Carbon tax described as ‘lightning rod’ issue at private Fine Gael meeting

Tánaiste Leo Varadkar has said he expects people to be slightly better off when offsets designed to negate the impact of carbon tax rise are introduced.

A motion tabled at the private Fine Gael parliamentary party meeting called for a postponement of further increases in carbon tax until at least six months after the end of the war in Ukraine.

It also called for the Government to continue to pursue a European Union derogation to allow Ireland to lower VAT on fuel.

Several TDs and senators spoke in favour of the motion, which was tabled by John Paul Phelan, Michael Ring and Paul Kehoe, while others spoke in general terms about cost of living concerns.

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There was no vote on the carbon tax motion but the meeting agreed it should be noted.

Mr Varadkar said there will be a plan to “fully offset” the forthcoming increases and that this plan may come before Cabinet ahead of the Dáil’s return after the Easter recess.

He suggested people may even be a bit better off as a result of the offsets.

Sources played down the significance of this as the expected increase in carbon tax on gas and home heating fuel is in the region of €1.50 per month.

Mr Varadkar told the meeting the country needed to avoid spiralling inflation, saying its underlying causes have to be treated.

He said that the public finances were in good order, and there will be “some room for manoeuvre on the cost of living”.

Mr Varadkar said costs people face for childcare, healthcare, public transport and higher education should be further reduced.

However, he cautioned against responding to every increase.

During the meeting, Carlow-Kilkenny TD Mr Phelan spoke in favour of his motion arguing that carbon tax had become more of a revenue raising measure than one designed to change behaviour.

Laois Offaly TD Charlie Flanagan raised concern that targets for the number of electric cars on the road were “unrealistic” and there were not enough charging points.

He also raised questions about the Government’s home retrofitting scheme, suggesting it was “confusing” and had “over-promised”.

Cork North-West TD Michael Creed described carbon tax was a “lightning rod” issue.

Kerry TD Brendan Griffin is said to have expressed the anger of rural Ireland at carbon tax and was among a number of contributors who were critical of Fine Gael’s Coalition partners in the Green Party.

A number of speakers hit out at plans by Green leader Eamon Ryan for a public awareness campaign on energy conservation including messages such as people should undertake fewer car journeys.

Mr Ring, a Mayo TD, claimed Mr Ryan only wanted people to shower once a week.

On the Ukraine crisis, Mr Varadkar said it was difficult to estimate how many refugees will arrive in Ireland due to the uncertainty of how long the war will last.

He said the country will deal with the humanitarian crisis “as best we can” and he expects accommodation in Gormanstown, Millstreet and City West will be fully in use by Easter.

Meanwhile, a showdown over carbon taxes was averted at the Fianna Fáil parliamentary party meeting, despite competing motions being put down on whether increases to the tax should go ahead next month.

A motion calling for a delay in the rise to the carbon tax, as well as other taxes due to cost of living pressures, had been put down by Carlow-Kilkenny TD John McGuinness.

A counter motion was proposed by Senator Malcolm Byrne and TDs Paul McAuliffe and Chris O’Sullivan but they were taken as part of a general debate, without being voted on.

Mr Byrne said the Taoiseach should give a state of the nation address on the current challenges.

The meeting heard that the carbon tax had been poorly communicated and understanding of what it was for was low.

Minister for Housing Darragh O’Brien spoke in favour of the tax, as did Minister of State Niall Collins and Senator Timmy Dooley.

Mr O’Brien told the meeting that the climate crisis was real and “measures to tackle it cannot be paused.” He claimed Opposition party Sinn Féin had “zero credibility” on the issue.

Mr Collins told the meeting that people who opposed the tax “don’t know or understand” that it was ring-fenced for the fuel allowance, home retrofitting schemes and agri environment schemes - and said that when this was explained clearly, there was rarely a counter argument.

Mr Dooley made similar points, arguing as well that the State should be more ambitious about offshore wind as a route to remove European dependence on Russian oil and gas, which he told the meeting was “funding the killing of Ukrainian men, women and children”.

Mr McGuinness is said to have moderated his position at the meeting, saying he wanted an explanation on a plan for the short and long term - but that he was not saying no to a carbon tax in principle.

The meeting discussed how to manage the rising costs of living in a wartime economy, while also addressing climate change. There was an acknowledgement at the meeting, sources said, that communication had been weak around explaining some of the schemes funded by the carbon tax.

One source present at the meeting said Taoiseach Micheál Martin had wanted to avoid a split and instead sought consensus on the issue. Senator Pat Casey and Minister for Public Expenditure Michael McGrath also spoke in favour of the tax.

Mr Martin said while employment had surpassed targets, there were nonetheless “pressures on people”. He reiterated statements made on Tuesday that the Government would offset the impact of rises in the carbon tax so that people were not worse off.

With more than 20,000 Ukrainians now having arrived into the country, Mr Martin told the meeting that Ireland will continue to push for the strongest sanctions possible at EU level, while working on accommodation and supports at home.

More than 2,000 of the Ukrainians are children now in primary schools, with 1,800 in secondary schools, he said.

The meeting also decided Fianna Fáil would send TDs and Senators to Northern Ireland to support SDLP candidates in Stormont elections next month, assisting with canvassing.

The two parties struck a cooperation agreement in 2019, and SDLP members reportedly campaigned for Fianna Fáil candidates in the 2020 General Election.

However, the pact has not been well-received in some quarters. Last week, Ógra Fianna Fáil passed a motion calling for the alliance to be reviewed at the next Fianna Fáil ard fheis.

Dublin North West TD Paul McAuliffe will coordinate the effort to support SDLP candidates.