Sinn Féin forced on the defensive over €1.6bn energy price cap proposal

Sinn Féin has been forced on to the defensive over its €1.6 billion plan to freeze household energy bills at levels last seen more than a year ago until next February, following a barrage of criticism from the Government and implicit criticism from the Irish Fiscal Advisory Council (IFAC).

Criticising the plan as “vague” and “one dimensional”, Taoiseach Micheál Martin said the Sinn Féin proposal offers a “blank cheque” to energy companies, but party leader Mary Lou McDonald hit back saying the Government was the one leaving families facing blank cheques by failing to act.

Tánaiste Leo Varadkar, meanwhile, though not referencing Sinn Féin specifically, said such price caps have “echoes” of the bank guarantee: “I’d be nervous about it, but not ruling it out,” he said. “But anyone who says they can cost it, how can they possibly cost it?”

The Coalition has not ruled out some form of price cap and has commissioned research on the pros and cons of the idea. However it now appears to heavily favour household electricity bill credits similar to the €200 one paid out earlier this year.

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The political attacks on Sinn Féin’s policy are expected, but the remarks of IFAC chairman Sebastian Barnes have been noted. He suggested on Friday that energy credits are a “much more sensible approach” than price caps which are “very risky in terms of the public finances”.

He told RTÉ's Morning Ireland: “Saying today that you’re going to cap them at a particular level, when you’ve got no idea what the prices are going to be, is a huge risk that the Government shouldn’t take.”

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However, Sinn Féin’s public expenditure spokeswoman Mairéad Farrell responded to IFAC’s advice to Government, saying electricity companies signal price rises in advance and her party has “done the calculations” and left a “buffer” to cope with higher prices. “The reality is that households can’t be faced with a winter of complete and utter uncertainty,” she said in defence of the plan.

The capping plan – one that would run between October and the end of February – is part of a Sinn Féin €4 billion cost-of-living package. Insisting that the proposals could be funded, Sinn Féin finance spokesman Pearse Doherty said the Exchequer was showing a €4.5 billion surplus. In addition, the 9 per cent Vat rate would be extended to gas and electricity, costing €75 million, while excise on home heating oil would be removed until the end of February, costing a further €75 million.

Saying that he expected that electricity price cap would cost less than €1.4 billion, he said Sinn Féin was providing €1.6 billion for this plan, “taking account of the possibility for further volatility in the wholesale market in the months ahead”.

The plan seeks to keep prices at summer 2021 levels. “We have also proposed that a windfall tax be imposed on energy companies, with reforms made to the wholesale energy market.”

Mr Doherty said the Government had given less help to households and business to deal with rising costs over the past year than any other EU state bar Denmark. The Government had been “embarrassed” into a U-turn about windfall tax even though the Department of Finance had dismissed the idea for months.