Varadkar refuses to rule out windfall tax on grocery retailers

Taoiseach Leo Varadkar has refused to rule out imposing a windfall tax on grocery retailers if there is evidence of unusually high profits and said he believed there was evidence of profiteering in the economy.

In an interview broadcast on Virgin Media’s Tonight programme on Thursday, Mr Varadkar said he would not take a windfall tax off the table, following calls from Labour Party finance spokesman Ged Nash for one to be introduced amid persistent inflation. However, Mr Varadkar said there would first have to be evidence of retailers banking extraordinary profits.

While some companies did not publish detailed accounts, he said there was evidence that some retailers were “securing bigger margins on their profits in Ireland than they would in other markets”.

“There’s no reason why any company should be making substantially bigger margins here in Ireland than will be the case in the UK or in other parts of Europe,” he said. “We want to examine the evidence first, and see if the evidence is there, and it can be done – we have a bank levy, for example.”

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Asked if consumers were being ripped off, he said “the evidence is there”, notwithstanding the impact of the war in Ukraine and the rebound in consumer demand after the Covid-19 pandemic, which also brought inflationary pressures.

“Even the European Central Bank says that there are some companies that are recording corporate profits, and that is profiteering in my view,” he said.

[ The Irish Times view on grocery prices: Government will struggle to find answers ]

Mr Varadkar said he expected to see prices moderate in the coming months, but warned that while inflation would level off, prices tend not to go back to where they were – meaning wages had to rise, as did pensions and welfare payments.

The Taoiseach said he would have reservations about ring-fencing social housing for older people, even as the number of them in emergency housing grows. He acknowledged the prospect of older people renting later in life and facing a precarious housing situation was a significant risk but said the Government was planning for it.

Mr Varadkar, who has seen protesters gather outside his home in recent weeks, said he would be opposed to legislation banning them from doing so if they were in a public space.

“If you start making it illegal for people to protest on a public street, I would be worried that will be a slippery slope towards restricting the right to protest,” he said, adding that he would be “nervous” about going down that road.

Asked about a complaint made to An Garda Síochána regarding Minister of State Niall Collins, he said the Limerick County TD was entitled to due process. He believed the gardaí were doing the right thing in examining the complaint, but felt Mr Collins would have no case to answer.