Energy prices and cost of living
Deputy Doherty argues the Government is doing too little for households hit by high electricity and other prices, despite EU calls for action. The Tánaiste replies that Ireland has already introduced one of the largest support packages in Europe, and the two continue to debate whether the response is adequate.
An tseachtain seo, den dara huair ó mhí an Mhárta, d'impigh an Coimisiún Eorpach ar bhallstáit céimeanna a chur i bhfeidhm chun an brú ó phraghsanna leictreachais a laghdú. Tá an Rialtas go fóill ag diúltú rud ar bith a dhéanamh chun cuidiú le gnáthdhaoine atá thíos le billí leictreachais iontach mór. Le bheith fírinneach faoi, tá an Rialtas ag déanamh rudaí níos measa tríd an gcreidmheas fuinnimh a bhaint díreach nuair a bhí siad ag teastáil ó dhaoine go mór. Beidh daoine anois ag cur na ceiste simplí seo, má tá an Coimisiún Eorpach ag impí ar an Rialtas gníomhú, cén fáth go bhfuil sé go fóill ag déanamh rud ar bith? This week, for the second time since March, the European Commission has urged member states to come up with measures to ease the burden of electricity prices. This morning, people are asking a very simple question: if the Government has been told to act, why is it still standing back?
The reality for families is stark. Electricity bills are rising again, heating costs are through the roof, grocery prices are up week after week and households are being pushed to the pin of their collar just to get by. Here is the reality behind all those bills. The Irish Independent today spoke to an 85-year-old man from Balbriggan. He has been working for 71 years and still cannot afford to retire. He works 15 hours a week just to keep his head above water. He sees it plainly. The State pension is not enough to live on. After a lifetime of work, he is still paying for heat, food and insurance, with the cost of everything rising. He knows that if he stops working, he will not be able to pay his bills. The newspaper also spoke to another man. He is a farmer from Cork in his 70s. He gets up every morning at 6 a.m. to go to work, every single day, not out of choice but because costs have spiralled far beyond what the pension can cover. The cost of heating is up, fuel costs have doubled and the price of everything is climbing up and up. This is not how people imagined their later years. After a lifetime of contribution, they should not be worrying about whether they can afford to heat their homes, but that is the human reality of this crisis.
What did the Government do at the very moment people needed supports? It took them away. Energy credits are gone, scrapped just when the pressure was intensifying and just as households were already at breaking point. That decision is indefensible because, at the very same time, we see this week that the Government's economic spring forecast shows the money is there. The reality is that a fraction of the surpluses would make a real difference in ordinary people's lives. The Government has more than enough to act, more than enough to support households and more than enough to give people a real break. This is not about money but about political choices. The Government is choosing not to act. It is choosing to leave families exposed. It is choosing to let bills rise. It is choosing to tell people to wait - wait for the budget, wait until next year and wait while the crisis deepens. People cannot wait because the crisis is here, right now. The bills are landing right now. The pressure on families is right now. These families need relief immediately.
Does the Tánaiste accept that his Government got it wrong when it scrapped the energy credits that were so obviously needed? Will the Government now act to reintroduce those supports and bring forward an urgent cost-of-living package or will it continue to sit on billions of euro in surpluses while workers, families, pensioners and so many others across the State are pushed to the brink?
Comment on this
I thank the Deputy. Of course, the Government did not wait. It brought forward, objectively, one of the largest packages of supports in the European Union to assist our citizens. It is either the largest or second largest package in the European Union, depending on how you look at it, and it is around two and a half times larger than the average package in the European Union. While I welcome the European Commission's high-level proposals of yesterday as an important contribution to this discussion, we in Ireland, in this Oireachtas and in the Government, did not wait for the European Commission to come up with a list of ideas.
To the Deputy's question, I welcome the high-level proposals published yesterday. They are being discussed today and tomorrow at a meeting of the European Council in Cyprus, where our Taoiseach will represent the country. I hope that meeting provides an opportunity to put a bit of meat on the bones of further areas where the European Union can bring forward opportunities to act. I welcome that the proposals yesterday referenced the ability of countries to go beyond the energy tax directive. The Deputy will remember that I brought a financial resolution into this House in which we went beyond the energy tax directive on diesel. On that occasion, we did so more to get ready to ask for forgiveness than permission. I welcome the recognition from the European Commission that it needs to give member states flexibility in relation to that.
I also note that the Commission's proposals say that measures should be targeted income measures. That is why we extended the fuel allowance. I welcome that the Commission said measures should be temporary because I think we have to stay agile and flexible during this crisis. It is hard to predict where the global economy will be in six weeks, let alone in six months. That is why our current measures run to the end of July. The Commission says that taking action on excise duty is an option, which is why we have cut the excise duty on diesel by 32 cent and on petrol by 27 cent. Between the green diesel excise duty cut and the support scheme, the cut for a litre of green diesel is 27.5 cent.
The Deputy is right that the Commission said there are options that can be considered in relation to electricity. I note it said it will soon adopt a legal proposal in relation to this, and Ireland will constructively engage on that. There is an interesting question, quite frankly, as to what more we can do around the structural cost of electricity. To give the Deputy an example, and I read the same article today as he did, we want to invest a lot more in upgrading our grid. We want to make sure more electricity is produced from renewables. The question of how much of that will come on to the household bill versus how much of it will come from the resources of the State is an important and legitimate debate. We are already planning on spending €18 billion on upgrading the grid. Is there more that can be done in that space? We will work constructively at a European level in this regard. We have already acted on the VAT rate on electricity. The Deputy will remember that we took the decision to extend the lowest rate of VAT that we can levy on electricity. That 9% rate has been in place since 2022, but it has constantly been rolled over. We took a decision early on to provide certainty that the rate would be in place until 2030. That measure has already come at a cost of about €1 billion.
We do not rule out taking further actions - no Government can - but an energy crisis in the summer months is very different from the challenges that people could face in the winter months. We have to make sure that we intervene, as we did with the largest or second largest package in the European Union, but also that we have an ability to intervene further. As the Deputy and all of us know in the context of this crisis, no matter what happens in Iran, the damage done now to the energy infrastructure means it will take a significant time to repair. Therefore, we have to be agile.
On the Deputy's point on the surplus, I am very pleased that there is a surplus. It did not come about by accident and did not fall from the sky. The sensible, pro-enterprise policies that this country has implemented mean that we have a fiscal buffer built up. The surplus is not just sitting idle. It is going into infrastructure and climate adaptation, through those funds, and into the Future Ireland Fund to meet, for example, pension requirements. It provides us with options.
Comment on this
The Tánaiste is still not listening. He is trying to spin it, and he can try to spin it whatever way he wants, but people, in their real, lived experiences, know where they are at. They see prices going up. They see the prices of electricity, fuel, home heating oil and groceries going up. They see all of that. They see a Government that is talking about surpluses - billions of euro more than were expected - and refusing to act.
The Government does not need the European Commission’s approval to introduce energy credits. It withdrew those energy credits in the height of winter. We told the Tánaiste what would happen. What happened Simon? Never have we seen more people in the history of this State who cannot pay their electricity bills. On top of that, we have fuel prices and groceries increasing and rents, insurance and student fees going up. It is never ending on families. I am telling the Tánaiste, what the Government needs to do is act now. It needs to bring forward an emergency cost-of-living package that supports families in the here and now. People cannot wait for the Government to get its act together in the budget in October for measures to be implemented in January. People’s bills are rising now. They are looking for help and leadership and the Government is continuing to give them the deaf ear.
Comment on this
Truthfully, it is quite the opposite. We have already brought forward a package of €750 million. That is the opposite of refusing to act; it is acting. It is concrete, meaningful action and people see it at the pump. They know that the diesel price is lower than it was before. It is still too high but people know it is lower. They know the petrol price is lower than it was. Hauliers and their representative body have welcomed the package. Farmers and their representative body have welcomed the package. We continue to work and engage with many stakeholders including the Irish Congress of Trade Unions, ICTU, the Irish Business and Employers Confederation, IBEC, and many others. The Deputy should also acknowledge that never before in the history of the State have more people been in receipt of a fuel allowance. We made a decision to expand it to 50,000 more low-income, working families.
Here is the difference between being in government and opposition; we cannot come in here every Thursday and effectively propose we do another budget. I want to make sure we have options at budget time. We already took a very significant intervention and stand ready to take further interventions. However, we will not have the options we require as a country if we try and have a budget every Thursday.