It will be “months rather than weeks” before energy market reforms being worked on at European level have an impact on consumer bills, Green Party leader Eamon Ryan has said.
Mr Ryan attended talks of EU energy ministers in Prague this week, where proposals around capping gas prices and jointly purchasing gas were discussed without arriving at an agreement.
The European Commission will come forward with further plans on Tuesday and that will in turn go to a meeting of the heads of Government of member states at the end of next week, Mr Ryan said.
“What type of cap and how (it works), that detail has yet to be decided - and that mightn’t come immediately because it is complex, but there will be further measures,” he said.
Alongside other measures such as common procurement and windfall taxes, the cap will “make a difference through the winter, into the spring,” he said. “It’s through the coming months, rather than weeks, that it starts to help,” he said.
Mr Ryan indicated there may be further cost of living interventions to help households next year - but that his preference was to wait until spring to see how energy markets performed over the winter heating season.
“I think we’re right to say, as we did, we’ll review in the spring.”
“What sort of winter we have is going to have huge implications on this, and what energy prices are. That continues to change, so I think we’re best waiting until the spring. So yes, I think we may have to do further measures but we’ll have a better idea of them then, and the need for them,” he said.
He said that steps taken already would make a difference, such as the increase in European gas stocks and the windfall tax measures. Mr Ryan pointed to an ESRI analysis of the budget which he said showed the one-off measures protected those on lowest incomes.
“It covered any likely increase in the cost of energy. And that was the most important first base because those at risk of fuel poverty are the ones that you have to protect most,” he said.
The same analysis, however, found that increases to tax credits and welfare payments which will be below the level of inflation mean that “many lower-income households will experience real terms cuts in living standards” next year, without a repeat of bonuses and lump sum payments.
The thinktank also found that above inflation increases delivered through tax cuts “will mitigate the effect of inflation on higher income households” while USC and PRSI bands were frozen and tax credits indexed below inflation. It said this will reduce the after-tax purchasing power of lower earners who do not make enough to pay income tax - although some would gain from increases in the minimum wage.
