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exclusive Planned carbon tax hike will go ahead – despite soaring cost of living

Leo Varadkar warns of double pain if increase planned for next month is delayed


Green Party leader Eamon Ryan. Photo: Andres Poveda

Green Party leader Eamon Ryan. Photo: Andres Poveda

Green Party leader Eamon Ryan. Photo: Andres Poveda

Green Party leader Eamon Ryan has vowed that a planned hike to carbon tax must go ahead next month despite the soaring cost of living.

As backbench TDs from Fianna Fáil and Fine Gael revolt over the planned increase, Tánaiste Leo Varadkar said nothing can be done without the support of all three parties in the Coalition.

Mr Varadkar also warned that delaying the planned increase for May will mean double the pain in a few months’ time.

The issue is likely to dominate political party meetings and Dáil debate this week.

Mr Ryan told the Irish Independent last night that the hike in solid fuels and home heating oil was a Budget measure that had already been decided upon and approved by the Dáil.

“My preference is for targeted measures to assist those in fuel poverty – not for cutting fuel taxes on a universal basis,” he said.

But the minister said he will bring measures to Government in the next two weeks to help people reduce their energy bills.

Meanwhile, Mr Varadkar warned Government rebels that giving up the increase, of €7.50 more per tonne of carbon dioxide emitted, “means a double increase down the line in October or next May”.

The revenue collected is being used to part-fund the fuel allowance, as well as warmer home retrofitting and green schemes for farmers, the Fine Gael leader pointed out.

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“So the impact on those programmes would have to be considered too,” he said.

Mr Varadkar and the Taoiseach are facing a challenge to the intended rise amid signs that backbench unhappiness is spreading across Government.

They fear that suspending it now would hand a propaganda victory to Sinn Féin, which has been warning for months that the carbon tax increase cannot go ahead.

Sinn Féin leader Mary Lou McDonald is adamantly against the hike.

“What we don’t want is the levying of further increases on households and families at a time when people are trying to cope with spiralling inflation,” she told RTÉ.

“It makes absolutely no sense for the State to propose to go ahead and levy these increases at a time when they know that families are really struggling. People are making the choice between heating and eating.

“The rationale for carbon taxes is to disincentivise over-use. It’s aimed at behavioural change. But spiralling inflation and the hardship that families are facing is effecting huge behavioural change, to the extent that older citizens are staying in bed and families are heating only one room. That’s how bad things are.”

A spokesman for the Taoiseach said: “The Government is acutely aware of the challenges people are facing due to the war in Ukraine and the impact it is having on rising energy prices and the cost of living.

“That is why we have put in over €2bn worth of measures since the Budget to help ease those pressures, especially on the most vulnerable in society, and hard-hit sectors like hauliers and agriculture.

“We can’t deal with this crisis on a week-to-week basis, and the Government is working with colleagues across the EU for measures to alleviate high energy costs across Europe.”

Fine Gael TD John Paul Phelan has tabled a motion to scrap the new charges and was publicly backed by two colleagues who spoke to the Irish Independent last night.

Former rural affairs minister Michael Ring said that current conditions had trumped the principle of the tax. Wexford Fine Gael TD Paul Kehoe also voiced support for the carbon tax rise to be halted.

Mr Varadkar said: “This is why we have parliamentary party meetings. It allows us to discuss current and emerging issues of concern.”

But he warned the carbon tax rise “is already legislated for, so the Government position can only be changed by agreement of all three parties”.

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