Taoiseach Micheál Martin has said that Ireland and the world are facing the worst energy crisis since the oil crisis of the 1970s. The Tánaiste said that he is concerned about energy supply but “not unduly concerned” as the risk of black-outs or a drop in supply this winter was “as likely as it was last winter.”
In response to the crisis, the Government will cap the revenues of energy companies, tax their windfall profits and give all the proceeds to households and businesses, according to the Minister for Public Expenditure, Michael McGrath. This is the coalition’s clearest statement yet of its emerging policy on tackling rising energy costs.
“We will provide direct support to our citizens and to our businesses and we will take money off those energy companies who are making unjustified gains,” according to Mr. McGrath.
Earlier, the Taoiseach said the Government would favour further energy credits in the forthcoming budget to deal with rising energy bills rather than a price cap on energy bills. Mr. Martin said it was “an effective way” to help the general population. He highlighted that the full impact of a cap introduced in the UK had not yet been worked out. “There are huge questions around the cap. Who ultimately pays for it and over what time frame? We do have tried-and-trusted ways that we can get money to people quickly in order to meet bills.”
Tánaiste Leo Varadkar has said bringing in price caps on energy bills has “echoes of the bank guarantee”. While not explicitly ruling it out, Mr. Varadkar said he would be “nervous” about a price cap, comparing it to the state guarantee of the banks in 2008 which resulted in an EU-IMF bailout two years later.
Sinn Féin leader Mary Lou McDonald stated her party are in favour of a price cap on energy bills in order to provide affordability and certainty to households, arguing that “an intervention of this nature is absolutely proportionate and absolutely necessary given the unprecedented rise in energy costs.”
Coalition leaders and the Finance and Public Expenditure Ministers agreed on Tuesday to commission a paper studying the issue of energy price caps and how they might work, as well as their pros and cons.