Tensions in Coalition over proposals for another €200 energy credit in spring

Tensions have emerged within the Coalition over a push for an additional €200 “spring credit” to help alleviate the cost of electricity bills.

According to Government sources, several Ministers are of the view that another electricity credit would be politically wise during the spring, to handle bills that will land from May onwards – on top of those credits already approved.

The final tranche of three €200 electricity credits approved in the budget will land into customer accounts in March, and there is resistance in the Department of Finance and the Department of Public Expenditure to the idea of pushing ahead with another universal credit before the next winter heating season.

There are also said to be misgivings in the Green Party over the potential for another universal measure, especially during spring and summer when the weather is better and utility bills are lower. The argument runs that the Coalition was well served by holding off during the summer when under pressure to announce more cost-of-living benefits, and instead push ahead with a significant budget day package.

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A well-placed source said that “there would be disquiet and concern [in the Department of Finance] at moving too quickly on further one-off supports”, including electricity credits, arguing that “if you were to do another energy credit, you wouldn’t announce it now”.

But one source said there was a particular push for a spring credit in Fine Gael. “There’s a strong view within Fine Gael that the feedback on the ground from the public is the energy credit is the bee’s knees.” The same source said an early credit could help steady the Government’s standing after a rocky series of controversies since the new year.

A senior Fine Gael source confirmed that a €200 credit was an option, but that it would depend on the overall composition of a cost-of-living package, what is done on the pensions and welfare mix and on VAT.

Coalition leaders will meet next week, followed later in the week by a key Cabinet subcommittee on the economy, to fine tune the approach in advance of the expiry of a range of cost-of-living measures announced in the budget.

[ Next €200 energy credit is rolled out as €1bn welfare package comes into effect ]

The temporary reduced VAT rate for tourism and hospitality, the reduced VAT rate for gas and electricity, and the lowered excise duty on auto fuels are all due to expire before the end of the month. The collective cost of extending them all until the end of the year would be about €1.1 billion. The future of the Temporary Business Energy Support Scheme (TBESS) is also set to be decided.

Renewing them would require the allocation of additional funding as the budget was predicated on their expiry at the end of February. The hospitality sector is fighting a rearguard action on the lowered 9 per cent VAT rate. The Green Party has misgivings over extending the lowered rate of excise on fuel – although the other Coalition parties are firm in their desire to see some sort of extension.

There is also likely to be discussion on whether to put in place a range of targeted, once-off measures, which will likely be drawn from the same menu of options deployed in the budget – such as double child benefit, once-off payments in living alone allowance, fuel allowance, the working family payment, or similar.

There is an acceptance that the TBESS is likely to be extended, as is allowed for in the legislation governing its establishment, for another two months, potentially with some tweaks to eligibility in order to counteract disappointing levels of uptake seen so far.