Household supports for soaring energy bills will extend into 2023, says Varadkar

Tánaiste Leo Varadkar has said Government supports to help householders hit by the energy crisis will extend into 2023.

Speaking from Kilkenny on Friday morning, where the Fine Gael party is holding a pre-budget think tank, Mr Varadkar said while the Government is looking at a one-off budget approach for this year, which would be paid from the Exchequer surplus, there will be no cliff edge and supports will extend into next year. Mr Varadkar said there would be one-off measures of “several billion” this year to support households and businesses.

In a nod to the escalating scale of the challenge around the cost of energy, he signalled willingness to consider a potentially open-ended commitment to helping people with utility bills.

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“One thing I’m very conscious of is that utility bills land every two months, it won’t be enough in my view just to help people before Christmas. People will need help after Christmas as well, and perhaps throughout next year, and we need to bear in mind that that’s a possibility.”

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“If you’re asking me how long this crisis is going to go on for, I don’t know the answer to that question.”

“It would seem to me to make no sense to help people with their bills before Christmas and then say in the new year, in the spring, next winter, things are just as bad, well now you’re on your own. That doesn’t stand to reason for me.”

The Tánaiste also said a cap on energy prices cannot be entirely ruled out — but that Ireland will examine all options available. He noted that the UK energy price cap will ultimately be paid for by the British taxpayer.

Ireland will aim to strike a balance between the options, he said, and the Government will not rule out any course of action.

EU proposals, which are being discussed at a European energy ministers’ meeting in Brussels today, would take money from the energy companies to support householders, he said.

Minister for the Environment Eamon Ryan, who is attending the European energy ministers’ meeting said the Government will do everything it can “to keep the lights on” for householders this winter. Proposals will be made at the Brussels meeting to forge a united EU response to rising energy costs as a result of the Russian invasion of Ukraine.

Mr Ryan said he thought there would be agreement on three proposals - the first of which is to take “some” of the excess profits of the energy suppliers and “recycle” that money to help householders pay their energy bills.

The second proposal is for some of the “unearned” profits from gas markets to be used to assist householders through a cap on international gas sales. The third proposal is to reduce peak demand.

Mr Ryan told Morning Ireland how the excessive profits of the energy companies are treated is important as it is essentially unearned profit that has come because of the war. That profit needed to be delivered back to householders and businesses, he added.

When asked about the possibility of a cap on prices similar to that proposed in the United Kingdom, Mr Ryan pointed out that in the end taxpayers would have to pay for the cap. “Someone has to pay,” he said.

Mr Ryan emphasised the importance of speed for emergency measures to help reduce households’ soaring bills.

“The measures the commission has recommended in taking some of those excess profits and recycling them back into the households makes sense,” he said. The EU must roll out emergency measures to curb gas and power bills within weeks, and countries cannot afford to wait for broader plans to reform energy markets to emerge in the coming months, he added.

The cost-of-living crisis and how high bills may go are among the key issues that will be addressed by Fine Gael at its Kilkenny think-in. The party will look at measures to help households and businesses pay their energy bills, tax measures and targeted help for the most vulnerable.

The Tánaiste said he was confident of the country’s energy security but added “it would be sensible” to have storage capacity in case of disruption of the supply line from Norway and the United Kingdom. He dismissed Opposition calls for more money to be spent now, as “we don’t know how long this will go on”.

Mr Ryan said he believed Ireland would have energy security despite the tight gap between supply and demand but warned: “We can’t guarantee anything.”