Gerald Nash (Louth, Labour) | Oireachtas source

I appreciate the opportunity to speak on these resolutions here this evening. Like Deputy Doherty and his party, the Labour Party and I have been arguing for the application of VAT reductions on energy bills for some time now. We see this is an opportunity to help to drive down the ever-rising cost of living for hard-pressed families across the country. This is just one tool or weapon in the armoury of Government to address this unprecedented problem, the extent of which we have not experienced for a long number of years.

To say that there was a sluggishness about the Government's response and the case made to the European Union on VAT reductions is being diplomatic in the extreme. It took an extraordinary amount of time for the Government to take the advice of Opposition partners and to take that case to the European Commission to ensure that we could have some kind of relief on VAT. That is now being applied many months after that initial call was made. The Minister of State has said clearly that there will be a cost to the Exchequer, in terms of VAT and excise reductions that are being applied, and that will be applied going forward at least for the next few months. There is no doubt about it though that a much more comprehensive package of targeted measures - and I the term “targeted measures” deliberately - need to be applied over the next few months and certainly in the context of October’s budget, if we are to properly assist and resource the families who are at the sharp end of this ever-escalating cost-of-living crisis. We know, and this been repeated time and time again in this Chamber, that the experience of the cost of living crisis is not felt equally across this country. It is predominantly most adversely impacting on those who are on low incomes, on those who are rural dwellers and on those citizens who are older.

While, of course, we welcome elements of the Government’s response to this, it can and should go further. That is not just a clichéd response to Government. In our own cost proposals, we have proposed, for example, additional changes to the fuel allowance system. Day in and day out - and I know that the Minister of State will be dealing with these cases himself in his own constituency - we are dealing with people who are €5, 10 and €15 outside the fuel allowance threshold. Many of them are, as Deputy Doherty described, relying on home heating oil to heat their homes.

We would love to be in a position to see the VAT cut that has been proposed by Deputy Doherty applied to home heating oil. The Minister of State goes into some detail in his script in relation to the restrictions that appear to be applied to this in the context of the European VAT directive, for example, and that is something that we need to consider. Unfortunately and regrettably, Commissioner Gentiloni has said that he does not envisage any additional relaxation or flexibility being applied to the VAT directive and other relevant European Union directives over the next period to better insulate households against the ever-rising cost of living. That is a serious own goal from the Commissioner and the European Commission more generally. We do not know where this is going to land. We do not know how protracted the conflict in Ukraine is going to be. We cannot forecast the future, even with the best will in the world. Experts have applied their considerable brains to this matter but we cannot anticipate where this is going to land. The European Commission must be open to change and the Government must be open to making the case at the EU for further concessions, if they can be described thus, to help to insulate the less well off against the impact of this crisis.

The European Commission might not be entertaining or envisaging additional relaxation of directives and so on but this Government has to make the case for same. It is also obliged, as the Government in this sovereign State, to do everything it can and use every weapon in its armoury to insulate as best it can those who are feeling the worst impacts of this phenomenon that we are experiencing at the moment. Much more can be done through the social welfare and taxation systems, but especially through the social welfare system and the Government's own pay policy.

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