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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Energy bills and cost of living

Summary

Deputy Doherty pressed the Government on soaring energy costs and the lack of urgent support for families facing winter bills. The Tánaiste said the Government recognised the crisis and was working on electricity-focused help for the new year, while Doherty warned delays would leave people unsupported as prices kept rising.

Tá costais fhuinnimh sa tír seo ag ardú agus tá teaghlaigh amuigh ansin ag streachailt lena gcuid billí a íoc. Tá fíorbhrú ar dhaoine le hairgead a fháil chun a gcuid tithe a théamh an fómhar agus an Nollaig seo. Tá an Rialtas ag déanamh neamhaird air seo. Níl sé ag gníomhú cosúil le rialtais eile ar fud na hEorpa. Cén fáth? Tá pacáiste de thacaíochtaí de dhíth ar dhaoine anois le dul i ngleic leis an ghéarchéim seo.

There is no doubt that winter is here. Those on low and middle incomes are facing energy price hikes in the months ahead. Today, we hear from the Central Statistics Office, CSO, that inflation is now running at 5.3%, the highest rate in more than 20 years. This is largely driven by energy costs. The CSO tells us that in the past 12 months, the price of electricity has shot up by 21%, the price of gas by 26% and the cost of heating one's home by a staggering 71% if using oil. In a survey published by my colleague, Deputy Kerrane, in which 14,000 people took part, 99% of respondents said that the Government was not doing enough to tackle the cost of living. Some 77% said that this has had an impact on their mental health.

Since the beginning of this year, suppliers have announced more than 35 price increases. Bonkers.ie shows that those price hikes could increase annual household energy bills by as much as €1,300. Workers and families need a helping hand now.

Across Europe, we see governments responding to soaring energy prices in order to shield households. In Spain, VAT on electricity bills has been slashed by 11%. In Italy, the Government has launched a package worth €6.2 billion to protect households from rising energy prices to the end of the year. This Government has done nothing despite the fact that we in this State face the highest energy prices in Europe. We in Sinn Féin call on the Tánaiste's Government to wake up. We have repeatedly called for relief to be provided to low and middle-income households, households that will struggle when they receive their bills for electricity, heating and oil in the coming months.

In October, the Commission launched a toolbox for action to support member states in tackling rising energy costs. We have said that the Government should work with the Commission to reduce VAT on domestic energy bills, thereby providing an immediate 12% cut in energy prices for households this winter. The Government rejected that proposal but we have put forward many others. For example, I am sure the Tánaiste is aware that many jurisdictions operate discount schemes for households. Under these schemes, the electricity or gas provider applies a discount to the household's energy bill, with the amount of the discount then reimbursed to the provider by the State. I am sure the Tánaiste is aware of this because a similar scheme already operates here through the free electricity allowance. This allowance is automatically deducted from the household bill and the supplier is reimbursed by the State. A similar scheme could be rolled out if the political will was there to provide immediate financial relief in respect of the electricity and home heating bills of low and middle-income households this winter.

Has the Government even explored that option? If not, will the Tánaiste consider or commit to exploring that option? We are asking the Government to wake up to the fact that people are hard-pressed. These numbers do not lie. There has been a 71% increase in the cost of heating your home if you use oil. There has also been an increase of more than 20% in the cost of electricity and gas. Despite their households having cheaper energy costs than those in this State, other European Union member states are acting, in some cases through multibillion euro packages, to support workers and families through this period. In light of the fact that the Government is reported to be considering a financial package, how long must workers and families wait for it to act? Households cannot wait any longer.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I thank the Deputy. The cost of living in Ireland is rising very quickly. After more than a decade of little or no inflation, we now see prices raising at a rate of more than 5% a year. We have not seen that in 20 years. This is very much driven by increases in fuel and energy prices. The Government is very aware of that. We know it is very difficult for many families who are trying to make ends meet and find enough money to pay the bills at the end of the week or the end of the month. Of course, we also know it from our own experience of going into the shop or forecourt or getting our electricity or gas bills through the post. We need to help.

Government is helping in at least four ways: pay increases, welfare and pension increases, a reduction in personal taxation and help with the cost of living in respect of a number of services. To expand on that a little bit more, with regard to pay increases, an increase in the minimum wage will kick in from January and there are also increases in public sector pay. There are also significant pay increases in most, although not all, parts of the private sector. With regard to welfare and pensions, an increase in the fuel allowance has already kicked in. Increases in the pension and weekly welfare payments will kick in from the first week of January. Reductions in personal taxation will also kick in from January. This means that people will pay less income tax. This is being achieved through increases in tax credits and an increase in the cut-off for the standard rate of tax. People will see that in their payslips in January. There are also other things that can help with the cost of living. There is to be a rent freeze in real terms. The freeze in childcare fees will be really important to many families who spend a great deal of money on childcare. There will also be a reduction in the cost of medicine. These will also kick in from January. These are the four sets of actions the Government is taking which should see the rate of inflation coming down in 2022. That is what we anticipate will happen.

With regard to energy prices in particular, the Government is aware of the European toolbox and the options available to us to assist families and households with the high cost of energy. These are currently under consideration. We would certainly like to do something to help with electricity bills and perhaps gas bills also. The Ministers, Deputies Donohoe, Michael McGrath and Eamon Ryan, are working on that at the moment. We hope to be in a position to make a decision on that in the near future so that people will see the effects of that decision in the bills they receive being a little bit lower than expected in the new year.

Comment on this

There seems to be a trend here. It was the same when the Government was going to roll out free antigen tests but then Lidl and so on sorted it out. It is likely that the same thing will happen here. The Government will take so long to come up with a scheme that the weather will have got better. We will be into the spring or the summer and the Government will say that help is no longer needed. We have been raising this issue with the Government since October. There have been 35 energy price increases. It was 4°C yesterday. I am not sure what the temperature outside is at the minute. People are suffering as a result of these energy price increases. Bonkers.ie tells us that they amount to €1,300 per year. The Tánaiste has not mentioned anything about offsetting the rapid rise in oil prices. Most people in rural Ireland use oil rather than electricity or gas to heat their homes. Oil heating has seen the sharpest increase, 71% in a year.

There are solutions. We already have a model through the electricity discount scheme. We can expand that to other operators. When is the Government going to bring forward a scheme? I am conscious that next week is the Dáil's last sitting week for the year. While Government is doing basically nothing on this issue, bills are coming in and households are under additional pressure and wondering how to make ends meet.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

It is very much the view of Government that we need to take action and do something to help people with their energy bills in the new year. We are particularly focusing on electricity because it is a bill everyone gets. It is something that people have to use. They do not have any choice as to what type of energy to use and must use what comes in on the wires. We are working on that at the moment. As I said, if we are going to do something that will have an impact on people's bills in the new year, we will have to make a decision in the next week or two. The Ministers, Deputies Donohoe, Michael McGrath and Eamon Ryan, are working on that as I speak.

The Deputy did not acknowledge some of the things the Government is doing to help people with the cost of living. There are to be pay increases next year. An increase in the minimum wages kicks in from January. Most people in the private sector are getting decent pay increases this year coming, as they should. There are to be increases in the pension and welfare payments from January and there has already been an increase in the fuel allowance. There will also be reductions in income tax for middle-income earners. It is not only low-income earners who struggle with bills. People on middle incomes and middle-class people do too. We are reducing income tax in the new year. People will see that in their payslips from January. When they see that, they will know it is something Sinn Féin opposed.

Comment on this

And their bills will keep on going up.

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