Dáil debates
Tuesday, 24 January 2023
Saincheisteanna Tráthúla - Topical Issue Debate
Business Supports
Mairéad Farrell (Galway West, Sinn Fein)
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I am sharing time with Deputy Conway-Walsh.
Gabhaim buíochas leis an Aire Staít as an gceist seo a thógáil. An fáth go bhfuilimid á hardú inniu ná gur chas mise le gnólacht i gConamara agus dúirt sé liom go bhfuil sé ag úsáid an gháis peitriliam leachtaithe seo. Mar gheall air sin, níl sé in ann an scéim chun cabhrú i dtéarmaí fuinnimh a úsáid, rud a chiallaíonn go bhfuil sé an-deacair dó na doirse a choinneáil ar oscailt, rud a chiallaíonn go bhfuil sé an-deacair dó daoine a choinneáil fostaithe. Is féidir linn breathnú air seo agus oibriú lena chéile chun féachaint cén bhealach gur féidir linn cabhrú leis na gnólachtaí seo. Is léir nach an gnólacht seo amháin atá i gceist ach go bhfuil an deacracht seo ag gnólachtaí timpeall na tíre.
I want to raise this issue. I met with a business in Connemara which uses this liquefied petroleum gas, LPG, and as a result it was unable to access the temporary business energy support scheme, TBESS. It has been struggling badly over the last number of years between Covid and now the huge rise in energy costs. As a result, the business cannot be kept open all the time. It is a hotel. In a small, rural area that has a serious impact on employment in the village. It is having a big knock-on effect. It is important to raise this issue. We can work on it together to see if there is a way to help these businesses in the west that are impacted to try to keep the doors open.
Rose Conway-Walsh (Mayo, Sinn Fein)
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The Government has made a big mistake by not including LPG in the TBESS, which is designed to help viable businesses to survive in the current spike in energy prices. This has excluded many rural businesses unfairly from the support scheme. The Minister of State must appreciate the fear and anger caused in rural Ireland when businesses were informed by Revenue that the TBESS will only apply to those metered in the supply of gas and electricity. As people in Mayo are all too aware, mains natural gas is simply not available in that part of the country. This does not make sense. It was a mistake, an unintended consequence. It means that businesses in rural Ireland that rely on bulk gas purchase of LPG are denied access to the scheme. These businesses, like many others, have seen unsustainable increases in their energy costs. Rural Ireland and Mayo seem to be an afterthought for the Government.
I want to get this right. I hoped it was an oversight that would be addressed but, disappointingly, when I raised it with the previous Minister of State, he said he would not review the scheme until after it had closed at the end of February, when it is too late for businesses to access the support. This is wholly unacceptable and it risks doing irreparable damage to our rural economies. The Government must see reason and allow all businesses to access the support. Businesses in Mayo and across rural Ireland cannot afford to be treated in this unfair manner. This has to be put right. We have all the auditing done by Revenue so the Government can tell how much energy is being used this year, how much it cost, how many units have been used and what was used last year. The differential can be quantified in order for these businesses to be included in the support scheme. There is no reason whatsoever they cannot be included. These businesses are employing people in places like Achill, Ballina, Belmullet and similar areas across the county. They deserve much better than this. I am asking the Minister of State to please reverse this and right the wrong.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I thank both Deputies for raising this important question. Deputy Conway-Walsh will be aware I have a strong interest in Mayo, with significant family connections and family businesses there. I have a good understanding of the pressures faced right across Mayo and other parts of rural Ireland. Indeed, her constituency colleague, Deputy Dillon, also raised this with the Minister, Deputy Michael McGrath, on Question Time earlier.
l will cut to the chase on the reasons for it because that is what the Deputies specifically raised, and we can provide further detail. The difficulty with this is that many of these businesses would have received broad supports through the employment wage subsidy scheme, EWSS, and a range of different supports during Covid. As a result, there is no intention whatsoever to exclude businesses of any particular geographical position or type.
On the issue of oil and LPG being excluded from the scheme, this was because they were not supplied by way of a meter. Revenue and the Department of Finance pointed out at the time the scheme was devised that it would be difficult to accurately determine the actual usage for each claim period, the relevant unit price for each claim period, and the actual increase in that unit price and usage over the same time frame in the reference period.
As her party's spokesperson on public expenditure, Deputy Mairéad Farrell will be particularly concerned about how schemes are structured and making sure they can be captured in a way that Revenue can accurately assess what is being done. As she knows, the scheme opened generally for registration at the end of November and for claims on 5 December. There are €12 million worth of claims of which close to €11 million have been paid out. It is still early days in the taking up of the scheme but that does not address the Deputy's point about businesses using oil and LPG as energy sources.
TBESS is available to all tax-compliant businesses carrying on trade, the profits of which are chargeable to tax under case I or case II of Schedule D. It also applies to sporting bodies and charities that carry out trading activities. There is no intention to exclude businesses or services; it is simply a matter of how that is recorded. The Minister stated earlier that the scheme is due to end at the end of February 2023. There is provision under sections 100 to 102 of the Finance Act to extend it to the end of April and to consider the caps. The Minister indicated that he would look at the operation of TBESS for the first three months, as the Department of Finance and the Government did in respect of other schemes that were designed to provided supports through difficult periods.
I will set out the facts for the House more broadly. To be eligible to make a claim under TBESS a business must demonstrate that the average unit price for electricity or gas, as the case may be, on the relevant bill has increased by 50% or more compared to the average unit price in the reference period. It is tightly analysed and assessed in order to make that comparison. In broad terms, it is the average unit price in the month that is 12 months prior to the month in which the relevant bill arises. That is the energy cost threshold.
I hear what both Deputies are saying with regard to whether we can do something more, or if we can we work on this. I urge them to contribute to the review and provide specific ideas, during the revision or the devising of any new scheme, on the specific problem of measuring the use, the actual cost and the change over time in circumstances where one is dealing with something that is not metered in the course of ordinary business.
Mairéad Farrell (Galway West, Sinn Fein)
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Is í an fhadhb a atá agam i ndáiríre ná má bhíonn ar ghnólachtaí áirithe fanacht roinnt míonna go dtí go mbeidh an chabhair sin acu, ciallaíonn sé sin go mbeidh ar chuid acu a gcuid doirse a dhúnadh. Mar gheall ar sin, dóibh siúd atá i gceantair níos iargúlta, táimid ag admháil faoi sin mar gheall go bhfuil siad ag brath ar ola agus an LPG seo agus nach féidir leo an chabhair a fháil ón Rialtas. Caithfimid breathnú air sin.
I take the Minister of State's point that we need to bring ideas into the review, but I would make the point that a number of months in a small business's life, in a small rural isolated area, can have a serious impact in terms of them having to close their doors. We do need to look at any kind of way we can assist those businesses to remain open, for the viability of small villages across the west.
Rose Conway-Walsh (Mayo, Sinn Fein)
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The crux of matter seems to be the auditing, showing the exact usage and the measurement issue. If we can prove to the Minister of State or Revenue, which I believe we can beyond any doubt whatsoever, the exact usage, the number of units and the exact costs and do absolute comparisons in the same way that is done elsewhere, can this scheme be applied retrospectively to those who have missed out on this scheme in recent months? That is where we need to hone in. I can 100% provide that evidence to the Minister of State or Revenue, or I can get the businesses to supply it. Nobody is looking to avail of something that they are not entitled to or to abuse the system in any way. Everything is upfront and can be audited.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I completely appreciate the point made by both Deputies, particularly on auditing. This scheme is devised under a European framework and is also subject to state aid rules so it is not simply me, the Department or a lack of desire. It is constructed under the state aid rules as a particular intervention measure, all of which we must comply with. Therefore, please do not let me go further than I can in any of that. The Minister has said he will look at the operation of the scheme, in broad terms, to see if there are ways in which it can be adapted for in the future.
The Deputy is correct to point out the impact weeks or months of difficulties can have on the viability of any business. I refer, in particular, to many tourism interests that find it difficult to attract business over the winter period. When one looks at the scheme and how it has operated versus expectations, one must also consider energy prices and where they are relative to expectations. Despite them having been extraordinarily high, energy prices are much lower than we had expected at this time of year both because of changes in energy price in respect of oil and gas generally on the wholesale market, and the considerably warmer than expected weather for the period. This has meant that bills, while they were exceptionally high during the August-September period - which I saw in my own constituency - have not been as high as might have been expected. By way of additional detail, wholesale gas prices are expected to be 57% lower in the first quarter of this year than they would have been expected to be last October. Of course, the winter period is not over and gas and oil prices remain considerably high, but it is worth making the point that they are lower.
We continue to urge eligible businesses to make claims under the scheme. The window for making claims is important. Revenue has endeavoured to make it as easy as possible. I appreciate that this speaks to the application of the scheme more broadly and not to the specific points raised by the Deputies in respect of the exclusions from that part of the scheme.