Leo Varadkar wants budget assurance from Fianna Fáil

Taoiseach Leo Varadkar and Fianna Fáil leader Micheál Martin.

Taoiseach Leo Varadkar is to up the stakes with Fianna Fáil leader Micheál Martin this week by insisting, at a private meeting, that he will only put forward a budget in October if he knows his party will still be in power to implement it.

Mr Varadkar will make the claim to speed up the start of talks on whether to renew the confidence-and-supply deal between the parties, despite Mr Martin repeatedly saying the deal will not be discussed until after the budget legislation is passed.

Speaking as a separate internal Cabinet rift, between Finance Minister Paschal Donohoe and Social Protection Minister Regina Doherty emerged over whether USC funds could be used to address the pensions time bomb, Fine Gael and Fianna Fáil sources said the parties’ two leaders would meet this week.

The meeting is likely to take place in Munster, after the Cabinet’s special meeting in Derrynane, south-west Kerry, on Wednesday. It is the opening salvo in a lengthy budget priorities battle.

However, the meeting will also be used by both Mr Varadkar and Mr Martin to underline the seriousness of instability in the lead-up to Brexit, with Mr Varadkar expected to tell his rival this includes the need to ensure that the upcoming budget is fully implemented.

It is understood Mr Varadkar — who has stoked up the possibility that he could call a snap general election in the autumn, while separately claiming Fianna Fáil still plans to bring down the Government — will use the meeting to try and start a discussion on renewing the confidence-and-supply deal.

However, sources close to Mr Martin said it is likely the Fianna Fáil leader will, instead, repeat his position that the confidence-and-supply deal discussions must wait until after all of the October budget legislation is passed, potentially blocking any deal talks until early January.

Meanwhile, the meeting is also expected to see some discussion on upcoming budget plans, with reports that Ms Doherty wants to use some of the €4bn annual USC intake to address the pensions time bomb, a move opposed by Mr Donohoe, but which is likely to be backed by Fianna Fáil.

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