Double whammy on the way in tax and gas price hikes

Niall O'Connor

STRUGGLING householders were today braced for tax hikes and increased energy bills.

The anticipated rise in gas prices comes as the Government point-blankly refused to rule out social welfare cuts or income tax hikes.

Despite the two areas forming key pre-election pledges, coalition sources have indicated that "everything is on the table".

A raft of Cabinet ministers have refused to rule out touching income tax and social welfare amid growing expectation that both are being closely looked at.

Speaking today, Transport Minister Leo Varadkar said that avoiding the two areas is "doable" but warned: "It won't be easy".

"It can be done, whether or not it's the right thing ... it's only June, we haven't really had a chance to discuss things at cabinet," he told Newstalk Breakfast this morning.

"It is doable, it won't be easy. It's a commitment that we made in the programme for Government and we should make sure we do everything we can to make sure that's the case," he added.


His comments came as Bord Gais requested that the Energy Regulator gives the green light for a 10pc price increase -- which will hit hard-pressed families by up to €88 per year.

The move is being watched closely by rival gas and electricity firms -- who are widely expected to follow suit in what would be a devastating blow to households.

The increases will push a household's combined energy and gas bill above €2,000 per year for the first time.

The Commission for Energy Regulation cited the euro crisis as a factor in prices going up.

The body will release its latest report on the market next month, where it is expected to approve a hike despite a drop in wholesale gas prices.

"The euro crisis also has to be factored in. If the euro continues to weaken, that obviously makes imported energy more expensive which is not good news," according to a spokesman.

And the increase in electricity and gas bills comes as families brace themselves for the introduction of the much-feared property tax and water charges.

In terms of increased income taxes, major pressure will be heaped on ministers over the coming weeks, as the Government prepares to implement a €3.5bn tax-and-grab budget.

Any move to touch income tax or social welfare rates would cause major strain among the coalition partners.

One senior Labour party source told the Herald: "The polls are clearly indicating that it is us who will be lashed by the electorate.

"We're not the scape goats in this coalition and Fine Gael would want to get that clear in their heads."

Fianna Fail meanwhile accused the Government of rowing back on commitments.

"These were very attractive carrots for voters in the last general election, who had been battered by a number of really tough Budgets. I think people will be furious if the Government renege on these two commitments," said finance spokesperson Michael McGrath.