Bríd Smith (Dublin South Central, People Before Profit Alliance) | Oireachtas source

I will listen to the Minister of State's answer afterwards. Have we given up on that? I am sure the Minister of State has an answer to that question.

Second, the Act covers the activities in the fossil fuel sector "such as production or refining of natural gas, coal, petroleum or manufacture of coke oven products, carried on in the State". Again, I have a question. Does this sufficiently cover or capture all the companies who reaped windfall profits during the crisis and continue to do so? My main alarm and concern remains the same. The tax will be on profits above 120% of average profits in the years before the Bill. The tax will be 75% of those profits. Why? Why are they allowed to retain 120%, and why, even then, is the rate set at only 75% of those profits? Why is that happening?

More worrying is the scope in this Bill for opt-out clauses and loopholes. Let us be honest, we can guess that a small army of consultants and tax advisers are, as we speak, working away at methods to avoid paying this tax. I think the estimates provided by the civil servants may be very optimistic, considering the scope the Bill gives an inventive accountant or sets of inventive accountants. First, any losses for the previous five years can be discounted. Second, the memo capital expenditure on the acquisition or construction of allowable tangible assets will be deductible in full. I suspect this will drive a horse and carriage through any amount that may be payable by these companies. Last, in the heads of the Bill there was a discussion that all moneys accumulated should be spent, in defined ways, on renewable energy or to reduce customers' bills.

That is not here, and from what I can see, and I ask the Minister of State to speak to this, all revenues collected seem to be under the control of the Revenue Commissioners.

I want to address some wider political issues. By definition, a windfall tax is a once-off and temporary measure. It cannot address the systemic problems that have led to this expensive profiteering. Since the crisis, like every Deputy here, I have been inundated with people who are scared, terrified of their gas and electricity bills and who must make the choices between eating or heating.

The story we are all told is that it is because of Putin and that brutal invasion of Ukraine. The reality is different, however. I disagree with the previous Government speaker. Yes, the illegal war did spark the crisis, but the flames caught because of the very way the European Union has built and developed a liberalised market. In Ireland, Fianna Fáil and Fine Gael changed the remit of the ESB and facilitated competition in the energy provision. Therefore, even before this crisis, we could see that the promises of liberalisation and privatisation were pipe dreams. That crisis revealed all of that for us to see.

Last May, the Irish Independentreported that Irish prices were 26% higher than the EU average in energy. According to the report from Mr. Charlie Weston, "Electricity prices in Ireland are 26pc above the EU average, and are the fourth most expensive in the bloc. Only Germany, Denmark and Belgium are more expensive." Figures from EUROSTAT show us that, in April, the electricity prices in Ireland were a staggering 48% above the EU average, only behind Denmark and Belgium. That is from the EUROSTAT records. This is far from the rhetoric that Thatcher and Reagan made us all dream of, correcting all the wrongs and delivering value for everyone. This neoliberal revolution was meant to herald an era of dynamic energy companies, reduced prices, investment in the State and investment in the state of our technology. As with all neoliberal promises, however, what we got was very different. We got a plethora of competing firms, price rises, large profits for some and an attack on the traditional unionised workforces in companies right across this country and beyond.

Recent studies have also shown us that the creation of a market in the energy sector has also made it much more difficult. We have evidence of that again today with the announcement that a case is to be taken against the Irish State by the Lansdowne Oil and Gas company for the failure to allow the development at Barryroe. That is a very good example of why liberalisation has made it much more difficult for us, as a State, to take the measures we need to deal with the climate crisis, and how investment in renewables has been less than it would have been with a nationalised, State-owned and controlled energy company.

I want to plug something, and I will give the Minister of State a preview of it if he wants. I am holding a document People Before Profit just produced called People's Power: The case for nationalising the energy system. It has been put together very well and coherently and basically argues for returning the not-for-profit mandate to the ESB to allow that company to flourish and become a nationalised energy company in the renewable sector. After all, the Ukraine crisis has shown us that, ultimately, when we are faced with a crisis, private companies will do what comes naturally. They will use that crisis to advance their own bottom line to amass profits. We have heard it said many times that you never waste a good crisis. We have seen widespread profiteering in energy as well as in other sectors, such as food, retail, etc. Do not take my word for it, however, or the word of anybody in the Opposition. The International Monetary Fund, IMF, on Monday told us that, "Rising corporate profits account for ... half the increase in Europe’s inflation over the past two years as companies increased prices by more than spiking costs of imported energy." This is an opportunity for profits to be gouged and made to rise, and our answer to it is pretty poor. The IMF is no left-wing think tank. It is simply confirming the reality of how markets in general work and how the energy market itself works.

Bizarrely, the profiteering of renewable companies was built into how this Byzantine market was created, with the guarantee that they could charge whatever was the highest fuel cost on any given day regardless of what they actually paid themselves or what it cost them to produce the energy. The necessity for a windfall tax is clear. It is due in large part to the very way the European Union and Irish Governments have created a market and liberalised the energy sector.

The other thing that liberalisation did, of course, was to increase the numbers who suffer from energy poverty. This has been a feature of the globally driven market within the energy systems. It has reached gigantic proportions now with this crisis. According to the Commission for Regulation of Utilities, CRU, and the Minister of State will know this, more than 400,000 households - almost 500,000 - are in energy bills arrears in this State. The once-off help with electricity bills has not ended or addressed that crisis in energy poverty in Irish households. Continuing with a market-based approach to energy provision guarantees it will remain a feature even after this crisis passes and even, despite the Government's claims, after the war in Ukraine ends.

This Bill we are dealing with today effectively is an admission of failure. It is failure of the political ideology that allowed the profiteering of the energy sector in the first place, the failure of the State and regulators to stop it, and the failure to tackle aggressively the philosophy that made this possible. We have not seen the last of price gouging and profiteering from the energy sector. The Bill, in that sense, is little more than a plaster for a gaping wound. I do not think it is fit for purpose and it needs a huge amount of amending.

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