I thank the Minister of State, Deputy Chambers, for taking this really important matter. The next few weeks and months are crunch time for Ireland's hospitality sector. I do not think there is any doubt about this. We have some very important decisions to make as a Government. We can make decisions that will allow Ireland's hospitality sector to flourish or we can make decisions that will see a continuation of the trends that have seen the closure of hospitality businesses such as cafes and restaurants and the whole sector struggling.
For me, the decision we have to make is very clear. The VAT rate now for hospitality businesses is 13.5%. We need to split that VAT within the sector. Let the accommodation continue at 13.5%. It is okay and can cope with this level. For those food-led businesses and the food-led industry, though, we have to reduce the VAT rate back to where it was before the budget, at 9%. When I talk about food-led businesses, I am talking about cafes and restaurants and those small, family-run hotels that deal almost primarily in food in some instances. I refer as well to the gastropubs. These are the businesses that are the heart of our towns and villages. These are the cafes and restaurants that create the buzz and vibrancy on our main streets. They are run by our friends, neighbours and by family members. If we see this sector struggle and go down the Swanee, then it will be our towns and villages and our communities that will struggle. This is an important point to make.
The thing about this is that many of these businesses are not struggling to fill tables, to fill seats or to get customers in through the door. They are vibrant, have a good product and are serving up really good food, but they cannot make ends meet and cannot make profits. A Government cannot control everything. There is very little we can do, for example, about the cost of ingredients. I refer to the cost of carrots, onions or of a tub of mayonnaise, these important ingredients that this sector uses. There is very little we can do about the escalating cost of energy, for example. There are, however, things we can help with, such as rates. The big lever we can pull, though, is the VAT rate and to reduce it to 9%. This is the single biggest intervention we can make to ensure this sector remains viable and alive.
Some 67% of jobs in rural Ireland are supported by hospitality. That is staggering. It is the biggest indigenous employer. We cannot stand by and see this incredibly important sector, that we are all so passionate about, eroded.
I speak to business owners every day. They are anxious. Many have sleepless nights. I am talking about some of the most successful businesses in my region but the owners are losing sleep because of this issue. We have to intervene and reduce the VAT rate for food-led businesses back to 9% to just give them a chance.