LAST UPDATE | 7 Apr 2022

TÁNAISTE LEO VARADKAR has said next month increase in Carbon Tax will be ‘offset’ by the government as the Dáil saw more heated scenes on the cost-of-living crisis. 

Sinn Féin TD Pearse Doherty called for the increase to be postponed, with Varadkar accusing Doherty of being “fake” when Doherty said the Tánaiste was “out of touch” with his own TDs on the issue. 

The carbon tax is set to increase next month from €33.50 to €41.00 per tonne of carbon. It is a charge applied to highly carbon-emitting fuels such as coal, peat, oil and natural gas. 

Varadkar has said the government estimates it will add about €20 to the cost of filling a tank of home heating oil and €1.50 a month on gas bills but that the government “will offset that”. 

Both Varadkar and Taoiseach Micheál Martin had said in recent days that the cost of the increase would be offset but Doherty pushed Varadkar for details on how this would be achieved.

He also accused the government of “changing its position” after it had previously ruled out any further interventions.

“The carbon tax hike should not go ahead. Government should not be pushing up the prices on home heating oil that has already doubled, more than doubled in the last year or indeed gas. Efforts should be made to reduce prices of home heating oil and other fields not to increase them,” he said. 

Varadkar began his reply by referencing today’s recorded acceleration of inflation, saying that the CSO is confirming “what people have been experiencing for the last three to six months”. 

He said it was important to point out that the Carbon Tax increase will not apply to petrol, diesel or electricity. 

“You would think from some of the commentary that the Carbon Tax is somehow responsible for all our most or even a lot of the increases that people are experiencing. That’s not the case,” he said. 

Varadkar added that the government “can’t fully offset the cost of raising prices but can offset it substantially”. He said that €2 billion has been spent by govt to ease burden on people but that ‘more needs to be done’.

Varadkar however said that, after engagement with the European Commission on the issue of the VAT rate for fuels, it would not be possible to reduce this as it would be in breach the European VAT directive. 

He told Doherty as the two talked over one another: 

The reason why you won’t let me speak, the reason why you continue to try to shout me down is you don’t want to know, you don’t want the Irish people to know what a fake you are, that you keep making proposals that you know can’t be implemented. 

Also addressing the rising cost-of living, Labour leader Ivana Bacik TD said that an increase in take home pay for working people would be of assistance to people and that a targeted emergency increase in the minimum wage should be considered. 

I believe we need to strengthen collective bargaining rights to strengthen workers abilities to negotiate those improved pay pay rates and conditions to ensure real and sustainable increases in income,” she said. 

Doherty also raised the apparent disquiet among some Fine Gael TDs about the Carbon Tax increase, telling the Tanaiste that “some of your backbenchers understand the pressure that families are under”. 

During a heated four-hour Fine Gael parliamentary party meeting last night, a number of TDs spoke against the carbon tax increase and the rising cost of living. 

A Fine Gael source said the meeting was unlike any other parliamentary meeting they had attended.

Speaking at the Fine Gael meeting last night, it is understood Varadkar said there will be a plan to offset the increases which may come before Cabinet ahead of the Dáil’s return from the upcoming easter recess. 

Fine Gael TD Brendan Griffin was critical of the carbon tax and joked that the Green Party might soon want people to turn their lights off when having sex. 

Griffin also said he couldn’t go to his local pub without receiving abuse about the rising cost of living and government inaction, it is understood. 

Earlier this week, the Taoiseach reiterated that the money raised from the carbon tax is ring-fenced for efforts to tackle the climate emergency. 

“The whole importance of the Carbon Tax is to enable us to have resources to enable people to develop energy efficiency and ultimately reduce costs of energy in their homes.

“So we’ve got to avoid a knee-jerk response here and we’ve got to do this in a very considered way,” he said. 

The marathon Fine Gael parliamentary party meeting began at 5.30pm and didn’t wrap up until after 9.30pm.

The party will hold a special parliamentary party meeting next week to update on what can be done around the carbon tax offset.

With reporting by Christina Finn and Orla Dwyer