Ministers are considering how best to support businesses facing soaring energy bills without giving millions of euro to companies that are not feeling pressure as a result of the sharp rise in prices.
Officials are drawing up options for Ministers, with final decisions likely to be reached next week, but are said to be struggling to design a final package to help lessen the burden of sharp increase in electricity and fuel costs.
While domestic consumers are likely to receive a flat-rate energy credit, this may not be suitable for businesses as the range of energy bills is much greater than for homes. The Government wants to find ways to target the supports at the businesses that need them most.
“We don’t want to be subsidising data centres,” said one source familiar with the discussions in Government.
Another official questioned whether the Coalition could give supports to multinational companies earning billions in global profits.
Tánaiste Leo Varadkar told the Dáil on Thursday that the Government would consider the reintroduction of wage subsidy and business support schemes, which channelled billions of euro to businesses at the height of the Covid-19 pandemic, in a “worst-case scenario”.
However, it is understood that such an approach has not yet been agreed by the Coalition.
Mr Varadkar, the Minister for Enterprise, also admitted it was unclear how much Ireland stood to gain should the European Commission proposals for a price cap and windfall taxes on the profits of energy firms be implemented.
“Quite frankly, when it comes to the EU proposals, I cannot explain them or interpret them,” he said. “They are not government proposals … They are not yet agreed and, quite frankly, they are not entirely clear. We need to figure them out, ideally, before budget day, because what is done at European level will impact on what we want to do here.
“However, the principle is there that there will be a windfall tax and we will use the proceeds from that windfall tax to help reduce the cost of energy for families and businesses.”
Cost of living
The budget and a package of cost-of-living supports are to be announced on the same day, September 27th. Ahead of that, negotiations are intensifying with Minister for Public Expenditure Michael McGrath holding meetings with his colleagues to agree individual budget settlements for their departments for next year.
Minister for Climate Eamon Ryan and Minister for Foreign Affairs Simon Coveney met Mr McGrath on Thursday, while the biggest spending departments, health and social welfare, have not yet agreed their allocations.
One person closely involved in the process said the package was “taking shape” but that many of the big decisions were yet to be taken. It is expected, however, that the welfare package will involve extra allocations for this year, including the strong possibility of a double payment.
Meanwhile, Taoiseach Micheál Martin said he disagreed with comments made by Mr Varadkar that some of the proposals from the Commission on Taxation and Welfare came “straight out of the Sinn Féin manifesto”.
He said people had to look at the report’s many diverse recommendations “in the round”, and if there were recommendations they opposed, it was important that they also said which recommendations they favoured.
He said that, to be fair to Mr Varadkar, the Tánaiste had complimented the report at the margins of the Cabinet meeting on Wednesday. Mr Varadkar had said there were some proposals in the report he strongly favoured, the Fianna Fáil leader added.