Tánaiste Leo Varadkar has said the Government cannot mitigate in full the rising cost of living and all it can do is “ease the pain”. 

Earlier today Electricity Ireland announced that from 1st May residential electricity prices will increase by 23.4%, while gas prices will soar by 24.8%.

The Government has previously announced a range of measures to help households with their energy bills but An Tánaiste said that they cannot stop entirely these costs being passed onto customers:  

“Unfortunately it’s something that is largely outside of the control of Government and the price of gas and therefore the price of electricity - which is generated from gas - is determined by the cost of gas on the international market,” he told The Hard Shoulder. 

“And that has quadrupled actually. 

“So the crumb of comfort - if there is any - is that prices aren’t quadrupling. They are increasing by eye watering double figures and Government can’t fully correct for that but we can try and ease the pain and that’s why we’ve set aside a billion euros to do so. 

“So there’s the €200 that’s coming off your electricity bill, there’s the €125 for the poorest families and households receiving the fuel allowance, there’s the increase in the fuel allowance as well and there’s the 20 cents that we’ve taken off petrol and the 15 cents that we’ve taken off diesel. 

“Compared to other countries, that’s a pretty big response… But all we can do is ease the pain.” 

Listen and subscribe to The Hard Shoulder on Apple Podcasts, Google Podcasts and Spotify.

Tax bands

However, he did say that he had asked the Minister for Finance, Paschal Donohoe, to consider whether a 30% tax band should be introduced in a future budget: 

“We’ve widened the tax bands in the last two budgets, the average couple, say both earning €35,000 a year or more, are €1,200 better off in their pockets today than they would be under Sinn Féin or the Social Democrats or Labour,” he continued. 

“So we’re going to continue to widen the tax bands… and we’ll do that in this budget and the next budget. 

“The question is - how do you do it? 

“Do we do it the way we’re currently doing it at the moment, which is by widening the bands - so people pay less of their income at the 40% rate or do you perhaps consider as an alternative a 30% rate and that’s what I’ve asked Minister Donohue to look into. 

“But it’s not Fine Gael policy - at least not yet - and it’s not Government policy either. It’s an option that we’ll be able to consider in the run up to the next budget.” 

An older man counting Euro notes. Picture by: Rodica Ciorba / Alamy Stock Photo

Refugees

Minister for Public Expenditure Michael McGrath has briefed the cabinet that for every 10,000 Ukrainians who come to Ireland, it will cost taxpayers between €400m and €500m to support them. 

However, An Tánaiste gave short shrift to the idea that the arrival of refugees had stopped the Government spending more on the cost of living crisis: 

“I wouldn’t like anyone to get into the space of suggesting that because we’re accommodating and caring for people who’ve been bombed out of their homes that somehow that’s why people have to pay for higher energy prices,” he said. 

“They [the Ukrainians] are not to blame.”

Main image: Tánaiste Leo Varadkar arriving at Cabinet, 22-03-2022. Image: Sasko Lazarov / RollingNews.