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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Electricity costs and cost of living

Summary

Deputy Tóibín accused the Government of driving up living costs, focusing on high electricity prices, ESB profits and higher taxes and charges. The Taoiseach said the best response was lower inflation, wage growth, VAT reductions on energy, investment in the grid and an affordability group to address energy prices.

Verona Murphy An Ceann Comhairle Independent

I call Deputy Tóibín, representing the Independent Technical Group.

Comment on this

The Government is one of the most significant drivers of rip-off Ireland. Many of the costs affecting families currently are being driven up by the Government. To take electricity as an example, Ireland has one of the highest electricity costs in the whole of the European Union and the gap between retail price and electricity costs here is one of the largest in the world. The ESB is a semi-State company. It operates under Government policy. It is one of the biggest players in the market and is profiteering to the tune of €706 million in the jaws of a cost-of-living crisis. There are 300,000 people currently in energy arrears. The Society of St. Vincent de Paul has said it dealt with a quarter of a million people on its helpline calls before Christmas.

This month, the Government increased the tax on petrol and diesel. It already increased the tax on petrol and diesel in the budget, only three months ago, and it increased the tax on heating oil and gas on families. In 2024, the Government took €4.1 billion in fuel taxes, the highest ever in the jaws of a cost-of-living crisis. The cost of filling a car is currently €19 more today than it was five years ago. That is not because of market issues or anything other than Government taxes. The Government is not finished with fuel taxes. It's aim is to increase carbon taxes for the next five years, irrespective of the economic circumstances of citizens at any given time. The Department of Transport has admitted in response to a freedom of information, FOI, request that there will be no new public transport capacity provided this year. The Government is using extra fuel costs and taxes as a stick to beat people out of their cars while refusing to provide a carrot of extra public transport capacity this year.

At the start of this month, the Government also increased tolls on the M50 and other motorways. Some 160,000 people use the M50 on a daily basis because they have to. It is the busiest road in the country. Last year, we paid €212 million on tolls on the M50, not to a public private partnership, PPP, but to the Government because we own those bridges. We have paid €2.2 billion in tolls already on those two bridges that cost £58 million to build. It is incredible. We have bought those M50 bridges 30 times over. The Government is using them as a cash cow and as a tax on commuters and workers. Increasingly, the squeezed middle is having Government costs on it increased. What will the Taoiseach do to make life affordable for these people?

Comment on this

More fundamentally, we acknowledge that there are very significant pressures on people in terms of costs and pricing and making ends meet. The most effective way to deal with that is how you manage the economy more broadly and how you get inflation down to very low levels and have average wage growth and real income growth that significantly helps people to deal with those pressures. If you look at nominal wage growth in the economy, it is at approximately 5.5% or 5%. Inflation is at 2%. In 2024, 2025 and 2026, we are, for the first time in a while, looking at real income growth, which will help workers. It does not deal with it in its entirety but it will help workers deal with the pressures of increased costs.

There were very significant increases in the aftermath of the Russian invasion of Ukraine and the oil and energy crisis that arose from that. We decided in the budget to invest in services, which is important in terms of education, health and so forth, but also to invest in social protection to protect the lowest income groups, which we did fairly comprehensively in the last budget. The results are there from the ESRI analysis in terms of the lowest income deciles, which got the highest allocation of resources. I would like the Deputy to acknowledge that. Those are not my figures; they are ESRI figures in respect of that reality. We did it in terms of the fuel allowance. We increased it but we also increased the coverage of it, in other words, 26% of people will now avail of the fuel allowance, particularly those on the working family payment. This will help in that regard.

Our population has grown dramatically, which is really putting pressure on services. It is extraordinary that from 1995 to today, our population went up 52%. That has an enormous impact on services. In many ways, there is positivity in that in terms of the Irish economy growing. In the last number of years, that increase has continued.

Fundamentally, managing the economy means creating jobs. The most effective way to deal with cost-of-living and poverty pressures is to make sure there is employment available to people. At the moment, our unemployment rate is in or around 5%, if we take 15-year-olds and onwards. Those are the figures, but our rate of participation in employment is increasing all the time and average weekly earnings are up significantly as well. Through the broader management of the economy, investment in services, infrastructure, housing, education, health and childcare are the areas we decided to prioritise in the budget, along with social protection. In the social protection framework, we said we would look after those at risk of poverty as the key priority, and we did that.

Comment on this

First of all, real income fell in 2021, 2022 and 2023. We are talking about a marginal recovery on those particular years. The Taoiseach talks about fuel allowances. The Government is giving money with one hand but picking the pockets of people with the other. The Government is taking more in fuel taxes than it is giving back in allowances. What we are talking about here is the working poor.

In the budget for this year, the Government increased income taxes on the squeezed middle. Property taxes will increase for homeowners this year. An Post, for example, is increasing the cost if its stamps. Rents and house prices are increasing significantly, not just because the Government will not deliver supply into the market, but also because its own rent cap policies have increased rents in recent times to over €2,000 a month on average. That is really important.

Look at the My Future Fund auto-enrolment scheme. It will start to bite this month for people who cannot afford their present situation. In terms of rip-off Ireland, will the Government reduce taxes on fuel and the cost of tolls?

Comment on this

We reduced VAT on energy and we extended that reduction to 2030. We did that.

Comment on this

We have the highest electricity costs.

Comment on this

There is an issue with electricity prices. There is no question about that. The Minister has set up an affordability group on energy to deal with that. There are regulatory issues and more pan-European issues. We are an island nation. There is wider distribution. We are investing hugely in the grid and choosing investment in infrastructure because we need to make sure the growing population has access to energy in the years to come. We are prioritising in a strategic way the allocation of resources for the benefit of all of our people into the future.

The Deputy referenced the carbon tax and so on. That is helping us to address fuel poverty, particularly for those on the lowest incomes. It is helping us to deal with the dramatic transformation of retrofitting investment, for example, which is a very effective way of reducing the cost of energy for many households. A huge number of households have benefited from that. Agriculture has also benefited from allocations from that source also.

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