Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move:

That Dáil Éireann approves the following Orders in draft: Finance Act 2022 (Temporary Business Energy Support Scheme) (Energy Costs Threshold Aggregate Amount) Order 2023,

Finance Act 2022 (Temporary Business Energy Support Scheme) (Energy Costs Threshold Aggregate Amount) (No. 2) Order 2023, and

Finance Act 2022 (Temporary Business Energy Support Scheme) (Specified Period) Order 2023, copies of which have been laid in draft form before Dáil Éireann on 21st February, 2023.

The temporary business energy support scheme, TBESS, was introduced to support qualifying businesses over the winter months with increases in electricity or natural gas costs that arose as a result of the invasion of Ukraine by Russia. Sections 100 to 102, inclusive, of the Finance Act 2022 provide the legislative basis for the scheme. The scheme provides support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 28 February 2023, subject to monthly caps.

The TBESS is available to eligible tax-compliant businesses carrying on a trade or profession, the profits of which are chargeable to tax under case I or case II of Schedule D. The scheme operates on a self-assessment basis. The scheme, which is being administered by Revenue, provides for a cash payment to qualifying businesses. State aid approval for the scheme was received on 24 November 2022. Revenue’s online system for registration for the scheme opened on 26 November 2022 and claims can be submitted under the scheme since 5 December 2022. The Finance Act 2022 was signed into law on 15 December 2022 and payments to qualifying claimants commenced after this date.

In accordance with section 100(1) of the Finance Act 2022, my Department has carried out an assessment of the matters relevant to the scheme. Following this assessment and relevant consultation with the Ministers for Enterprise, Trade and Employment, the Environment, Climate and Communications, and Public Expenditure, National Development Plan Delivery and Reform, I propose to exercise the powers set out in section 100(2)(a) of the Finance Act 2022. This section provides that the Minister of Finance can extend the scheme to 30 April 2023 and can increase or decrease the monthly limits on relief by ministerial order where it is considered necessary to ensure that the scheme is meeting its objectives.

While the Government confirmed its decision yesterday to extend the scheme to 31 May 2023, pending introduction of necessary legislation to make this change, and to facilitate the continuation of the scheme in the meantime, I propose to exercise the power contained in section 100 of the Finance Act 2022 to extend the scheme to 30 April 2023. I also propose to exercise the power to increase the monthly limit on aid under the scheme to €15,000 per trade or profession, subject to an overall cap of €45,000 in cases where a business is carried on from more than one location. These limits are currently €10,000 and €30,000, respectively. The increase will be prospective, applying from 1 March 2023.

The extension of the scheme and increase in the monthly limits on aid are considered necessary to provide certainty to businesses and to ensure they can continue to be given the support required to deal with the ongoing negative impacts arising from Russia’s illegal invasion of Ukraine. It is evident that higher energy costs continue to be keenly felt by businesses across the country and that the situation demands continued Government intervention. I also propose to make a number of further amendments to the scheme, which were agreed by Government yesterday. These changes will be made via legislation and are subject to state aid approval as they go beyond what is allowed in the Finance Act 2022.

First, I propose to extend the end date of the scheme to 31 May 2023 with a further option to extend to 31 July 2023. Second, I propose to reduce the energy cost threshold for the scheme such that a tax-compliant business may claim relief where it can demonstrate that the average unit price for electricity or natural gas on the relevant bill has increased by 30% or more as compared to the average unit price of electricity or natural gas in a reference period. This revised threshold will be applied on a retrospective basis from September 2022 such that businesses that were not previously eligible for the scheme due to the 50% energy cost threshold may now be eligible for the scheme. Third, I propose to increase, on a prospective basis from 1 March 2023, the level of relief from 40% of the eligible cost to 50%, subject to the relevant monthly caps contained in the legislation.

It is important to note that state aid approval under the temporary crisis framework for state aid measures to support the economy following the aggression against Ukraine by Russia is required before amendments to TBESS can be implemented. Finally, as the Government announced yesterday, a separate scheme will be developed by the Department of Enterprise, Trade and Employment for businesses that use oil and liquefied petroleum gas, LPG.

I acknowledge this is an issue that many Deputies from across the House have raised in recent weeks. It was not possible to deal with that issue through the TBESS, based on the feedback from Revenue, but we have now reached agreement that a separate and comparable scheme will be developed by the Department of Enterprise, Trade and Employment as quickly as possible.

See this speech in context