Government considering windfall taxes on higher profits of energy companies

Taoiseach Micheál Martin has said the Government is currently looking at the introduction of a windfall tax for power supply companies as one of four specific measures to address the “alarming” increase in energy prices.

Mr Martin confirmed that a windfall tax levied on the profits of energy utilities is a live option for the Government, and added that “various Ministers are working on that issue”. It was extensively discussed as a special meeting of senior Ministers on Monday, specifically convened to discuss rising energy prices.

The dramatic increase in gas and electricity has resulted in energy companies and oil companies making greatly increased profits. The Government has come under pressure to impose a levy on the windfall profits, as has been done elsewhere, including in the UK which has introduced a 25 per cent energy profits levy.

The Government is now working on a strategy to try to protect households from further substantial hikes in their energy bills. The strategy is expected to be submitted to Cabinet at its meeting next week.

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The other measures will include a new information campaign to encourage households to reduce their energy consumption in the face of soaring prices, as well as a new energy security strategy to ensure there is continuity of supply when crises and disruptive events – such as Ukraine invasion – arise.

During the course of a media interview in Clones, Co Monaghan, on Tuesday, Mr Martin focused on the energy crisis, saying the matter was of real concern not only here in Ireland but throughout Europe.

He said an emergency meeting of EU ministers would be held within 10 days to try to address what he described as the “alarming” and “exponential” rise of energy prices across Europe.

The Taoiseach said he spoke with the president of the European Commission, Ursula von der Leyen, on Tuesday morning to discuss the issue. She told him that new proposals to deal with the crisis would be tabled at an emergency meeting of EU ministers on September 9th.

“We are in extraordinary times. I spoke this morning with Ms von der Leyen in respect of the exponential rise in energy prices. That is a matter of real concern across Europe now, in terms of the fact that we’re looking at price increases over the coming months the likes of which no one anticipated. If you look at future pricing in terms of the wholesale market it’s quite alarming.”

He continued: “There will be an emergency measure that will be proposed by the commission to deal with the immediate situation, and then also a more sustained reform of the energy market over the next 12 months.”

The Taoiseach also welcomed the news that agreement has been arrived at between the public service unions and the Government over pay. He said the end-of-September budget and its cost-of-living package would further benefit families struggling to make ends meet.

He said the agreement reached with the public sector unions had been a fair one. “We’re going through a very difficult period economically because of the war in Ukraine. That is a fundamental factor in all of this and particularly on the energy prices, which is feeding into inflation and so, therefore, we need (industrial) harmony (and) need to work through this crisis in a collective way.”

On the decision by Minister for Children Roderic O’Gorman to abandon an independent review of the Commission into Mother and Baby Homes’s handling of the personal testimony of survivors, Mr Martin said that this Government and Mr O’Gorman had done more than any previous government in resolving this matter, including enacting legislation giving the right to birth information, the capacity to exhume bodies from Tuam, as well as an allocation of €800 million for redress.

“It is not open to a government to change the outcomes from a commission of investigation but the Minister will continue to work with survivors making sure that the entire of their personal testimonies can be on the public record,” he said.