The Government’s supports to help ease rising energy prices will be strictly limited and withdrawn as quickly as possible, Minister for Public Expenditure Jack Chambers has said, hours before the Cabinet meets to discuss options.
Warning of the scale of the crisis, he said the Middle East conflict threatened “the biggest impact on the global economy for decades if it continues”, and had “huge ramifications for the growth trajectory of every economy in Europe and the world”.
A tax rebate scheme for hauliers, a double fuel allowance payment and a reduction in excise duty to cut fuel prices at the pumps are all expected to be agreed by the Government on Monday.
Speaking in Tralee on the margins of the British-Irish Parliamentary Assembly, Chambers said the Government spent €10 billion in supporting households during Covid, but hinted that a similar level of support was not possible now.
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“What’s different now is that this has quite severe ramifications for the global economy if it continues. For an open trading economy like Ireland, that brings risk that we have to be cognisant of around the level of intervention that we make,” he told The Irish Times.
“Any intervention we make will have to be temporary. We’ve unravelled other interventions that we’ve made in the past, and we’ll have to do so again. That’s necessary when you’re making an exceptional intervention,” he said.
“There’s an understanding in the public as well that this is highly unpredictable and volatile, and that we have to take a step back and continually assess and evaluate the level of intervention, what’s appropriate at any given time.”
He said the Government was right not to act quickly in response to the conflict, despite Opposition demands. “We know this could have the biggest impact on the global economy for decades if it continues.
“That has huge ramifications for the growth trajectory of every economy in Europe and the world,” he said, adding that there was “exceptional volatility in global markets”, especially the futures market overnight.
Ministers will take this afternoon in Dublin “to finalise” decisions on the help that is possible, but they will be “appropriate” and time-limited: “We will keep it under ongoing review, because we don’t want to extend this.”
Measures would have to be “time bound” and kept under review “as the conflict continues, or worsens or lessens”, said Chambers, who spoke after he had addressed the conference.
[ Ireland looks to tackle rising fuel costs amid turmoil of Iran warOpens in new window ]
“We’re seeing the impact on the price at the pump. That’s why it’s appropriate we make an intervention now, but that it’s carefully calibrated in a way that allows us to continue to review the international position,” he said.
His comments come as US president Donald Trump announced on Monday that he had postponed air strikes on Iranian power plants, saying there had been “productive conversations” about a “complete and total resolution” to the conflict.
