Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I do. It is important that we have a scheme that supports businesses. Deputy Boyd Barrett raised what I would like to touch on. My amendment calls for a report on the operation of the temporary business energy support scheme and options to amend its qualifying criteria and rates of payment, with reference to appropriate thresholds, such as turnover and profitability. It goes to the core of the issue.

The reality is that people are hanging on. I have made the point to members and others before the budget that while this support will be very welcome among smaller operators, it is not enough. It will contribute a proportion of their energy costs but the percentage probably does not make it viable. I am not sure how many will be in this category, but we are hearing about it. I suppose the ones that are really struggling are the ones who will reach out to you, but I am concerned about the smaller operators who have seen their electricity and gas prices increase significantly over a year. Forty percent of the increase will be available and will be a cushion but the fact that those with cash reserves and who may have the ability to trade through this period will get the same support, up to a cap of €10,000, or €30,000 if there are multiple connections, means there is not a good, directed and focused State resource. Therefore, I believe we should have been able to vary the rates, ensuring small businesses that lack sufficient cash reserves and access to credit will be able to meet the rising energy costs and that those with a greater turnover or profitability, possibly the larger corporations, will have their support limited. This is what our amendment is about.

We have seen various incarnations of the wage subsidy scheme. Payments were tapered on the basis of income. This is not the case with the temporary business energy support scheme. Rather, there is a flat-rate payment. All companies, regardless of whether they have millions of euro in cash reserves, can avail of the support up to a cap, whereas a company without a cash reserve might be running on an overdraft that pushes it over the cliff.

We called for a similar scheme to be introduced that would absorb a portion of the energy bills of companies during the winter, having regard to a reference point. We pointed to one of the schemes that existed in another European jurisdiction. We did not agree completely that scheme because it kicked in only on reaching a high threshold, but there were different supports depending on a company’s status. I will not continue to speak at length on this as I have raised my view on it. I am mindful that the Minister has made up his mind on this issue.

The other issue is that there are multiple ways to design a scheme like this. Some countries have said that when a company’s energy prices increase by X percent, it is a portion above X percent on which the relief will be provided. That is what we have done here. The Netherlands went to 100% but was able to provide supports of up to 70%. They ranged from 30% to 70%, depending on the viability or the support necessary for the companies.

When there is a cut-off point, it is always challenging and difficult because there is then a system of winners and losers. In this scenario, it is really tough for many companies. A 50% increase in electricity and gas costs, or an increase marginally below that, is quite significant. We will have a scenario in which companies that use more electricity will have a lower bill than those that miss the threshold. I am conscious that, no matter where a point is set, there will be winners and losers, but sometimes when we design these things we nearly need to taper them to ensure the step is not so big. That is the situation in this case. To take an example, a company operated by Deputy Ó Murchú might have an electricity bill of €24,000 this year and as it had a bill of €15,000 for the same period last year, Deputy Ó Murchú's company is eligible under the scheme because its electricity cost has increased by 60%, or €9,000. Forty percent of that, €3,600, will be provided by the State, meaning the bill this year for Deputy Ó Murchú will increase by €5,400. By contrast, a company operated by Deputy Matthews which had an electricity bill this year of €22,000, which is just €2,000 less, and an electricity bill for the previous year of €15,000 - which is the same as that of Deputy Ó Murchú's company - would not be eligible for the benefit. Therefore, it has to pay the increase of €7,000 itself. It will have used less energy. Maybe there will be reasons for that. Maybe it is a more environmentally-friendly company using energy more sustainably and maybe it is careful about its lights or fridges or has invested under some of the energy schemes we have supported in various Finance Bills down the years but it will be paying €7,000 by comparison with the company that is using more energy, which will be paying €5,400. There is an issue here that I ask the Minister to consider.

We cannot take away the step effect but could possibly mitigate it by having a second step. I do not have a proposal on how to rectify the problem. The issue is that while the bill of Deputy Matthews's company - which is the energy-efficient company - will have increased from €15,000 to €22,000, it will not get any support. That is a problem. I do not have a solution but am raising this in the context of similar schemes that have been tweaked and amended. The scheme in question needs to be amended. There could be a second step, with a different level of support, and so on. Through the amendments the Minister has introduced, he has given himself the option, or the authority, power or flexibility to vary the rates, which is good. We argued for that in respect of schemes introduced during the Covid pandemic. It means we do not have to have primary legislation all the time. My understanding is that it does not allow you to introduce multiple rates. Maybe the Minister will clarify that. If multiple rates cannot be introduced, it is a problem.

The other issue raised with us, on which we will seek to make an amendment on Report Stage, is related to amendment No. 93, in the name of the Minister and which deals with the exclusion of financial institutions. The credit union movement has been in contact about this.

They are raising concerns, albeit not about the exclusion of credit institutions. They understand that this is a state aid requirement. They would argue that credit unions should be exempt from this as credit unions are there for the social good. They serve their members, they do not have customers or profits and all of the dividends are for their members. They believe that an amendment on Report Stage could ensure that credit unions would also be able to benefit from this scheme. I am not sure what the Minister's thinking on this is but I would like to hear it.