Ivana Bacik (Dublin Bay South, Labour) | Oireachtas source

I am glad to speak on this motion. We are aware that energy prices have risen across Europe. That is not in question, but there are particular factors at play in Ireland. Bloomberg is reporting that the biggest monthly gains in electricity costs are in Dublin, where power rates have climbed by 44%. Similarly, the costs of gas and other fuels are going up and up. We can no doubt attribute this anomaly to climate change. While the current unseasonably warm weather has a sinister cause, it has been positive in that fewer people in Ireland have had to turn on the heating so far. However, as we see a drop in temperature, even today, rising costs will have an even greater impact on households. We are all hearing already about the fear of many families and individuals as they face the winter ahead and see prices continuing to rise.

On Saturday, I addressed a protest organised by the Cost of Living Coalition in Rathmines in my constituency. I spoke to students, older people, renters and many others. They described the increasingly narrow margins they experience to get by week after week. This is a genuine issue across the country.

Undoubtedly, the terrible war being waged by Russia against Ukraine has had a significant effect on energy prices across Europe and worldwide. However, it feels as if we are being held to ransom here in Ireland by energy giants and market speculators. While households here are resilient and looking to where they can cut costs, and cut energy consumption with a climate focus, we can see it is not additional discretionary spending that drives hardship in Ireland; rather, it is the cost of basic necessities that does so. I include the costs of housing, rent, childcare and, of course, energy. Even though we all seek to reduce energy consumption, prices are still rising drastically. We are all hearing about these issues. There are many people who cannot manage without retaining their heating and energy-use levels.

Vulnerability to market factors has contributed to the hardship people are in, and a change of system and radical measures are now needed to help, not the sort of Band-Aid solutions or half measures we saw introduced in budget 2023. While one-off measures such as the lump-sum payments assisted people for a while, their initial shine is starting to wear off. Once energy credits and lump-sum payments are used up, prices will continue to rise. Social protection recipients are receiving payments below the rate of inflation, and property and deprivation are likely to increase as temperatures drop. Therefore, it is past time that we saw an end to the undue deference to profit and profit-driven companies when it comes to securing the well-being of our people. A profit motive is fundamentally inconsistent with supporting people through periods such as this. We need to see a strengthening of the role of the State and the intervention of the State in the markets.

To be constructive, what did we propose to avoid some of these problems and reduce reliance on the private sector and the market? Labour, in the budget, would have implemented a three-pronged approach to the energy crisis, with a windfall tax on excess profits, a cap on energy prices and changes to the fuel allowance and other energy supports. We have no hesitation in pushing further for the principle of a windfall tax on profits and a solidarity tax. We conservatively estimated that our iteration of a windfall levy would yield €600 million in 2022, rising to €800 million in 2023. The cap on energy prices has been resisted by the Government, which has said it is a complex and dynamic measure. It certainly is but we have seen many EU countries taking this approach. We pushed for the so-called Iberian model, introduced by socialist governments in Spain and Portugal. It has provided a model for limiting the price of gas and electricity production and, in effect, subsidising gas generators. Spain and Portugal have adopted that model since June and have reduced bills for Spanish and Portuguese households by between 15% and 20%.

We have called for the temporary nationalisation of the Corrib gas field. I renew that call today in order that the price we pay for our domestic gas supply will be set at the cost of production, plus a margin for the operator, rather than having it set by the international market as at present. This does not entail a cap on fuel prices but such a measure would serve to regulate and reduce the cost for households. It can be achieved using existing legislation. As I have stated repeatedly in the House, this legislation was invoked by previous Governments in the 1970s during the fuel crisis.

Alongside these measures, we would have put in place a range of targeted supports through budget 2023 to help cover the costs of the over 1 million households we know to be at risk of energy poverty. We would have created a refundable carbon tax credit targeted at ordinary working families in poorly insulated homes, and we would also have ensured that the credit would be worth €800 in total to low- and middle-income workers. Particularly for families who remain reliant on solid fuel and home heating oil in advance of retrofitting measures, this would have made a significant difference.

It is hard to escape the conclusion, without these targeted measures, that a mini budget may well be required in the new year to account for the increasing inflation rate and increasing prices, particularly of energy and fuel. At the very least, the Government could have taken other measures that might have avoided that necessity. An example would be a clawback mechanism of some sort for our existing system of energy credits, such as the withdrawal of income tax credits from those earning €100,000, which we also called for. Another example would involve the application of a levy equivalent to the electricity credit, modelled on the previous non-principal private residence charge, to holiday and vacant homes to prevent those with multiple properties from benefiting from universal measures.

We in Labour staunchly advocate universal measures, where necessary and of benefit, but this is a situation where targeting should have taken place. No one should benefit disproportionately when some are suffering so disproportionately. When I speak to individuals and groups who are disproportionately harmed, I want to restate our call for more effective reliefs for people who consume energy on a pay-as-you-go basis. We are all conscious that they are particularly affected. People on lower incomes are overrepresented in this group and are least insulated from price hikes. As with the eviction Bill, there should be a guarantee set in stone so no one’s lights or power will be switched off because they cannot afford to pay this winter.

Another group struggling this winter and from whom I have heard in many cases comprises those in district heating schemes. The Minister will know that this group pays for energy at the commercial rate. I heard from an individual in my constituency whose bill has risen by nearly 600%, which is an extraordinary price hike. I am aware that there are others living in hundreds of apartment blocks around the country who are also affected. I submitted a parliamentary question very recently on this. In response, the Minister mentioned a steering group that is to report on the matter. This is an unsatisfactory response for those facing bills of in excess of €1,000 this winter. We need to see more urgent action taken.

We are also calling on the Government to examine, as a matter of urgency, the regulation of energy companies' use of standing charges to offset the artificial price reduction brought about by the energy credit scheme. We know some suppliers are now charging nearly €1,000 per year in standing charges regardless of how much energy households or businesses use. Hiking charges is anathema to the message we should be sending, considering that we are asking people to reduce their use of unnecessary energy and switch to renewable sources. Therefore, I ask the Minister to revisit the Government’s decision on this.

All of this comes against a backdrop of increasingly visible effects of climate change, on which there is an ongoing debate at COP27 in Egypt, yet Ireland still has what are among the highest emissions per person. Our system remains highly reliant on fossil fuel energy, so we need to see radical measures introduced to ensure a move to renewables and the ramping up of actions necessary to combat climate change.

I look forward to continuing that aspect of the debate during the debate on the new climate action plan.

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