By | September 16, 2022
Skyrocketing ESB profits to be used to bring down energy costs for families and businesses - Taoiseach

The government is to use soaring ESB profits to lower energy costs for families and businesses

Taoiseach Micheál Martin said the government is a shareholder on behalf of the Irish people and “obviously given the scale of the gain due to the energy crisis, I think the government can look forward to a much higher dividend than would have been the case previously to (energy) the crisis.”

The government will use this handout “to underpin its efforts to reduce the pressure on households and also protect jobs”, he said in a speech in Co Clare.

Elsewhere, Tánaiste Leo Varadkar said: “I think it is right and proper that the Government take back some of the big profits that some of the energy companies are making.”

He said that in the case of ESB, it could be done either through a windfall tax or a larger dividend

“We would use that money then to help bring costs down for families and businesses and that’s what we intend to do.

Mr Varadkar also said he wants to see the Help to Buy scheme for first-time buyers extended beyond the end of the year, a move being considered ahead of the Budget.

Profits at ESB rose in the six months to the end of June amid rising energy prices.

Profit, including a one-off gain from what it called “exceptional volatility” in global commodity markets, rose to €390.3m from €128.4m a year ago.

The group recorded revenues of almost 3.7 billion euros, which was up from almost 2.2 billion euros the year before.

The Taoiseach said the Government will bring in a cost of living package with the Budget to protect households and jobs “as best we can”.

He said: “we will do it with the ESB profits, but also through the unexpected measures that will be taken at European level but will apply to Ireland, and we will also get some revenue back”.

Martin said the Treasury surplus will provide “certainly in the medium term, to enable us to help people who need help because of rising electricity bills, rising energy costs and general inflation”.

He added: “Where the government is going is through measures and mechanisms, through energy credits, tax, through the public service pay agreement, by reducing costs in terms of public services, and then through social welfare, to reduce costs overall and to give people support to meet the extraordinary bills that they currently have.”

Martin warned that energy prices “will go higher again into the last quarter of 2022 and the first quarter of 2023”, but that the government would respond to help people facing historically high bills.

Earlier this week, Ryanair chief executive Michael O’Leary warned of the risk of driving inflation, telling Virgin Media News: “The government giving €200 energy subsidies to rich people like me is not the way out of this.”

Asked if the airline boss was right, Varadkar said he understood O’Leary’s point but said means-tested payments are “very complicated… very expensive, very slow to administer, and sometimes they’re not always fair.”

He asked where the line should be, saying people on good incomes often struggle to pay rent, mortgages and childcare costs.

Mr Varadkar added: “For anyone who is very well off in Ireland, whatever they can get in the way of a household energy credit, they will pay it back, you know, in income tax and capital gains tax and property tax.”

Mr Varadkar said he did not believe the upcoming Budget would drive more inflation.

He said that, unlike the inflationary effect of expansionary budgets during the Celtic Tiger years, it is a “very different situation now” with rising interest rates meaning credit is more expensive and billions of euros leaving the country in energy costs.

“That’s why I think if we stay within the parameters that we have set, an expansionary budget would not be inflationary,” he said.

The business minister was speaking in Kerry where he met business and community groups.

He was asked by reporters about the possibility of the lower 9 percent VAT rate for the tourism sector being extended beyond the current cut-off date at the end of February. He said a decision has not been made on whether it will be extended and expressed a belief that “price cutting” – has not been the norm in the sector.

On the Taxation and Welfare Commission’s recommendation to introduce a “tourist tax” on hotel rooms similar to those found in many cities around the world, Varadkar said that if it were to be introduced it would be best left to local authorities. decide about. He suggested that the funds could be used locally to improve tourist attractions rather than going into state coffers.

Mr Varadkar stood by comments earlier this week when he said some of the commission’s proposals are “straight out of the Sinn Féin manifesto”.

Some on the commission were surprised by the comments.

The Fine Gael leader said on Friday: “What I said was just a statement of fact that some of the recommendations contained in the commission’s report are Sinn Féin policy. That is a fact.

“I also said that some of the recommendations were very good and I would support them and I also said that the commission’s report is very thorough, objective, analytical.

“So I think if you take my comments during the round, they were very fair.”

He said he did not agree with the commission’s recommendation to raise inheritance tax or its proposal to get rid of the Help to Buy scheme. Of the latter measure, Varadkar said: “It’s really important for first-time buyers.

“I want it extended, not ended at the end of this year.”

He said: “I do not accept the view that the Government or any future Government must automatically accept the recommendations.

“That has never been the case for any commission.”

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