Varadkar: Leaders have asked ministers to find ways of tackling increased cost of living

Tánaiste Leo Varadkar said: "Whether it's the shock of looking at your gas bill, whether it's the electricity bill, whether it's the rising cost of filling a tank of diesel or petrol. Everyone is feeling it in their pocket." Photo: Damien Storan.

Ministers have been told to come up with ways to bring down the cost of living, Leo Varadkar has confirmed.

The Tánaiste told the Dáil that the three coalition leaders met on Monday and have told line ministers to come back with proposals to help tackle rising costs. 

The Tánaiste was replying to Sinn Féin deputy leader Pearse Doherty who said that "workers and families are under pressure like never before" due to climbing costs of fuel, energy and food. He said that in the 12 months to December, inflation hit 20-year highs, childcare is a "second mortgage", oil prices are up 53% and rents "continued to spiral".

"Your government hasn't managed to deal with this cost of living crisis, you have failed to come up with a comprehensive plan to support these households. Instead, the government is trading soundbites with leaks from parliamentary party meetings rather than real and immediate action. 

The Irish people deserve a government that understands the difficulties they are facing. The time to act is long overdue.

Mr Doherty said the cost of living hits the poorest and middle-income earners hardest and said that a €10 raise in social protection rates is needed as well as an extension to the fuel allowance season, both of which have not been enacted. He said it is "crazy" that May's proposed increases in the carbon tax will go ahead as planned.

In response, Mr Varadkar said the government "acknowledges that the cost of living is rising" and "rising very, very fast".

"People are feeling the squeeze. Whether it's the shock of looking at your gas bill, whether it's the electricity bill, whether it's the rising cost of filling a tank of diesel or petrol. Everyone is feeling it in their pocket. And of course, those on the lowest incomes are feeling it more so than those who are not. The government gets that and we've already taken action.

"The three government leaders met on Monday night, commissioned line ministers to develop proposals for a package of measures that will allow us to help families with the cost of living - that is being worked on at the moment with further discussions today. 

"We're meeting with the unions and employers this afternoon and there's a chance to discuss it then. There'll be a committee meeting of the Cabinet Economic Committee, which I chair, next week, which will be another chance to discuss it as well.

"We will make a decision on it. And we'll make it soon, certainly in the next couple of weeks, because we do acknowledge that the cost of living is rising."

Government sources said a range of measures will be looked at in advance of next week's subcommittee meeting.

These include a potential increase in the amount companies can pay staff in tax-free bonuses from €500 to €1,000, a dedicated hardship fund for people struggling to pay bills, and cuts to VAT on food, fuel or energy.

However, a senior source said that nothing concrete had been decided and the Government would have to be mindful of EU State Aid rules and would focus only on the "pinch points" affecting consumers.

Mr Doherty said the crisis "did not fall out of the sky" and that those on social welfare will be worse off after last year's Budget. He said the carbon tax increase would see the cost of energy go up €17 for gas and €19 per tank fill for oil. He also said a ban on rent increases is needed.