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Government clampdown on energy companies’ profits is welcome but overdue

Funds generated through a windfall tax on energy companies must be targeted at vulnerable households most at risk from fuel poverty, according to Social Democrats TD Jennifer Whitmore.

Deputy Whitmore, who is the party’s spokesperson on Climate and Biodiversity, said:

“The Social Democrats have always agreed with the principle of a windfall tax on the profits of energy companies, so it is positive news that the Government has belatedly moved on this issue.

“While it is not yet clear how much money a windfall tax will generate, it has the potential to be a significant figure given the eyewatering profits being enjoyed by energy companies over the past year.

“It is also welcome that the Government has decided to introduce a temporary solidarity contribution from companies involved in fossil fuel production, which will be collected in 2023 and 2024.

“By comparison, however, I would question why the cap on non-gas market revenues will only be in place until June of next year under the Government’s proposals. With the energy crisis certain to be with us in 2023 – and possibly for many years to come – this seems like an extraordinarily short timeframe for a windfall tax.

“There must also be full transparency in terms of how energy companies’ profits are recorded so we can be assured that the Government is maximising the amounts due.

“It is vital that any funds collected through these measures are targeted at households most at risk from energy poverty. Previous energy subsidies approved by the Government have not prioritised vulnerable families or individuals. Disgracefully, universal supports will see €50 million of taxpayers’ money allocated to the owners of holiday homes.

“Even before the conflict in Ukraine, energy companies were earning grotesque profits off the backs of consumers in the teeth of a cost-of-living crisis. Placing a cap on their earnings through the introduction of a windfall tax is a proportionate and justified response.

“However, the Government must ensure that it spends any money raised in a responsible and targeted way so that homes and businesses are more resilient to future energy price shocks.”

November 22, 2022

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