Ministers are pressing for a multibillion-euro budget day giveaway to help consumers with spiralling energy costs which is expected to include a larger electricity bill credit than the €200 provided earlier this year.
The Irish Times understands the credit to help with soaring energy costs is set to be paid as part of a package of once-off measures accompanying the budget that could top €2 billion to help people with the rising cost of living, but no agreement has been reached yet by the Coalition parties on the exact size or scope of the package or its components.
The Cabinet discussed the energy crisis at its weekly meeting on Wednesday and there is a sense among Ministers that the size of the budget day package is increasing all the time in response to rising costs.
Energia became the latest energy provider to increase its prices, with a 39 per cent hike in its gas rate and a 29 per cent rise in electricity. Many homeowners will also see their mortgage repayments increase, following a meeting of the European Central Bank on Thursday which is expected to raise its interest rate by 0.75 per cent.
Tony O’Reilly, Nell McCafferty, Ian Bailey and more: 50 people who died in 2024
Changing career midlife: ‘At 45 I thought I was finished... But it didn’t even occur to me that I could do anything else’
Restaurant of the year, best value and Michelin predictions: Our reviewer’s top picks of 2024
Women are far more likely to re-gift unwanted presents than men
In addition, sources say that pressure on the Government to stage what one source called “a massive intervention” will be increased by an expected announcement by the British government to spend up to £100 billion on assisting people with energy bills.
Read more:
- [ Ministers signal second energy credit likely but warn no guarantee blackouts will be avoided ]
- [ EU seeks to cut electricity prices by more than half with cap ]
- [ Putin says Russia will stop supplying any energy if West imposes price caps ]
- [ EU energy plan to siphon off revenues triggers backlash from senior European Commission officials ]
Several sources pointed to the budget surplus, currently running at over €6 billion, suggesting it provided the Government with the financial firepower to stage a major intervention.
‘Rainy day fund’
But Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath are said to be warning colleagues of the dangers of using too much of the available resources too quickly in a crisis that is set to continue into next year.
Mr Donohoe is also arguing strongly for a portion of the surplus to be diverted to the Government’s “rainy day fund” to prepare for future contingencies.
On Wednesday business and trade union leaders also met in Government Buildings to discuss the energy crisis, and sources said they were strongly supportive of a major intervention by Government.
Meanwhile, the European Commission unveiled proposals to bring down energy bills, including a plan to siphon off bumper energy company revenues and redistribute them, which will be discussed by EU energy ministers in an emergency meeting on Friday.
Among the measures, it is proposed that each country should impose a mandatory cut of net electricity demand by 5 per cent during peak hours, when gas power plants kick in, the legislation states. It does not include an exemption for Ireland, as was the case in a previous energy-saving deal reached in July.
Governments would be charged with identifying the peak hours, considered to be the 10-15 per cent of the time when national energy consumption reaches a maximum, such as when people get home from work.
European dissent
The indicative proposals enjoy strong support among some senior Government sources here, who say they have the potential to drive down the cost to consumers by redirecting some of the extraordinary gains in the electricity sector towards assistance measures.
But The Irish Times has learned there is strong dissent among senior European Commission officials to the plan, proposed by president Ursula von der Leyen yesterday.
A group within the commission has been urgently trying to persuade their colleagues to rethink the proposal before national energy ministers meet to consider it on Friday, according to internal communications.
The dissenters view the plan as overly influenced by the circumstances of Germany and an ill-fit for other member states, and describe it as a patch-up that preserves an electricity market that is fundamentally flawed in its design and should be intrinsically reformed instead.
“Germany has the deep pockets and they can fund whatever nonsense they want – other member states cannot,” one senior commission official wrote in a critique of the plan that has been circulated among staff.
The official described the plan as a “very haphazard Robin Hood” idea.
