Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Irish premier Micheal Martin has said that EU plans to target energy firms' profits will provide ‘an important stream of revenue’ ahead of a ‘difficult winter’, but added that the crisis could be prolonged further.
It came as the European Commission announced proposals to redistribute to customers profits made in Europe's energy sector, made amid the energy crisis fuelled by Russia's invasion of Ukraine.
European Commission President Ursula von der Leyen told the European Parliament that a temporary cap should be placed on the revenues of electricity companies, which could raise €140 billion to help people hit by spiralling prices.
She said profits ‘must be shared and channelled’ to those who need help the most, adding that the EU's electricity market must be reformed to tackle high energy costs.
The European Commission is also proposing that EU member states collect any 2022 profits from the oil, gas, coal and refinery sectors that are above a 20% increase on the average profits of the previous three years, and redistribute them to customers.
Member states would be asked to reduce energy demand during peak hours, and aim to reduce overall electricity demand by at least 10% until March 31 next year under the draft plan.
Rising energy and living costs are set to dominate this Dail term as it returned on Wednesday following the summer break.
In the first Leaders' Questions of the term, in which Labour leader Ivana Bacik called for the ‘exorbitant’ profits made by energy companies to be targeted, the taoiseach said that the commission's proposal is ‘aimed at addressing windfall gains’.
‘These proposals will raise additional revenues which will be used to reduce the cost of energy for society, and they may not come immediately, but they will be an important stream of revenue in terms of the duration of this crisis,’ Martin said.
‘We will have a surplus at the end of the year. We will use that as effectively and efficiently as we can to alleviate pressures on people.
‘But we do need a more ongoing revenue stream as well to deal with perhaps a prolongation of this crisis, which we do not want to see.’
He added: ‘I don't disagree with you at all in terms of the need to make sure that those exorbitant revenues are dealt with in terms of the type of extraordinary increases that companies have benefited from.’
Earlier, Simon Coveney said the government had not ‘officially’ ruled out any options to deal with soaring energy costs at home and will consider the viability of capping householders' and businesses' bills.
The minister for Foreign Affairs said all measures to ease the pressure on households and businesses are being considered, including a price cap or more electricity credits, or a ‘combination’ of both.
He made the comments as the Cabinet meets to discuss proposals on how to deal with spiralling energy costs.
The government's budget will be announced on September 27.
‘The government hasn't ruled anything out officially and as late as last night I had a conversation with others in Government in terms of how to deal with the energy crisis as best we can,’ Coveney told RTE's Today with Claire Byrne programme.
‘The issues under consideration which is energy credit to households, we also have to have a support package for businesses, SMEs in particular and we are looking at the viability of a price cap in terms of how we introduce that and what level we could set it at, whether it is partial or full in terms of energy usage.
‘We will be talking to other EU countries and we will be seeing what the UK has done in terms of the details of that.
‘Let's not forget in two weeks' time today we will be announcing a Budget and a big part of that will be responding to the pressures that households and businesses will be facing in terms of energy costs.
‘These are exceptional times and we will be doing exceptional things in this budget.
‘I don't want to give an indication now if that involves a price cap or financial supports or combination of both but they are all under consideration at the moment.’
Coveney said the government wants to give householders and businesses ‘as much certainty as we can’ as they face into a winter of ‘real uncertainty and concern’.
He said it was up to the government to respond to those pressures and anxieties.
‘We need to do that in partnership with other European countries, with the European Commission to ensure that we spend public money,’ Coveney added.
‘We are effectively giving people back their own money here, we are using public money and taxation to try to reduce the pressures and uncertainty and anxiety that otherwise would be the case if we didn't intervene.
‘If that involves the partial capping of energy prices or it involves some form of extended energy credits over a period of time, that is very much a discussion at the minute.
‘The government is understandably cautious where a government would intervene to set energy prices but we are living in unprecedented times.
‘We have to ensure we have done our homework fully before we commit to something of this scale in terms of cost.
‘This is about protecting families through the winter and protecting businesses to stay in business so we will spend a lot of money to protect people from energy inflation.’
By Cate McCurry and Grainne Ni Aodha, PA
source: PA
Copyright 2022 Alliance News Limited. All Rights Reserved.