Government left with jam on its face after EU over promises and under-delivers

Not for the first time, the Government been left with jam on its face after the EU over promised and under-delivered. Over the past week, senior Irish politicians, including Eamon Ryan, were saying a windfall tax on energy companies in Europe, plus a price cap, would be worth €140 billion to the EU States, and possibly €2 billion to Ireland.

But as Naomi O’Leary, Pat Leahy and Marie O’Halloran report, the measures will be in place for six months not 12, and the tax will be levied on companies where they are based, and savings from the cap will only apply where the energy is produced. That will severely limit Ireland’s potential to raise revenue as most energy here is imported from elsewhere.

As expected, energy prices dominated the exchanges in the Dáil yesterday with Taoiseach Micheál Martin and Sinn Féin leader Mary Lou McDonald clashing over her party’s proposal to cap electricity bills here in Ireland by subventing energy companies.

Martin accused her of writing a blank cheque. Unfortunately for the Government, it was expecting to get a similar blank cheque (or a considerably large one) from Europe, but sadly that is no longer available.

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Commission on Taxation unites everybody in cherry-picking its recommendations for criticism

The Commission on Taxation’s report on future taxes seems to have the unique attribute of uniting every sector and political party in the State — just about every one of them had occasion to have a go at it.

Fine Gael leader and Tánaiste Leo Varadkar didn’t mince his words: “There are other things that, quite frankly, are straight out of the Sinn Féin manifesto, you know, increasing inheritance tax, for example, increasing taxes on people’s savings.

“There’s no way that’s going to happen, while Fine Gael is in Government. So you have a mixed bag of things that I agree with, [and] things that simply won’t happen, certainly not under this Government.”

The commission made sweeping recommendations on how to pay for public services in future, for our ageing population, as well as paying for climate change. In fairness, there were measures that Varadkar and Fine Gael liked. But lowering the threshold for inheritance tax was always going to go down like a lead balloon for Fine Gael and Fianna Fáil.

As Simon Carswell and Cormac McQuinn outline, the report has also prompted concerns from trade unions and industry groups.

ICTU expressed concerns about a range of tax supports for high-income earners but welcomed its recommendations for targeting wealth, capital income and unfair tax breaks. Small business group ISME criticised the proposals on raising VAT, saying rates were already high in Ireland by international standards.

The IFA complained at the taxes addressed at the agri-sector: increasing taxes on agri-diesel, increasing PRSI payments for farmers, and the inclusion of agricultural land in any site valuation tax.

Chambers Ireland gave the most interesting quote. It warned sectors to avoid what it called “reverse cherry picking” which it defined as “the active seeking of measures to be unhappy about”.

Chambers Ireland was right. There were a huge swathe of recommendations and they involved both good news and bad news for each sector.

Paul Murphy’s kick-start

It was an eventful first day back in Leinster House. The kick-start of the new Dáil session for one TD was literal in his case. People Before Profit TD Paul Murphy got hemmed in and said he was jostled by a group of right-wing protesters as he made his way out to another protest outside the gates.

Somebody then levelled a kick at him, Murphy said.

When Murphy disclosed it on Twitter there was invariable blowback. Murphy was reminded of then tánaiste Joan Burton and her adviser being hemmed-in in their car by an angry mob in 2014. That scene was described as a “peaceful protest” by Murphy at the time but what happened stretched the credibility of the description to breaking point.

So there was lots of stuff on Twitter and elsewhere about pots and kettles etc. It must be recorded, however, that Murphy has never been involved in anything remotely physical in terms of protest, beyond holding a megaphone.

Whoever allegedly kicked him outside the Dáil was a disgrace, and it was wrong to beset him in the way he said they did. Burton should not have been subjected to what happened in 2014. But using that in terms of justifying what happened to Murphy is wrong, and that’s amplified by him being the subject of this alleged (albeit minor) assault .

Fianna Fáil show little sympathy to Paschal’s quandary

This is an interesting story that Pat Leahy and Cormac McQuinn have been following closely. There was an oral understanding between Fianna Fáil and Fine Gael that when the Taoiseach and Tánaiste positions rotated, so would those of the Minister for Finance and the Minister for Public Expenditure.

But Fine Gael, behind the scenes, has been putting a spanner in the works this month, arguing for Paschal Donohoe to retain the presidency of the Eurogroup of finance ministers after relinquishing his current role in Cabinet.

The first stabs at this earlier in the month put a case for Donohoe staying on as Minister for Finance as, otherwise, Ireland might lost the prestigious position he now holds. The rhetoric changed a little then, arguing for him to stay on as president of the Eurogroup even if he relinquished the Finance portfolio at home. There is precedence for this, apparently.

As Leahy and McQuinn report, Fianna Fáil are not overly enthusiastic at the proposal and the Fine Gael urgings for them to don the green jersey has been met with deaf ears.

“There will be no negotiation,” one senior Fianna Fáil figure told us. The source believed the stance on the issue was hardening in the party.

Later, Leahy and McQuinn write of the chances of Donohoe staying on in his EU role after he changed ministerial portfolios: “EU sources were lukewarm on this possibility, however, and in any case it would require Fianna Fáil to agree that their Minister for Finance did not attend the Eurogroup. Party sources said that was a remote possibility.”

And looking more remote by the day.

BEST READS

Miriam Lord’s column on the first day of the autumn in the Dáil begins with a glorious description of a faux pas by the Ceann Comhairle who elevated Mary Lou McDonald to the status of Taoiseach by mistake.

Marie O’Halloran (welcome back after your break Marie) reports on the first of the heated Leaders’ Questions of the season. This revolved around the energy crisis.

And Catherine Martin defends the Government’s decision not to adopt a recommendation that the Exchequer fund public service media and broadcasting.

LISTEN

Hugh Linehan has returned to anchor our weekly take on political trends and directions in the Inside Politics Podcast.

And if you have not listened to it yet, check out my seven-party series, GUBU, on how the Malcolm Macarthur killings in 1982 almost toppled the Government of Charles J Haughey.

PLAYBOOK

Dáil

9.00: Parliamentary Questions to Tánaiste Leo Varadkar

10.00: Parliamentary Questions to Minister for Rural and Community Development Heather Humphreys

12.00: Leaders’ Questions with either Leo Varadkar or Eamon Ryan deputising for Micheál Martin who is opening a Penney’s branch in Tallaght.

13.45: Statements on An Bord Pleanála (Department of Housing, Local Government and Heritage)

17.15: Private Members’ Business (Regional Group): Motion re Security of Electricity Supply

19.15:Water Services (Amendment) (No. 2) Bill 2022 (Second Stage)

19.15: Regulated Professions (Health and Social Care) Bill 2022 (Second Stage)

22.33: Topical Issues

23.21: Dáil adjourns

Seanad

10.30: Commencement Matters

12.00: Order of Business

14.30: Assisted Decision-Making (Capacity) (Amendment) Bill 2022 — Second Stage

16.30: Statements on the Report of the Future of Media Commission

18.00: Seanad adjourns

Committee

09.30: Joint Committee on Gender Equality

Recommendations of the report of the Citizens’ Assembly on Gender Equality on Pay and Workplace Conditions

Guests from the ESRI and from TU Dublin