Mary Lou McDonald (Dublin Central, Sinn Fein) | Oireachtas source

The recent meeting of the European Council provided leaders with a prime opportunity to address the cost of living crisis and in particular the skyrocketing energy bills that have hammered workers and families for more than a year now. For more than five months, Sinn Féin has been calling on the Government to engage with the European Commission to cut VAT on these extortionate bills. Unfortunately this is something that the Taoiseach and the Ministers for Finance and Public Expenditure and Reform have pushed back against. All the while, the price of energy has soared and households found it increasingly difficult to light and heat their homes or to put fuel in the car to get to work.

Given the intense pressure people are under, and given that a VAT break is a common-sense solution, it is astonishing that the Minister for Finance, Deputy Donohoe, wrote to the European Commission only three weeks ago, on 10 March, months after the idea was first raised with the Government in the Dáil. The constant refrain from the Taoiseach and from the Minister was that barriers presented by Europe prevented the Government from implementing a VAT cut. Time and again, Government representatives said they were awaiting movement from the EU and the Commission for further cost-of-living measures. This Council meeting surely provided the Taoiseach and the Government with the platform to make it clear to our European partners that workers and families in Ireland desperately need a VAT cut on energy bills. Therefore, I am very disappointed that the Taoiseach did not elaborate on this specific point in his contribution. He stated, "A number of measures aimed at curbing rising energy prices were discussed, drawing on options presented by the European Commission." I, for one, would have appreciated clarity on the VAT issue because movement on that will make a big difference for many families who do not have a spare euro to give and who saw the Government's €200 credit wiped out before it was delivered. I assume, given the intensity of the crisis faced by workers and families, that the Taoiseach has taken the opportunity to request a special derogation on fuels and energy; on electricity, gas and home heating oil. Indeed, the statement outlining the conclusions from the European Council meeting makes clear that there is flexibility from the Commission for member states to seek a reduction on VAT on energy bills for consumers. The Government now explicitly has the space it said it required from Europe to implement a VAT cut. The urgency required must be demonstrated to do what needs to be done to give hard-pressed households the break they so desperately need.

I ask that the Minister of State, Deputy O'Donovan, tell us whether the Government has, in fact, formally requested a special derogation on the VAT directives. We are in a real crisis and people need to get real help and support from the Government. There can be no doubt about it. Across the State, people are faced with the choice of heating or eating. I have said this many times in this Chamber but I want to give one example, as it is of value to place it on the record. My colleague, Deputy Kerrane, conducted a cost-of-living study recently. The stories we were told are utterly heartbreaking. I will give one. One person responded that they and their partner are both students in their final year of college. So these are young people. They said that there are days we have had to miss college and their daughter has missed preschool because they could not afford petrol to drive there. Other days they have had to lie that we forgot our daughter’s lunch because they had no lunch box options left in the fridge. That is the reality of it. I am sure that everyone recognises those types of stories. There can be no more excuses and there cannot be further delay. The Government cannot hide behind an alibi of complexity although, of course, these matters are complex. I have told the Taoiseach many times that the Government cannot do everything, and there is no expectation that it can do everything to get living costs down, but it can certainly do much more and it must do so. That includes cutting VAT on energy bills as an emergency measure. This must be done as soon as possible. It will make a real and substantial difference for those struggling to make ends meet and who simply need breathing space.

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