Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputies for their questions. In relation to the windfall tax and energy prices, the windfall tax proposal, which is at an advanced stage and being developed by the Minister for the Environment, Climate and Communications and the Minister for Finance, derives from EU law in this area. My understanding is that it has two elements. The first is a tax on gas and oil product producers in Ireland, of which there are not many but there are a few. There is also a tax on generators. The tax raised on generators will be used to bring down prices for businesses and householders. It will apply to profits made in 2022 to be taxed in 2023, and profits made in 2023 to be taxed in 2034. Generally, profits are taxed the year after they are made. That is the principle that will be applied, as I understand it. I do not think that nationalising the energy sector is a good idea.

At the outset, it would involve paying a large amount of compensation to the shareholders and owners of those companies. People might argue that this will be recovered after ten, 15 or 20 years, but, certainly initially, it would involve a significant financial outlay and a big cost to the taxpayer, which would not be recouped for a long time, if at all. I am not sure if countries have ever tried to experiment with running energy systems on a not-for-profit basis. I think it was attempted in communist countries between the 1920s and the 1980s and what they suffered as a result was a lack of investment, shortages, blackouts and so on. I am not sure it is a model we would like to experiment with here, given it did not work in-----

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