Inside Politics Newsletter

Hello election budget bonanza, goodbye Tories?

Budget requests are already coming in thick and fast from backbenchers

Buoyant tax returns are likely to fuel political demands on Minister for Finance Jack Chambers for a giveaway budget. Photograph: Dara Mac Dónaill/The Irish Times

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Jennifer Bray
Thu Jul 4 2024 - 07:39

Good morning,

The lead story on our front page today details what looks, on the face of it, like very good news for the new Minister for Finance Jack Chambers.

Corporation tax and income tax receipts are surging and the State’s coffers are in decent nick. But headlines detailing this embarrassment of riches will pile the pressure on Mr Chambers to make Budget 2025 one to remember.

As Eoin Burke-Kennedy and Pat Leahy report this morning, despite repeated warnings about the potential volatility of multinational profits, corporation tax receipts have continued to grow, with half-year exchequer returns published yesterday showing the tax generated €5.9 billion in June, up by €1.6 billion, or 38 per cent, on the same month last year.

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“Senior Government figures acknowledged that the buoyant tax returns are likely to fuel political demands on Minister for Finance Jack Chambers and Minister for Public Expenditure Paschal Donohoe for a big giveaway in the autumn budget. The first indications of that will be when the two budget ministers deliver the Summer Economic Statement next week, which will set the fiscal parameters for the budget,” they write.

Already the requests are coming in thick and fast from backbenchers.

Veteran Fine Gael TD Charlie Flanagan called for cuts in inheritance tax and investment in defence. His colleague Brendan Griffin said he would be seeking the restoration of the 9 per cent VAT rate for the hospitality industry as well as a reduction in USC. Fianna Fáil’s Cormac Devlin said he wanted to see a tax package for workers, an increase in the State pension and supports to deal with continuing cost of living pressures.

There were some futile attempts to stem the tide yesterday, with Mr Chambers telling reporters that Budget 2025 will be “tighter” and more like those that came before Covid and the cost of living crisis.

But he did hint that there would still be measures to help cash strapped families.

Then last night, in a statement issued after a meeting with representatives of the banking industry, Taoiseach Simon Harris pledged further cost of living supports, which some sources expect could be paid this year in the wake of the budget.

“The Government will continue to help with the cost of living, with more measures to take effect in September and to be announced in the forthcoming budget,” he said. Hello, election.

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And speaking of elections, voters in the UK go to the polls today after a six week campaign which seemed to lurch from bad to worse to worse again for the Conservative Party. Polls suggest a landslide victory for the Labour Party.

A survey by YouGov for Sky News put Labour on course for a 212-seat majority, the biggest for any single party since 1832. The poll, released yesterday evening, suggested Labour could win 431 seats, compared with just 102 for the Conservatives and 72 for the Liberal Democrats.

Our London Correspondent Mark Paul reports that Rishi Sunak said he would take full responsibility for the result, with some Tories worried that even his seat might be under threat. No sitting prime minister has lost their seat in British electoral history.

Even Tory ministers acknowledged the electorate was about to hand them a historic beating. Mel Stride, the work and pensions secretary and a close ally of Mr Sunak, said Britain was “on the brink of, probably, the largest landslide we have ever seen in this country”.

Our latest Inside Politics podcast examines what comes next if the Tories implode. You can listen to it here.

Best Reads

Marie O’Halloran has this report from the Dáil: “What planet are you on?’ Tánaiste in angry outburst at left-wing TDs over neutrality and Middle East.

And Harry McGee has this report from the Fianna Fáil and Fine Gael parliamentary party meetings: Taoiseach plans early meeting with UK government after election to ‘reset’ relations between both islands.

Miriam Lord: Fascinating turnabout as Mary Lou McDonald scoffs at Fine Gael’s claim to be party of law and order.

The drama continues in the United States presidential race: Joe Biden fights to assure Democrats he can continue his bid for the White House.

Aer Lingus pilots to be balloted on Labour Court proposals, union says.

Eamon Ryan warns against diluting or delaying the Dublin transport plan and hits out against politicians seeking advantage by “playing on concerns” about the impact on business.

Playbook

Dáil Éireann

Minister for Transport Eamon Ryan will take questions on his brief at 9am, and then at 10.30am, Minister for Finance Jack Chambers will take questions on his brief. Leaders’ Questions are up at noon followed by questions on policy or legislation at 12.34am. Government Business will begin at 1.44pm, with the Public Health (Tobacco) Bill 2024 scheduled for second stage. This piece of legislation would ban the sale by retail of tobacco products to people under the age of 21. Topical Issues are scheduled for 6pm. After this, a Private Members’ Bill will be debated on the environmental impact of local industrial emissions in Castlecomer, Kilkenny. The Dáil adjourns at 8.03pm.

The full schedule can be found here.

Seanad Éireann

Commencement matters are scheduled for 9.30am, followed by the order of business an hour later. The Charities (Amendment) Bill 2023 will be debated at 11.45am. Among other measures, this will require charitable organisations to apply for consent from the Charities Regulatory Authority in certain circumstances. The last piece of business of the day in the Seanad will be Private Members’ time, with Fianna Fáil Senators Malcolm Byrne and Fiona O’Loughlin due to bring a Bill which aims to ban protests or pickets outside a private residence. It follows a string of protest outside politicians’ homes, including the home of Taoiseach Simon Harris.

The full schedule can be found here.

Committees

It will be quiet enough in the committee rooms today.

The Public Accounts Committee will hear from Waterways Ireland to discuss their 2022 financial statements at 9.30am. At the same time, the Committee on the Implementation of the Good Friday Agreement will meet in private, while the Joint Committee on Drugs Use will also meet at the same time. The Public Petitions Committee will meet at 1.30pm to discuss the latest petitions.

The full schedule can be found here.