Monday 19 March 2018

Kenny to buy off Labour vote with €100-a-week rise

Taoiseach Enda Kenny
Taoiseach Enda Kenny
Philip Ryan

Philip Ryan

Low-paid parents promised €11.75 an hour in 'radical' plan.

Taoiseach Enda Kenny is planning a major overhaul of the social welfare system which will put him on a direct collision course with Labour leader and Tanaiste Joan Burton ahead of the General Election.

The Sunday Independent can exclusively reveal that Mr Kenny is planning to make a pledge to young parents that they will earn at least €11.75 per hour, no matter where they are working, if Fine Gael is returned to power.

The radical shake-up of the welfare system could see low-paid mothers and fathers earning the minimum wage of €9.15 from January receive a top-up of around €2.60 per hour from the State to encourage them to stay off the dole.

This could result in a parent working a 40-hour week receiving an additional €104 - or close to €5,000 a year - under the reform package aimed at abolishing so-called 'social welfare traps'.

However, sources familiar with the policy say this could increase or decrease depending on a family's circumstances.

Fine Gael's first significant pre-election promise to voters is being pitched by party strategists as a "radical alternative" to the 'Living Wage' plan on which Labour is pinning its re-election hopes.

While Fine Gael is not ruling out increases in the minimum wage, party strategists believe introducing a living wage of €11.50 per hour will have a devastating impact on small businesses as it would be employers taking the financial hit.

The Sunday Independent also understands that Fine Gael's plan to top up low-income family wages follows the damning findings of a yet-to-be-published report on welfare reform currently sitting in Joan Burton's Department of Social Protection. The report by the Advisory Group on Tax and Social Welfare is believed to have "sharply criticised" flaws in the country's welfare system, which create "major barriers" for parents moving from the dole to work, according to sources.

The report is especially critical of the Family Income Supplement - a top-up payment for low-paid workers with children that is championed by Ms Burton.

Labour sources said the report found that claims of welfare traps were overstated.

Last night, a senior Fine Gael source insisted the party's welfare reform package was aimed at exposing Sinn Fein's promise of a living wage as a "dangerous attack on Ireland's small businesses", while showing that Fianna Fail does not appear to have "any policy at all" in the area.

"As we have shown in the past, Fine Gael and Labour will work together to produce sensible solutions that protect jobs and help people get back to work," the source insisted.

However, the move will be seen by Labour as a fresh attempt by Fine Gael to move on its voters and will add to Ms Burton's woes as her party seeks to recover from internal squabbling over accusations of polling data being leaked.

And it comes the day after Ms Burton's keynote speech at the Labour Party Symposium on James Connolly, where she insisted the key election battle will not be between the Government and the Opposition, but rather the focus will be on the clash of ideologies between the Coalition parties.

"As Labour leader, I want this Government returned, because I believe we have a shared vision - for economic stability, for full employment, for a better society. But we have different ideas about how to achieve that vision. So each party fights its corner," Ms Burton said.

Ms Burton did not mention the living wage, however, she noted the difference between Fine Gael's ambition to abolish the Universal Social Charge (USC) and Labour's pledge to cut the tax for workers earning up to €70,000.

The Sunday Independent understands the Taoiseach last week asked Junior Finance Minister Simon Harris to finalise the Working Family Payment model, which is a core element of Fine Gael's long-term economic plan.

Mr Kenny's proposal - which has been billed the "most radical change in the welfare system in a generation" - will see families working between 15 and 40 hours a week receive an "in work benefit" to top up their pay to €11.75 per hour.

And after a week of speculation over the possibility of Fianna Fail and Sinn Fein forming a coalition, it can be revealed that Micheal Martin will cut USC up to €80,000 - a move seen as a sop to the Labour Party.

However, Mr Martin told the Sunday Independent: "Under our proposals two million people would be taken out of USC altogether - that's 65,400 more than the Labour Party is proposing."

With all parties close to finalising their manifestos, focus last week again turned to when the Taoiseach will call the General Election.

Speculation is rife in political circles that Mr Kenny will set an election date in mid-to-late February and call the vote soon after the Fine Gael ard fheis in the RDS in Dublin on January 23.

The move would mean Sinn Fein, which provisionally booked the RDS for its ard fheis on February 5 and 6, would have to cancel the party conference and lose out on valuable air time on RTE.

Sunday Independent

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