Fianna Fáil Deputy Leader Éamon Ó Cuív TD has said that after two days of spin and posturing, the Government has failed to take any meaningful measures to tackle the jobs crisis.  He added that the Fine Gael/ Labour Government’s decision to proceed with a 2% increase on the standard rate of VAT will have a devastating impact on the economy, and will cost jobs.


Deputy Ó Cuív commented, “The Minister for Finance Michael Noonan had an opportunity this week present a credible plan for dealing with the jobs crisis.  The small measures he announced are welcome, but limited.  Long gone are the targets for 100,000 jobs. Instead, he has delivered a hammer blow to businesses and jobs, especially those in border areas, with a hike in the rate of VAT.


“Ever since this move was announced in the German parliament last month, the Government has had the opportunity to reflect on the damage it will do.  Fianna Fáil have consistently offered support for a change of heart, but this Government have ploughed on, ignoring the pleas of retailers and business groups and ignoring the fact that our economy is so fragile. This move will cost jobs.  It will delay recovery.  


“The Government spin about their success on jobs is relentless, undaunted by the reality of Live Register figures or the feedback they are getting from small business people on the ground.  Fine Gael and Labour repeatedly claim that they are committed to tackling the jobs crisis, but are implementing a move that will unambiguously cost jobs.”



Deputy Ó Cuív also debunked the notion that the increase will bring VAT rates into line with other European states: “The reality is that it will result in a 3% VAT differential with the North, which will see a surge in cross border shopping.   


 “It also leaves Ireland at a competitive disadvantage with other European states, as we will have the joint highest rate of VAT in the Eurozone, and one of the highest rates in all of Europe. So while with one hand the Government claims to be supporting exporting enterprises, this move leaves most at a disadvantage with their European peers.


“Fianna Fáil continues to call on the Minister to rethink this decision.  It will damage the economy, cost jobs, and hit the poorest the hardest.”