ENERGY supports to help households with sky high prices “cannot become the norm”, Finance Minister Paschal Donohoe has claimed.
This is despite revelations that hundreds of thousands of families are unable to pay their electricity and gas bills.
The Irish Sun yesterday revealed how officials in the Department of Environment have warned the new Minister Darragh O’Brien that households will need support to pay for rising energy bills.
Paschal Donohoe said no new credit will be given[/caption]
A briefing for the Minister claims that 230,000 households are in arrears in their electricity bills, while a further 162,000 have fallen behind on their gas bills.
Officials warned that the average annual electricity bill in Ireland now stands at €1,779 with a year’s worth of gas costing €1,503.
The Department predicted that household bills will continue to climb over the coming years due to the cost of upgrading Ireland’s energy infrastructure, and believe “targeted supports” will be needed to help households.
SKY HIGH BILLS
Despite this, the Government are ruling out using across the board energy credits to help shield households from these sky high bills.
The issue dominated the Dail yesterday with Sinn Fein’s David Cullinane accusing the Government of “throwing families under the bus” while energy companies record bumper profits.
He said: “What are people being faced with here – five more years of increased prices.
“They are seeing bankers’ bonuses going up.
“They are seeing bumper profits for these companies and they see a government who is going to throw all of those families under the bus.”
The Finance Minister said the Government is looking at ways to prevent the impact of the cost of living crisis on households and businesses.
NEW SCHEME
He pointed towards State backed retrofitting grants with €280 million set aside this year for the Warmer Home Scheme to help insulate homes and lower energy bills.
However, he warned that energy credits cannot be used again due to the volatile economic times that Ireland faces with concerns that U.S tariffs could impact our finances.
He said: “I can’t stand here in front of the House today and say that the level of payments we made available over the last number of years that that can become the norm.
“Those payments were made available at a time in which inflation was five, ten or fifteen percent.
“They were made available across a world that is very different to today.
“So that kind of level of payment is something that if we begin to normalise – if we say is going to be available year after year – of itself runs the risk of creating difficulty to our country and economy in the years ahead.”
Minister Donohoe said the Government will look at ways of implemented “targeted support” for those who need it the most.
NO NEW CREDITS
This comes after Public Expenditure Minister Jack Chambers revealed that households will no longer be given energy credits to help with the electricity bills – but will be protected from rising costs by welfare boosts and tax cuts.
Officials from the Department of Public Expenditure recently warned Chambers that electricity prices will rise over the next five years due to the need to invest €20 billion in Ireland’s energy grid.
The Department said our electricity grid needs serious investment to cope with the growing number of homes, power hungry data centres and to receive energy from new wind farms.
They warned that this €20 billion bill will likely see electricity prices for households grow over the coming five years but urged the Minister not to use energy credits to combat this due to the cost to the State.
A €100 energy credit for every household costs the State €210 million.
‘MOVE AWAY’
Minister Chambers told the Irish Sun that the Government is planning to move away from energy credits but will help households cope with rising electricity prices through social welfare boosts and tax cuts.
He said: “We have said we’re going to move away from one off temporary measures.
“I think when we’re making decisions we have to consider them in the context of the overall fiscal parameters that we’ve set out.
“And in that context, there are lots of ways we can support families in the context of fuel poverty or higher energy bills and that will be considered in the round in addition to the overall capital investment in our energy system some of which will be central to the National Development Plan process that will help mitigate some of the otherwise increasing costs as part of any increase in energy bills.”
A new National Development Plan will be published later this year which will set out how the €14bn from the Apple tax case will be spent with priority areas including energy infrastructure, housing, water and transport.
HIGHEST IN EUROPE
Minister Chambers believes that major State investment in the energy grid will help prevent households being forced to pay higher prices to foot the bill for the improvements that are needed to our energy infrastructure.
He said that the Government will also consider easing the burden on households through welfare increases and tax cuts in upcoming budgets.
Speaking at the launch of the National Lottery’s Good Causes Awards, he said: “I recognise that households face some of the highest bills in Europe and we need to consider that in the context of the budget…
“What we have committed to as a government is going back to a more regular budgetary environment where we set out the fiscal parameters and make decisions and prioritise interventions and supports and measures for families and workers in that context whether that’s through taxation or social protection.
“And they are decisions that government will have to consider closer to budget time.”
