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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Energy prices and Government response

Summary

Deputy Mattie McGrath criticised the Government for refusing to cap electricity costs or levy extra taxes on energy companies, saying businesses and households were being hammered by price hikes. The Minister defended the Government's €1.2 billion package, argued international wholesale prices were the main driver, and said the measures were substantial and would be kept under review despite sharp exchanges.

Why has the Government deliberately chosen not to cap the cost of electricity or implement a windfall tax on electricity providers in this country? Never has there been a more important time to be decisive and to reduce the crippling bills that households, small businesses and farmers are facing. All energy customers are once again facing extremely significant increases in their bills from this month, with seven providers applying massive price hikes. These companies are receiving little or no support from the community, public or businesses. Why would the Government do nothing and effectively hand these companies carte blanche approval to do what they like? That is what it has done.

When all of the price increases since the start of last year are totalled, they add up to more than €1,700 per year to people's electricity bills and over €1,700 to their gas bills. In overall terms, these cumulative increases will mean an average household will be paying €2,500 more in energy costs than was the case in 2020. Those are the basic and bare facts.

The Government's only intervention of offering a rebate for households this winter is completely insufficient. This rebate will not even cover 25% of the increased cost of household energy bills above 2020 levels. It is a pittance. It is silly. For many households, that amount will not even pay one month's supply bill. Those are the facts of the matter. In all, the money from this voucher scheme will only end up going directly to the energy companies, which is not the desired effect. In reality, it is a bailout for those companies.

Ministers have been quick to recommend that customers change providers to obtain better prices. According to the CRU, however, customers who attempt to switch will be able to make no real savings because the discounts offered as incentives have been dramatically reduced. The companies are doing what they like all the time.

Electric Ireland has approximately 1.2 million electricity customers and 145,000 gas customers. Its parent group, the ESB, reported operating profits of €679 million for last year, an increase of 10% on 2020. The dividend it paid to the State was a mere €126 million. Why does the Government not take a much larger slice of that? The massive profits made by ESB Group during the current energy crisis should be used to reduce utility bills. This is especially true when one considers that ESB Group has reported overall profits of €1.5 billion in the past year alone. That is a staggering level of funds. No one would deny a company the right to make a profit but those are staggering, eye-watering figures. As the owner of this company, how can the Government allow it to make record profits off the backs of ordinary householders and small businesses amid soaring prices for energy?

Comment on this

I thank the Deputy for raising this issue. We absolutely recognise that there is much worry out there. Many households, businesses, community groups, sports clubs, and so on, are genuinely worried about the months ahead and the bills that are coming their way. They worry about how they are going to be able to meet those bills. We accept that, and it is why we have brought forward a whole range of issues, which I will not go through again because I think people are well familiar with them. However, by any measure, it is a serious response from the Government. We have done the best we can in bringing forward an €11 billion package that will benefit every household in the country.

The Deputy made points about the energy companies. We are acting on that through the EU framework. There was agreement on 30 September at the Council of energy ministers. That will result in a temporary solidarity contribution from the fossil fuel production companies and a cap on market revenues for those energy providers that have not seen an increase in their costs. That will apply to providers involved in wind and solar energy, and so on. The commitment we are giving is that the resources that we collect, and we are currently calculating and assessing how much money Ireland is likely to get from those initiatives, will be given back to households and businesses to help them cope with the increased bills they are facing.

The cap on market revenues must be implemented by the start of December and the solidarity contribution by the end of December. That is a tight timeframe, given that legislation and technical implementation in the energy market will be needed. The Government is committed to doing that and to ensuring that we provide the benefit of that extra revenue we will collect for those who need it most.

The temporary business energy support scheme will be up and running next month. It will be backdated to 1 September. As the Deputy knows, it provides for a payment, capped at €10,000 per month, to individual businesses which will meet 40% of the increase in their energy costs this year relative to last year. It will be based on the per unit price. Of course, that will be administered by the Revenue Commissioners. We believe it will be of significant benefit to businesses all over the country.

We know that clubs, service providers and community groups are facing a hard winter. We want to keep the floodlights on. We want to keep our community halls warm. We want people to be able to avail of all of these vital services and local amenities. That is why we have provided €340 million in extra funding between now and the end of the year across a whole range of areas. Some €35 million, for example, will be provided for our sports clubs to ensure that our children and all members of clubs across the country can continue to avail of the facilities that we and local communities have invested in over the years.

Comment on this

That was a pretty feeble answer. The Government is tired; it has created this problem itself.

The Government likes to blame the war in Ukraine but, as awful as that is, the Government has created this problem. You cannot make a silk purse out of a sow's ear. That is what the Government is trying to do here. Some 40% is not nearly enough for businesses. I know of one SuperValu in Tipperary whose bill increased from €6,000 in February last year to €18,000 this year. What good is 40%? That is replicated for all other businesses, big and small.

The Departments did not have the energy to stop the money going to aid millionaires and people like ourselves who do not need it and can manage without it. What is wrong with the Government that it cannot do that? It is time for the entire Government to pack its bags, bí ar an bhóthar and go back to the people because the people know the Government has created this problem. It is blinkered by Green Party policies and no matter what happens it will continue with the folly of supporting the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, and following him down this cul-de-sac from which there is no comeback or exit. It is a deep, dark cul-de-sac and that is where the Government will remain but the people of the country do not want to go down those cul-de-sacs. They are frozen, worried, they cannot afford to meet these bills and the Government is trying to kill their spirit. It will not kill that spirit because they are resilient people and they know they will get the Government out very soon from where they are sitting on their pretty seats.

Comment on this

People are worried. We should not add to their worries by being unfair in our analysis of the situation. The price today for UK gas on wholesale markets is approximately £3 a therm. This day two years ago, the price was 50 pence a therm, yet the Deputy said that it is all the fault of the Government.

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What about Shannon LNG?

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The Deputy completely undermined-----

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-----his own argument by not even recognising-----

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Do you want glasses to see properly?

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Catherine Connolly An Leas-Cheann Comhairle Independent

Let the Minister reply.

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To be fair, the Deputy is not even recognising basic facts, namely, that the wholesale price of energy on the international markets has rocketed. For the Deputy to say that it is all the fault of the Government is just not accurate, not credible and he is just-----

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No place to hide.

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-----misleading people for his own political advantage, as he sees it.

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The Minister has no place to hide.

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The Government has brought forward a package worth €1.2 billion of specific special payments that will be made between now and early December. That will be of real help to people. We stood by businesses during the Covid-19 pandemic. We have seen a strong recovery in the Irish economy. We are now setting a scheme and are focused on getting that up and running. Of course, we will keep it under review and if the Government needs to do more next year, at least we have the resources to do so because we will have a surplus next year. We have put funding away so that we have the capacity to respond and to provide extra help to people if we need to-----

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Businesses are disappearing by the hour.

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-----over the course of next year.

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