Thursday, 31 March 2022
Ceisteanna ó Cheannairí - Leaders' Questions
Tá oibrithe agus teaghlaigh go fóill ag dul i ngleic le boilsciú ollmhór praghsanna agus is gá le freagra práinneach ón Rialtas ar an ngéarchéim sa chostas maireachtála. Níl seo níos soiléire ná nuair atáimid ag déileáil le costas fuinnimh. An tseachtain seo caite, d’fhógair Energia ardú praghsanna ar a gcustaiméirí agus inné d’fhógair Electric Ireland, an soláthraí leictreachais is mó sa Stát, go mbeidh siad ag ardú an praghas leictreachais 25% agus an praghas gáis 23%, rud a chuirfidh €518 le billí bliantúla teaghlaigh.
Workers and families continue to contend with massive price inflation and they face an unprecedented cost-of-living crisis that demands an urgent response from the Government. Nowhere is this more evident than in energy costs. Last week, Energia announced a price increase for its customers. That was the fourth price hike announced by Energia in the past year. It came just a week after Bord Gáis Energy announced a massive price increase that will add €775 to yearly household energy bills. Yesterday, Electric Ireland, the largest electricity provider in the State, announced it would be increasing its electricity prices by 23% and gas prices by 25%. That will add €518 to yearly bills of householders who are struggling already. This comes after 35 energy price increases announced last year. However, the only announcements we hear on energy prices are from the providers who are repeatedly hiking up their prices. We hear nothing from the Minister with responsibility for energy. We have heard no measures from him that would reduce the bills of workers and families. Without action, low and middle-income households will bear the brunt of price hikes that they simply cannot afford.
We all recognise the external factors driving up the wholesale cost of energy and that not all price hikes can be eliminated. However, the Minister can and must do much more. Sinn Féin has already outlined to the Minister what could be done. For five months, we have been calling on the Government to engage with the European Commission to reduce VAT on household energy bills for a period. In response to a parliamentary question, the Minister for Finance has informed me that he only wrote to the Commission on this matter two weeks ago. That is completely unacceptable and the households that are bearing the brunt of this believe that is unacceptable. We need a government that is active and will press the Commission to allow for VAT applied to domestic energy bills to be reduced to zero.
Has the Government now formally sought a derogation for VAT on energy bills from the Commission? Is it the Government’s intention to reduce VAT to zero for a period on domestic energy bills, as we have called on the Government to do for the past five months? When does the Minister expect this process to be concluded?
The Minister knows well that the Government could reduce the cost of home heating oil tonight if it wanted to. Over one third of households use home heating oil to warm their homes. In the north west, the west and Border areas, two thirds of households use home heating oil as the primary source of heating. The Minister could reduce the cost tonight. He could reduce excise duty on home heating oil, which would reduce the cost of a tank fill by about €100. The cost of a fill has increased to €1,600 this month. Many families are simply at breaking point.
I must also ask has the Minister engaged with the ESB? Electric Ireland is a subsidiary of the ESB. The ESB made profits of almost €700 million and paid dividends to the State. Has the Minister engaged with the ESB as an energy provider and generator to ensure those profits are not recorded next year and savings are passed on to consumers?
The war in Ukraine is central to this crisis, obviously, but it started before that. There is a similar cause. From early last year, the Russian Government started to turn off the gas supply to Europe. Europe is at historically low levels in gas storage because of that decision. We saw those high gas prices last year and responded in the budget with increases in social welfare and other provisions to protect people because, like Sinn Féin, we can see this as an existential crisis for the people in our country.
We did not stop there. The Deputy has asked what measures have been put in place. I must list them. Similar to other European countries, and in a similar timely manner, we have introduced a €200 credit to people's bills. It will come in next week. It will not cover the cost increase and will only help cushion the blow, but it was important we had it in place and next week it will be seen in people's bills. We have also reduced excise rates. We have introduced a new 80% grant for people to insulate their homes, which is the best way of responding to the crisis. It is to reduce the costs, reduce the use of fuel and reduce the influence of the Russian Government in our economic affairs by its control of oil and gas supplies and the prices. We have reduced public transport prices for those under 24 by 50% and the general fares for everyone else by 20%. And we will have to do a lot more. We further increased the social welfare provisions because we will have to be targeted in what we do for those households most at risk of fuel poverty.
The Deputy asked whether I talked to the Commission. I have spent the last week travelling, unfortunately, more than anything else. I was in Paris last week at the International Energy Agency meeting, where I had long discussions with the Commissioner for Energy, Kadri Simson. I was in Berlin over the past three days where I spoke to German and other colleagues on exactly how we would manage this crisis, because we have to do it collectively. As Professor John FitzGerald said yesterday, the developments in the coming weeks are uncertain. Last week, Russia threatened to turn off the gas and oil to Europe, which would have led to a further spike in prices that are already beyond any historic comparison. It is five, six or sevenfold of prices a year and a half ago. Professor FitzGerald is correct that we must be careful in monitoring and managing that and introduce measures in a timely manner.
What the Minister for Finance, Deputy Donohoe, is doing is very important. During this process, I have found that when I have gone to him or to the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and have said we have a problem, he has responded as I have seen him work during the Covid pandemic and other issues by asking what we can do, being flexible and being willing to think outside the box. He also has the issue that we have to pay for everything in this country: the social welfare, housing and education and not only for the Irish people but also the people to whom we are giving refuge and sanctuary from the bombs dropping in Mariupol, Kyiv and other cities in Ukraine. We have to have the resources to be able to make sure they get the basic welcome and services they need as well as our own people. If we were to promise that we would cut every tax or cover every bill, it would be a false promise because then we would have to tell them the services we would have to cut because we had cut all the tax revenues.
Of course, I have also been speaking to the ESB right through this crisis. I met its representatives in Berlin at the same conference. It plays a vital role because another thing we must do during this time of real challenge is to make sure we are part of a transition away from the fundamental weakness we have, which is our excessive reliance on fossil fuels. The ESB is the public company, owned by us and working for us, which will help us in that transition.
The Minister answered not one of the questions I put to him. He is the Minister with responsibility for energy, yet the only thing we hear is successive energy providers telling customers they are hiking up the prices and there has been nothing from him. There has been deafening silence from the Minister. Bord Gáis Energy is putting €775 on the bill of a household and Electric Ireland some €518. What is the Minister with responsibility for energy saying? Nothing.
I will put the questions again. Has the Government formally sought the derogation to reduce VAT on energy bills? Does the Minister support the reduction of VAT on energy bills down to zero? When will this process be concluded? The ESB has made profits of close to €700 million and paid dividends of more than €100 million to the State.
Its subsidiary, Electric Ireland is the biggest provider of energy in this State and has just told its customers it is ramping up prices with respect to both the unit cost and standing charge. Has the Minister talked to the ESB about ensuring these are reduced as far as possible to support customers? Will the Minister, who has responsibility for energy, please say something that is relevant to the price increases happening to every single household throughout this State?
It would be very easy for me to come in here and say we are going to cut VAT. The reason I mentioned the Minister, Deputy Donohoe, is he would rightly come back and ask how we are going to fund everything we need to do. That is the reality we face in Government that cannot be ignored. We have mounting things we have to pay for.
-----to see what we can change to help reduce our weakness, and they come back and say we will look at the market and all of the structures and not rule anything in or out. The fundamental thing everyone is agreed on, however, and the thing we need to accelerate is the reduction in the use of the fuels-----
I ask the Minister what he is going to do as the Minister with responsibility for energy. I refer to those actions he actually could take this week if he had the political will to do so. Electric Ireland has, as we know, joined Bord Gais and Energia in hiking its prices. Its 1.3 million customers will now pay 23% more for electricity and 25% more for gas. The standing charge is also going up by a whopping 36%, so even if people reduce their energy use as the Minister suggests, the companies will still manage to fleece people. While families are struggling heat their homes, the ESB is not exactly struggling to break even. It made bumper profits of €680 million last year. Other energy companies are similarly cash rich. If they were compelled to put customers on their most beneficial tariff instead of instantly jacking up prices at the end of an introductory 12-month contract, their profit margins would decline slightly but it would make a huge difference to their vulnerable customers.
The Government is not some kind of innocent bystander in all of this. It cannot just wring its hands as the Minister is doing and watch dispassionately from the sidelines as workers and families are squeezed for every penny they are worth. There are things the Government can do in the form of targeted measures that would make a real difference to those most in need. Age Action Ireland has highlighted that just a third of older people get the fuel allowance and the payment is not keeping pace with soaring energy price rises. It wants the Government to replace the fuel allowance with an energy guarantee that would mean a guaranteed number of free units of energy per month instead of a cash payment. This would mean more people qualify for assistance and would insulate them from sudden price shocks. This is the only way to insulate people from price shocks.
If they were forced to wait for the Minister's retrofitting scheme, they would never be warm. Nearly 7,000 low-income households are now on waiting lists for more than two years to get work done on their homes. They are the lucky ones because they actually qualify for the Minister's schemes. If you are not in receipt of a social welfare payment but are on a low or middle income it is tough luck and you have no choice but to take out a loan that in all likelihood you cannot afford. Workers and families cannot use Green Party hot air to warm their homes. They need the Minister to deliver for them and meet his targets instead of constantly missing them.
I have a few questions. Will the Minister compel energy companies to place customers on their most beneficial tariff? Will he replace the fuel allowance with an energy guarantee? Will he do more than just talk about retrofitting, for the many people who are excluded?
We are going to have to do a whole variety of additional measures. What we have done so far is not going to be enough. We are going to need to do more. On the ESB, people must remember it is a public company. In the past year it was able to hold back on some of the increases it had in its cost of gas because it hedged much of it into the future. Those hedging positions are coming to an end, which is why some of those prices are coming through now as well as the historic further increases that have happened recently.
How do we do it? I also met last week with the Commission for the Regulation of Utilities, CRU. I asked it to come up with further ways we can help protect our people, something it was doing anyway, because we all agree this is an existential crisis. I would not rule anything out and welcome ideas, suggestions or proposals that would particularly help those most vulnerable. We have taken measures that are universal like the €200 credit going in next week. It was correct to do that because sometimes it is very hard to target who exactly is in the greatest difficulty. Further measures should be looking at market mechanisms and further efficiency measures and not just at Government always signing every cheque. It is about looking for ways we can change the market. A way I have mentioned before in the House, because it could be really effective, is to give time-of-day pricing and mandating it so that people have to opt out from it. This would be a way for people to be able to save further through the pricing mechanism. It is just one example. We will come forward in the coming weeks with a number of other measures such as that to try to help address this real crisis we have. The real challenge is we do not know how long it is going to last for. We do not know how long this war is going to last for. We must think in a timely way as to how we do this so it works over a period of time that is potentially protracted.
Lastly, on what real things we are doing, the Deputy mentioned the waiting list for the warmer homes scheme. I stand up and absolutely believe investment in retrofitting and making homes efficient is the best approach because it is targeted at those on lower incomes. On the 7,000 houses that built up as a backlog during Covid when we could not go into people's houses, in the major retrofitting scheme we announced three or four weeks ago as part of our response, we said clearing those and getting them done first is important. That is not insignificant for those 7,000 houses and more will follow afterwards as we scale this up and ramp it up. That is the best way of protecting people. There are some market mechanisms we look at like, as the Deputy mentioned, looking at tariffs or how at the fuel allowance works. With those sorts of measures, to my mind, we work with the Department of Finance in a budgetary process to get it exactly right. There will be a range of other measures we are looking at and that we expect to finalise within the coming weeks as part of our overall response.
There is an emergency situation. The Minister and Government need to do much more than just looking at things. Families cannot wait until the budget in October. The Minister asked for ideas. The Society of St. Vincent de Paul, Age Action, the Money Advice & Budgeting Service, MABS, and other agencies like that have many ideas about things the Government could do now to relieve pressure on people on low and middle incomes. Will the Minister give a commitment to meet those agencies within the next week and hear from them, because they are at the coalface, what steps he could take now to relieve the pressure on so many families who are currently struggling.
On the cost-of-living measures, the vast bulk of them were not targeted, contrary to advice. Equally, the vast bulk of the funding the Government is providing for retrofitting is not targeted. It is available to people who can afford €26,000 upfront to get their homes retrofitted. It does not help people on low incomes who cannot afford upfront funding like that. It does not help those 7,000 people on the waiting list who will be waiting for umpteen months, if not years.
Will the Minister meet those groups? Will he give a commitment to do that within the next week?
In terms of targeting, the measures in last October's budget were deliberately designed to target those at risk. Not only did we increase the fuel allowance, we also increased the qualified child allowance, the living alone allowance and the working family payment.
It is that blend of different social welfare provisions that are needed.
Lastly, in terms of the best way to manage this, we had a national dialogue on climate change last week, focused on the immediate energy crisis as well as on how we transition, with the trade unions, the social partners and the NGOs. This Government is working on a partnership basis and has to do so. To my mind, social partnership has to underpin everything, and that includes listening to the likes of the St. Vincent de Paul and others and working with them on solutions. This is not easy. No country has it easy right now but we will continue to work on measures to protect our people at this critical time.
People Before Profit is asking the Government to declare an emergency in the cost of living. The Government declared an emergency in relation to Covid-19 and brought in emergency measures. It has effectively declared an emergency in relation to Ukraine and brought in emergency measures. It is long past time that it accepts there is an emergency in the cost of living and introduces immediately - not in October - a package of measures to alleviate the cost-of-living crisis that will potentially drive tens of thousands of people in this country into poverty.
There are so many aspects to the cost-of-living crisis that I do not have time to go through them all, but let us look at two that are most basic. To live, people need to be able to heat their homes and they need to be able to afford a roof over their heads. On the first count, yesterday, hundreds of thousands of people were dealt yet another hammer blow with the decision of the ESB, a State-owned company, to increase electricity and gas prices by 24% and 25%, respectively. This is a huge increase, averaging an additional €400 to €500 for its customers over the next year. This follows fast on the heels of Bord Gáis price increases of approximately €690 to €700 per year, just this year. Prior to that, Energia announced a €426 increase this year, on top of average increases in energy costs last year of 27%.
We must remember these increases have not hit yet. People are already reeling from the increases last year but these additional increases have yet to hit. They are going to hit in April and May. How the hell are 470,000 people who are in danger of energy poverty, according to official Government figures, going to cope? The answer is they simply cannot. These increases are by energy companies who have all seen record increases in their profits. In the case of the ESB, profits were up to €679 million and this is the third year they have increased.
Let us look at the housing crisis, the other basic one. We are now back up to almost 10,000 families in homeless accommodation, including more than 2,000 children, because rents have gone through the roof. The Government refuses to control rents, so while the real estate investment trusts, REITs, vulture funds and landlords are seeing record increases in profits, thousands of people are being forced into homeless accommodation. The latest Parliamentary Budget Office, PBO, figures indicate that 138,000 people are in social housing need and it is getting worse.
Will the Government declare an emergency in the cost of living and introduce an emergency package of measures to deal with the cost of living? Crucially, will the Government finally use powers to control the cost of energy and bring in rent controls to make rents affordable?
What has happened with energy prices is fundamental to the cost-of-living increases. There is a real connection. It is not just about energy; there is also the potential increase in the cost of food. There are other reasons, including supply chain issues coming out of Covid, but the war in Ukraine and what Russia is doing is central to the cost-of-living issue.
I make that point because I believe that, in addressing the cost-of-living issue and the housing crisis, we need to use this moment of real emergency to effect change in both to help address both. When we are addressing the housing crisis, we now also have to house some 700 people coming into the country per day. We have to give sanctuary to them, quite correctly, like every other country in the EU. Can we do that in ways that really double down and accelerate what we need to do for our own people anyway? I refer to tackling vacant sites, opening up new rental streams and building really quickly. Can we use this emergency to provide solutions that are not just good for the Ukrainian families we have to help and protect but also for Irish families? I believe that we can do so. In a moment of emergency like this, we have to act fast and we have to be bold. The solutions for the Ukrainian refugee issue will help us domestically as well and that is what we should aim to do.
Similarly, when it comes to the cost of living, reducing our dependence on fossil fuels and going all out in terms of what we already know we need to do for the climate transition, including retrofitting, reforming the market, incentivising people to make the switch, pushing sustainable mobility and pushing a different type of agriculture that means we are not spending so much on fertilisers, all make sense.
In that way, we can stop giving money to Mr. Putin's government and start keeping it here at home. We can also achieve two objectives, to address the cost of living and the war challenges, and that is what this Government is going to do.
First, energy costs went up 27% last year, before the Ukraine crisis. The Minister cannot hide behind the Ukraine crisis and use it as an excuse. He absolutely failed to address the fact that while ordinary householders, many of them pensioners and people on low incomes - ordinary working people - are crippled by these hikes in prices, all of the energy companies are seeing record profits. Similarly, rents are up by 10% in Dublin and by 20% in other parts of the country while all of the REITS, vulture funds and landlords are seeing increases in their profits but the Government will not control their profits. It is okay to land the costs on those who can least afford them, on working people, pensioners and those on low incomes, but the Government will not touch the profits of those who are making money out of this crisis. That is the elephant in the room.
The Minister cannot hide behind Ukraine. Of course we want solidarity with the Ukrainian people, but simultaneously we need to solve the housing crisis and control the cost of living. Why will the Government not take the empty houses from the vulture funds, REITs and speculators who are sitting on them?
I am trying to answer the question. One of the main reasons is that Mr. Putin started reducing the flow of gas into Europe and started raising Gazprom stocks in Russia. At this moment in time, gas stocks in Europe are at about 25% capacity-----
-----while Russian gas stocks are at full capacity. That lack of gas supply pushed up the price of gas which also pushed up the price of electricity. That is a fact. That is the reality and is something we should be honest about and aware of.
The market said so because we buy so much gas. We made a mistake in Europe by putting ourselves in a position that made us vulnerable to that threat. It has taken a war for us to wake up and be wise to that, and now we have to reduce our risk by reducing the use of those fuels. That is our key response and that is what we have to focus on.
Today we are focusing on the cost-of-living crisis and rightly so. We have seen massive and outrageous hikes in energy bills that are hitting households very hard but which are compounded by pre-existing high costs arising out of the housing crisis, where we see people having to spend a huge proportion of their income on rental and mortgage costs but also on childcare costs, which are referred to by many as a second mortgage.
There are so many households with children struggling to pay for childcare. Today, I want to focus on childcare. When we describe childcare as a cost, and when parents see it as a cost, that is missing the point. This should be an investment in our future, in our society and in our children. Without the levels of public investment in childcare that we so sorely need inequality in Ireland is starting the day a child is born, which is not how it should be in a true republic. Children deserve an equal start.
The Labour Party, in particular through Labour Women, has been pushing for an equal early years campaign to ensure that children in Ireland will get an equal start and that parents will be freed from the heavy burden of paying privately for childcare, which remains so expensive and is such a huge cost for so many households. We know that in Ireland public funding for childcare remains a fraction of what is invested in other European countries. We know that UNICEF has recommended that 1% of GDP be invested in early years education and care. Although funding has increased and that is welcome, we still fall far short of that target by approximately 0.7%. For this reason, I have been calling for a Donogh O'Malley moment in early years education and care. Just as 50 years ago he, as Minister, introduced the concept of free secondary school places for every child as a right, thereby building prosperity for our country and building the investment in our children, so too should we now be seeking to implement and introduce a free childcare place, a guaranteed early years education and care place, for every child to give every child in Ireland an equal start.
Parents need to see a solution to the crisis of childcare they are facing and the State needs to do much more to address that. Most of all, children deserve that equal start. The Minister will have heard, as I do every day in our constituency of Dublin Bay South, that such is the challenge in even securing places in childcare facilities, let alone affordable places, parents are being asked to pay in advance for days they may not even avail of and they are booking childcare places long before children are born. Many who do manage to secure a place find their childcare bill exceeds what they are paying in mortgage or rent. The core funding model that is being developed - I know that is under way - will change things, but what has been committed to will simply not do enough to address rising costs and the shortage of places.
The system is failing providers and educators in childcare settings. We know from SIPTU's Big Start campaign that early years educators are demoralised, underpaid and, indeed, undervalued. Many are not paid a living wage. Does the Minister agree that we need a public childcare model in Ireland? Will the Government guarantee an early years place for every child and fair pay and conditions for staff?
I wish Deputy Bacik the very best in her new role as leader of the Labour Party, which is a huge honour, privilege and responsibility. We look forward to working with her in that new role and we wish her and the Labour Party well. Our democratic system is critical to everything we do. A leadership position is an honour to hold.
I expressed concern earlier that if we just see the solution to our energy crisis as being a cut to every form of tax revenue, that presents difficulties. One of the areas to which the Government is committed in the run-in to the budget process in terms of the provision of additional resources is the area of childcare. My answer to the Deputy's question about whether we should prioritise that among the variety of different priorities we have is "Yes". I think we are right to do so. It is very difficult now for young people to see how they can raise a family here because of the cost of housing, the pressures in the workplace and all sorts of other pressures. It is a real challenge. We need to make it easier and to support them at that critical time. The strength of the support at that time will bear fruit as those children grow up having had the best possible love and care in their early years. How exactly we do that is the issue. The Minister, Deputy O'Gorman, will have a critical role in that regard. As part of the budgetary process, he will need to have a clear discussion with the Minister for Public Expenditure and Reform on how to get those resources and how best to develop a new childcare system. I am sure Deputy Bacik will acknowledge that the Minister, Deputy O'Gorman, has already done a huge amount for people working in the sector, for example in recognising why caring work is always the least well paid work and what it is in our society that does not see that work as the most important work.
From a personal perspective, I always think we have to be careful if we are going to have a Donogh O'Malley moment. We have to remember the right of parents to make decisions. It is up to each family and parents to decide what is best. There are many parents who, for various reasons, decide that they will raise children in their own homes. We have to be careful not to forget them in the supports that are needed and make sure they are not discriminated against in terms of whatever measures we put in place. My sense of what the Minister, Deputy O'Gorman, is working on is that it is along the lines, and within the scale of ambition, of what Deputy Bacik has spoken about. We want that sort of that moment whereby we make it really easy in this country for people to be able to raise a child in the best way possible and we ensure it fits with the various different family circumstances. That is going to be a budget measure; it will not be introduced within the timelines mentioned in regard to other measures spoken about today. That discussion would be well placed with the Minister at the relevant Oireachtas committees in advance of the budget.
I thank the Minister for his kind words. It is indeed an honour to have been elected as leader of the Labour Party. It is also a big responsibility and a challenge. I look forward to ensuring we grow the support for that strong labour voice and message that is so sorely needed. It is a strong centre-left and red-green voice that seeks to deliver progressive and positive change and a more equal society and, as part of that, to deliver on change for childcare.
I note what the Minister said, but parents need to see a change urgently. We know that care work is very gendered in our society, that 98% of those working as early years professionals are women and that they remain undervalued and underpaid. We need to see urgent change on that. We also need real change to ensure parental choice. Of course it is about parental choice, but currently high fees and lack of places are forcing parents to have no choice and, as such, parents cannot, for example, return to work. We heard this morning about a woman who is struggling to find a childcare place in Dublin. She will not able to return to work because there is not an affordable childcare place available to her. Parents have no choices and children currently do not have equality.
My own view which, I think, is matched in the Government is that the State needs to take a stronger role here, perhaps by way of a State agency in order that we are not just relying on the market. While many of the private operators are doing a really good job in terms of the excellent facilities they provide, this area requires a lot of State engagement, for example by supporting community initiatives in terms of how early years care and childcare facilities are managed and presented. We do this better when we do it on a collective basis. Where there is no choice because childcare is so expensive and it is difficult to access a place, State planning and organisation will be one of the characteristics of the change that comes.