those who buy a secondhand house are penalised. The Minister should take into consideration that many people buy secondhand houses under the impression that they will get grant aid.

The zero rating of blocks will only add to the black economy. Genuine builders who pay their taxes and VAT cannot compete with cowboy builders. Those on the dole who have jobs on the side can quote a cheaper price for jobs. They get the cash up front and do not pay tax or VAT. That is the reality in country areas and builders cannot compete with that.

I should like to support Deputy O'Kennedy's amendment. One of the biggest issues since the introduction of the budget has been the increase in the VAT rate on building materials from 5 per cent to 10 per cent. The Minister may ask, if he makes adjustments in this area, where will he find the revenue he will lose but this was the worst possible area to increase the VAT rate. In recent months there has been a lot said here and outside about the building industry but we are all aware that the number unemployed in that sector is alarming. The industry has been crippled for the last couple of years but the VAT increase is the straw that is breaking the camel's back. It is generally accepted that one way to prime the economic pump is to put money into the construction industry. Such an investment has a spin off effect in building that occurs quicker than in any other sector. When the Government were making the decision on where to increase VAT they chose the worst area to hit.

I accept that adjustments have been made since the budget — there was an extension of the date when people could close deals to 1 May — but there has not been any change in regard to VAT on building materials. The effect will be severe on a crippled industry. The Minister is aware of the number of building workers in our constituency who are unemployed. This move will put more legitimate builders out of business. Small builders are giving up and people are going to cowboy builders who do not pay proper tax. Those individuals are getting a boost as a result of the change in the VAT rates. I should like to know if VAT is applied before or after the new house grant. Immediately after the budget there was a lot of confusion about the issue. I hope the Minister will clarify the position.

I support the amendment. There seems to be a lot of confusion on the Government side about this. There is no consistency in the policies of the Departments of the Environment and Finance in relation to new and secondhand houses. In the budget the Minister gave £2,000 with one hand but took it back with the other hand. This resulted in a net loss of £1,000. The Minister has added £2,000 to the cost, has increased the grant by £1,000 and they balance out. The whole thing is pointless. We should consider that there is a net loss of £1,000. We have all heard of the policy for refurbishing dwellings but, on the other hand, we have discrimination against those buying secondhand houses. There is no coherent policy in the Department of the Environment, from whom the Minister presumably got advice on his tax proposal, or in the Department of Finance.

Is the Minister in a position to give the House the figures to show the net effect? What is the net intake to the Exchequer on the whole deal? Is the whole thing a waste of time? Is it just a question of keeping people going sending in forms without any net benefit to the Exchequer or the construction industry or improvement in secondhand houses or encouraging the building of new houses? There is no clear policy. One would expect a consistent policy between the taxation relief measures and schemes promoted by the Department of the Environment.

The first point I should like to make about the amendment is that it proposes the zero rating of building services, ready-mixed concrete and concrete blocks. The cost of the amendment would be in the order of £79 million this year and £142 million in a full year, to get what Deputy O'Kennedy regards as the ritual statement of the financial position on to the record first. I also have to make the point, and it follows on from considerations we discussed on a previous section, that zero rating on this scale would certainly fall foul of EC directives in the matter. They are two very important points but, nevertheless, not the ones that are uppermost in Deputies' minds although they should be given their proper importance.

I should like to make some remarks about the rest of the comments made. The rate of VAT on houses applies to the gross price as quoted by the builder. The price the builder quotes is the gross price inclusive of 10 per cent VAT at this point and it is after that that the purchaser gets whatever grants or other assistance he may be entitled to. I can understand that Deputies have this question in their minds because there was at one stage, in discussions between myself and representatives of the Construction Industry Federation, consideration given to removing the grant payment, or a portion of the grant payment, from the VAT base. As it turned out on further examination that proved not to be a very convenient kind of arrangement. Instead we increased the grant to the present level of £2,000.

Deputy O'Dea mentioned the reduction in VAT on concrete blocks in connection with the black economy particularly. A point which is often overlooked is that one of the reasons for VAT on concrete blocks was the representations made to me by people involved in the manufacture of concrete blocks who said that their position as manufacturers and sellers of concrete blocks was being undermined by people unregistered in the same business.

They were not proposing an increase in VAT for the building industry when they made that case to the Minister.

There appeared to be a difficulty in that sector, and since we were rearranging the rates it appeared to be appropriate to take the opportunity of putting the concrete blocks into the 10 per cent VAT rate which will produce some benefit for the concrete block makers.

The same thing applies to the building industry.

The same rate applies to the building industry.

The Minister is not worried about the black economy in relation to the building industry but he is in relation to the manufacture of concrete blocks. What is the difference?

The Deputies are forgetting to look at the wider picture, where we now have a single rate of 10 per cent across the sector. This is an important aspect——

That argument——

——of the rationalisation of the VAT system.

——is not worthy of the Minister.

I understand the concern of all Deputies about the black economy. It would be idle to pretend that there is not a link between the level of taxation and operations in the black economy and I do not intend to do it.

They grow together.

The way to deal with that is to follow the policies that allow us to bring down the total level of taxation——

—— and to expand the base. We would be waiting until the cows came home for the Deputies opposite to make proposals that would bring about that result.

You are the Government.

I am waiting for the Deputies opposite to support the kind of policies that we are following that will bring us towards that end.

(Interruptions.)

This is where the Opposition fall down. They do not want to be involved in making choices and that is the reason why we have so many arguments here. The Government are making choices and we are making up our minds about what needs to be done but the Deputies opposite do not want to see the whole picture.

The Minister is making the thing worse. The Minister is adding to the problem.

I am just as worried as Deputies and the industry about the black economy. I have had a number of discussions with representatives of the industry and I am looking at a number of measures that have been proposed as a means of cutting down on the level of activity in the black economy in that industry. I am not sure yet whether any or all of them would be immediately effective but when we examine these measures we will see how far they can go. There may be things we can do in the administration of the tax system to help to reduce the incentive in the black economy. We should not exaggerate the benefits from being in the black economy because those in the black economy, by definition, cannot claim VAT.

They are doing well enough without us advertising it.

They cannot claim back VAT they have paid on their inputs.

(Interruptions.)

If the foursome over there want to listen to themselves talking I am prepared to sit down and listen to them until 7 o'clock. If they want answers they should have the patience to wait to make their remarks until I have concluded mine.

We would be waiting until the cows come home.

The black economy operator has to bear VAT on any inputs and he cannot claim it back. Most builders are in a net reclaim position so that they are actually being repaid more VAT then they charge out. To that extent they have a certain element which enables them to keep up with the black economy opeators.

It has been suggested that there has been a bias towards secondhand houses because we have a VAT rate of 10 per cent on new houses whereas for secondhand houses the rate of stamp duty is 4 or 6 per cent. I am not sure of the line on the benches opposite because Deputy Browne seemed to be taking a different view. Deputy Browne seemed to feel that there was a bias in favour of new houses, which there is. For the majority of new house buyers, when one takes account of the fact that they can get the grant now £2,000, the mortgage subsidy and, in certain circumstances, the other £5,000 grant we have introduced, there is a bias in their favour. It seems for that portion of the market——

On a point of order——

That is not a point of order, Deputy, I can see it in your eye.

How do you know, you do not know what I am about to say?

For that portion of the market there is a very definite incentive, a very definite advantage for the new house buyer.

I am making a point of order. The Minister is grossly misrepresenting the views expressed on this side of the House. He is suggesting that there is some conflict between Deputy Browne and myself in that I am saying that there is a bias towards secondhand houses and Deputy Browne is saying——

That is not a point of order. That is a point of disorder among the Opposition Deputies.

Of course there should be a bias in favour of new houses, but the Minister is giving it with one hand and taking away with the other by reducing the bias in favour of new houses.

I am confirmed in my reading of the gleam in Deputy O'Dea's eye. I knew it was not a point of order. I was pointing out that on the one hand Deputy O'Dea claimed that there was a bias towards secondhand houses whereas Deputy Browne seems to suggest that what was wrong with the system was that there was a bias towards new houses. The two opinions do not go together and I was trying to point out the facts so that we can draw the appropriate conclusions. For the new house market, particularly for the first time buyer who usually buys a grant-qualifying house, the buyer qualifies for the £2,000 grant, for the mortgage interest subsidy, for mortgage income tax relief which applies to almost everybody and, in the appropriate circumstances, for the £5,000 grant. Taking all of that together and the 10 per cent VAT on the new house it seems that for the first time typical young house buyer there is a definite incentive to buy a new house.

Including the 10 per cent VAT.

Deputies opposite will know this as well as I do. Deputy McCreevy and I know it particularly well in Kildare. The £5,000 grant scheme we introduced has taken off at a rapid rate and is proving to be one of the growth areas of the housing market.

(Interruptions.)

Deputy Calleary made some remarks about the building standards required. I am not in a position to answer that. It does not arise on the Bill and it would be a matter to be more properly taken up by my colleague, the Minister for the Environment.

There might be a better chance of getting a positive response.

I suspect he might be making a more objective case, so that would naturally follow. Deputy Mac Giolla feels that he has detected inconsistencies in treatment and made a number of remarks about money being put in on the one hand and taken out on the other. Deputy Mac Giolla is talking only about housing. We are talking here about the application of the value-added tax system to all of the construction sector and housing is only one part of it.

Of course there is inconsistency. If we treated everybody in the same way that could only be on the basis that we did not think there was any particular need for involvement by the State in assisting people or encouraging them to do one thing or the other. Governments for a long time have taken the view that we should assist or encourage people to buy their own accommodation and equally for some years past Governments have taken the view that we should encourage people to make rented accommodation available, and in the efforts to promote those objectives we have adopted different strategies. If we are talking about encouraging people to buy houses we have a mixture of direct grants and tax reliefs as in the case of mortgage interest. On the other hand, if we are talking about stimulating people to provide extra accommodation the decision has been to encourage people by granting them tax reliefs as in the famous section 23 modified by section 29 and in the measures we discussed here yesterday. The fact that we adopt different approaches to different parts of the problem does not indicate inconsistency.

I might have anticipated the end in any event, but let me say that two or three significant things have now emerged from the Minister's response to our case. The Minister for the first time, as far as I know, has acknowledged that the growth of the black economy is almost at the same pace as the growth in taxation——

I did not say that.

——that it is the level of taxation which is stimulating growth in the black economy.

On a point of order——

If I may be allowed to use the Minister's techniques, I can see from the gleam in his eye that this is not a point of order.

A Deputy

He is waiting for the cows to come home.

The cows will be a long time coming because the Government and the Minister will not even have the cows to send out, much less wait for them to come home. What has been staring everyone else in the face up to this moment and the Minister has at last seen is that we are seeing a real growth in the black economy as a consequence of the levels of taxation. It is a huge growth area which is serious for the economy and also for the whole social and business order in our society. Apparently we can look forward to further growth in that characteristic of our society because, with total tax revenue this year forecast to grow by over £400 million over last year's outturn, there is no doubt that those engaged in that activity are looking forward to better times.

The Deputy is confusing the base and the rate again.

They are the only ones who can look forward to better times. Part of the problem is that the Minister does not wish to recognise that. We have been highlighting that not just in this debate but since he first took up responsibility as Minister and decided to follow policies of trying to bridge a deficit by heaping on extra inflation. Let me say in that context that in a sense I wish to dissociate myself from those of my colleagues who accuse this Government of being Thatcherite because I understand that Thatcherite policies are geared to bridging the current budget deficit by reducing public expenditure and keeping the levels of taxation low and if possible reducing them. This Government are doing no such thing. This Government are increasing levels of taxation. They are attempting to bridge the deficit not by reducing current expenditure but by increasing levels of taxation to the point——

The Deputy had better not let Deputy Gene Fitzgerald hear him say that he is converted to Thatcherism.

I am talking about wasteful expenditure and I wanted to give some examples. Mrs. Thatcher would be in total agreement with this. With levels of taxation such as have been heaped on the building industry there is no hope. We will not bridge the deficit. The projection at the beginning of this year, as far as I remember, was £4 million. A Leas-Cheann Comhairle, as surely as you are sitting in that Chair and the Minister will not be too long sitting in his chair, we will not even be able to stay within that very soft target. If you set such a soft target that you can boast at the end of the day that you have kept within your target, that is some achievement. I am prepared to bet 2p — and I was right last year and the previous year — that we will not be staying within the soft target.

(Interruptions.)

If we are to stay within it we will have a further supplementary budget. We will not be staying within it because we are placing impositions on perhaps the most important elements in our economy, in this case the building sector. I want to conclude on this because we could have anticipated the Minister's reply. If he were really as interested in creating the conditions for economic growth and renewal as he seems to be in juggling with words which issue from this side of the House to misrepresent the various positions of Deputies — he likes to do that when he finds a point on which perhaps a Deputy is wrong or when someone may say something with which I disagree or when Deputy Mac Giolla and I may seem to be arguing — he would get down to doing what he has been elected to do, which is to create conditions in which the vital elements of our economy, particularly the building industry, can begin to breathe again. If he is satisfied that his way is right then I am afraid they will begin to suffocate and have little chance of ever being restored to health. The Minister is not going to accept our amendment.

Amendment put and declared lost.

An Leas-Ceann Comhairle

Amendment No. 49 in the names of Deputies O'Kennedy, Mac Giolla and De Rossa. Amendment No. 53 is related and by agreement amendments Nos. 49 and 53 may be discussed together.

I move amendment No. 49:

In page 39, to delete lines 15 to 27.

This relates to articles of children's personal footwear. Again we have all too short a time to make our case and I will not spend too long on this. The Minister gave a figure today for what accepting our amendment would cost. I think the figure was £6 million.

It is £6.9 million.

In this year or a full year?

In this year and £11.5 million in a full year.

It is £6.9 million which will break down to the order of about £4.5 million net. That will be the cost of it.

On a technical point of information to help the Deputy, he does not really add to his case by talking about the difference between gross and net at this point. The buoyancy adjustment that we made on budget day already takes account of those factors. If he is talking about changing at this point he must talk about the gross cost.

I do not necessarily accept the precision of what the Minister has said but I have not time to go into that now.

The Deputy believed in buoyancy when he was making the case but he does not believe in it when he is at the other side of the House.

The difference between us is that when I was sitting in that seat I generated buoyancy as a consequence of which we got tax revenue over and above what was projected.

The Deputy remembers.

I do, but it will be some time before any Minister for Finance, having regard to what the current holder of the office has done, will be able to look for buoyancy again when projecting his figures for the budget outturn. We are dealing with children's footwear. This is a major imposition on poorer families. The poorer families have some characteristics which the middle class and upper middle class families of Dublin 4, and perhaps part of the Minister's and part of my constituency, may not have. First, there tends to be more of them and, secondly, the cost of clothing and footwear for the poorer families is always a major element of cost. The two parent two children family is more a characteristic of the well-to-do than the poorer section of the community. Whenever we heap extra charges on clothing or footwear we are hitting those who can least afford it. I make my case on grounds of equity and social justice. One would not meet a person in Dublin 4, an area the Taoiseach frequents so often, complaining——

Deputy O'Kennedy is seen there too.

Yes, I do not confine my advice and discussion to that area. Fortunately, I have other more real contacts, most of them the unemployed in my home town Nenagh. The real burden falls on the poorer families. The Minister has ignored these people by taking into the VAT band a commodity which had been zero-rated. We hear about social tensions, family and marital problems and so on, but most of the marital problems in the well-to-do areas derive from different causes than the marital problems in the poorer sections. In the latter case marital problems arise almost exclusively because of lack of financial resources.

That is stretching marital problems——

This is a problem which arises all over the country, because if a women cannot buy clothes or shoes for her children but her husband buys himself a few pints this can start a row. This is reality. I am asking the Minister to look at this again on social and economic grounds. The few remaining footwear businesses rely on the home market. The people I am talking about are not wearing Swiss Bally shoes. They buy the most durable, inexpensive Irish footwear.

When it comes to taxation it is time to show that we have a social awareness. If people are to be hit hard by these taxes, as is happening here, we run the risk of even more serious consequences for the poorer classes and the industries concerned. I appeal to the Minister, not with any great degree of confidence, to look at this again.

I support what Deputy O'Kennedy said about the VAT on footwear. In 1982 the Coalition Government were defeated because they tried to introduce VAT on clothing and footwear. An election was held and the electorate threw them out because of the introduction of that tax. Now, using their majority, they are pushing through this tax against the wishes of the people. In an earlier budget, the Government succeeded in putting VAT on clothes and in this budget they succeeded in putting VAT on footwear and increasing the VAT on clothes. This is an extraordinary attitude when the people made their views so clear three years ago and since then. Because of the biting recession and the increasingly vicious budgets each year, people are less able to pay for footwear. We see the type of footwear people are buying — the cheapest possible. In the long run this is probably the worst thing they could do because it will cost them a lot more over the years than if they bought footwear which would last a year or two. They are buying the cheapest footwear because it is all they can afford. They are not prepared to pay £20, £30 or £40 for footwear. The VAT on footwear and the increased VAT on clothing is one of the gravest personal impositions in this budget and is seen by many people as extraordinary following the opposition to a similar tax some years ago.

Long before this recession the shoe and leather industry was in a very bad state, mainly as a result of our entry to the EC and the fact that the industry were not geared for this type of competition — they no longer had protection and they had not invested in new machinery. The recession has put further burdens on this industry, which needs a boost rather than to be penalised. This industry should be encouraged by giving them incentives to use Irish leather and so on.

The lower paid workers and those on welfare and unemployment assistance will see this tax as a very great imposition. Parents have to buy shoes for children of 12, 13, 14, 15, 16 and 17 because teenagers need new shoes more often than at any other time in their lives. This is a very big outlay for any household with four, five or six children. The lower income group seen to have the bigger families, a higher percentage of them are unemployed and they are not well educated. It is the socially deprived group who are being penalised most because they spend a much higher proportion of their income on shoes and clothes than the people in the higher income group. This tax is seen as a major imposition on their standard of living.

This section deals with a 10 per cent VAT rate on shoes and increasing the VAT rate on clothing from 8 per cent to 10 per cent. This is seen as an anti-family and anti-social measure. The people hit hardest, as other Deputies have said, are the less well off members of the community. I ask the Minister to reconsider this before Report Stage.

How is an 11 year old to be identified to avail of the provision that up to that age shoes are VAT-free? Many 11 year olds take a larger size than average and children of 13 and 14 years of age take a smaller size than average. This measure will also bear heavily on the already hardpressed footwear industry. I am thinking of Clarks in Dundalk and other footwear businesses are also under severe pressure. The Minister is ill-advised in increasing the VAT on clothing and footwear.

Deputy Ahern addressed himself to the position of those who may be over that age and how that is to be determined. If you are unlucky enough to be eight or nine years of age and have a foot size of a child of ten, 11 or 12 you will be caught in the trap. I have to declare a personal interest because I have an eight year old child who takes the same size as a 13 year old in clothes and shoes. However, the Minister need not worry about me but should concentrate on those who are more important.

I support Deputies O'Kennedy, Ahern and Mac Giolla in the case they made. We have pointed out at some length the effect of these impositions. On an earlier section of the Bill the Minister advanced an extraordinary argument when he said that the rate of VAT on footwear did not affect the industry——

Do not force him to repeat that argument, I could not listen to it again.

It is most extraordinary but I will let it rest. Deputy Ahern referred to the situation regarding footwear appropriate to children of 11 years or under. No country in the civilised world has more ludicrous legislation than that which applies one rate of tax to footwear appropriate to children over 11 years of age and no tax at all on footwear for children under 11 years of age. That provision should be withdrawn in the interest of sanity, if nothing else.

I asked the Minister this morning how he proposed to tackle the unemployment problem by increasing the burden of taxation on most labour-intensive industries. I do not recall him replying to that and I should like to get the answer.

The imposition of VAT on footwear seriously affects the living standards of poor families. The Minister must realise that those families are already suffering as a result of the high cost of living and serious unemployment. I do not know how the Minister arrives at the cut off point of 11 years of age. It baffles me because children of all ages go through many pairs of shoes and boots in a year. Indeed there should be an incentive for parents whose children are approaching the teenage stage instead of penalising them. There have been many job losses in the footwear industry over the past few years and it is in need of a lift instead of the imposition of an extra 10 per cent in VAT which will kill it. I ask the Minister to seriously reconsider the position in this regard.

In referring to footwear, I presume this includes football boots? Many young children play hurling and football and wear out their shoes and boots very quickly. There is also a VAT rate of 23 per cent on hurleys which is also relevant and perhaps the Minister could let us know how much it would cost the State if he removed VAT on hurleys.

This is not appropriate on this amendment.

The Deputy has missed the boat.

Footwear includes that which is used for the purposes of games.

The Minister has come down very hard on young children, not just in relation to clothes and shoes but also in regard to the games they play. If a youngster goes out to kick football in his boots it will cost a lot more now. If he brings his hurley also he will get no sympathy from the Minister. The poor mothers will have to find the money for clothes and shoes. In rural areas, children do not normally tog out in football gear but play in their own clothes and shoes which wear out very quickly. I can anticipate the Minister's response, his track record is so consistent that if he was a horse in training for the Derby, he would be past the post. He has been more consistent than any previous Minister in his pace and in his stubborn resistance to change. He is determined to ignore advice or suggestions from any quarter. The case which my colleagues made so well will now be ignored. He ignored poor Deputy Conlon yesterday and we have no hope at all. I see Deputy Yates coming in. Perhaps he will join in the debate on children's footwear and clothes. We would welcome his support although it is in a lost cause.

In one respect, Deputy Yates is past that but in another he has not come to it.

I also wish to mention that one newspaper has distinguished itself by not reporting one line of these debates. I suppose that is a distinction of some kind but I will give them a suggestion for another headline. I might as well name it, the good old Irish Press to which many of us and our predecessors contributed. There was not one line. They managed to find this much about the Second Stage debate one day when only the Minister and myself were here. Could I suggest another headline to them if they are interested and forget the details of who said what?

I do not think that is relevant to the section.

It might be.

The Deputy is losing his grip.

It is the type of headline which might appeal to The Irish Press, although I have a feeling that the distinguished notetaker in the Gallery at the moment does not represent that paper.

The Deputy should address the Chair.

I am addressing the Chair. They might find a headline in the fact that, during the whole course of the Committee Stage debate, they had something in common with another distinguished group, the Labour Party. I am not criticising their notetakers. The Labour Party deliberately absented themselves from the House for every minute of the Committee Stage debate. They absented themselves from the exemptions from old age pensioners, the exemptions on income tax for poorer families. They were absent for the lot.

We are on amendment No. 49.

They were also absent when we were talking about VAT on children's clothing and footwear. They are a bunch of sheep who can be herded in to interrupt our leader when he is making a contribution. They were here in their droves today to clap obsequiously when the Taoiseach made his rather weak and defensive case in relation to recent events.

The Deputy is well in contention.

Sheeplike.

The last thing the Labour Party want to be accused of is being in any way associated with the Minister for Finance. They want to distance themselves as far as they can from him.

The Deputy will have to come back to the amendment.

I will come back to it now. As Deputy Mac Giolla said, we are now talking about something which brought down the Government some years ago when apparently some Members of this House had some degree of social conscience, although they were not to be found in the Labour Party. They will not be found there now either. They have not come into the House to express an opinion. I am serious. I would welcome their support. I am not a hypocrite. They are. I would welcome their support for the cause they sometimes proclaim. They say they are concerned about the poor and about the cost of living for the poor, young married couples and their children.

I deplore the hypocrisy which allows them like cowards to stay out of the House when these issues are being debated. I acknowledge what Deputy Yates and others have to say. Even if they vote the other way, at least they say their piece. Even if there is an inconsistency in saying one thing and voting the other way, that is at least some recognition of the House. A party who stay outside the House during the whole course of the debate deserve nothing but contempt. From the people they claim to represent I am sure they will get that.

The Deputy must relate his remarks to the amendment.

The point we are dealing with is footwear and clothing for children and the cost of footwear and clothing for poorer families in our community. If that is not relevant to those who claim to represent the poor and the needy, nothing is relevant any more.

Relevant to the amendment.

The amendment is in my name. Deputy Mac Giolla is in the House and he and Deputy De Rossa have been fairly consistent in their attendance. I am appealing to all Members of the House to vote for my amendment. I regret that the Labour Deputies are not here to hear me. I regret the fact that they have not listened to the arguments.

If I do not put the amendment within five minutes nobody will have a chance to vote.

Even if we could not convince the Minister with our arguments, the second hope was that we might convince some of the Labour Deputies to support some of these amendments. If they do not come into the House they will not be convinced. When the bell rings, like sheep when they hear the shepherd's bell they will be here. They will sit up there as they did today when the Taoiseach was speaking.

The Deputy is tempting me.

The shepherd knows them by name and he knows he can rely on them just as much as he can rely on the most hard line right wing Fine Gael Deputy in the House.

This is very tempting.

One lot in the Government pretend they stand for something, and we know where the other lot generally stand. That is what has the country in an awful state. No wonder the building industry, the footwear industry and the clothing industry are in a state of decline. No wonder the social tensions we see are as acute as they are. There will be no change until the real change occurs and we change places. The Labour Party will be here in a few moments. Those who are interested in spotting the first cuckoo can watch them as they come in. When the bells ring the cuckoos will return to the nest and they will fly in formation behind the Minister for Finance. They will not break out of line. They will be first in under mother hen. I regret that our arguments have not been accepted. They are valid and right. When the Labour Party come into the House, as usual they will get in under mother hen and cluck and say they care. The people will answer them very soon.

I listened carefully in my office and in the House to Deputy O'Kennedy. It is a source of regret to many Members of the House that in all the amendments he has tabled he has not tabled one which was complementary to another. There are many areas where the VAT base needs to be widened, VAT on transport, VAT on fast food outlets, VAT on meals in restaurants, the whole transport section.

The Minister said I put down too many amendments. Does the Deputy want me to put down more?

Deputy O'Kennedy may not like it, but there is not one realistic amendment which says where you could get revenue within the VAT base if you took VAT off footwear and clothing. There are options which the Deputy ignored.

Small businessmen had to do a considerable amount of form filling. They had to complete seven different columns of VAT rates. I did it myself in a drapery business. The fact that this was brought back to three rates is extremely welcome because they were doing unpaid tax collection work for the State.

This is a fitting end to what has been a very wandering debate, not from any predilection of mine, although I have been called a few things in the course of the debate on the Finance Bill. I have been called a polymath, a shepherd and something else. The compliments are becoming embarrassing. I want to take up some of the points made by Deputies, apart from the wanderings of Deputy O'Kennedy. In relation to the definition of sizes in which Deputies Opposite expressed some interest, that definition is already in operation since this rate of VAT came in on 1 March.

That does not answer the question.

The zero rating applies to all baby and infant footwear and children's footwear up to and including size 5½ or 38 continental and other equivalants. We have adopted the same sensible approach which we adopted previously in relation to clothing by working it out with the trade. It is a perfectly viable and implementable definition.

As it is now 7 p.m. I must, in accordance with an order of the House made today, put the following question: "That all amendments set down by the Minister for Finance and not disposed of are hereby made to the Bill; the Bill as amended is hereby agreed to in Committee and, as amended, is reported to the House."

Before putting the question I wish to announce that I understand it is proposed to extend the time for Private Members' Business and to postpone the taking of the division on the Estimate for the Department of Agriculture until approximately 8.55 p.m. The exact time will be announced when the Minister of State is seeking the consent of the House for the change.

Question put.
The Committee divided: Tá, 73; Níl, 66.

  • Allen, Bernard.
  • Barnes, Monica.
  • Barrett, Seán.
  • Barry, Peter.
  • Begley, Michael.
  • Bell, Michael.
  • Bermingham, Joe.
  • Birmingham, George Martin.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Carey, Donal.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlon, John F.
  • Connaughton, Paul.
  • Coogan, Fintan.
  • Cooney, Patrick Mark.
  • Cosgrave, Liam T.
  • Cosgrave, Michael Joe.
  • Coveney, Hugh.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John.
  • Dowling, Dick.
  • O'Brien, Fergus.
  • O'Brien, Willie.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Prendergast, Frank.
  • Doyle, Avril.
  • Doyle, Joe.
  • Dukes, Alan.
  • Durkan, Bernard J.
  • Farrelly, John V.
  • Fennell, Nuala.
  • FitzGerald, Garret.
  • Flaherty, Mary.
  • Flanagan, Oliver J.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McLoughlin, Frank.
  • Manning, Maurice.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East)
  • Quinn, Ruairí.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick Joseph.
  • Skelly, Liam.
  • Spring, Dick.
  • Taylor-Quinn, Madeline.
  • Timmins, Godfrey.
  • Yates, Ivan.

Níl

  • Ahern, Bertie.
  • Ahern, Michael.
  • Aylward, Liam.
  • Barrett, Michael.
  • Blaney, Neil Terence.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Paudge.
  • Briscoe, Ben.
  • Browne, John
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Byrne, Seán.
  • Calleary, Seán.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Coughlan, Cathal Seán.
  • Cowen, Brian.
  • Daly, Brendan.
  • De Rossa, Proinsias.
  • Fahey, Francis.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Fitzgerald, Liam Joseph.
  • Flynn, Pádraig.
  • Foley, Denis.
  • Gallagher, Denis.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Kirk, Séamus.
  • Kitt, Michael.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leonard, Tom.
  • Leyden, Terry.
  • Lyons, Denis.
  • McCarthy, Séan.
  • McCreevy, Charlie.
  • McElistrim, Tom.
  • Mac Giolla, Tomás.
  • Molloy, Robert.
  • Morley, P.J.
  • Moynihan, Donal.
  • Nolan, M. J.
  • Noonan, Michael J.
  • (Limerick West)
  • O'Connell, John.
  • O'Dea, William.
  • O'Hanlon, Rory.
  • O'Keeffe, Edmond.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • Ormonde, Donal.
  • O'Rourke, Mary.
  • Power, Paddy.
  • Reynolds, Albert.
  • Treacy, Noel.
  • Tunney, Jim.
  • Wallace, Dan.
  • Wallace, Dan.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and McLoughlin; Níl, Deputies V. Brady and Barrett (Dublin North-West).
Question declared carried.