Budget backlash

A BITTER backlash against “savage” budget cuts to disabled people rocked both Coalition parties last night.

More than 40 Fine Gael TDs demanded a showdown with Social Protection Minister Joan Burton after anger erupted at moves to slash payments to young disabled people by as much as 46%.

In a major climbdown, Finance Minister Michael Noonan signalled a hasty retreat, saying it could be “looked at again” when the Social Welfare Bill goes before the Dáil.

The emotive issue left Labour leader Eamon Gilmore embarrassed as the row cost him his third TD in as many weeks.

Fury among Fine Gael deputies saw about half its TDs insist on confronting Ms Burton over the cuts that are set to see the disability allowance reduced by €88 a week for those between the age of 18 and 21; and €44 for those between 22 and 24, who apply in future.

One senior Fine Gael TD said the anger expressed meant “it will be sorted”.

The “savage” cut was also a key reason for TD Patrick Nulty, who won the Dublin West by-election for Labour just 41 days ago, to announce he would vote against parts of the budget — ensuring his loss of the whip.

“I cannot support cutting payments to disabled people, I cannot support cutting the fuel allowance to pensioners, and I will not do it,” he said.

Mr Nulty’s dramatic departure followed hard on the heels of Willie Penrose and Tommy Broughan over cuts issues — and comes against a background of disquiet in Labour.

Sources close to Ms Burton denied suggestions circulating among some backbench TDs that she threatened to resign during a pre-budget showdown over her department’s funding resources and employment policy differences with Fine Gael.

The row over disability cuts dominated the second day of the budget, which saw Mr Noonan impose about €1.6 billion worth of new taxes.

But in a deftly handled speech, Mr Noonan was viewed as showing more emotional intelligence than Labour counterpart Brendan Howlin in a move likely to see Fine Gael endure less public anger than the smaller Coalition party.

Fuel, savings, rental income and cigarettes bore the brunt of the levy grab in a bid, Mr Noonan said, to spare salaries from further raids.

He also attempted to shock the property market back to life with a series of incentives to boost house buying — but families struggling to cope with the mortgage debt crisis were again offered little assistance.

Low-paid workers saw the threshold level for the universal social charge leap from €4,004 to €10,036, but opposition parties said the benefit would largely be eaten up by new charges such as the €100-a-year property tax and the rise in VAT to 23%.

A steep hike in carbon tax to €20 per tonne saw petrol and diesel rise and all bands of motor tax are to increase from January 1. Alcohol duty was left untouched, but Mr Noonan warned that low-cost supermarket sales would be hit in the new year. Excise duty on a pack of 20 cigarettes is to rise 25c.

However, moves to abolish upward only rent reviews on commercial property were abandoned. Sinn Féin and Fianna Fáil insisted it was a “regressive” budget that would hurt the poorest in society.