The average energy bill will cost families €2,177 a year. That is a bi-monthly bill of €363. Many will not be able to afford to pay these bills and put food on the table. So what can be done?
The Government’s response has been typically awful. It is letting data centres consume 15% of our electricity energy and these push up costs. It has given people €200 and promises to give more.
But these are once-off measures but, according to Eamonn Ryan, the energy price hikes will continue for at least two years.
Energy companies have profiteered massively, driving up bills and inflation in the process.
Take, for example, energy companies like ESB, Energia and SSE Airtricity. These all own wind farms that supply electricity to the wholesale market. According to the Commission for the Regulation of Utilities, these are earning SIX times as much as they earned in 2021.
Clearly, the energy companies’ profits should be taxed and redistributed. For example, the ESB group’s after-tax profits tripled in the first half of this year compared to the same period in 2021, reaching €390 million.
Many opposition parties have called for windfall taxes. People Before Profit said it months ago but the government denounced it.
Now even the Tories in Britain introduced windfall taxes and the EU says they will.
But what was radical a few months ago no longer suffices.
When governments impose a windfall tax, the big companies will just pass it on to consumers.
Moreover, the EU proposal for a windfall tax is pathetic. It will only last for six months
Price Reductions and Price Caps
So, we need something more: Price Caps.
The government should use its existing legal power to impose a price cap. That means that energy companies can only charge the price set back in February.
Sinn Féin has a proposal for reducing prices until the end of next February. Unfortunately, they plan to pay for this by using state funds to “subvent” (subsidise) energy company costs. Then they want to recoup some of this with a windfall tax.
People Before Profit’s alternative is to reduce and cap bills by forcing energy companies to lower their prices. Our ‘Price Controls Bill (2022)’ would use existing legislation to declare a cost of living emergency and force the Minister for Trade and Enterprise to then use emergency powers to set maximum prices.
Price caps will of course cut into the profits of these companies, and we do not propose giving them a subsidy. Instead, we have to go further and re-nationalise the electricity and energy sectors.
The reason should be obvious. You can’t control what you don’t own.
As Richard Boyd Barrett said back in 2013, “surely being able to produce our energy is the best way to exert some control over prices.” So far, no other opposition party has called for nationalisation.
People Before Profit have been consistent on this issue since our founding: energy should be publicly owned. It should be democratically controlled and run on the basis of need and not profit.
The whole policy of ‘liberalising‘ energy, whereby different private or for-profit companies generate electricity, while others buy it from those who operate a grid has been a disaster. It has led to dearer electricity
Before all this, the ESB produced the cheapest electricity in Europe for the domestic user. But then it was given a for-profit mandate and we got liberalisation. Even before the latest crisis, were paying for some of the most expensive electricity in Europe.
If we are serious about protecting people through this energy and cost of living crisis – and if we are serious about protecting our climate – nationalising our energy resources is paramount. Other measures are just sticking plasters, we need public ownership to have any real chance of sorting this crisis.