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After the apocalypse, all that will be left is ChatGPT and lobbyists for the hospitality VAT rate

Inside Politics: New cost-of-living package bears the hallmarks of the Coalition’s interventions to date

The final cost of the new cost-of-living package is in the region of €1.25 billion, north of the €1 billion suggested over the weekend. Photograph: PA

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Jack Horgan-Jones
Tue Feb 21 2023 - 08:09

Before the Cabinet has even officially signed off on them, the dust is settling on the latest cost-of-living interventions drummed up by the Coalition.

It is just less than a year since the invasion of Ukraine and just over a year since the first time the Government made a specific intervention on the cost of living.

The main measures will see a bonus for pensioners, carers, lone parents and other welfare recipients, and €100 for parents in a child welfare bonus (per child).

Alongside this, there are a range of extensions to the tax measures due to expire, and the Government’s business support scheme has been tweaked. A full summary of the changes is here.

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The package agreed by Coalition leaders bears the hallmarks of all the cost-of-living interventions so far: a grab-bag of targeted and universal measures, fine-tuned and turbocharged at the last minute with enough excess cash to surprise slightly to the upside (the final cost is in the region of €1.25 billion, north of the €1 billion suggested over the weekend). These things are always negotiable, it seems, if the timing is right – Minister for Social Protection Heather Humphreys is said to have cannily made a final intervention on the welfare package almost right at the end of Monday’s meeting, suggesting the intended €150 bonus be bumped up to €200. She secured agreement, bringing the total social protection spend in the package up to about €400 million.

To some extent, it stands in contrast to the scale of the interventions at budget time. Gone are the barrage of once-off payments to welfare recipients, while hawks in Government prevailed when it came to another €200 energy credit (for now, at least). The slimmed-down child benefit bonus (from €140 to €100) is another sign of the times (although it may also give an angle of attack for the Opposition, who will paint it as unnecessary parsimony from the Government, and unfavourably compare it to the scale of measures trailed in recent weeks).

Since the end of last week, the Government has been trying to manage expectations. This iteration of the debate on cost-of-living measures has signalled a subtle but important change in the Government’s stance. As Cliff Taylor wrote over the weekend, the sands are shifting beneath the feet of the exchequer.

But even so, it doesn’t represent a total overhaul of the Government’s approach. As long as the coffers are healthy, and the pressures on households and businesses acute, expect calls for more spending to be heeded.

If you don’t believe us, just look at the 9 per cent VAT rate for the hospitality sector: loathed by officials and many commentators, it was given yet another reprieve on Monday, advertising the extent to which the Coalition is constrained.

After the apocalypse, all that will be left will be cockroaches, ChatGPT and lobbyists seeking another extension to the hospitality VAT rate.

Best reads

Fiona Reddan mulls over what we might expect from the economic strategy of Minister for Finance Michael McGrath.

Fintan O’Toole on the West’s objectives in Ukraine.

As part of a series marking the one-year anniversary of the war in Ukraine, Lara Marlowe writes on the nuances of Emmanuel Macron’s positioning.

Efforts to generate enough momentum for take-off on a Northern Ireland protocol deal continue. Bobby McDonagh is writing on the DUP’s best interests here, and Pat Leahy covers off latest developments here.

Off the political piste, Jennifer O’Connell’s thoughtful piece on the controversy over rewriting Roald Dahl is here.

Playbook

Cabinet is scheduled for 9am with the main business of the day being sign-off for the aforementioned measures. There will likely be a press briefing with Coalition leaders afterwards.

As we report this morning, Cabinet is also set to approve an expanded plan for Irish involvement in EU-led Ukraine-linked military missions.

There’s a run-down of the rest of what was due to be discussed at Cabinet here.

In Leinster House, Leaders’ Questions is at 2pm. Taoiseach’s Questions follows, before a Government motion on the Citizens’ Assembly on drug use. Sinn Féin has a motion on housing and the eviction ban at 5.40pm, before Catherine Martin takes oral questions in the evening, with topical issues following.

The Seanad sits at 2.30pm and will deal with legislation governing oil emergencies and the mutual recognition of custodial sentences in the afternoon.

Over at the committees, legislation on hate speech is being considered at the justice committee at 3pm.

Minister of State Ossian Smyth is dealing with revised estimates for environment, climate and communications – at the environment and climate action committee at 11am.

The housing committee continues its warp-speed examination of the Government’s new planning Bill – hearing from local authorities (who aren’t happy with it). That’s also at 3pm.

The Ukraine war and its consequences, as well as migration more generally, will take centre stage at two committees in the afternoon. The integration committee will have a stakeholder engagement session, including hearing from the Far Right Observatory, at 3pm. At the same time, the Ukrainian and Moldovan ambassadors are giving an update to the Foreign Affairs committee.

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