Ireland’s share of European Union levies on windfall revenues currently flowing to energy companies would be used to provide “direct support” to citizens and businesses under Government plans to be unveiled at the budget later this month.
The Coalition party leaders and senior Ministers held discussions on Tuesday night about the cost-of-living package, but the emerging plan would see any revenues taken from energy companies channelled into an expansion of the energy credit introduced for households earlier this year.
Speaking at the Fianna Fáil think-in on Tuesday in Mullingar, Co Westmeath, Minister for Public Expenditure Michael McGrath said the Government would cap the revenues of energy companies, tax their windfall profits and give all of the proceeds to households and businesses affected by rising electricity and fuel prices.
“We will provide direct support to our citizens and to our businesses and we will take money off those energy companies who are making unjustified gains,” he said.
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Senior Government sources said they were awaiting further detail from the European Commission about how much Ireland could expect from the new revenue-raising plans. The supports that are to be introduced in the September 27th budget will be paid from existing Government resources, they said.
The commission is planning an EU-wide windfall levy to recoup a third of the “surplus” profits of fossil fuel firms from this financial year, according to a draft proposal seen by Reuters. It will also propose a cap at €180 per megawatt hour on the price at which non-gas fuelled generators can sell their power.
The measure would skim off revenue above that price and use the cash to help consumers and businesses facing soaring energy bills, according to the draft proposal, details of which are due to be unveiled in Brussels on Wednesday.
Meanwhile, senior Government sources say the Coalition leaders will shortly discuss the implications of the switch between Fianna Fáil and Fine Gael in the Department of Finance and the Department of Public Expenditure, which is scheduled to take place when the role of taoiseach rotates between the party leaders in December.
Taoiseach Micheál Martin said on Tuesday it was “clear and understood” when the Government was formed that when the parties swapped the position of taoiseach the role of minister for finance would also switch.
But there are concerns in Government that moving Paschal Donohoe from the finance portfolio would result in him losing the powerful position of president of the group of finance ministers from euro-zone countries, the Eurogroup.
While there has been speculation that Mr Donohoe could retain the European position if he was minister for public expenditure, Fianna Fáil would have to agree that Mr Donohoe could be Ireland’s representative on the group for that to happen.
Mr McGrath is widely tipped to become the minister for finance after the changeover, with the officeholder having always been Ireland’s nominee on the group. Mr McGrath told reporters that if he was minister for finance he would expect to take Ireland’s seat on the Eurogroup.
Mr Donohoe’s term as group president comes to an end early next year and there is thought to be widespread support from European colleagues for him to serve a second term.
However, he would need to secure the agreement of member states in order to stay on if serving as minister for public expenditure and would need the leaders of the Coalition to decide who should be the Irish representative on the group.
