Jennifer Whitmore (Wicklow, Social Democrats) | Oireachtas source

I thank the Minister of State. Hopefully, it will accede to that.

On the specifics of this Bill, on Tuesday I said we welcome that a windfall tax or a temporary solidarity contribution is being put in place to deal with the energy companies. There are specific issues, though, in relation to the application of that, which I will now go through. I have concerns about the number of loopholes that are provided for within the legislation. These loopholes will enable the energy companies to essentially get out of paying their full and fair dues when it comes to this payment. We have to remember that the additional income they received on the back of the war in Ukraine was completely unexpected. Any losses, capital costs or dealings they would have had prior to that war would have been done within their companies and a risk-based approach would have been taken. They would have assessed all those issues. This would have been done based on their normal income and what their projected income was. They could never have foreseen what was going to happen in Ukraine. Therefore, any of the additional revenues they have accrued were a bonus.

I do not believe any facility should be provided to enable any of these companies to use losses or, indeed, capital acquisitions from 2018 until 2023 in their contribution to this taxable profit. I, therefore, ask the Minister of State to reconsider that. I know the rationale behind it, but we have to be careful and we must recognise that businesses make their decisions on their own reviews. They forecast their own profits. We should not be providing this loophole so they can get out of paying back the incredible profits they have seen over the last couple of years. That is my first point.

My second point is that the direction from the EU on 6 October last year is clear in what expects Ireland or, indeed, any country that is applying the temporary solidarity contribution to do with this money. The solidarity contribution should be used for financial support measures to final energy customers and, in particular, vulnerable households. They speak about targeting financial support measures to the most vulnerable households and companies being affected by soaring energy prices. We have seen so many people being impacted by this energy crisis and some people are being impacted considerably more than others.

The level of energy poverty in our country has skyrocketed and many people are struggling to keep their heads above water. The money taken in through the temporary solidarity contribution, TSC, should, as per the EU directive, be targeted towards those most in need. I would like to see some element of ring-fencing included in the Bill. The Bill refers to every aspect of the directive bar the one that details what happens to the TSC's proceeds, so I ask that the Government make clear that it will ring-fence. I believe the Minister of State told the Dáil that all moneys accrued through the TSC would be targeted at the most vulnerable. I ask him to ensure that happens and to put it on a statutory footing in this Bill so as to avoid any doubt about where the money is going.

The premise of the EU’s directive is not just about reducing energy costs but also about reducing energy demand. There were expectations of electricity demand reductions as a result of the Bill. In Ireland, individuals, small businesses and households are doing their best to reduce their energy demands. The high prices have played a part in that, but people are also trying to do their best in terms of retrofitting with solar panels and so on. However, all of that effort is being negated by the large energy users, particularly data centres, essentially being allowed to increase their demand exponentially. At the same time we are telling people to put a large amount of money into their homes to reduce their demands, we are allowing large data centres to blow our targets out of the water. Will the Minister of State take this point into consideration? It is something the EU mentioned in the directive.

Another aspect of the EU directive I have not seen reflected in the Bill is reporting. The European Commission has applied conditions under the directive whereby member states should report to it on the application of the TSC and the use of the proceeds. I ask that this Chamber be provided on a statutory basis the same level of detail and the same access to information through reporting functions. This is important. A large role of the windfall tax, or TSC, will be to give confidence to the public that measures are being applied to energy companies to ensure they are being controlled in the level of profits they are making. This is in order for the public to be sure that not only is there a solidarity tax on these companies but there is transparency around which companies it is being levied on, how much they are paying and what is being done with the money. This is all about building trust with the public, who have had a very difficult few years, even while they saw energy companies' profits skyrocketing. They need to be assured those companies are being made to pay on their profits. The only way to give them that confidence is to be transparent in the details, ensure everything is specified within the legislation, have robust reporting requirements under the Bill and make the information publicly available. That last is important. Will the Minister of State take this suggestion on board?

The Bill is welcome. It could be stronger, but it is an important measure for the Government to introduce. The Social Democrats and other parties called for it. I also welcome that the Bill will be applied retrospectively to profits in 2022 and 2023. I ask the Minister of State to take on board my suggestions. The Bill should mirror the conditions and requirements placed on each territory under the EU directive. It is important the issues of ring-fencing and reporting also be included in the legislation. If the TSC is introduced, we do not want to see an undermining of public faith by companies not paying as much as they should because of the very many loopholes in terms of losses and capital costs that allow them to offset business decisions made long before they knew the war was coming. This is an important point from the perspective of public confidence and I ask that the Government review the offsets being afforded the companies to ensure there is no way of getting out of paying the TSC.

See this speech in context