That Sinn Féin turned to Britain’s Conservative Party for economic solutions was not the political revelation expected ahead of the Dáil’s return today.
However, ahead of Sinn Féin’s food for thought, Mary Lou McDonald announced that one of her party’s proposals to solve the energy cost crisis is to introduce a cap on electricity and gas bills.
Sounds like a great plan and good news for energy customers. But the devil is in the details, and Sinn Féin’s plan would involve the government paying millions of euros in taxpayers’ money to the mega-rich energy companies to keep their prices at a certain level.
Sinn Féin’s plan would see energy bills capped at €1,000 per year for the average household, a rate based on last summer’s prices, before the electricity and gas crises really hit home. The figure is based on data from the Energy Regulatory Commission (CRU).
The party estimates that the average bill will rise to around €2,300 next year, so the move will save the average home around €1,300. The proposed bill cap would remain in place until February, when households pay most for energy.
The subsidy would cost between 1.2 and 1.3 billion euros in tax money.
The party would also introduce a windfall, or excessive profits, tax on energy companies to ensure they don’t take advantage of the government subsidy and raise their prices.
Sinn Féin is exploring a model similar to that in Italy, under which companies would be taxed on all profits above 10 percent, or €5 million, compared to the previous year.
Recently appointed British Prime Minister Liz Truss proposed a price cap that would mean energy bills would be capped at £2,500 (€2,900) a year, costing taxpayers between £130 billion and £150 billion. A similar system exists in France, and Germany will also introduce a cap on gas bills.
The need for energy cost caps is very real as bills are set to skyrocket in the coming weeks and many people are at real risk of fuel poverty this winter.
The EU is considering a range of measures to deal with the deepening cost of living crisis triggered by the Russian invasion of Ukraine.
However, Member States are divided on whether to introduce a cap on gas prices.
Germany, the Netherlands and Denmark are among the opponents of a gas price cap, fearing it would penalize them as they try to attract LNG supplies in what is currently a highly competitive energy market.
The other side of the argument is obvious enough that households and businesses are wondering how in God’s name they’re going to pay their energy bills in the coming months.
Public Spending Secretary Michael McGrath said subsidizing energy companies at the price cap is tantamount to offering the industry a blank check.
However, he supports the EU proposal to cap energy company profits, as proposed by the EU. Rather than capping bills, the government is more likely to proceed with its energy credit scheme, which can be granted in three installments totaling €600 per household.
In this case, the money still goes directly to energy companies and is deducted from bills, costing the taxpayer around €400 million. That’s a lot less than the potential saving of €1,300 from Sinn Féin’s proposal.
But the government will argue that it is introducing other measures such as doubling social benefits.
The public doesn’t care what measures are put in place, they just want to leave the lights and heating on for the coming months.
https://www.independent.ie/opinion/comment/sinn-feins-energy-cap-proposal-sounds-good-on-the-face-of-it-but-someone-must-still-pick-up-the-bill-41987323.html Sinn Féin’s energy cap proposal sounds good on the face of it, but someone still has to foot the bill