Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

This Bill is better than nothing but it is too little and too late to address the cost-of-living misery and the energy poverty that has been inflicted on huge swathes of our population since the cost-of-living crisis took off. I believe it was People Before Profit that put the first cost-of-living motion to the Dáil at the outset of the crisis in October 2021, which looked for measures to be taken to control the price of energy. The Government resisted. It was only when the European Union finally acknowledged that profiteering was going on that the Government began to soften up to the idea that some sort of windfall tax might be acceptable. Prior to that, up to the point when some of us were screaming for measures to be taken on the profiteering of these energy companies, the Government was finding excuses around the need not to interfere with the market. It was the usual mantra about not interfering with the market.

We need to understand what that has meant in human terms over the last couple of years. The Economic and Social Research Institute, not a left wing think tank, did a report on energy poverty, published in the middle of last year, which suggested that 29% of people in this country are suffering energy poverty. We need to understand what energy poverty means. It means that people do not turn on the heating or the hot water, to the extent that it is detrimental to their health. Older people, vulnerable people, and less well-off people are shivering in the cold but terrified to turn on the electricity, to turn on the heating, or to use the water because they might not be able to pay the bills. That is what all of this is about. It happened at the same time the energy companies internationally and domestically here in Ireland were enjoying a profit bonanza. It was an absolutely unprecedented extraordinary profit bonanza.

When the figures for 2021 came out and showed the ESB had recorded profits in that year of €679 million, our jaws all dropped. That was a major increase over what had been seen previously. When 2022 came along, these already staggering profits jumped to €847 million, all while tens of thousands of people, or nearly 30% of the population, were suffering energy poverty. Even those not suffering from energy poverty are crippled with extraordinarily high bills. It gets worse in 2023. In the first six months of the year, the ESB recorded a profit of €676 million. In other words, in the first six months of this year the ESB recorded a profit pretty much equivalent to what it enjoyed in the entire year in 2021, which already represented an extraordinary increase on previous profits. Therefore, we are talking about an absolutely enormous profit bonanza. I have referred only to the ESB, the State-owned company, but other private companies are seeing similar increases.

Internationally, utterly sickening profits are being made by BP, for example, which made nearly €7 billion in profit in the second quarter of 2022. This was the second highest quarterly profit in its history. BP, Shell and Total all made billions. Between April 2022 and June 2022, Shell recorded a profit of nearly €10 billion. You could not make this stuff up. The shareholders in these companies are enjoying a bonanza of dividends and getting richer as people shiver with the cold and are terrified to turn on the heating and hot water. It is important to say – this is relevant to the detail of the Bill – that this was profiteering on top of profiteering that could have occurred only because of the EU demand for so-called liberalisation of the energy market from the 1990s, which our Government so enthusiastically went along with.

Liberalisation, or competition, according to the mantra used to justify it at the time, was to benefit the consumer and lead to lower prices. This was the ideological claptrap used to justify privatisation or the liberalisation of the energy market. The public was to benefit, but what was the reality? In Europe between 1994, when liberalisation began, and 2014, which was even before the recent cost-of-living crisis and the Ukraine war, average consumer electricity prices in the EU 15 increased by 40%. In Ireland, however, the figure far exceeded this. A 40% increase after liberalisation, which was supposed to benefit the consumer, is shocking enough but in the same period in Ireland the prices increased by – guess what – 267%. A measure that was supposed to reduce prices saw them increase by 267%, long before the war in Ukraine hit. The liberalisation allows those concerned to pile profiteering on top of profiteering because there is no control over them when they decide to benefit from the crisis. It is a classic instance of what Naomi Klein called the "shock doctrine" - never let a good crisis pass you by when you can exploit it to make profit at the expense of ordinary people. That is what the energy companies have done.

The prepay energy sector in this country is dominated by three multimillionaires and one billionaire, the richest of whom has a personal wealth of €8 billion, which must have increased dramatically over the past two years while ordinary people were suffering. The Government, faced with this naked, brazen profiteering resulting from the disastrous ideologically driven decision to liberalise the markets, dragged its heels. It found excuses for doing nothing for the past two years while ordinary people have suffered. Finally, when it was dragged kicking and screaming, it came up with this Bill. What does this Bill do? It picks out a window for the cap on market revenues between December of last year and June of this year. The window basically covers six months of price-hiking that has gone on for more than two years. It is better than nothing to tax the extraordinary super-profits but it is for only six months.

The other element of the Bill is the temporary solidarity contribution. Correct me if I am wrong but although the Bill covers 2022 and 2023, it applies only when profit is 20% above the baseline figure for the four previous years. That is my understanding of it and the Minister can correct me if I am wrong. What does it mean? It means the Government is allowing for 20% super-profits in the period of the cost-of-living crisis. Only when those super-profits are achieved will there be some tax imposed on anything above the 20%. How much of the ESB profit in the period I have mentioned, which was up 30% on the previous year, will actually be captured? Given that the company was already hiking prices for the previous two decades and crippling people with higher and higher energy prices every year, and then took advantage of the war in Ukraine and the cost-of-living crisis to jack up prices further, why would we not wish to capture every single cent of surplus or excess profit to alleviate the cost-of-living misery being suffered by ordinary people? I do not see why we should allow the energy companies 20% above the baseline of the previous four years before the temporary solidarity contribution kicks in. We will have to trawl over the detail of this when we get to the next Stage, but it seems as if the Government has done the least possible to capture these super, staggering, obscene windfall profits, which have been generated at the cost of the many people affected by considerable misery, hardship, suffering, worry and so on.

We should not be imposing windfall taxes on energy companies alone. Surely we should be doing the same to the banks, given the profit bonanza they have enjoyed as a result of the interest rate hikes, which are crippling tens of thousands of mortgage holders while the bank shareholders are making a fortune. The latter have hit the jackpot at the expense of mortgage holders. Therefore, one person's cost-of-living misery, whereby he or she may not be able make the mortgage repayments for his or her home, is another person's bank share dividend bonanza. The poor are literally getting poorer while some are getting richer.

Looking at these two aspects of the cost-of-living crisis – there is a lot more we could talk about – and at its evolution by way of the so-called liberalisation of energy markets, the inescapable conclusion one has to draw is that we have to take energy back under full public control and reinstate the break-even principle by which the ESB operated until its liberalisation in 2001, although liberalisation began earlier to some degree. It should operate on a not-for-profit basis, its main motivation being to deliver affordable energy for people in the interest of our society and fairness and not in the interest of making profit and the so-called market.

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