A few weeks ago, the Taoiseach announced in terms of the budgetary process "What I intend to do this year is very different to ... any other budget to date". We did not quite understand what he meant when he made that statement some weeks ago. However, since then, his Government has announced the fiscal framework, the capital investment programme as well as the expenditure sector reform programme outside of this House. His disregard for the House and its participation in the budgetary process has reached new levels.

On Thursday last, it was announced that he intended to increase the rate of VAT by 2% in one fell swoop in 2012. This information came to Members of this House after it had been distributed to members of the German Parliament. Clearly, the Taoiseach's budgetary process was different to any previous budgetary process. He has doubled the press conferences, trebled the leaks and halved the information to this House. In passing, I ask the Taoiseach to confirm that the documentation that was sent to the German Parliament has now been lodged in the Oireachtas Library, where it should be, so Members from across the House can have access to it.

The Taoiseach must accept that this shows contempt for this House and its elected representatives. To be specific, at a time when economic growth rates are very low, retail businesses are on their knees and confidence is low across the eurozone and in the United States because of difficulties there, surely the Taoiseach must agree it is the worst possible time to increase VAT by 2% in one fell swoop in 2012. Without question, does he agree that this is a tax on jobs and will damage the overall domestic economy, particularly the economy of the Border counties? I point out to the Taoiseach that in 2009, when the VAT rate was increased by 0.5%, the current Minister, Deputy Bruton, described it as turning a recession into a depression, and the current Minister, Deputy Burton, described it as an astronomical increase.

When this proposal is combined with other suggestions about sick leave and redundancy payments, it all adds up to a Government that is heading towards a massive disincentive to job creation and an attack on jobs and small business. Will the Taoiseach consider reversing the decision to increase VAT by 2%?

For the Deputy's information, no decision has been taken by the Government in respect of details of the budget. The only reason the information was sent to Mr. Draghi, Mr. Juncker, Mr. Rehn and the Minister for Finance in Poland, signed by our Minister for Finance and the Governor of the Central Bank, was because of the mess we inherited. I will not go back into that kind of politics. I have no intention of it.

Another promise.

Another U-turn.

Part of the memorandum of understanding that we have had to change is in respect of a commitment to take out €250 million extra in income tax in this year's budget for next year, which was agreed by the previous Government. We take a different view here. The Minister for Finance made clear his intention to bring a proposal as one of a number of proposals to the Government for its consideration in respect of a VAT increase of 2% and with no further increase planned over the period of the programme. The difference now is that the exchange rate has moved in our favour as distinct from what it was when Deputy Martin referred to differences in VAT rates previously. If tax plays a role in driving cross-Border shopping, it is the overall level of taxation which combines income tax, corporation tax, VAT and other charges. The UK increased its standard rate of VAT by 2.5% in 2010 and by a further 2.5% earlier this year, and that was up from the temporary lower level of 15% in 2008. We take a different view than Deputy Martin. As far as the Government is concerned, we want to focus on not impeding the opportunity for people to have jobs and to be able to go work. The evidence clearly is that increases in income tax, which were followed by Deputy Martin and his party, directly hit people who want to have a choice in spending their money and in what they purchase.

Tell us what the impact of the VAT increase will be?

To return to Deputy Martin's question, he asked would the decision be reversed. The Cabinet has not made a decision in any of the details of the budget to date but will do so obviously in the next few days.

I have no difficulty with information being sent anywhere once it is sent to this House first — that is the point. If the Taoiseach was sincere about his budgetary process——

The Deputy does not seem to realise that he left us in the lurch.

Allow me to make my point. If the Taoiseach was sincere about his budgetary process, greater transparency and greater detail, he would have given all of this information to the House——

Tell us about your legacy to this country.

Mr. Popularity.

——three or four weeks ago. There is no difficulty. When 41 members of the German Parliament can read this documentation, why cannot Members of this House read it? It is a disgrace that the Taoiseach has not already circulated this to every Member of the House, given that 41 members of the German Parliament have it. I have no difficulty about who gets it, once this House gets it first. That is the key point.

Can I have a supplementary question from the Deputy?

The Minister, Deputy Noonan, has made it absolutely clear that a decision has been taken on the 2% increase. The Taoiseach should stop maintaining a fiction about it. He is reported this morning; again, he made it very clear. He said the only reason he is sticking to the 2% is that it is obvious. All the other stuff he describes as speculation. The Tánaiste said he was very puzzled about how all this documentation got to the German Parliament. The Taoiseach said it was speculative. It took the Minister, Deputy Noonan, to confirm it in an honest and open manner.

Thank you, Deputy. Your time is up.

Did you give all that information——

The fundamental point is this — the ESRI has said that this VAT increase will hit the poorest households the most. I am asking the Taoiseach to stop maintaining the fiction——

Could we have the Deputy's question?

——and indicate this evening that he will reverse that decision of a 2% increase on the VAT rate.

The Deputy's party proposed that 2% increase.

Timing is everything, Bernard.

Timing is everything.

Let us just put something on the record now for Deputy Martin.

On the promissory note.

Hear, hear.

He and his party——

I thought the Taoiseach said he had——

What about the promissory note?

——signed off in the middle of the night and they imposed on the backs of the Irish generation to follow a €3 billion charge every year for the next ten years.

We put it through the Dáil and the Taoiseach voted for it.

Deputy Martin voted for it.

A man who is not even in the House——

The Taoiseach voted for it.

He voted for it.

In the light of day, the Taoiseach voted for it.

And he extended the guarantee last week.

Will the Deputies cool down?

We are being provoked.

That is what Deputy Martin did. He can waffle all he likes about it but facts are facts.

The Taoiseach voted for it.

Yes, and the Deputy's colleagues came in here and the Deputy said it will cost €6 billion instead of €100 million. The man seated beside the Deputy said it was his idea and a wonderful thing in the following weekend's newspapers. It was his idea, a brilliant opportunity and here we go.

Thanks, Willie.

I am not that good.

We are over time, Taoiseach.

The 2% increase that the Minister will bring to Government as a proposal, upon which I might add the Government has not signed off on yet, means that the zero rate of VAT which currently applies to a range of goods and services, including most foods, children's clothing and, importantly, footwear——

The Taoiseach knows all about that.

——oral medicines and so on will not be touched. The 9% rate which involves the reduction of VAT across the hospitality sector will remain unchanged, will not be touched——

So the Taoiseach has a brief.

Is the Taoiseach confirming the 2% — that the rate is going up? This is pathetic, Taoiseach.

——and the 13.5% rate which applies to residential housing, labour intensive services and general repairs and maintenance are unaffected.

The Taoiseach should move Standing Orders and bring in——-

Thank you, Taoiseach.

The point I am making to Deputy Martin is that this Government makes a deliberate choice in what it wants to do——

I just asked the Taoiseach to confirm it.

——and what we want to do is sort out our public finances by a different route to the one his crowd adopted——

Has the Taoiseach made a choice?

——and therefore we have renegotiated with the troika in respect of income tax.

Hear, hear.

The Minister will bring his proposal to Government for a 2% increase in VAT with no further increase for the remainder of the programme and no further increase in income tax for the remainder of the programme, and the Government will make its decision on that——

No cut in the rate. He made too many commitments——

——in due course over the next few days.

The Taoiseach has boxed himself into a corner.

What the Deputy stated, therefore, is not true.

The damage is done.