Budget to help ‘most vulnerable’ with rising energy costs – Taoiseach

Taoiseach Micheál Martin has said the Government will use the upcoming budget to protect people with lower incomes from the impact of rising energy costs.

Mr Martin also said the Coalition is confident that power blackouts can be avoided this winter.

The Taoiseach was speaking during his visit to New York for meetings at the United Nations.

He said that the Government was “concerned” about energy prices which he said were rising as part of a global “inflationary spike”.

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Mr Martin added: “In the forthcoming budget we will seek to try and protect the lowest income groups and those most impacted by an increase in fuel prices.”

Asked if this would mean an increase in fuel allowance welfare payments he said the Government would have to decide on specific measures “but a principle of protecting those most vulnerable to price hikes around energy is one that we will subscribe to and adhere to.

“We want to protect people from the worst impacts of that.”

There have been amber alerts about electricity supply in recent weeks and warnings in early summer of potential electricity outages.

Mr Martin said Minister for Energy Eamon Ryan was “confident that we’ll get through this winter”.

The Taoiseach said there were “challenges ahead” and this is why Ireland must push ahead with wind energy generation over the next decade.

Amid continuing concern over energy supplies, the Social Democrats and People Before Profit (PBP) on Tuesday called for a moratorium on new data centres in the Republic because of their high energy use.

Mr Martin said he hadn’t seen the details of the PBP Bill seeking to ban new data centres. But he said such centres were needed for the technological transformation that was taking place and he didn’t think legislating to ban them sounded like a “very intelligent approach” to the genuine issues that were raised.

He said that in recent times there had been efforts to bring in countermeasures to protect the environment like the creation of carbon sinks to offset the energy demands of data centres.

Pensions

Earlier, Minister for Public Expenditure Michael McGrath said there was a need for the Government to respond to rising costs of living with welfare rates unmoved for the last two years.

Speaking after Cabinet, Mr McGrath said he was in discussions with Minister for Social Protection Heather Humphreys in advance of the budget, and that there was a recognition that inflation was putting pressure on incomes.

“We certainly recognise that the cost of living is rising, there will be a need for the Government to respond to that, and I acknowledge the point that the core social welfare rates have not changed in the last two budgets,” he said.

However, he pointed out that the room for new spending measures in next month’s budget is limited. While there is an overall “envelope” of €4.2 billion.

Ms Humphreys said: “Both of us are conscious that welfare rates, including the state pension have not increased over the last two years, the cost of living has gone up so all of these considerations will form part of our discussions.”

Maximum price orders

In the Dáil, the Tánaiste said there was a need for a tax and social welfare package in Budget 2022 because of the rise in the cost of living as otherwise people on pensions and social welfare would end up "worse off".

Leo Varadkar also said the Government had not ruled out maximum price orders for the surge in gas and electricity prices but he warned of the potential for energy companies to go out of business as was happening in the UK because of a cap on prices.

He said if the Government imposed a price cap the retailers still had to pay for the energy and, in the UK, companies were going bust as a result.

“So it’s not necessarily an example to follow but certainly not something that we rule out,” he said.

Labour leader Alan Kelly had warned that “your Government is genuinely faced with a winter of discontent, unless you really genuinely act on these issues that really affect people’s everyday lives and living standards” as he highlighted an increase of between €400 and €500 in energy prices this winter.

The Tipperary TD said that “if gas and electricity prices really do soar this winter” the Government should implement maximum price orders to stop energy companies further increasing prices in the wake of “amber alerts” about power outages and rising prices across all consumer areas.

Mr Kelly said inflation had hit a 3 per cent high in August, the highest increase since 2008, and was only “going in one direction”.

The Tánaiste said everyone could see the cost of living increases – on the forecourt, in supermarkets and in home heating oil prices – and this was caused by international reasons.

He said that there would be a tax and social welfare package to combat inflation and rising energy prices and the Government had reached agreement on the welfare package but not its composition.

Infrastructure and defects

On other budgetary matters, Mr McGrath refused to be drawn on weekend reports that there could be delays to the Dart expansion programme and Dublin’s metro project, saying there would be further details on these projects unveiled as part of the National Development Plan. He said he is expecting to publish that in the next three weeks.

On the issue of Mica redress payments, Mr McGrath said it was “an incredibly difficult issue for individuals and families who are impacted”. The Government, he said, would “find a solution and that’s what we will do while at the same time recognising that we have an obligation to taxpayers generally”.

Government members and TDs, including current minister for agriculture Charlie McConalogue and his predecessor Dara Calleary, have indicated they expect a 100 per cent cost redress scheme to be brought forward by the Government. Mr Varadkar said he understood the stress faced by families and the need to bring forward a solution, but warned: "We do have to bear in mind the impact on the general taxpayer as well".

“Ultimately it’s not the Government that pays for this, it’s the taxpayer, the average working person,” he said.

“That’s why we have to make sure that there’s some form of cost control on it,” he added, pointing out there were many other defective buildings, including defective apartment buildings in his constituency.

“We need to do something for them too but we have to have some sense of what the total cost will be and we have to bear in mind that this is taxpayers money.”