Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputy for raising those points. Members are looking for initiatives every week and I understand that. We have to stand back, however, and take a more considered view on how we respond to this fairly unique crisis, which has been caused by the combination of a pandemic, emerging from that pandemic and the imbalance of supply and demand which that created and a terrible war, the likes of which we have not seen since the Second World War that is happening on the Continent of Europe and that is creating huge issues for all of us. We have to look at this in the medium term, rather than just from week to week. I believe the Deputy accepts that and I appreciate the point she has made on that.

I refer to the European Union and European Commission approach to the energy market. There have been considerable discussions in recent months at European Council level on the market, on how it is designed and on whether that market can be adjusted or changed to reduce the cost of energy. Different member states have different perspectives on that and we have consistently put forward the view that we need more flexibility on the legislation and the directives, including the energy tax and the VAT directives. We already enjoy a historic derogation on the VAT rate on fuels of 13.5%. We have told the Commission, including prior to the last meeting and prior to Versailles, that there should be flexibilities in the current situation that would not endanger the historic derogation we have. If we had simply reduced energy prices below that 13.5% rate, there was no guarantee under the existing laws that we could stay at 13.5% when the crisis was over but rather, we would have to go to 23%. That was something we were anxious to avoid.

We put forward an amendment to the conclusions of the last meeting, which was accepted, to try to head off that situation. It still has to involve discussions with the Commission. We want to be absolutely clear and certain. This is to allow us flexibility. We have different options and know what we can and cannot do. With the laws as they were, we were not in a position to do it all along, which we made clear to the House. We reduced excise duties significantly, by between 15% and 20%. The Central Bank spokesperson said that had an impact on reducing the costs on people from what they would otherwise have been.

The other side of the argument is that the Commission itself acknowledges that the market needs to be revisited with regard to the domination of gas in dictating the price of all energy in the European Union market.

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