Cavan Monaghan Deputy Brendan Smith has raised concerns that the new carbon tax that kicked in this month will strangle retailers in border counties, as increased prices will drive people across the border to buy solid fuels.

The Fianna Fáil Deputy raised a special debate in the Dáil on the matter today, questioning the Finance Minister Michael Noonan about the impact of this new tax on the border region economy.

Deputy Smith explained: "Domestic solid fuel in the North is already cheaper due to a 5% VAT rate, compared to 13.5% per cent on this side of the border and an exemption from the British government’s climate levy. The new carbon tax, which was announced in the Budget and has taken effect this month, makes solid fuels on this side of the border even more expensive. It means that there is now an additional €10 charge per tonne, which will increase to €20 per tonne from May next year.

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"This will add €2.50 to a 40 kg bag of coal and 50 cent to a bale of briquettes. A household that goes through two bags of coal a week for half of the year will pay an extra €130. For many people in Cavan and Monaghan, this is an extra household cost that they simply cannot afford.

"The fact that the same fuel is available for much lower prices across the border will certainly lead to an increase in people travelling across the border to buy their fuel, and an increase in cross border fuel smuggling. This will strangle fuel suppliers in border counties who are already struggling to keep their businesses open."

(CD)