Concrete block levy to go ahead in modified form in Finance Bill

There is agreement among the Government parties that a concrete block levy should go ahead but it now looks certain the proposal will be modified from the budget day proposal when the final details are announced next Thursday.

In addition, a budget scheme to support businesses with rising energy costs is expected to be amended in the Finance Bill, potentially extending the scheme to professional businesses such as GPs, solicitors and dentists.

Senior figures from all Government parties have reiterated their backing for the principle of a financial sanction of some kind on the construction manufacturing sector to help pay the multibillion scheme to rebuild homes which used substandard blocks containing mica. However, in the wake of a backlash from rural backbench TDs in Fianna Fáil and Fine Gael that the concrete block level as currently designed would inevitably be passed on to homebuyers, Government sources have said the levy will be changed somewhat to take those concerns on board.

Minister for Finance Paschal Donohoe raised that possibility during a visit to Washington DC on Thursday. He said he would be working with the leaders of the three Coalition parties on clarifications in relation to the details of the levy. He said this would be set out in the Finance Bill next Thursday.

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[ Concrete levy could be cut, adjusted or delayed in an effort to soothe political tensions ]

[ State may need to limit home-building to just 21,000 units a year to meet climate targets ]

“I will be completing work on this on my return to Dublin, and [will be] recognising some important matters that have been raised, particularly by the construction sector. But I also have to make the case for the fact if we are going to undertake needed and justified commitments of €2.7 billion to rebuild homes ruined by mica we have to find a way of paying for it.

“I will be working with the party leaders on this in the coming days, and we will look to further clarify how it will be applied in the Finance Bill.”

He said any measure would be “consistent to what I announced” in the budget.

Cutting the rate of the levy, adjusting its scope or deferring it from its planned introduction date of April 3rd are being considered as options, according to Government sources.

Meanwhile, a scheme to support businesses with rising energy costs looks set to be extended to professional businesses following discussions between Ministers.

The intervention follows criticism from groups, including GPs and dentists, that they had been left out of the Temporary Business Energy Support Scheme (TBESS) which was announced as part of Budget 2023 to help businesses with rising gas and electricity costs. On budget day the Government said the scheme was open only to case 1 tax trading businesses, such as hotels, shops and restaurants, and was not available to case 2 businesses providing professional services.

On Thursday evening, however, a spokesman for Tánaiste and Minister for Enterprise Leo Varadkar said: “The Tánaiste raised this issue with Minister [for Finance, Paschal] Donohoe and has received confirmation that it’s possible to bring case 2 (professions and vocations) into scope. Expanding the scope of the scheme will impact on the overall cost of the support. The details of TBESS will be confirmed in the Finance Bill.”

Asked whether more specific costings had been done, he said details were not yet finalised. Initial costs for the scheme, when open to so-called “trading” businesses only, was €1.25 billion.

Under the existing plan the scheme aims to cover up to 40 per cent of increases in businesses’ heating and power bills, up to €10,000 a month. Eligible businesses will have to be able to show they have seen a 50 per cent or more increase in their average energy unit price this year compared with the same period in 2021. The scheme is to run until at least February 2023, with payments backdated to September when it was introduced.

Groups such as the Irish Dental Association and Chartered Accountants Ireland had lobbied for the scheme to be extended to their members, arguing without supports their increased costs would most likely have to be passed on to patients and clients.

On Thursday, a number of Fianna Fáil TDs and Senators reiterated concerns about the concrete levy.

Dublin North West TD Paul McAuliffe said many of his rural colleagues were very concerned because there was a tradition of self-building in those areas. “I hope that we have a resolution particularly in Border areas. There will be an impact for companies that are exporting so we have to iron out all the details.”

However, Mr McAuliffe said supported the principle that the Government alone should not be “on the hook” for funding the mica-redress scheme.

Kildare North TD James Lawless said: “I think as a principle there should be [an application of] the polluter pays principle. Those businesses and suppliers that have made profits from the defects should be held liable for their industry.”