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Pressure on Donohoe to raise pension and drop any tax-cut plans

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Warning: Finian McGrath told ministers to ‘go the extra mile’. Photo: David Conachy

Warning: Finian McGrath told ministers to ‘go the extra mile’. Photo: David Conachy

Warning: Finian McGrath told ministers to ‘go the extra mile’. Photo: David Conachy

Finance Minister Paschal Donohoe is coming under major pressure from the Independent Alliance to drop plans for any tax cuts and to increase the weekly State pension by €5 in next week's Budget.

The Irish Independent can reveal that Fine Gael ministers were warned by Minister Finian McGrath at Cabinet yesterday not to take the Alliance's support for granted and to "go the extra mile" for the group of independent ministers in next Tuesday's Budget.

Mr McGrath and junior minister John Halligan are still pushing for a €5 increase in the State pension as well as other welfare payments.

Both ministers are also unhappy that Taoiseach Leo Varadkar raised the possibility of some minimal tax cuts in the Budget whilst he was in Los Angeles last week, at a time when Mr Donohoe is repeatedly telling ministers there is little money for extra spending in their departments because of Brexit.

Mr Halligan hit out at Mr Varadkar for raising the possibility of tax cuts.

"My view would be that rather than do that to give some money to pensioners and those on low incomes," he told the Irish Independent. "Our economy will suffer with a no-deal Brexit and they are the people that will suffer most."

Mr McGrath is understood to have warned Fine Gael colleagues at the Cabinet meeting yesterday they should realise they are in a partnership Government and need to go "the extra mile", as one source put it, to assist the Alliance in this Budget - which is likely to be the last before the next election - because its support has kept the Fine Gael-led minority administration in office for more than three years. A Cabinet source also said that Mr McGrath warned against tax cuts, saying public services need to take priority because of Brexit.

Mr Halligan, who is Minister of State for Training and Skills, said pensioners and other vulnerable groups will be worst-hit by a no-deal Brexit and cannot be abandoned.

The State pension along with all other weekly welfare payments have been increased by €5 in each of the last three Budgets negotiated by Fine Gael, the Independents in Government and Fianna Fáil.

But both Fine Gael and Fianna Fáil appear to have ruled out repeating the increase this year because of Brexit.

However, Mr Halligan said: "I know money will be tight with no deal, but we can't abandon pensioners. These are people who built Irish society and the economy with hard work and labour all their lives and of all the people that suffer the most I really do think that we should show compassion and concern and somehow find some money to give them.

"I will be alright on a TDs' salary, but what about pensioners?"

Mr Donohoe is holding Budget meetings with ministers this week as well as talks with Fianna Fáil's Michael McGrath and Barry Cowen.

Irish Independent