Ciarán Ahern (Dublin South West, Labour)

I thank Sinn Féin for bringing forward this motion. I admit I am uncomfortable with the element of it concerning the carbon tax from a climate perspective. The Labour Party believes that it is an important tax and that the polluter-pays principle is an important one in terms of our response to the climate crisis. I completely accept that there are people in homes who may have no other option right now than to remain on oil and gas heating but carve-outs in the carbon tax system that would protect the most financially vulnerable are possible. We in the Labour Party have proposed a refundable carbon tax credit to encourage those who can reduce their emissions while protecting those in low-income households and still ensure big polluters pay their fair share. Notwithstanding that, we will be supporting this otherwise excellent motion and again I thank Sinn Féin for bringing it before the House.

For the past number of years under Fianna Fáil and Fine Gael Governments, we have been in what feels like a permanent cost-of-living crisis. People are being squeezed from every angle, be it grocery inflation, the cost of renting and buying a home, and childcare costs, something this Government has been conspicuously silent on since its pre-election commitment to reduce fees to €200 a month. We know student fees will be going up by at least €500 this year. Compounding it all we have the matter at hand, namely, energy bills. Barnardos recently reported that 40% of parents have been forced into borrowing money to help to pay for essentials for their children, while lone parents are disproportionately more likely to cut back on those essentials. We are literally seeing parents going hungry so that their children are fed. Others are going without heating in their homes or are taking on debt just to keep the lights on.

When we hear from the Government that budget 2026 will not be a cost-of-living budget, I am struck by the cynicism of Fianna Fáil and Fine Gael. For a couple of years in the lead-up to last year's general election, we had "The Late Late Show"-style one-for-everyone-in-the-audience giveaway budgets to buy votes. Now that they have got themselves back into government, they have decided it is time to tighten the purse strings. It is utterly cynical. This year, we need a cost-of-living budget that targets and supports the most vulnerable households, takes real and meaningful measures to help parents who are struggling, and lifts low-income households and children out of poverty. Indeed, the Labour Party will be bringing forward a motion on these very issues tomorrow.

I find it particularly galling that we are hearing from the Government that we cannot afford a cost-of-living budget but we can afford to hand more than €630 million in VAT cuts to the hospitality sector this year. This sector is currently experiencing record levels of employment - for every closure, 11 new businesses open - and is no stranger to price-gouging, particularly in accommodation. It already enjoys a reduced VAT rate. Some €630 million is a huge sum of money and how it is deployed is a political choice. Giving it over to VAT cuts for the hospitality sector leaves less space for supports for working and vulnerable people. If it is a choice between supporting people through this cost-of-living crisis or supporting the bottom line of McDonald's or the Merrion Hotel, I know where the Labour Party stands.

We need to see targeted energy credits in the coming budget. As the motion notes, there are 300,000 people in arrears on their electricity bills and 185,000 people in arrears on gas bills. Those are the people we need to be supporting with meaningful and targeted measures. We are approaching three years since the first universal energy credits were paid out. Surely that has been enough time for the Government to have devised a way to target those credits more effectively.

We need to talk about the energy companies as well. They are running rings around us. Flogas has hiked its prices by 7% after its parent company, DCC, recorded operating profits of €820 million in its most recent accounts. Energia is increasing electricity prices by more than 12% after making a very healthy €154 million in profits last year. SSE Airtricity has announced a 9.5% increase in electricity rates, its second hike this year after a 10.5% increase in electricity in April alongside an 8.4% increase in gas prices. Its most recent accounts show a €111 million operating profit. Bord Gáis Energy and Pinergy are also hiking their prices as they trade profitably. There is a word for this and it is "profiteering". It is blatant greed. Ordinary families, many of whom are already struggling, are paying for this. How are they supposed to cope? As imperfect as they were, the energy credits were a lifeline for so many people and people have become reliant on them. The Government is now going cold turkey on them. The result is that some people will simply go cold.

The bigger picture here is that these energy companies need to be reined in. This gross profiteering in the midst of a cost-of-living crisis needs to be stamped out. This oligarchical-like behaviour needs to be stamped out. The energy market is supposed to be competitive but the companies are carrying on more like cartels. The Minister of State needs to start looking seriously at ways we could reintroduce some level of regulation on energy prices beyond network tariffs. I know it is not easy. The markets are governed by a hodgepodge of different EU-level rules but there are carve-outs that allow for price regulation in order to protect customers and we should be looking to exploit these. As the Minister of State will be aware, under EU energy market rules our electricity and gas markets have been fully liberalised. The CRU judged competition to be effective in the electricity market in 2011 and in the gas market in 2014. The ESB, via Electric Ireland, still holds a large market share by virtue of its once monopolised position but competition had developed at the time to the point that the CRU judged that it was effective enough to protect consumers and keep prices down.

Once that happened EU rules meant that they could no longer justify blanket price regulation and so regulations were lifted. If we look to the North, Power NI is a former monopoly provider similar to how the ESB once was here in the South. Because Power NI still holds a very large share of the domestic market, its tariffs are regulated by the Utility Regulator to ensure that customers are protected and that prices remain fair. This was the case even prior to Brexit when EU competition law applied in the North because the European Commission accepted the case that there were less competitive dynamics in the North and regulation of Power NI's tariffs was continued as a public service measure. I think we are approaching a point where those competitive dynamics that enabled the liberalisation of our energy markets back in the 2010s have failed. Competition has not delivered better and fairer prices for consumers. Instead, it seems that energy companies have given up on the idea of competing with each other and a price hike by one gives an excuse for a price hike by the rest. Are vulnerable customers protected by this approach? Is this a sign of a functioning market? Under EU electricity and gas directives, price regulation is allowed in exceptional circumstances such as when competition is not working, or in order to protect those vulnerable customers. I believe that we are very much approaching the point, if we are not already there, where we can justifiably claim that competition in the Irish energy markets has failed and that the Minister should be looking to exploit those exceptional circumstances provisions in EU rules in order to rein in the energy companies. At the very least he should be making the case to the European Commission.

Another avenue that I think might be worth exploring, one closer to home, is the powers conferred on the Minister under section 10 of the Electricity Regulation Act 1999, which allows a Minister to issue policy directions to the regulator, the CRU, provided the Minister does not instruct on any individual case. The Minister, Deputy O'Brien, may be aware that this was utilised by one of his predecessors to introduce what became known as the large energy user rebalancing subvention. It was intended to achieve a permanent rebalancing of network tariffs by shifting part of the transmission and distribution network costs away from large industrial users and onto domestic customers. It reduced costs for around 1,500 corporate energy users and was ended in 2022. Perhaps the Minister could consider using some similar mechanism, but in the inverse, to reduce costs for households by increasing the network costs burden on the large energy users. There is a case to be made, particularly in the context of data centres and the effect they are having on our energy costs. It is beyond baffling that, as the motion puts it, the draft price review, PR6, proposes to increase costs on households while giving a discount to data centres. These are the same data centres that are putting our energy system under enormous pressure with a 412% increase in electricity usage in the past decade leading to increased costs for ordinary households. The Government knows this. The Secretary General in the Department of public expenditure has said himself that soaring electricity demand is largely attributable to data centres. This follows the Secretary General in the Minister's own Department of energy saying that we are getting to the point where the Government must choose between the power demands of data centres and building homes. Ordinary working families are paying for this and, quite simply, it is wrong. Do we want to be a country that looks after its citizens, one that ensures they can afford to keep their homes warm and their lights on, or are we more interested in protecting big businesses like tech companies? Of course there is also the climate element and the impact data centres are having on our water usage and our emissions. The massive energy demands from these data centres means they guzzle through fossil fuels and are taking basically all of the relatively small amount of new renewable energy we are currently producing. This renewable energy could be used to decarbonise our homes, reduce our bills or electrify our public transport, but instead it is being gobbled by data centres.

It is notable that the Government has scrapped its own energy poverty action plan in favour of advancing an energy affordability action plan. This seems to be a ruse to shift the focus away from energy poverty among struggling households and towards businesses impacted by high energy costs. This is all about political choices and priorities. It is a political choice to give a massive tax cut to the hospitality sector while denying vulnerable households desperately needed supports. It is a political choice to allow energy companies to run riot rather than even make an attempt at reining them in. It is a political choice to put the needs of tech companies and data centres over the needs of ordinary households. It seems to me that this Government is making all the wrong choices. We will see whose side they are on come budget day.

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