Phasing out of USC in doubt over Garda deal

The phasing out of the universal social charge (USC) is in doubt as the Government will have to find an extra €40m each year to fund the Labour Court’s Garda pay deal.

Public Expenditure and Reform Minister Paschal Donohoe said the deal would have “significant consequences” and he could not rule out cuts to frontline services or social investment.

Neither could he say that it would not impact on the phasing out of the USC.

Ministers reluctantly signed off on the Labour Court recommendation yesterday with senior cabinet ministers claiming they had been “torpedoed” and “let down” by the court.

A Garda strike was averted on Friday after the Garda Representative Association received the recommendation.

Mr Donohoe said: “Any change of agreement that we have in relation to the Lansdowne Road Agreement has consequences for everything else that Government wants to do.”

Asked specifically if the Garda deal would mean the retention of the USC, he said: “It has consequences for everything”.

However, he was clear to point out that there would be no increases in taxes. “We believe that the levels of income tax that we have in place play a vital role in creating jobs.”

Mr Donohoe said he would now be consulting with Justice Minister Frances Fitzgerald on how the package would be funded. But he warned: “It does have consequences for An Garda Síochána and it does have consequences that are now being raised by other unions.”

He said he would be engaging with all the unions within the Irish Congress of Trade Unions in an “orderly and strong” manner.

“I want to work with the unions to deal with the challenges that our country faces but it has to be done in a way that is affordable to everybody,” he said.