The Labour party has called for a windfall tax on energy companies to fund a universal pay increase. 

With the cost of living soaring, the party’s leader Ivana Bacik said a pay increase would help struggling families and boost the economy as well. 

“It isn’t just a cost to the exchequer - particularly if we’re looking at negotiated pay increases - because we know that pay increases also fuel greater productivity,” Deputy Bacik told Newstalk. 

“And we know that many, many employers are struggling to recruit at present and need, in any case, to offer more pay and better conditions to attract workers to sectors like hospitality, like childcare and homecare.” 

Man adjusting home central heating thermostat to lower temperature and save energy and money.

Tánaiste Leo Varadkar has previously said that the Government cannot mitigate entirely the current crisis and the Department of Finance has allocated €1bn to help people with their bills; each household will receive €200 towards their energy bill, the fuel allowance has been increased and public transport fares have been cut. 

“Compared to other countries, that’s a pretty big response… But all we can do is ease the pain,” Deputy Varadkar told Newstalk. 

Fine Gael is also considering whether the party should make the introduction of a 30% tax band party policy. 

However, Deputy Bacik says the Government needs to do more and that a windfall tax would bring in the requisite funds: 

“We know that in the first quarter of this year tax receipts were increased by €4bn and we have also called in Labour for a windfall tax on the profits being made by energy companies as a result of the huge hike in fuel and energy prices,” she said. 

“So we believe there is money to pay for it.”  

Main image: A hand counting expenses of an electricity bill on smartphone calculator. Picture by: Sergio Monti / Alamy Stock Photo