Wednesday 16 January 2019

Cormac McQuinn: 'No matter what Leo talks about, one thing will overshadow it...'

  

Taoiseach Leo Varadkar. Photo: Damien Eagers
Taoiseach Leo Varadkar. Photo: Damien Eagers
Cormac McQuinn

Cormac McQuinn

Taoiseach Leo Varadkar was on his travels over the weekend, flying to Africa to visit Irish troops on a European Union mission in Mali. Ironically in the era of Brexit, Mali is the first place Irish and British troops were deployed together on a joint mission to train troops under the EU banner.

Before travelling to Africa, Mr Varadkar was in Germany where he delivered a speech to Bavarian politicians on the challenges facing Europe. No prizes for guessing that Brexit topped that list - at least from an Irish perspective.

And now we're facing into yet another crunch period in the seemingly never-ending saga of the UK's divorce from the EU.

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Westminster will debate and vote on British Prime Minister Theresa May's Brexit deal with the EU. There are serious doubts that it will be passed amid the row over the backstop to avoid a hard Border in Ireland.

The chaos of a no-deal Brexit is potentially less than 12 weeks away.

After delivering his speech in Germany, Mr Varadkar sat down with journalists.

He was asked questions on domestic issues, the State's volatile corporation tax receipts, and the threat of a strike by nurses.

His responses vividly show how Brexit dominates everything the Government does.

He defended Fine Gael's plans to cut income tax when challenged on how it was used to cover a massive overspend in the health budget last year.

Fine Gael wants to increase the point at which people pay the higher rate of tax over the next five years.

At the weekend, Mr Varadkar laid out how it would be paid for by increasing income tax receipts due to more people working and higher salaries.

He said half of the increased income tax revenue of some €1.2bn a year would be used to fund the cuts, so the yield for the Exchequer would still go up.

He said: "If the economy continues to grow, if we continue to have more people working, people earning more, we can afford to give some of that back in tax concessions."

Though unspoken, the "ifs" in that sentence will largely depend on Brexit.

On the next domestic topic, Mr Varadkar warned nurses threatening strike action that any extra State funds may be needed to save private sector jobs in industries that would be worst hit by a hard Brexit, not to fund their pay demands.

If nurses' pay demands aren't possible to meet due to the threat of a hard Brexit, then Fine Gael's tax promises - or at least the scale of them - are surely at serious risk of being scuppered too.

Fine Gael will be hoping the kind of Brexit - be it hard or soft - and its impact on the Irish economy will be well-known by Budget day, when income tax decisions are announced. After all, the tax pledge is likely to form a major part of its election manifesto.

The two issues are further proof - as if it were needed - that Brexit overshadows almost everything in Irish politics.

Irish Independent

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