Seán Sherlock (Cork East, Labour) | Oireachtas source

We in the Labour Party welcome this Bill and the fact the Government has come around to the idea of a windfall tax, albeit, it must be said, at the behest of the European Commission. We would like to have seen this measure introduced much earlier. Exorbitant profits have been made by the energy companies over the past number of years in the midst of one of the worst cost-of-living crises in recent memory. The figures are very much unconscionable, especially when we consider the degree to which many people and households have struggled to keep their houses warm over the past two winter periods.

Thankfully, in the summer months, that issue is not quite so acute but the fact remains that consumers are still feeling the pinch on energy bills. I doubt there is a single one of us in this House who has not heard from our constituents on how it is affecting them. They continue to be charged very high prices on energy bills while we know that the cost of wholesale gas and oil is coming down. Energy companies were quick to hike their prices to take in record profits but they have been far slower in passing on cuts in their costs to household consumers. I listened intently to the Minister, Deputy McGrath, in the past week when this very question about the nature of the energy markets was put to him. The response, while empathetic to those households, suggested to me there was no clear intent on the part of the Government to hold these energy companies to account. The point has been made by Deputy Mac Lochlainn on the nature of the market. It has a pure and naked capitalistic formation which puts hundreds of thousands of households at its mercy. We need to critique that market because once there is an externality or an external shock of some sort, it seems the very people who suffer as a result of that are the households who we represent here tonight. Nobody seeks to critique the market or to change the very nature of the market. While we are trying to secure energy supply, there is no real mechanism from a legislative point of view at European level that allows for Government to intervene directly in the market to ensure it is critiqued or amended, so that the very essence of energy and security of supply and that principle is adhered to. We need to start critiquing these policies.

In the 12 months following our motion, Shell plc recorded $40 billion in profit while BP's profits doubled to $28 billion. Likewise, profits have soared at ESB and Centrica plc, the owner of Bord Gáis, while revenue at the Corrib gas field, which we in the Labour Party called to be temporarily nationalised, has risen considerably. Regular household consumers are sickened to see these figures while they struggle to keep the heating on. Reference has been made to the Society St. Vincent de Paul report earlier this year which showed that 377,000 households were unable to adequately heat their homes last year. This figure should be compared with the figure of 166 households from 2021 when the true scale of the harm that is being caused by the energy crisis becomes abundantly clear. It has been a catastrophe. More and more people fell into energy poverty after the Government rejected the previous Labour Party motion.

I spoke to a person of pensionable age who is on a modest State pension and this person said that half a radiator cannot be heated and that half a lightbulb cannot be turned on. These are the stark choices people make where there is energy poverty. It is a case of heating one room and not heating the other one. Those are the stark choices people are faced with in the country we live in today. Until such time as we take on the might of the energy companies and until there is some sort of global political response to this, we will continue to see these super-normal profits being earned by these companies, with governments and nation states powerless to intervene to any great extent.

The windfall tax and this legislation is coming very late in the day. The excuse for delaying the windfall tax has been that the Government was waiting for EU regulation on the matter. I understand that but this was published in October and only now, eight months later, are we debating the issue. Several EU countries have been much quicker to implement the provisions of the EU’s regulation after it was published. Germany, for example, passed legislation on a windfall tax in December while France’s windfall tax has been operational since January. Austria and Greece all introduced legislation late last year, as did Slovakia, Portugal and Romania. Even the Tories in the UK introduced taxes on excess profits last year. Why has it taken us this long to begin to even have this formal discussion? The general scheme of this Bill was not published until late March of this year and every excuse the Government gives for this delay falls flat on its face when we look to what has been done by our European neighbours already.

On the substance of the Bill, we welcome the fact the windfall tax is now being imposed on the extraordinary profits which energy companies have seen of late and, ethically, it is the right thing to do. It would be deeply unfair if we were to allow some to exploit Russia’s brutal and illegal invasion of Ukraine for their own gain while others are experiencing real harm as a result of it’s knock-on effects.

Households have been taking a hit on all fronts between the energy crisis, inflation, interest rates, in food and in basic household essentials. Those hit hardest need to be given every support possible. There has been a palpable frustration among those who have struggled through this cost-of-living crisis when they see the profits being made within the energy sector. They deserve a break, to be fair.

I acknowledge the fact that, for instance, this Government has increased the income thresholds for fuel allowance. That has provided some alleviation and there have been once-off measures. We ask that sustainable measures be taken, using money garnered from this windfall tax, to ensure energy poverty, in the first instance, is dealt with and that it is done as quickly as possible.

We want to see a proper targeting of relief measures funded by the windfall tax. The revenue raised should go to those who need it most. We saw in the Society of St. Vincent de Paul report that more and more people are struggling to keep the heat on. These are the households we need to target with the proceeds from the windfall tax.

I represent the constituency of Cork East and the Whitegate oil refinery is situated in Whitegate in my constituency. I acknowledge Irving Oil and the transition it is involved in at present where there is a significant investment by it to, for instance, triple its production of renewable diesel so as to meet Ireland’s climate ambitions. I also acknowledge the company’s partnership with the Simply Blue Group which is about transforming or transitioning the Whitegate refinery into a renewable energy production hub which produces green hydrogen, for instance, and e-fuels, in full integration with floating offshore platforms.

This brings me to the point I will make about the next wave of wind energy. If we are serious about security of energy supply in this country and not having to be beholden to the global markets with regard to pricing mechanisms and buying forward, then the Government needs to put more resources into entities like the Maritime Area Regulatory Authority, MARA. We need to see what the next phase of floating offshore will look like. We need more concrete actions from Government in that respect because that is the only way we can stave off debates like this taking place. I acknowledge that some progress has been made in respect of phase 2 and the areas which have been determined but we need to move rapidly to phase 3 and to work with entities like Whitegate and Irving Oil. Whether we like it or not, oil is still part of the energy mix. It is 51%, if I am not mistaken, but I ask that the Government does not introduce legislation that stymies the potential of companies like Irving Oil to make that transition. That is my core point.

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