Energy Costs and Windfall Taxes: Motion [Private Members]

Deputy Jennifer Whitmore

I move:

That Dáil Éireann:

notes that:

— the price of energy has more than doubled in the past year;

— consumers' energy bills have increased to an average of €4,300 per year;

— more than 40 per cent of households are now estimated to be living in fuel poverty, according to the Economic and Social Research Institute;

— a consultant geriatrician at the Mater Misericordiae University Hospital told RTÉ in December 2022 that older people were developing hypothermia in their homes because their homes were so cold;

— the energy crisis is a primary driving factor of the cost-of-living crisis that is decimating the incomes of workers and families;

— according to a new survey from Barnardos Ireland, 25 per cent of parents have had to cut down on household bills, like gas and electricity, in order to afford food for their families;

— the Barnardos' survey also found that one third of parents have skipped meals so their children would have enough to eat; and

— the number of parents using foodbanks has more than doubled in the past year – from four per cent to 10 per cent;

further notes that:

— the unprecedented energy crisis is threatening the future of many viable businesses;

— energy bills for many small and medium enterprises have more than tripled in the past year alone;

— there is a risk of the energy crisis becoming a jobs crisis if businesses begin to close;

— the Irish Small and Medium Enterprises Association has warned that supports already announced by the Government do not go far enough;

— just €26 million has so far been drawn down from the Temporary Business Energy Support Scheme (TBESS) — which has a budget of €1.2 billion; and

— the low take up of the TBESS is evidence the scheme is not fit for purpose;

furthermore, notes that:

— as consumers' and businesses' bills soar, energy companies are making record profits;

— Shell's profits doubled to €36 billion in 2022;

— ExxonMobil made a staggering €51.5 billion profit in 2022 – which equates to a profit of €5.8 million every single hour;

— in the first six months of 2022, the Electricity Supply Board's profits more than tripled to €390.3 million;

— operating profits at Bord Gáis Energy increased by 74 per cent in the first six months of 2022;

— profits at the Corrib gas field trebled in the first six months of 2022 to an estimated €560 million;

— profits at non-gas electricity generators are running six times ahead of expectations – because electricity prices are linked to the price of gas;

— the Minister for Environment, Climate and Communications, Eamon Ryan TD, first committed to the introduction of a windfall tax in August 2022 and the European Union (EU) authorised the introduction of a windfall tax in September 2022;

— despite wholesale energy costs decreasing in recent months, not a single energy company or supplier has reduced its prices; and

— ExxonMobil issued proceedings against the EU in December 2022 in an attempt to scupper plans for windfall taxes across the entire bloc;

recognises that:

— the 1998 Energy Charter Treaty protects fossil fuel companies by allowing them to sue governments that introduce policies that impact their profits;

— the Energy Charter Treaty is therefore incompatible with our Climate Action Plan and inimical to our climate action targets;

— many EU countries, including France, Germany, the Netherlands, Poland and Spain, have announced their intention to withdraw from the Energy Charter Treaty; and

— the Irish Government has refused to withdraw from the Energy Charter Treaty;

further recognises that:

— a blanket energy price cap for households and businesses would be difficult to budget for and would not disincentivise energy use;

— a number of EU countries have introduced targeted energy price caps to provide certainty and security for consumers and businesses;

— in Germany a targeted energy price cap, which caps the price of approximately 80 per cent of average energy usage, will cushion households and businesses from dramatic energy price shocks and provide certainty about costs;

— such a targeted price cap would also incentivise the conservation of energy; and

— a windfall tax would work in tandem with a targeted price cap to ensure that energy companies cannot price gouge while the cap is in place;

agrees that:

— profiteering on war is immoral;

— record profits at energy companies are grotesque;

— the Government's delay in introducing a windfall tax on energy companies is deeply concerning;

— the Government's response to the energy crisis has been grossly insufficient and support is not going to those families and businesses who need it most; and

— the Government's refusal to join other EU countries in leaving the Energy Charter Treaty should be condemned; and

calls on the Government to:

— introduce targeted price caps, which would cap prices for average energy use by households and businesses, as soon as possible;

— immediately introduce a windfall tax on energy companies and use that money to support struggling consumers and businesses;

— commit to reviewing the proposed cap on market revenues for non-gas electricity generators before its proposed June 2023 expiry date with a view to extending it until 2024; and

— announce its intention to immediately leave the Energy Charter Treaty.

Soaring energy costs are causing turmoil in households and businesses all over the country. Price increases have been relentless, with some energy companies increasing their prices on five separate occasions last year. This maelstrom of price rises can make people feel dizzy, and it is hard to keep track of exactly how high prices are becoming when they are increasing or seem to be increasing every other day.

Energy companies are boiling us alive and hoping we do not notice. Worse, they are charging us exorbitant prices for the pleasure of being boiled. Since there is so much opacity regarding price rises, it is important for us to be clear here today. We need clarity so we can truly appreciate just how far and fast energy prices have risen in this country. According to the Sustainable Energy Authority of Ireland, SEAI, Irish residential customers were paying between 15 cent and 18 cent per kilowatt hour for electricity in 2021. In 2022, after Russia invaded Ukraine, prices rose by up to 35 cent per kilowatt hour. Last month, these rates spiked to between 43 cent and 45 cent per kilowatt hour. That indicates a rise from 15 cent to 45 cent per kilowatt hour, meaning that energy costs have tripled in two years. On average, residential customers are now paying €4,300 for energy per year. There is no indication that this is the upper limit. In fact, prices could go even higher. There is no precedent in modern history for the speed at which energy prices have increased and the exorbitant prices now being charged. Never before were families expected to pay so much just to ensure they could cook their children a modest meal and keep them warm.

Energy is not an optional extra. It does not entail discretionary expenditure that can be excised from budgets to save cash. People and businesses need it to survive. Parents are now enduring extreme stress and worry every day. They are worried about how they will continue to heat their homes and feed their families. Businesses, particularly small and medium enterprises, have been hit particularly hard and some have seen their bills quadruple. Many otherwise viable businesses are now contemplating closure simply because they cannot afford to keep the lights on.

The price rises being foisted on families and businesses are unprecedented, but so too are the profits being generated by rapacious energy companies. Yesterday the Taoiseach told my colleague Deputy Shortall that Irish energy companies would soon be posting enormous full-year profits for 2022. We can assume that this was a warning to prepare us for more obscene profits from a sector that is merrily profiteering on a war. If their half-year profits are anything to go by, it will be a bumper year for energy companies.

In the first six months of last year, the ESB trebled its profits, and Bord Gáis Energy's profits increased by 74%. Profits at the Corrib gas field also trebled in the first six months of 2022. Profits at non-gas electricity generators, such as wind farms, are up to six times higher than expected. Meanwhile, the Government's windfall tax, which the Minister responsible for energy, Deputy Eamon Ryan, committed to in August and on which the EU signed off in September, is nowhere to be seen. The last we heard from the Minister, he was still drafting the legislation to underpin it. Other EU countries, such as Germany and Spain, have already managed to introduce a windfall tax, and they did it in December. Italy's windfall tax was introduced in March 2022 and collected €4 billion by December, yet here in Ireland we have to wait. Yesterday, the Taoiseach told us the windfall tax would be ready in a matter of weeks. I hope that promise is delivered on.

I have a question for the Minister of State, Deputy Ossian Smyth, on which I would really appreciate a response. Is Ireland in contravention of the EU regulation underpinning the windfall tax? Article 14 states member states shall adopt and publish measures implementing the contribution by 31 December 2022. If that is the case, Ireland has missed the deadline and is in contravention of the regulation.

Profiteering from a war is immoral and grotesque, and the Government must stop facilitating it. In tandem, it must now act to constrain prices and provide tangible reliefs for households and businesses. The Social Democrats introduced this motion because we are deeply concerned about the Government's approach to the energy crisis. It opted for the blunt instrument of electricity credits at the start of this crisis. Credits were first announced in December 2021 because we were told there was no time to do anything else. The Government said it wanted to get the money to people fast and that credits were the easiest way to do it. Fast forward to budget 2023 last autumn and the credits were again relied on as support mechanisms. Now we are talking about what amounts to a mini-budget in the spring. We are again told credits will be used as the preferred energy support. More than a year has passed since energy credits were first announced but the Government remains trapped in emergency mode. There has been no evolution in its policy and no recognition that, as this crisis develops, so too must its policy approach.

The worst thing is that the Government's policy approach is clearly not working. At the end of December, nearly 260,000 energy customers were in arrears. The Government's temporary business energy support scheme is so convoluted that it is functionally useless. Just €26 million has been drawn down by businesses from the €1.2 billion available under the scheme. The Taoiseach admitted yesterday that this was just a fraction of what the Government had expected and said the Minister for Finance had gone back to the drawing board, but only to the extent that he is going to tweak a scheme that is really an abject failure. While the Minister busies himself painting lipstick on a pig, businesses are going under.

What we need is a policy shift, not cosmetic changes. Targeted energy price caps for both households and businesses are the only guaranteed way to keep prices down and ensure certainty about costs. This would not be a blanket cap that would reduce the cost of energy in an unlimited or uncontrolled way. It would mean families and businesses would be supplied with energy at reduced rates to meet their average energy needs. Any energy use in excess of this amount would be charged at market rates. It is a cap that can be budgeted for. How do we know this? It is because the Germans have already done it. Unlike an unlimited cap, it does not disproportionately benefit wealthier households and it incentivises energy conservation.

Yesterday, when Deputy Shortall raised this with the Taoiseach, he tried to pillory the idea by associating it with Ms Liz Truss, who we all accept was no economic guru. Another Government Deputy derided it as a Tory cap. I can only charitably assume that Ministers and Deputies on the other side of the House do not know what they are talking about. Either that or they are being wilfully obtuse. The attack lines from the briefing memos in Government Buildings will have to be revised. The Government can accuse the Germans of many things but fiscal recklessness is not one of them. Is the Taoiseach really saying the Germans are writing blank cheques for energy companies or emulating Ms Truss's disastrous Brexiteer economics? Maybe he is really saying the Irish Government does not have the fiscal acumen or ability of the German Government and therefore cannot implement what it has done. The automatic reflex of the Government is to malign constructive suggestions from the Opposition rather than engage with them on their merits. It is a reaction that repeats itself with depressing regularity.

A progressive cap on energy prices that we know can be introduced and make a tangible difference to families and businesses becomes derided as "Truss economics" or the "Tory cap". This despite the fact that the cap originated from the boringly responsible Germans.

The Taoiseach even adopts the same scorched earth approach to research. This week, Barnardos published the results of a study that found that the number of parents using food banks had doubled to 10%. The leaders of most governments where this was happening would feel some sort of shame or a twinge of regret. Instead, the Taoiseach announced that he did not believe the results of the survey and implicitly smeared the professionalism of those who compiled it. The Taoiseach may not know many people who use food banks, but that does not mean they do not exist. Perhaps he should attend the Capuchin day centre some time to see the queues.

I would say that the Government was out of touch, but we have long since passed that stage. The Government is now in orbit, somewhere in deep space. Gaslighting the country is not a sustainable communications strategy. We continually hear that the Government's policies are working even though we see evidence of the opposite with our own eyes.

Yesterday, Electric Ireland told RTÉ that prices might not reduce for 18 to 24 months despite wholesale prices already being on the decrease. Something has to give. Enough is enough. Households and businesses cannot wait for prices to come down. They need action now. A targeted energy price cap would provide relief from energy price shocks. More than that, it would give certainty about pricing, thereby providing considerable relief for businesses. This has been done elsewhere. There is no reason it cannot be done in Ireland except for Government stubbornness and arrogance.

Deputy Gary Gannon

I thank my colleague, Deputy Whitmore, for tabling this important motion. The motions process is interesting. Essentially, we table motions that set out what the Government should be doing and then the Government says what it has done. All the while, real consequences are being felt in people's homes.

I wish to throw some light on what is being felt in people's homes and the level of urgency that we need to see from the Government. The price of energy has more than doubled in the past year. Consumer energy bills have increased to an average of €4,300 per year. According to the Economic and Social Research Institute, ESRI, 40% of households are estimated to be living in fuel poverty. Sometimes, we forget what "fuel poverty" means. It means people sitting in the cold because they cannot afford to turn heating on. In December, a consultant geriatrician at the Mater hospital told RTÉ that older people were developing hypothermia in their homes because their homes were so cold.

The energy crisis is a primary driving factor of the cost-of-living crisis that is decimating the incomes of workers and families. This fact was captured perfectly in Barnardos report yesterday, which found that 25% of parents had had to cut down on household bills like gas and electricity in order to afford basics like food. According to the same survey, 30% of parents were going without meals so that their children did not have to. Of all the questions I will ask the Minister today, will he accept that we are living through a crisis? There is chest beating in the Chamber about how we are the fastest-growing economy in the EU, and at the same time older people are experiencing hypothermia in their homes and parents are going without food so that their children do not have to. What has become of our Republic? We are living through an emergency and we need to start treating it as such. We cannot delay essential cost-of-living measures while hundreds of thousands of families around the country are in dire need of help right now.

The report referred to another factor in the cost-of-living crisis. Dublin rents are sitting at €2,300. After energy prices doubled this year, the average cost of gas and electricity has reached a staggering €4,300 per year, dragging 40% of households into energy poverty. These costs are unsustainable. That is why we are calling for urgency. The small businesses that have closed around the country will not feel the benefit of this summer's measures. It will be too little, too late to revive the hundreds of restaurants, pubs and shops that were crippled by rising prices and ignored when they needed help. Even more tragically, the individuals and families who find themselves in massive debt after the past few years of unacceptable pricing and profit by energy companies may never recover.

We need to discuss pricing and profiting by energy companies. At the same time that unimaginable need is being experienced in the homes of families the length and breadth of the country, energy companies have seen major profits. I will discuss an American example. The American giant ExxonMobil made a staggering €51.5 billion in profit in 2022. This equated to a profit of approximately €5.8 million every hour. Its CEO stated that it was benefiting from a "favourable market". That favourable market is war – the war in Ukraine, which has claimed tens of thousands of lives, razed entire cities to the ground and caused the largest refugee crisis in Europe since the Second World War.

A crisis is being experienced in homes, yet here we are still urging the Government to show some urgency and take a war-time-like mentality. The crisis is being experienced in terms of hunger and cold. Dreams, aspirations and quality of life are being destroyed, and that destruction is being exacerbated by inaction.

That is why we are tabling this motion. Although this summer's measures will be welcome, a targeted energy price cap that capped the price of energy usage for households and businesses would provide immediate relief from the rising cost of energy. It would ensure that those experiencing energy poverty could avail of affordable rates for their essential energy needs while those who used a disproportionately large amount of energy paid their fair share. This motion is about fairness. A market price cap will not go far enough for the most vulnerable in our society. A targeted cap would mean that wealthier householders did not disproportionately benefit and would encourage households to save energy, which is in line with our broader climate goals.

As Deputy Whitmore stated, this sort of cap has been introduced in other European countries. There are no reasons not to enact the same in Ireland. We need to be ambitious for our society. More than that, we need to be urgent in protecting our citizens. What greater role is there for government?

Deputy Holly Cairns

The price of energy has more than doubled in the past year. More than 40% of households are now estimated to be living in fuel poverty, according to the ESRI. The unprecedented energy crisis is threatening the future of many viable businesses.

We are in the middle of an energy crisis. Like the housing crisis, though, the Government's response has been slow, wholly inadequate and, frankly, divorced from reality. Today, the Social Democrats are repeating our call for pragmatic and effective measures that will actually benefit households and SMEs. Each of our proposals is proven to work and could be implemented, if the Government were willing.

Targeted energy price caps that capped the price of average energy usage for households and businesses would ensure that everyone could avail of affordable rates for their essential energy needs. Germany has recently introduced this measure, and it has proven effective. We also need a windfall tax on the significant profits of energy corporations. It is simply immoral that large companies are making millions – in some cases billions – of euro off the backs of families struggling to get by and SMEs at risk of closure.

We are all focused on providing practical solutions. The Government's household energy credits could have been directed at those who needed them the most. It was wrong that all of us in the House, along with senior civil servants, CEOs and banking executives, got the same payments as pensioners, carers and people on disability allowance. Any system that treats millionaires the same as people living below the poverty line is unjust.

The Social Democrats have consistently called for a cash transfer to individuals that reflects their income levels so that those who are at risk of poverty are the ones who will be most protected. A fundamental principle for us is that we must ensure that any financial support or measure is targeted towards those who need it most.

In contrast to the Government's approach to date, our proposed targeted energy cap would mean that wealthier households did not disproportionately benefit and would incentivise energy conservation. Several other EU countries have introduced targeted caps, providing certainty and security for consumers and businesses. For example, Germany has a targeted energy price cap, which caps the price of approximately 80% of average energy usage, cushioning homes and businesses from dramatic energy price shocks and providing certainty about costs.

A windfall tax on grotesque profiteering is a moral and economic imperative. Last year, Shell's profits doubled to €36 billion while ExxonMobil made €51.5 billion in profit. Closer to home, in the first six months of 2022, Bord Gáis Energy's profits increased by 74%, the Electricity Supply Board's profits more than tripled to €390.3 million, and profits at the Corrib gas field tripled to an estimated €560 million. All of these should be subjected to tax to fund supports for families and small businesses that are struggling.

The Minister for the Environment, Climate and Communications committed to a windfall tax in August 2022 and the EU authorised its introduction in September 2022. Why has it not been introduced yet? What is the delay?

Many small and medium enterprises are on the brink of closure. Shops, cafés, restaurants and other businesses in west Cork have been under severe pressure. I cannot emphasise enough how important these retailers and hospitality are to towns and villages across the country. They are economic engines in rural communities and vital sources of employment. The skyrocketing electricity and energy bills are terrifying for family-owned and small businesses, and this is in addition to rising insurance premiums and the rising cost of food and transport. There is a pressing need to provide targeted supports for SMEs. The Government's temporary business energy support scheme is demonstrably not fit for purpose and just €26 million has so far been drawn down from a budget of €1.2 billion. The Government's response so far shows a lack of consultation with families and businesses, and no awareness of the suffering families are enduring or the uncertainty SMEs are facing.

We are arguing for proven social democratic measures. A windfall tax will work in tandem with a targeted price cap to ensure that energy companies cannot price-gouge, thereby protecting households and businesses. These measures should have been introduced months ago. Why the delays? Where are the Government’s priorities?

Minister for the Environment, Climate and Communications (Deputy Eamon Ryan)

I apologise for being late to the Chamber. I will read back on the blacks and the content of the presentations so far by the Social Democrats. In my response, I want to set out some of the actions the Government has taken to protect people in this time of unprecedented high energy prices, to answer questions on some of the issues around the windfall taxes which we will be introducing in line with European legislation, as promised by me and other Government colleagues late last year, and also briefly to refer to the Energy Charter Treaty, which was rightly a subject for discussion in the motion and on which I am happy to share our thoughts and reflections.

First, we have to recognise that we are in unprecedented times because energy is being used as a weapon of war, prices are at a multiple of their historical average and Russia is using gas, oil and coal as a lever in its war in Ukraine. We have to resist that and make sure we protect our people and support the people of Ukraine as we do so.

It is important that we describe what has been happening to the prices in the market. The most important factor affecting electricity prices in Ireland is sustained high international energy prices since the second half of 2020. Data supplied by the Commission for Regulation of Utilities, CRU, indicate that average electricity and gas household bills have increased to a combined total of over €4,000, which is an increase of some 80% compared with the figure before the Russian invasion. In the aftermath of the invasion, at its peak during August last year, wholesale UK natural gas spot prices were trading at over 600 pence a therm, which is some 13 times the pre-pandemic average level of 50 pence a therm. Due to high gas storage levels, warmer than normal winter conditions and policy efforts to reduce natural gas demand across Europe, wholesale gas prices have fallen dramatically and are currently well below the peak values of last year. However, those wholesale prices are still trading at some 150 pence a therm, which is three times their historical, pre-pandemic levels.

It is important to note that Ireland faces a particular challenge in this regard as we are a price-taker in international markets and Irish electricity and gas prices have historically been higher than other European countries due to long-standing drivers such as geographical isolation, a dispersed population base, very high fossil fuel dependency and our small market scale. The best long-term approach to insulate consumers from volatility on international wholesale energy markets is to invest in energy efficiency and renewable energy, expand interconnection with neighbouring European markets and deepen the internal market in energy. That is what we are doing at scale and at speed.

In line with higher wholesale prices generally, wholesale electricity and gas prices rose steeply in the first quarter of last year and have remained high since. The recent reduction in wholesale gas prices in Europe is very welcome, although prices remain significantly higher than pre-crisis levels. With wholesale energy costs accounting for a significant percentage of total supplier costs, a sustained period of falling wholesale gas prices can lead to retail market price reductions. However, supplier hedging that results in a significant proportion of energy purchased several months in advance may impact the ability of suppliers to reduce prices, notwithstanding the decline in the wholesale cost of gas. Due to different forward hedging strategies of energy suppliers before this winter, my Department anticipates that we will not see prices falling until early next year. That will depend on what each supply company’s hedging policy is but we cannot anticipate an immediate reduction because the gas they are using was bought forward at times of much higher prices. A more sustained period of lower wholesale prices will be needed before we see both gas and electricity prices falling significantly.

I want to highlight the extensive response of the Government, given those high prices, to protect our citizens over the last 12 months. We pledged some €2.4 million in a package of supports during 2020. There were also a significant number of other measures, although I will not have time to go through all of them. With regard to energy credits, I disagree with Deputy Cairns. I believe this action is a very successful and correct way of protecting our people at a particular time. It was joined by targeted measures, particularly in social welfare, to target the most vulnerable and, according to the ESRI and others, that combination showed us protecting the most vulnerable through this very difficult period. We will continue to do that as we wind down the measures, which we need to do to give us a budget capability to provide the social welfare measures that we need.

I will move on to the key issue in the motion, with which we do not disagree, which is the introduction of both a temporary solidarity contribution and a cap on market revenues. We are going to do that. It is a European-wide phenomenon. At an extraordinary meeting of the EU Energy Council on 9 September last in Brussels, which I attended, it was agreed that we would have to address the extraordinary situation of energy prices in Europe, to agree to advance work on possible emergency measures to mitigate the impact of high prices on consumers and to support demand reduction for gas and electricity to strengthen the EU's winter preparedness. Following the meeting, Ministers noted the contribution provided by the Commission and invited the Commission by mid-September to propose additional measures, including the capping of revenues on inframarginal electricity producers with low cost of production, a proposal incentivising co-ordinated electricity demand reduction across the EU, and the design of emergency liquidity measures that would ensure market participants have at their disposal sufficient collateral to meet marginal calls. It was expected that this would address increased volatility in futures markets.

On 22 November last, the Government announced the decision to introduce measures to address windfall gains in the energy sector through the implementation of Council Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices. We decided to place a cap on all market revenues of non-gas electricity generators. We set that cap at €120 per megawatt hour for wind and solar, which goes much further than the EU regulation figure of €180 per megawatt hour, in order to fully capture windfall gains while maintaining appropriate future investment signals. We are going to ensure that excess revenues will be collected and used to support electricity consumers. The cap on market revenues will operate from December last year to June this year, as set out in the Council regulation. We have decided to implement the temporary solidarity contribution to apply to taxable profits which are more than 20% above the baseline period from 2018 to 2021. They are now subject to a rate of 75% windfall tax and losses from previous years will not be considered in the calculation of taxable profits.

The legislation to enact this Government decision is being progressed by my Department. Significant stakeholder engagement with other Departments, CRU, EirGrid and industry has been conducted to inform policy design and to make sure we have a practical implementation that works. In addition, a large body of economic and financial analysis and regulatory impact assessments have been conducted by the Departments and the Government's economic evaluation staff to provide evidence to inform the policy.

The proceeds to be collected from the implementation of Council Regulation (EU) 2022/1854 are highly dependent on the level of wholesale gas prices over the coming winter. Estimates as of February of this year are that the proceeds collected will range from some €280 million to €600 million.

It is at the lower end of the range signalled by Government in November last year, which went from €300 million up to €1.9 billion, with the primary reason being the reduction in wholesale gas prices. It is important to remember that the further the wholesale price falls, the lower the proceeds will be.

I have other issues which I wanted to set out in our energy poverty action plan but given the short timeframe available to me, I will conclude on the issue of the Energy Charter Treaty. This Government has real concerns, and has expressed strong views within the EU, on the compatibility of the Energy Charter Treaty with the Paris climate agreement, and on the Energy Charter Treaty's dispute resolution mechanism, which allows investors to sue states party to the treaty for failing to protect energy investments, in particular fossil fuel energy investments in the context of decarbonising energy systems. We believe these views carry more weight in international negotiations by advocating them as part of the EU. To date, Ireland has not announced a withdrawal from the Energy Charter Treaty because a majority of EU member states, and the European Commission, are still signed up to the treaty while a modernisation reform process of the treaty is being negotiated. The Government continues to reserve the option of supporting a co-ordinated withdrawal from the treaty if it is not modernised to align with the Paris Agreement, does not address our concerns, or does not support the international effort to decarbonise electricity systems and promote more renewable energy. Ireland will continue to keep that position under review and will work with EU partners to reach a common position. If a decision is made for a co-ordinated exit of EU member states from the treaty, Ireland will support that position. As I have highlighted, we are working on a range of measures to protect our country at this time, to support international efforts to restore security and to decarbonise the energy system.

Deputy Catherine Murphy

Last year, the six largest western oil companies made more money than in any year in the history of that industry. A combined €204.24 billion in profits meant last year was a fantastic year for the shareholders of BP, Chevron, Equinor, ExxonMobil, Shell and TotalEnergies. The shareholders received €102.6 billion in dividends last year. In the midst of a war in Ukraine and an energy crisis across Europe, which has left families cold and in a panic about how they will pay bills, those profits are not only obscene; they are a blatant example of war profiteering.

In the first half of last year, the ESB made a profit of €390.3 million. When it was asked why its costs were not dropping alongside wholesale prices, a spokesperson stated that there was a lag of 18 to 24 months before consumers would see the rates reduced because suppliers hedge the costs for the upcoming year. When wholesale prices go down, there is a lag. However, when wholesale prices go up, Electric Ireland is very quick to act. In fact, the company increased rates three times last year, in May, August and October. There were further profits of €560 million last year for the Corrib gas fields and €677.87 million for Bord Gáis Energy, the profits of which are expected to triple this year to €2.04 billion.

All of those profits have human faces behind them. These are the faces of families across the country who are being stretched beyond their limits to keep up with spiralling energy costs. Upwards of 40% of households in this country are in fuel poverty and that figure was produced before the winter utility bills were considered. The number of people applying for once-off, urgent and exceptional needs payments has increased by 75%. As we have already heard, consultants in the Mater Hospital are warning of older people developing hypothermia. Nearly 140,000 households across Ireland are behind on their gas bills before the January bills have even come in. There has been a 30% increase in registered vulnerable customers and the financially vulnerable are not included in this. Barnardos has reported that one in three parents skipped meals or reduced portion sizes last year so that their children would have enough to eat. One in ten families is using food banks.

Huge energy costs are also heavily impacting businesses, 44% of which are predicting a downturn in profits within the next 12 months. An overwhelming majority of businesses, some 69%, are worried about energy costs, a figure which is the third highest globally.

It is absolutely unacceptable that these energy companies are permitted to rake in these profits, doing untold damage to the environment as they go, at the expense of the citizens of this country. Windfall taxes urgently need to be introduced for them to be effective. Can the Minister give us a definite timeline on that? The European Energy Charter Treaty needs to be scrapped. As long as it remains in place, with this Government's support, fossil fuel companies will block any measures to limit their profits. ExxonMobil helpfully illustrated the imminent danger of the Energy Charter Treaty by initiating proceedings against the EU in December to attempt to prevent the introduction of windfall taxes across the block. That gives us a very good example of the kind of thing we have been talking about in a more general way in relation to investor courts. It is slightly different but it is really in the same family of things. It shows the kind of might that corporations have against democratic institutions. This Government needs to take a stand by withdrawing from the treaty, with immediate effect, and by stating clearly that we refuse to be held to ransom by unethical, greedy and energy companies that are profiteering.

We saw something yesterday on the news about people's greater level of acceptance of onshore energy and wind farms. People are accepting of this because they can see that we need energy security and they are also accepting in relation to price. We have to see that price reflected in their bills. We are not seeing that and we need to see it as a matter of urgency.

Deputy Cian O'Callaghan

I thank my colleague Deputy Whitmore for bringing forward this motion. I want to respond to the Minister's comments. There were two things lacking in his comments and responses. As Deputy Gannon foretold, the Minister gave us a list of the different measures the Government is taking but what we did not get was a timeline for the implementation of a windfall tax. We have no timeline on that at all. I ask that in his concluding remarks the Minister gives us an actual timeline as to when a windfall tax is going to be brought in; it is long overdue. Second, there was no substantial response to our proposal for targeted price cap measures along the lines of what has been introduced in Germany. We need to hear from the Government if it is going to take that proposal; if not, why not; and what its position on that is.

The point just made by my colleague Deputy Catherine Murphy about the Energy Charter Treaty is very well made. It is disappointing that the Government's position on this has been so weak. Let us be clear about the treaty and what it entails. It means that the Irish Government, the Irish State and the Irish people can be sued by an energy company that is reliant on fossil fuel not only for money they have invested to date, in terms of fossil fuel infrastructure, but on the basis of future unearned profits. This is colossal. There needs to be a real position of leadership from the Government on this. It is not enough for the Government to fall behind on this matter and say it is under review and under consideration. There is a 20-year lead-in to get out of the obligations under that charter. Given where we are with climate change and fossil fuels, we needed to be out of that energy charter years ago. At the very least, we need the Government to lead on this now. It is not compatible in any way with our Paris Agreement climate change objectives. We need to show leadership on this and indeed, on any other international treaties, the likes of the Comprehensive Economic and Trade Agreement, CETA, which allows for investor courts and for the Government to be sued by energy and fossil fuel companies for future unearned profits. We need to ensure we do not get into any further commitments on that. We see the huge profits of some of these multinational companies, such as ExxonMobil, which made a profit of €51.5 billion last year. As my colleague Deputy Gannon has said, €5.8 million was being made every hour last year. We should not be signed up to any of these treaties that give these companies any leeway at all.

I raise one specific point with the Minister in terms of district heating systems. As I know both Ministers will agree, we should be encouraging the use of these systems. They can be sustainable. What has happened to people living in housing reliant on district heating systems during this energy crisis has been an absolute disaster.

They face the sharp end as systems have been reliant on gas and they have been charged commercial rates of gas, which has led to a situation whereby social housing tenants, in particular, including those on prepaid meters, have been put in a particularly difficult position.

In one area of my constituency, 20% of social housing tenants have been cut off from prepay meters and have no access to hot water or heat through their district heating systems. They do not have alternatives. I have raised this matter with the Government on multiple occasions and it has not been addressed. This is leading to inhumane conditions for people, in particular those on lower incomes, some of whom have long-term illnesses.

This has led to a situation whereby people who are renting in social housing cannot take a hot shower because they are cut off from water. They are now washing in basins. I do not need to remind the Minister and Minister of State that it is 100 years since we started installing baths in social housing in the city so that people would have access to that basic facility in their homes and would no longer have to wash in basins. Due to the fact that the Government has failed to act on the issues affecting energy prices, in particular people in district heating systems, there are now substantial numbers of people back to washing out of basins.

The Government will not act on that. It is not doing anything about it. Its response is to say the matter is under review and it will do something about it in the future. It is being looked at, but we need emergency measures now to restore people's access to the basic humane conditions that the rest of us take for granted. I urge the Minister and Minister of State to act on our motion, respond to the points we have made and act for the particular group of vulnerable social housing tenants who have been totally left out in the cold and ignored by the Government.

Deputy Pearse Doherty

Gabhaim buíochas leis an gCathaoirleach Gníomhach. Ba mhaith liom buíochas a ghabháil freisin leis na Social Democrats agus leis an Teachta Whitmore as an rún seo a chur os comhair na Dála maidin inniu.

This motion is timely. The cost-of-living crisis bears down on workers and families, and we all understand that. The recent spike in inflation has largely been driven by the steep rise in energy prices fuelled by Russia's illegal invasion of Ukraine. This has resulted in households facing energy bills the likes of which they have never faced before. Electricity and gas bills are stretching household finances right to the very brink.

Over the past two years, the average gas bill has increased by 140% and the average electricity bill by 111%, a doubling of bills for families. Many of them have been unable to absorb these costs without having to make cuts elsewhere and many others have been forced to scale back on basics such as food or simply turn the heating off. The figures released by Barnardos last week, which should shock all of us, reflect this. One in ten parents surveyed are now visiting food banks to feed their children and one in three are going without meals.

Energy price rises have hit the living standards of these very households. The impact on middle- and low-income households has been the most severe. The price shock has also been felt by thousands of people who are reliant on gas and home heating oil and there is no doubt that the Government has failed abjectly to provide certainty to households as energy prices spiral and are expected to remain high in the coming months.

Across Europe, governments have intervened, recognising that the energy market is broken, in order to protect and support households from the price shock. Over the Christmas break, an energy price cap was introduced in Germany and the Netherlands. Energy price caps have also been introduced in France, Austria, Luxembourg and Poland. This is happening across Europe, yet the Government refuses to provide to Irish households the certainty that is being provided to households throughout Europe. Instead, Irish households have faced sky-high energy bills and are set to face more in the months ahead.

The motion calls on the Government to bring forward an energy price cap. Sinn Féin proposed one for some time before the budget. It is something the Government could and should have done, but refused to do. We know energy companies are taking in massive profits on the back of spiralling energy prices. Energia made profits of €112 million last year. Shell recorded its highest profits in history, $40 billion, while BP recorded massive profits of $28 billion.

For a year, Sinn Féin has called on the Government to bring forward a windfall tax on the super-profits of these companies. How galling is it for Irish households to know that for months the Minister for Public Expenditure, National Development Plan Delivery and Reform, Deputy Paschal Donohoe, and Fine Gael opposed taxing the windfall profits of these energy companies? It is galling that their priority in government was to protect the profit margin of the shareholders of massive energy companies while Irish households suffered under the strain of massive energy bills.

Is it any wonder that workers and families are suffering due to the cost-of-living crisis when the instinct of Fine Gael is always to look after the profit margins of the multi-billion euro energy companies at the expense of ordinary people? Sinn Féin supports the motion because it is what we have called for for a year and is what Fine Gael says should not happen. We welcome that the motion has been tabled today and the Government is finally moving on one aspect of it.

The Government should have introduced an electricity price break to support households, protect them from spiralling energy costs and provide them with certainty. For months, the Government has acted to protect the windfall profits of energy companies instead of taking action to end price gouging and profiteering off the back of the war and address the misery of Irish households. It is long past time for the Government to put the interests of workers and families first and to take action.

Deputy Darren O'Rourke

I welcome the motion and the specific proposals to introduce targeted price caps and a windfall tax, review the proposed revenues from non gas and electricity generators and leave the Energy Charter Treaty. Sinn Féin has advocated an energy price freeze for some months. It is welcome that the Social Democrats support that move. It would provide certainty and the maximum protection for consumers. Coupled with a windfall tax, it is the most effective way to tackle the disgusting profits and practices of big energy companies.

An energy price break has been introduced in several EU member states. Over the Christmas break, energy price caps for 2023 were introduced in Germany and the Netherlands, as well as in Austria, France, Luxembourg and Poland. The question of it undermining conservation could easily be addressed in a number of ways such as, for example, applying the price break only to average household electricity consumption or a household's consumption the previous year, as is the case in the design of the scheme in Germany.

The Government will not oppose the motion, but has no intention of introducing an energy price cap because, time and again, when push comes to shove and action is measured over spin, it will protect the profits of big energy companies. After all, it was the greatest opponent of energy windfall taxes despite the fact that Shell announced $40 billion in profit last year, the highest in 115 years. BP announced profits of $28 billion and Exxon Mobil profits of $56 billion. Closer to home, Vermilion, the operators of Corrib gas, made $102 million in one quarter. They are eye-watering figures. While hiking charges for ordinary customers Centrica, or Bord Gáis, said its earnings in 2022 will be eight times its 2021 earnings. Energia increased its profits by 50% in 2022. ESB made €390 million in the first six months of last year. This is simply obscene.

The Government opposed market reforms as a European level. When the EU toolbox provided for price caps and windfall taxes as far back as October 2020, the Government stood steadfast in opposition to it. In June 2022, the Minister, Deputy Eamon Ryan, said it was the wrong move. In August 2022, the Minister, Deputy Donohoe, said windfall taxes would undermine Irish energy independence. Such is the paucity of vision from Fianna Fáil, Fine Gael and the Green Party that they could not see that and act on behalf of ordinary consumers. Instead, they are eventually brought kicking and screaming when the European Union moves. That is a feature of every intervention the Government makes. It is the last one to move in the European Union. It will not lead; it will follow and resist positive proposals.

Deputy Eamon Ryan

Sinn Féin's figure is €180; ours is €120.

Deputy Darren O'Rourke

It resisted it every single time. Stand over the record.

Deputy Eamon Ryan

We were the most ambitious.

Deputy Darren O'Rourke

Every single time; look at what-----

Deputy Eamon Ryan

That is not true.

Deputy Darren O'Rourke

-----the Government is saying about the Energy Charter Treaty. I will read the Minister's words back to him. He said if a decision is made for a co-ordinated exit of EU member states from the treaty, Ireland will support that position and withdraw. It is the same in respect of windfall taxes. While the Iberian countries of Spain and Portugal moved, the Government resisted that. Today, instead of delivering €1.9 billion, he has told us the windfall tax will deliver €280 million because of his delay.

Deputies

Hear, hear.

An Cathaoirleach Gníomhach (Deputy Verona Murphy)

We will conduct the debate with respect for both sides. I would prefer if there were no interruptions.

Deputy Thomas Gould

Figures released to me following a parliamentary question show that the number in Cork seeking support from their local social welfare office rose in 2021 from 100 to 461 families. This is a shocking indictment of the Government's complete failure to tackle the cost-of-living crisis for ordinary families and individuals who should be at the core of policy. Last year, Eirtricity, which is supposedly a 100% renewable electricity provider, increased its profits by 221% in the first six months of the year alone. The Minister more than anyone else should know the price of wind did not go up last year but without decoupling gas and electricity prices, there is no reward for people who choose to use renewable energy to power their homes.

These price increases cannot be justified. The Minister is in charge. PrepayPower, which increased its energy prices seven times in the past two years, saw its profits rise by over €8 million in 2022. We are talking about some of the most vulnerable customers in the State who have waited months for the Government to explain how its winter disconnection ban will apply to them and who have no choice but to use meters because they are so vulnerable. Barnardos reports that one in ten parents used a food bank in the past 12 months. The Taoiseach may dispute this because it is does not look good for him and does not suit his narrative but these are the facts. This is what is happening on the ground. Poverty is being forced on parents and children in this State. We have not seen this for a very long time.

It is not just about people struggling to pay their rent or electricity bills. Parents are now unable to send their children on school trips or pay their children's club membership fees. This is having a much more profound effect on all these people. There are people who are profiting from the poverty and misery of ordinary people and this is happening on the Minister's watch. This Government is allowing this to happen.

Deputy Doherty has been advocating a windfall tax for over a year. Fine Gael has fought it tooth and nail. Shame on the Green Party for allowing the profiteers, the big energy companies, to get away with it.

Deputy Rose Conway-Walsh

I thank the Social Democrats for tabling this motion and welcome the opportunity to give voice to households and small businesses in Mayo that are crippled by extortionate electricity and energy bills. You only had to listen to Midwest Radio this morning to hear people ringing in and talking about bills that used to be €250 but are now €1,000, €1,200 and beyond. They know they are being fleeced and they feel helpless to protect themselves from those that are allowed to exploit the war in Ukraine and make billions on the backs of ordinary workers and families. In my local area, the Corrib gas field's profits are estimated to be €556 million for the first six months of 2022. So much for our natural resources belonging to the people of Ireland.

The Government has dragged its feet on bringing in a windfall tax. Now it just a windfall tax on oil and gas companies, not electricity companies. People cannot understand this. In its public statements, the Government has intentionally confused the issue. The Government's response to growing anger was to claim it would apply a windfall tax on energy companies. Despite multiple statements in the Dáil and in the media, I had to seek a response in writing from the Minister where he confirmed that electricity companies will face no windfall tax.

Deputy Eamon Ryan

They will.

Deputy Rose Conway-Walsh

The Minister needs to clear this up because there is too much messing around and people are being fleeced. Their money is being robbed from their accounts. The electricity companies are taking every penny out of their accounts. This is money for food, rent, mortgages and medicine. The Government is acting as a spectator and is allowing this to happen. It is not right. People are living in a hell of fuel poverty and energy deprivation. This is what has been allowed to happen. Will the windfall tax be applied to the profits of electricity companies for 2022 and will it be redistributed to those who have been fleeced? If so, when will it be done?

Deputy Patricia Ryan

Energy company profits have skyrocketed through the crisis. This is disaster capitalism at its best. Earlier this month, Shell announced that it made a profit of €40 billion last year while last week, BP announced that it made $28 billion in profit. Deputy Doherty already mentioned this to the Minister. It is disgusting that these companies are making massive profits while workers and families are struggling to pay energy bills. It is time to end the energy rip off that is forcing people into hardship by redirecting the profits of the big energy companies that are profiting from this crisis. The Government must introduce the windfall tax to cut these obscene profits. It cannot sit on its hands any longer. The money raised from this tax must be redirected into the pockets of hard-working families, who are at breaking point.

Constituents who recently had air-to-water heat pumps installed in the midlands retrofit programme have contacted me. They are happy with the heating system but because their 20-year-old doors and windows were not replaced, they are effectively heating their gardens. We need joined-up thinking. I have seen bills of up to €600 per month for electricity in a three-bedroom semi-detached house. It is simply not sustainable. It needs to be addressed urgently, particularly for older people and those on fixed incomes.

The motion also calls for a review of the proposed price cap on non-gas electricity generators. This is something we support as it would ensure that record profits from coal, oil and renewables are addressed. We previously called for the decoupling of the price of electricity from the price of gas. This has been resisted by the Government.

The motion calls on the Government to announce its intention to leave the Energy Charter Treaty immediately. This treaty was ratified in the 1990s and has no place in the post-Paris Agreement world. The treaty's investor-state dispute settlement clause has enabled fossil fuel companies to sue governments for policies that aim to phase out or curb the use of fossil fuels. Last year, the oil firm Rockhopper successfully sued the Italian Government for over €200 million. Senator Boylan has led the charge on this and introduced a motion last year to withdraw from this treaty. Poland has already left the treaty while other countries are considering it. We need to lead rather than follow on this. The planet depends on it.

Deputy Louise O'Reilly

I thank the Social Democrats for bringing forward this motion and giving us the chance to have this discussion. It was slightly less than edifying to see the senior Minister appear to make light of some of the pleas from the Opposition. It does not surprise me coming as it does from that particular quarter. I note that the Minister did not stay for the full debate as he has left the Chamber.

Sinn Féin will support this motion. We are on record for a long time as calling for an energy price break and a windfall tax on energy companies, which are making super-profits not just an ordinary level of eye-watering profit. They are making super-profits and were doing this in advance of the war in Ukraine. The war in Ukraine has increased the super-profits these companies make.

You have to place those super-profits made by these fantastically wealthy companies as facilitated by the Government, which the Green Party tells us it is so proud to be a member of, against the shocking statistics released by Barnardos this week where they told us that one in ten parents had to visit a food bank. Part of the reason why they visit food banks is because there are certain bills in a household that are non-negotiable. You have to keep the lights on and the children warm so, therefore, you must put your pride in your back pocket and go to a food bank; you have to pay your bills and feed your children so you take whatever help is there. There is no shame in a person visiting a food bank. The shame is on the Government that created the conditions under which people have been forced to visit food banks.

There is no shame in not being able to pay your bills; the shame is on the Government for not recognising that people are struggling and in desperate circumstances.

Energy price hikes hit those on low and fixed incomes the hardest. The Minister of State knows this, and yet they are the ones at the business end of decisions taken by the Government, who feel as though they have been forgotten, who hear Ministers and other representatives of the Green Party on the media almost delighting in the fact people's habits have changed because the price of energy has increased. Of course, they have changed from being habitually or occasionally warm to being unable to stay warm in their own homes. That is not something to be proud of, nor is it something they should be ashamed of. The shame is on the Government.

We welcome the points in the motion relating to the Energy Charter Treaty. I commend my party colleague Senator Boylan not just on the work she has done in the Seanad on this but also on the considerable work she continues to do. In fact, I think most people would not even have heard of the treaty were it not for the work and leadership provided by Senator Boylan on this matter. While the Government has not been sued directly under the treaty, it has probably been influenced by the threat of legal action, including the failure to revoke existing fossil fuel exploration licences, as was reported in the Irish Independent.

In his opening remarks, the Minister said, "If a decision is made for a co-ordinated exit of EU member states from the treaty, Ireland will support that position" and withdraw. Have they not for a moment considered providing a modicum of leadership on this, or will they just sit back and wait for the grown-ups to make decisions as though they are children sitting at the small table, waiting for the adults to take a decision? The Government should lead on this.

Deputy Ivana Bacik

I am sharing time with Deputy Nash.

I thank the Social Democrats for bringing forward the motion. We in the Labour Party are happy to support it in full. Today marks 12 and a half months since we introduced a Labour Party cost-of-living motion that proposed, among other things, the introduction of a windfall tax, so we have had similar debates previously. In the months since the debate on that motion was held, the price of energy has more than doubled, with an enormous negative impact on so many households. During that same period, however, we have seen record profits for oil and gas companies. Shell recorded a profit of $40 billion, its highest in 115 years, while BP’s profits doubled to $28 billion. In that time, we have missed a full year’s opportunity to recoup money from the profits of fossil fuel oligarchs and magnates. These are much-needed funds that could help to ease the burden of the cost of living for many families and households.

In his opening remarks, the Minister conceded that the Government will introduce such a tax but there has been no indication of when that will be or, indeed, of any urgency about it. Will the Minister of State give us on clarity on this? It is essential. The energy bills crisis is an attack on people’s pockets on all fronts. Households’ domestic bills are rising, leaving less and less left over at the end of the month, along with businesses’ overheads. SMEs are finding it harder and harder to pay salaries and energy bills, putting jobs at risk. Throughout the country, we are already seeing closures. I am increasingly hearing from employers that are citing the rising cost of energy as an immediate threat to their business and to the livelihoods of their staff.

Notwithstanding the untargeted cash injections in the form of the energy rebates from the Government, it seems adamantly passive in its role in this crisis. As I said, there is a tacit acceptance that a windfall tax will be introduced but no sense of urgency and no clarity as to when. The Government does not appear willing to press the EU on the timing of a windfall tax and is playing a game of wait and see when it comes to the Energy Charter Treaty. It will not even examine temporarily nationalising the Corrib gas field to control energy prices, as we in the Labour Party have suggested on a number of occasions.

Crucially, it is running down the clock, and is unwilling to take action, on the enormous prices customers in district heating schemes are being charged, with costs for those people continuing to spiral month on month. In my view, district heating exemplifies the Government’s reluctance to face up to private interests, the disjointedness of Government climate and energy policy, and the real-life effects on ordinary households of the failure to act. I have heard from many people in my constituency living in apartment complexes who are paying increasingly high rates of bills, in some cases thousands of euros, for energy they are not even using. For one constituent of mine, her latest bill stood at €1,700 for two months for a family of four. She pays 56.3 cent per kilowatt hour, excluding VAT, yet the Bord Gáis residential rate is 13.13 cent per kilowatt hour, excluding VAT. Through no fault of their own, therefore, and despite cutting down on her energy use, she is overpaying for her family's energy use by a factor of four.

I have made several representations about this issue, but the response has always been merely to reiterate that the regime is under review. One constituent wrote to the office of the Minister, Deputy Eamon Ryan, in recent weeks to ask when she would see change. The response stated that technically it is her supplier who is the purchaser rather than her, giving rise to a commercial rate. We can imagine her reaction to that response. It simply did not pass muster with her, as it would not do with many others who are scrimping and saving to pay bills. If an apartment block's management company is unwilling or unable to renegotiate a contract, the residents are left with these extortionate bills. This is a clear example of Government failure. I urge the Minister of State to accept the motion.

Deputy Ged Nash

I thank the Social Democrats for this timely motion. As my party colleague and party leader, Deputy Bacik, said, the Labour Party brought a motion to the floor of this House in January 2022, more than 12 months ago, demanding action on what was then a cost-of-living challenge, which very quickly became a cost-of-living crisis. The Minister of State will recall that motion was tabled a month before Putin's illegal invasion of Ukraine, when the cost-of-living challenge was clear. The rate of inflation was already on the rise, including in respect of energy costs. There was clear evidence at the time that energy companies were, even before Putin's illegal invasion of Ukraine, posting extraordinary profits as bills for customers continued to climb without showing any sign of abating.

We called then, because of the super-profits companies had posted in 2021, for the imposition of a windfall tax on the hyper-profits of energy companies. That was well over a year ago, before the invasion of Ukraine. Ministers played a game of cat and mouse with me for several months until last summer, when they finally agreed that the proposition of a windfall tax on the excessive profits of energy companies ought to be introduced. That was a full six months after the Labour Party had first called formally in this Chamber for the introduction of such a regime.

In the meantime, of course, bills rose endlessly. There were between 50 and 60 electricity bill increases in that period. That picture grates with people because, for example, the owner of Bord Gáis, Centrica, is on course to triple its profits for this financial year to almost €1.8 billion. Revenue at the Corrib gas field, for the first nine months of 2022, was up €1.3 billion. Likewise, profits at the ESB soared last year, with revenue up by €1.5 billion to June 2022 compared with the same period in 2021. What really grates is that Electric Ireland, a company owned by the ESB, increased its electricity prices by more than 11 cent per unit last August, and this is the same company that told us yesterday that even though wholesale prices are reducing, it could be 18 to 24 months before bills get back to what we might describe as normal. We can understand, therefore, the public anger and frustration as to the delays in introducing a windfall tax on the hyper-profits of these extraordinarily profitable companies, which continue to raise their prices and hammer consumers. Why the delay? It is extraordinary.

Austria, on 18 November 2022, introduced a windfall tax, while the Czech Republic did so on 4 November 2022. Greece, on 3 November 2022, established a 90% windfall tax on energy companies to be used to help its citizens to pay rising energy bills.

Portugal proposed a 33% windfall tax on excess profits on 21 December 2022. Romania did so on 28 December; Slovakia on 22 December; and the Tory party in the UK, a party that did not want to introduce a windfall tax in the first place, introduced taxes on excess profits. When is the Government going to move? When will it provide the resources that we need to insulate people as best we can from the worst excesses of this problem?

Deputy Richard Boyd Barrett

I thank the Social Democrats and Deputy Whitmore for tabling the motion, which we are very happy to support. The main reason we have a cost-of-living crisis is profiteering and privatisation. That is what needs to be addressed. People Before Profit first tabled a motion in the House in October 2021 calling for the introduction of price caps on energy, gas, oil and electricity. We have been calling for approximately a year and a half for the introduction of a windfall tax on the energy companies that are making obscene profits while real human beings suffer. The Government has done nothing except throw a few totally inadequate crumbs back at people in electricity credits and fuel allowance increases that do not go anywhere near dealing with the enormous hike in energy costs and the cost-of-living crisis that people are suffering. Hundreds of thousands of people are in arrears. If the Barnardos survey is even close to accurate - and I think it is and all the evidence suggests it is, despite the Taoiseach’s attempts to put question marks over it - there are hundreds of thousands of people who are now dependent on food banks such is the level of hardship they are suffering.

We need to remind ourselves what is at stake for ordinary individuals. I raised the case this week in a slightly different context because some people are being hit in multiple directions by the cost-of-living crisis. This was a couple in their late 50s where the husband used to work but then he was diagnosed with early onset Alzheimer’s. As a result, he can no longer work and his wife cannot work because she has to look after her husband. They had a HAP arrangement while he was still working so they have to pay a massive top-up on top of the inadequate HAP payments that they receive to cover the rent on the place that they live. As a result they are in significant arrears on their rent and energy bills, neither of which they have any prospect of paying because they are on basic social welfare payments. They go for an exceptional needs payment and they get a fraction of what is necessary to cover their rent arrears, which will just build and build, and the arrears on their energy bills. What are they supposed to do? This is somebody who is sick and his carer, but there are no answers because the Government will not deal with the fundamental problem, which is profiteering. The scale of the profiteering is absolutely obscene. The five biggest oil and gas companies in the western world saw their excess profits jump to €134 billion. This is extraordinary profiteering by these companies on the back of the misery of families like that or another family I brought up this week. This is a couple where the wife has cancer and has been on illness benefit but does not even get the fuel allowance. The husband cannot turn down the heating because she is sick so their bills are building up but they are not entitled to the fuel allowance because they are on what is called a short-term payment even though she has been on it for several years and has cancer. This is the suffering that people are enduring as a result of the gross profiteering, which is matched here in Ireland with the extraordinary profits being enjoyed by the ESB whose profits surged to €390 million in the first six months of last year with revenues up to €3.7 billion from €2.2 billion the previous year. These are absolutely enormous jumps in profits while real human beings are suffering misery.

What needs to happen? We have argued for nearly a year and a half for the introduction of price caps and for a windfall tax but to be honest, I think we are beyond that. We need to renationalise the energy sector. There is no justification for the energy sector being run on a for-profit basis because privatisation has been a disaster. The Government tries to blame the Ukraine war for the current situation but the facts are absolutely clear. Ever since we had the privatisation of energy in this country, energy prices, including electricity prices, have consistently shot through the roof. It is unconscionable that we can see these obscene super profits being made on the backs of the misery, hardship and suffering that ordinary people are experiencing with many people being driven outright into poverty. This is even in terms of the utter inconsistency and injustice of the tariffs they are being charged. I have raised the issue of district heating, as have others here today. People are being charged multiples of the unit cost per kWh than other people are being charged. It is utterly unjustifiable in the current situation. What does the Government do about it? Zero. Zilch. Nothing. It talks about it.

Over the weekend, it was reported that multinational companies are getting significantly lower price rates for their energy than our residential customers or even small businesses here which are being charged multiples of what big multinationals are being charged. It seems the energy companies can charge lower unit rates when they want to but there is no consistency and no fairness so some of the biggest and most profitable companies are charged significantly less for their energy than the struggling homeowners who are being crushed by the cost-of-living crisis. How is that addressed? The entire sector should be nationalised. Obviously, you pull out of insane treaties such as the Energy Charter Treaty where states allow energy companies to sue them if they do not make enough profits, which is unbelievable but is symptomatic of the way in which we have handed over the energy sector to private, for-profit companies and, tragically, the Green Party is going to do the same with our offshore wind energy, which is an even bigger disgrace.

Deputy Seán Canney

What has gone wrong in this country is that we put the cart before the horse. We decided to get rid of energy producing methods that we had such as the power stations in the midlands before we had an alternative in place. What we are finding now is that we have been preaching about how to heat our homes and do all the things that are green, which comes from all sides of the House, without looking to see where the energy was going to be produced from under the green methods. When considering Derrybrien, which is not functional because of a planning mess, one might ask: what are we at at all?

In my constituency, there are people who built their houses and got their mortgages and were told not to put in a chimney and that they must put in an air-to-water heat pump. Now they are getting bills for up to €1,200 for these air-to-water systems they are putting in. The €200 electric credit that the Government is giving to them pales into insignificance when that is going on.

I was told yesterday that the SEAI has told builder providers that they can no longer sell back boilers or solid fuel stoves because they are not what we should be doing.

We are forcing people to put in heating that is all dependent on electricity. It is causing huge concerns for people. If people with electric vehicles have to charge their car at a public charging point, it costs double what it cost this time last year.

We are bringing people on a journey without knowing how we will reach the end. We do not have the resources in place. From the SEAI point of view for the warmer homes schemes, people are told there is a delay and they have to wait up to a year for somebody to come out to do a bit of work. In the meantime, they have draughts in their house. They go to the local council to get draughty windows replaced but do not get replacement costs if they are double-glazed already. The council will only deal with single-glaze windows.

We have many policies and reports to say everything will be fine. Regarding the farming situation, I was in Roscommon at a protest on Monday about the cost of producing our sheep and the lack of support from Government. Every night these farmers are out in their sheds with the lights on. They are looking at the lights and thinking about what the electricity will cost. They have to do that in what I would call the maternity ward for the next month to make sure the lambing season is carried out as efficiently and safely as possible. There is no regard for any of that when we talk about policies and reports and everything we need to do. We have gone too far too quickly without realising there is a transition period of up to 20 years before our houses are warmer and we have a proper supply of green energy in this country. It will take time.

We keep talking about the potential offshore, yet I do not see one pylon off the west or any place near it for the next ten years. Those are the problems we have. We need a dose of reality. Let us not put the cart before the horse. Let us make sure people are protected.

Deputy Peadar Tóibín

Last year, the Government took more in VAT on fuel and energy than in any previous year. That is an incredible fact. Statistics we in Aontú have through parliamentary questions have shown the Government is quids in and making massive amounts in VAT on energy. VAT on electricity last year reached a record level of €381 million, up 40% on 2021. VAT on petrol, diesel, solid fuels and liquified petroleum gas has increased nearly 30% in a year in which families were hit and hurting the most. The Government is taking more in increased taxes than it is giving back in energy credits. That is incredible. The Government is lauding itself for giving energy credits to hard-hit families but is taking more out of their pockets to give them that money.

At the same time, energy companies are making supernormal profits. Shell made a record profit of $40 billion last year. BP reported a record profit of $28 million last year. The ESB made nearly €400 million profit in the first six months of last year. It is an incredible thing to have the State quids in during an energy crisis and these private and semi-State companies quids in while people are suffering so much.

People woke up this morning to the news that wholesale electricity prices fell 41% in the final quarter of last year. Those prices are now 17% lower than in the last quarter before the war in Ukraine. We have the lowest wholesale electricity prices at a time people are being gouged on the electricity prices they are being charged in their homes and when large companies are achieving far lower prices for electricity than the normal family living at home.

This is one of the most unequal and unfair electricity and energy markets to have existed for decades and is happening at a time people are suffering most. The market the Minister of State is standing over, has organised and that exists under his Government is allowing for supernormal profits to be created and massive taxes to be gathered when people are finding it hard to heat their homes, older people are spending half the day in bed to stay warm and people are going to food banks to be able to feed their children. How can the Minister of State stand over that?

I have been trying to work this out. The Government has been so slow and is saying it is difficult to create a fair and equitable windfall tax, yet the Italian Government has created a windfall tax that collected €3 billion last year. The British Tory Government managed to create a windfall tax that collected billions of pounds sterling last year. On the decoupling of the price of electricity from that of gas, the Government has said it cannot do it because it is a European competency but Spain and Portugal have decoupled those prices to make it cheaper for their people. I understand Fianna Fáil and Fine Gael have previous in allowing this terrible division to exist but why is the Green Party doing it? Is it in that party’s interest to keep the price of fuel high? Is it that party’s objective to keep high energy costs in the State to reduce the consumption of energy? Is the Green Party putting its objective of reducing fuel consumption ahead of a family’s ability to heat their home?

Deputy Michael Collins

I am disappointed that the senior Minister, Deputy Eamon Ryan, is not present for this important motion tabled by the Social Democrats. The motion calls, as ours did last November, for a windfall tax, or what we termed: "an excess profit "solidarity tax", as provided for in EU regulation 2022/1854 upon all/any companies and permanent establishments operating within the oil, gas, coal and refinery sectors in Ireland, which include the Corrib gas field, and give these funds back to consumers to help pay for energy bills". Unfortunately, Ireland cannot obtain tax revenues from companies that do not operate here, such as Chevron or Exxon Mobil, but we can raise extra tax and revenues from oil and gas companies that operate here and we fully support that.

With gas and electricity prices at record highs, there has been much talk of a windfall tax on energy companies as a way to address the energy crisis and, thankfully, our motion on this last year won the support of the Dáil. However, we need an update from the Government as to how we are coming closer to implementation following the announced limit on the revenues of non-gas energy generators at €120 per MWh for wind and solar generation and €180 per MWh for oil- and coal-fired generation.

There are a few things the Government can do to help households this winter. First, it should commit to keeping the 9% VAT rate on gas and electricity indefinitely, or even reduce it to 5%. That rate is due to revert to 13.5% soon. When people talk about the winners from the energy crisis, they forget the Government is one of them. VAT is levied on the net price of goods and services so, as the cost of gas, petrol, diesel and electricity has gone up, so has the Government’s tax take. It also needs to make plans for another energy credit to be paid to all householders this spring and summer and to look at taking a greater dividend from the ESB next year, which would help pay for the energy credits.

Deputy Mattie McGrath

I too support this motion. I see the Government is accepting it but that is all it will do with it. It will spin it then after that. Why will they not look after the people? From ordinary people, working people and families in their homes to community centres, schools, small butchers and hairdressers, everybody is being crippled with energy costs.

I, like the second-last speaker, am convinced, given the Government’s inertia to act and the massive profits it made last year on fuel, which were more than any other year, that it is a Green policy to make it expensive and a luxury item for people so they cannot use it. I have businesses every day of the week on to me. Trying to deal with these companies is impossible. One time there was a manager or somebody to talk to; now it is all emails and they are gone to the hills. They are gouging people.

A wonderful hotelier, 60 years in business, was on my local radio this morning. He spoke to me last week. John and Liz Nallen run the Hotel Minella.

It will be impossible to keep the doors open of they do not get fair play from the gas and electricity suppliers. Trying to get to meet somebody is almost impossible. There is no respect for those people and the amount of work they do for charity or the number of organisations that do work for charity. They are all being hammered.

Meanwhile, the Government's policies are to line the pockets of the fat cats. The Minister of State is doing this to support the two parties; I know that. It will benefit the fat cats whether it be CRH or across the board in big business. The oil companies that fund the parties indirectly have the Government in their pockets. The Government is doing it now with this new crazy idea. Somebody called it a journey the Government is bringing people on; it is bringing them down a cul-de-sac. It is a bóithrín with no end and people will find a big pond at the bottom of it and that will be the end of them.

The Government just does not get it with its fanciful policies. Why do we not have wind turbines out at sea? Why have we not got the proper policies in place? The Sustainable Energy Authority of Ireland, SEAI, does not have the money or wherewithal to do it. Shame on the Government.

Deputy Michael Healy-Rae

I thank the Social Democrats very much for bringing this very important motion before the Dáil. This is no disrespect to the Minister of State, but where in the name of goodness is the Minister, Deputy Eamon Ryan, today? Why could he not be here to debate this very important matter? Why could he not be here to answer questions and give his viewpoint? It is for the same reason he cannot go on any of the national broadcasters. He is afraid to face the people. He is afraid to answer questions from people on the Opposition side who have very valid questions on behalf of the electorate. We have fair and honest questions we want to put before him about his failed policies and fanciful ideas and his absolute, if the Minister of State will excuse me using the word, and it is polite word, raving antics. I would call him out to come into the Chamber when there is a debate like this and man up a small bit. He should face his responsibility as a senior Government Minister and answer the God damn questions we have to put before him.

The Dáil passed a similar type of motion in the Dáil last November, which was tabled by the Rural Independent Group, instructing the Government to act to reduce electricity prices for households, small businesses and farmers. We welcome the fact that this motion has been brought before the Minister of State today. We have to see a reduction in the cost of energy because of a simple fact. Why are we paying 50% more for energy in Ireland? Why does it cost 50% more to produce energy here than anywhere else? Why in the name of God did the Government not go ahead with the Shannon LNG facility to give us surety of supply? It should give us a chance and for God's sake try to let us have a bit of independence. The message this Government is giving people is that we should use more electricity and produce less of it at a higher cost.

Deputy Richard O'Donoghue

At the end of the year, the Government's budget showed it had taken €5 billion extra off the people in Ireland in taxes, even though Electric Ireland had €390.3 million in profits. I believe Bord Gáis Energy is expected to have €1 billion extra in its coffers this year than it had in 2021.

Yet, representatives from Barnardos are in the audiovisual room in LH2000 this morning with a book called, Food Insecurity in Ireland: Impact on Children and their Parents. The Minister of State should look at it and go to the audiovisual room. Children are going hungry. Why? Parents are trying to pay the bills, and doing without themselves, because of excessive energy costs. Local businesses are going out of business because of the increase in costs in keeping the fridges on and the doors open.

The Government has ignored it. Its responsibility lies with the protection of the children in this country - the next generation to come - and the people of Ireland. All the Government has done is tax us out of existence. It had €5 billion leftover that it said came from corporate tax. It did not all come from corporate. It came from increases in energy and fuel costs where the Government took 50 cent in every euro. It is taking taxes at 9% but because they have inflated so much, it is actually up 50% in taxes on electricity costs from this time in 2019 and 2020. The inflated costs are what is wrong. The Government is getting more tax and saying it is helping but it is giving pittance. It has let the people of Ireland go hungry. This will be on the Government's watch. It will be brought to account come election time.

Deputy Thomas Pringle

I welcome the opportunity to speak on the motion. I thank the Social Democrats for bringing it forward.

Last month, Europe's gas prices returned to pre-war levels yet citizens' bills continue to soar while energy companies make eye-watering profits. The Government has not only allowed this to happen but it has actually facilitated it. I warned of this back in September when speaking on budget 2023. I warned that by giving out three instalments of energy credits, we would be putting money straight into the pockets of the energy companies. At the time, I asked why energy companies would ever reduce their prices when they knew the Government would not only let them keep rising but would actually pay them when they did it.

It is five months later and here is the proof - gas prices have gone down and energy companies are paying less yet not a single energy company or supplier has reduced its prices to their customers. Why? Because they know the Government will facilitate any ridiculous rates they decide to charge. The reality is that we paid for Shell's record-breaking profit of €36 billion last year, which is more than double what it raked in in the previous year. It is absolutely despicable. Profiteering on a war is unethical and wrong. Instead of taking power away from these profit-hungry immoral companies, the Government has instead subsidised them at the expense of its own citizens.

I heard a quote on radio today that rings very true. Someone said gas prices rise like a rocket but drop like a feather. That is the reality of the situation everybody is facing here. On the radio this morning, people were talking about how ESB prices are fixed for the next two years. This is absolutely incredible stuff.

It is incredibly frustrating to see the detrimental impact energy prices are having on people and businesses in my constituency of Donegal. Many businesses in the county were forced to close their doors due to the struggles they faced in paying energy bills. I fear that many more will follow after what has been a very difficult winter for many small businesses.

The motion put forward today rightly points out the fact that there is a risk of an energy crisis coming, and a jobs crisis if businesses begin to close. The people of this country are already enduring a cost-of-living crisis. The last thing they need is yet another crisis to join the endless cycle of crises in the country. Citizens are struggling enough. Food banks are becoming increasingly frequent and sought after in rural communities as families struggle to put food on the table. It is devastating and we cannot continue to pay this way.

Deputy Joan Collins

I thank the Social Democrats for tabling this very important Private Members' motion which the Government should take more seriously.

The cost of energy is a crisis for many in the country. The Economic and Social Research Institute, ESRI, states that 40% of households are now living in fuel poverty. Many are cutting back on heating to afford food or cutting back on food to afford heating. Just as we see the costs of the crisis come out of people's wages, we see the mega-rich and megacorporations make billions in profits. The massive amount of money people are having to pay for energy and groceries is not just disappearing into thin air; it is disappearing into profits.

Shell's profits doubled in 2022 and ExxonMobil made €51.5 billion in the same period. These soaring profits saw billionaires' fortunes increase by €2.7 billion per day. This is not just while people struggled to pay bills and pay for groceries, it is because of it. These companies are making billions off people's backs. We need to put an end to this by capping the prices and taxing the profits through a windfall tax.

France capped its gas and electricity prices at 4% last year. Its inflation was 6% last year; ours went up to 9.2% and above. Germany introduced targeted price caps on about 80% of average energy use. Meanwhile, our energy bills have doubled. Inflation has put a massive squeeze on how far everyone's wages go and it is vital we bring in caps to help fight it.

I go to my local shop owner at the corner every morning to get the paper. Practically every day I go in, he asks why there are not price caps with regard to energy as this would help keep things on an even keel. We should leave the energy charter treaty. The fact that we are signed up a treaty that allows the fossil fuel companies that are causing the mass destruction of life on this planet to sue our Government for affecting profits is obscene. It is a political feature of this Government to support investor courts, like we have seen with the Comprehensive Economic and Trade Agreement, CETA, and Transatlantic Trade and Investment Partnership, TTIP. Allowing companies to be able to sue sovereign governments for loss of profits is both morally wrong and a disaster for any attempt to end the profiteering and greed.

According to Oxfam, profiteering has caused at least 50% of inflation increases in Europe and the US. It called this a cost-of-profit crisis; I call it a cost-of-greed crisis. The rich have made billions off working-class people struggling to pay rent and energy bills and put food on their tables. We should take every opportunity to stop and reverse these massive profits and price increases.

I support the creation of a windfall tax on the profits of the fossil fuel and energy companies, but I also support the calls from Oxfam for a wealth tax on billionaires and the mega rich to reverse the massive inequality and poverty this crisis has contributed to and accelerated. I support the motion.

Deputy Marian Harkin

I thank the Social Democrats for bringing forward this very important motion, which allows all of us here on the Opposition benches to call for the immediate introduction of a windfall tax on energy companies and to ring-fence that tax for households, many of whom are struggling to pay exorbitant energy bills, for the many who are living in fear of their next bill, and for businesses, especially small businesses, whose profit margins have eroded or simply disappeared and whose very viability is at risk because of the escalation in energy costs.

The Government has not given any timeline as to when it will introduce a windfall tax on energy companies, some of which have made obscene profits and especially on the backs of a war just on the fringes of the EU. As the motion tells us, ESB's profits in the first six months of 2022 more than tripled to €390 million. The operating profits at Bord Gáis Energy increased by 74% in the same period. I put it to the Minister of State, Deputy Ossian Smyth, that not only do we need a timeline, we need a commitment from him to implement a windfall tax as soon as possible. We can argue about the amounts of tax the Exchequer will pull in, but it is crucial that the tax is put in place. Taxation is not only about revenue. It is an instrument that every government has at its disposal to help ensure greater fairness and greater equity in our fiscal system so that those who profit more pay more. We are often told how progressive the tax system is in this State but that counts for nothing unless we take the necessary steps to impose those windfall taxes and help restore the confidence of citizens in our taxation system. People are outraged to see energy costs rising overnight as gas prices increase but remaining at a shockingly high level when gas prices have fallen. People have no faith in the system and windfall taxes would help to restore that balance.

I fully support the call for Ireland to announce immediately its intention, like France, the Netherlands Germany and other European countries, to leave the Energy Charter Treaty.

Minister of State at the Department of Public Expenditure, National Development Plan Delivery and Reform (Deputy Ossian Smyth)

I sincerely thank the Social Democrats for bringing this motion forward. It is very welcome to see a constructive set of proposals around a very serious problem that is facing us all. I am happy to see that. It is a form of constructive opposition. When I look at the motion I see that the Government agrees with most of what is in it. I will first address some specific questions that were raised by some Deputies.

Deputies Cian O'Callaghan and Harkin asked about the timeline on windfall taxes. The windfall divides into two types of tax, the first being a solidarity charge, called a solidarity contribution, which applies to organisations that own oil and gas reserves. The idea of this charge is that it will be levied on excess profits from the extraction of oil and gas, and that it would be applied according to the profits that are made. Ireland has decided to levy this at a rate of 75%, which I believe is one of the highest, if not the highest, in the EU. I believe that some other countries went for a 30% rate while we decided on a 75% tax on excess profits on the extraction of oil and gas. The Deputies have asked when this would apply. It applies for the years 2022 and 2023. In other words, it does apply retrospectively to last year's profits. We must know what those profits are before we can levy the tax, so we must wait for the company accounts and so on before we can levy that contribution.

The other half of the windfall taxes is the cap on revenues of non-gas electricity generation. For example, this could be a wind farm that finds it is able to sell electricity at 20 cent or 30 cent per unit whereas previously it had only been selling it at 10 cent per unit, and yet its costs had not changed whatsoever. Or, if a company managed to obtain a really unjustified profit that could be traced back to a war it is not a very noble way of making money and therefore we have decided to limit those profits. The guidance we got from the EU was that we could, for example, sell it at 18 cent a unit as the maximum price that a non-gas electricity generator could charge for the electricity it produces. Rather than set that at 18 cent the Government has decided to set it at 12 cent for the maximum amount they can charge. Again, this is a much more stringent approach than most of the EU. In some contributions from Deputies they felt that our ambition was not far enough or that we were not implementing windfall taxes to the extent that other countries were. I genuinely believe that in both of those cases having a 75% tax on excess profits of oil and gas and setting a maximum price for non-electricity generators to sell electricity at 12 cent represents an ambitious approach. To those Deputies who are worried that the money would be spent elsewhere, the money has been legally ring-fenced by the EU.

One question arose from Deputy Whitmore around whether Ireland is in contravention of the regulation from the Commission. I can confirm that we are not. We have been in contact with the Commission about this. The Government decision to implement this was taken on 22 November 2022.

Deputy Canney worried that we are moving too fast on the electrification of the economy and that oil boilers and gas boilers should not be banned. They are not banned yet although I expect that the public sector will not be reinstalling oil and gas boilers as soon as possible. Why should one arm of the State be paying to retrofit heat pumps and remove oil and gas boilers, and cementing that, while at the same time another arm of the State is still installing them? Clearly, we must have some sense there. At the same time I take Deputy Canney's points on his concern that we must have a just transition, that we must help people to move along, that we need to bring people with us, and that we need to make sure we are not putting people into difficulty as we move. At the same time, I believe it would be wrong to say that we are moving too quickly.

Deputy Pringle is worried that subsidies could support high prices and he pointed out that with electricity credit and so on there is a chance that adding money into the system can result in companies obtaining excess profits. The Deputy is absolutely right to be worried about that. We have to make sure that our interventions do not lead to excess profits and are not just snapped up by companies. That is the real fear with setting a cap on the price of electricity sold to consumers rather than a cap on the price that electricity generators can sell their electricity. They are different kinds of caps. Consider the example in Germany where the consumer price cap has, so far, cost them €80 billion. The problem with this is that it does nothing to limit the profits of the companies that are generating electricity. In Ireland the majority of the gas that comes into the country is imported. We are reliant on the overseas supply and the foreign price of gas. If we impose a cap on companies that are selling electricity to the consumer in Ireland, which is generated with imported gas, then we will have to subsidise them in order to allow them to continue to do that. The subsidies could be huge and it provides no incentive to reduce profits. We do, however, have control over the oil and any gas fields that are in Ireland, and we have control over any body generating electricity within the State. We can impose caps on how much they charge to sell and we can avoid the possibility of them making excess profits.

The implementation details on the windfall charges are likely to be legislated for in the coming weeks. I expect the revenue from that will be in the hundreds of millions of euro. Previously, there were higher estimates of how much money could be brought in by a windfall tax. They were just based on higher future prices for gas and oil. As the price of wholesale gas has gone down the estimates for how much money will be brought in by windfall charge went down. It will still be in the hundreds of millions of euro. It will be significant and it will be ring-fenced.

The Government, of course, is deeply aware and concerned by the pressure on people and business in Ireland among unprecedented high energy prices. It is a priority for the Government to provide supports to alleviate this. Intensive work is being undertaken and will continue to be undertaken to address the challenges faced by consumers.

The Government is examining a wide range of future supports for consumers. This includes the evaluation of price caps. We are not ruling out anything, including price caps, in the approach we intend to take. We are examining what is possible and trying to make sure that we do not end up subsidising companies.

Energy market developments are monitored, and Departments are working to support households and businesses to meet their energy costs. As previously outlined, the Government introduced a suite of measures worth €2.4 billion in 2022 to assist households with their energy costs, and budget 2023 provided for a further €2.5 billion in one-off measures to support households with the rising cost of living. I will not go through all of them, as there are at least ten.

In April and May 2022, 99% of eligible domestic electricity accounts were credited with the electricity costs emergency benefit payment. One more of those payments is due next month. The number of domestic electricity accounts in receipt of the first credit is 2.15 million, which means that 99.1% of all eligible customers have now had the credit applied to their account.

The Government has also increased funding for supports such as the fuel allowance, reducing VAT on gas and electricity bills, reduced excise duty on petrol and diesel and a total allocation of €267 million, of which €202 million is carbon tax receipts, to the Sustainable Energy Authority of Ireland residential and community retrofit schemes in 2022.

The energy poverty action plan, published in December 2022 in response to rising energy prices, sets out a range of near- and medium-term income, social protection and consumer protection support measures. This plan provides for the establishment of a €10 million fund to further support people in, or at risk of, energy poverty in 2023.

There is also a provision in the plan to legislate to extend the definition of vulnerable customer to include financial vulnerability, which will extend the protection against disconnection for non-payment of account for a longer period over the winter.

The Government has expressed strong views within the EU on the Energy Charter Treaty, ECT, and continues to reserve the option to support a co-ordinated EU withdrawal from the Energy Charter Treaty if it is not modernised to align with the Paris Agreement, address concerns about the ECT's dispute resolution mechanism and support the international effort to decarbonise electricity systems and promote more renewable energy.

The Government will implement Council Regulation (EU) 2022/1854, which seeks to address the windfall gains in the energy sector by collecting excess revenues from those companies that have unexpectedly benefited from the high prices and to redistribute the revenues to alleviate pressure on affected energy consumers. The proceeds from the implementation of this Council regulation, including the temporary solidarity contribution and the cap on market revenues of non-gas electricity generators, will go towards financial supports to households and companies heavily affected by soaring energy prices. It may also be used to help support investment in areas such as renewable energy.

The Government has provided, and will continue to provide, supports to people and businesses affected by the unprecedented high energy costs.

Deputy Róisín Shortall

I wish to share time with Deputy Whitmore.

Deputy An Cathaoirleach Gníomhach (Deputy Verona Murphy)

Is that agreed? Agreed.

Deputy Róisín Shortall

There is no disputing that we are in the midst of an unprecedented energy crisis. It is the key driver of the soaring cost of living that continues to affect every household in Ireland. However, we know that its impact is not indiscriminate. Low- and middle-income households are disproportionately affected by the soaring cost of living, as they spend a higher proportion of their budget on energy, food, and housing. This is borne out in the latest figures, which show that 40% of households are now estimated to be living in fuel poverty, nearly 270,000 customers were in arrears on their energy bills at the end of last year and the number of parents using food banks has doubled from what it was last year.

This is the devastating reality of life in Ireland for so many workers and families, and while customers' bills soar, energy companies are making bumper profits. In the first six months of 2022, the ESB's profits more than tripled to a staggering €390 million. During that same period, Bord Gáis Energy's profits increased by 74%. To add insult to injury, both companies imposed multiple price hikes throughout last year. Despite wholesale energy costs decreasing in recent months, not a single energy company or supplier has reduced its prices. In fact, we are told it could be months, even next year, before household energy prices drop. The unbridled profiteering we have seen in recent years cannot be allowed to continue. The market is utterly failing customers. The State must step in, as it should have done long ago.

Hard-pressed customers cannot wait any longer for the drop in wholesale gas and electricity prices to be reflected in their bills, not least because there is no guarantee that wholesale prices will drop for a sustained period. There are too many variables, including the very uncertain situation in Ukraine. That is why a new approach is urgently required. That is exactly what the Social Democrats propose in today's motion.

The Government's failure to commit to price caps is indefensible. What is desperately needed is a targeted energy price cap, one which would cap the price of average energy usage for domestic customers and businesses. This approach would ensure that everyone gets their essential energy needs met at an affordable price and, crucially, that wealthier households do not disproportionately benefit. I urge the Minister of State to give our proposal immediate consideration. This is not a blanket energy price cap like the one introduced in the UK, with no upper limit on the amount of discounted energy. It is a targeted measure that would also incentivise energy conservation.

Alongside targeted price caps is the urgent need to introduce a windfall tax on energy companies. It is a scandal that energy companies continue to profiteer from a war. The Government's reluctance to respond rapidly has been very disappointing. It is almost six months since the Minister, Deputy Eamon Ryan, first announced his intention to introduce a windfall tax, yet we are still waiting for the necessary legislation as record profits go unchecked.

Many households and businesses are at breaking point. They cannot absorb the soaring energy costs any longer. I very much welcome yesterday's announcement of the Government's intention to introduce a windfall tax, however late in the day. The key point is that households must be the main beneficiaries of this tax. In this respect, there is a strong case for a targeted price cap, as called for in the motion. I call on the Minister of State, Deputy Ossian Smyth, to give this proposal urgent consideration. Will he assure the House that the fact that the Government is not opposing the motion today is meaningful? We look forward to further detail in that regard.

Deputy Jennifer Whitmore

The Minister of State's response to the Social Democrats proposal for a targeted price cap does not make sense. He says that he is reluctant to do this because the profits of energy companies could skyrocket. Those profits are skyrocketing now, and we are seeing people suffer. We are seeing businesses go under, parents who cannot feed their children and elderly people who are suffering from hypothermia because they are afraid or unable to put on their heating.

The reason the Social Democrats proposed the price caps in the manner outlined is that they would be applied in conjunction with a windfall tax. We must have those two elements in place. We must limit the prices energy companies charge consumers. That would give clarity and certainty and remove the fear people have about the bills coming through their letterboxes every few months. At the same time, we must have caps on the profits. We must have those two elements in play. I am surprised the Government does not seem to understand that. There is not one big solution to this crisis. A number of measures must be put in place to fix and help people deal with it.

The non-gas electricity cap to which the Minister of State referred is to apply from December 2022 until June 2023. By the time it is in place, we will probably be past June. In addition, it does not deal with the huge profits made by wind companies from January to November of last year.

How will the Minister of State deal with those profits? Will he allow wind companies to make those huge profits on the backs of households throughout the country? That is unacceptable. The Minister, Deputy Eamon Ryan, stated that we are in unprecedented times and that energy is being used as a weapon of war. While Putin may have started that race, the energy companies have picked up the baton. They are now using the war as an obscene way of making profits off the backs of vulnerable people.

It is often said that in the midst of every crisis lies a great opportunity. Those energy companies have identified that opportunity and they are maxing out on it at the expense of our most vulnerable people. Companies will do what companies do. Their objective is to make money for their shareholders. It is the responsibility of the Minister of State and the Government to protect vulnerable people and to regulate what those companies can do to ensure that our most vulnerable people are not exposed to their profiteering. The Government is failing in that. The Government was behind the curve and behind the game in every element of this. The Minister of State talked about the windfall tax. Those measures were meant to be in place last December but they are not. The windfall tax on electricity generators will only be in place for a measly six months. The Minister of State talked about including financially vulnerable people and consumers in the Government's definition of vulnerable when it comes to disconnections. That was meant to be in place for winter 2022. It still has not been done.

Every single measure the Government brings in is delayed. Every week that those measures and bringing in those policy changes are delayed means more and more people are being put under pressure, more businesses are going under, and more families are stressed and unable to feed their children. That is not acceptable. We expect the Government to plan, to future-proof and be prepared, and not deal with this in a reactive manner. The Government needs to put people and our small businesses first and make sure that corporations are not the ones wagging its tail.

Question put and agreed to.

Dáil Éireann díospóireacht - Wednesday, 15 Feb 2023

Energy Costs and Windfall Taxes: Motion [Private Members]

Deputies

Dáil Éireann díospóireacht -
Wednesday, 15 Feb 2023