Paul Murphy criticises government response to energy price crisis
Paul Murphy spoke on rising energy prices and the government's inadequate proposals, arguing current measures fail to protect households from price gouging. He blamed privatisation, deregulation and reliance on fossil fuels for leaving Ireland vulnerable and called for a shift toward energy efficiency.
Main criticism of government proposals
Murphy said the government effectively admitted its second-stage proposal was insufficient and that reported parliamentary party comments show the scale of the crisis facing ordinary people. He recalled a motion on energy prices months earlier and criticised the government's response as an amendment that relied on the free market to solve the problem.
Household impact and human cost
He warned high energy prices hit those already struggling with rent and groceries, forcing choices between heating and eating. He cited an annual figure of 2,800 excess winter deaths and compared that with roughly 2,300 excess deaths recorded during March 2020 to February 2021, using the comparison to underscore the severity of cold-related harm.
Roots in privatisation and deregulation
Murphy traced the Irish dimension of the problem to EU-driven unbundling and privatisation from the 1990s, naming the 1996 and 1998 electricity and gas directives and a 1999 Electricity Regulation Bill. He said the removal of the ESB's not-for-profit mandate and opening the market to competition transformed public utilities into profit-seeking companies, with predictable rises in prices, energy poverty, disconnections and coal-related debts.
How market structure raises consumer bills
He explained that unbundling produces multiple private companies each seeking about an 8% return, which encourages passing input cost increases to consumers. Murphy detailed transmission and distribution charges - including transmission payments to AirGrid and Gas Networks Ireland and distribution tariffs to ESB networks and Gas Networks Ireland - saying those charges are the third highest in the EU and account for around one-third of a household bill.
Policy alternatives and energy efficiency
Murphy argued the priority should be energy efficiency - reducing consumption and avoiding large data-centre expansion - rather than locking households into high usage and prices. He criticised the absence of measures to encourage reduced energy use and noted that Irish homes are consuming more energy, urging a different direction from continued market reliance.
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I can't think of the last time that by the time the government came forward at second stage with a proposal that they had basically publicly acknowledged that it wasn't good enough and wasn't going to do anything. And that's the state that we're in now, given the comments that have been reported from yesterday's parliamentary party meetings. And it speaks on the one hand to the scale of the crisis that is facing ordinary people in terms of rising costs of living, with energy prices being a key driving component of that, and the pressure that the government feels on the one hand, and on the other hand the inadequacy of the proposals that they have to deal with it. I mean, we can go back to the motion we put forward on energy prices, what, four, five months ago, maybe, where the government's response to it literally was an amendment, where the bottom line, punchline of it was to say that the market will solve all of these problems, we rely on the free market. But energy prices, and your free market, continues to result in energy prices going through the roof. The big energy companies are taking advantage of the situation to increase price, increase price again and again, continuing to make massive profits. And all the government has to offer people on the receiving end of this price gouging is 100 euros, or 113 euros. It is a drop on a hot stove, wiped out by the price increases immediately, and made to look absolutely minuscule. And the problem is that the government and previous governments over-reliance on fossil fuels to power the economy has left Ireland at the mercy of global supply chain bottlenecks, as industries and countries try to boom back after the COVID pandemic lockdown, and shifting global weather patterns lead to greater energy use. The price increases are also compounded by the government's strategy of making ordinary householders foot the bill for gas and electricity infrastructure, instead of ensuring it is paid for in a fairer and more equitable way. It is worth comparing the price of gas that households in this country pay compared to elsewhere in the EU. In the second half of 2019, it was 12% above the EU average. Look at electricity prices, same, you can see there, 11% above the EU average in 2019, 2021, 18% above the EU average. And what is the consequence of these high energy prices? It hits those who are already struggling to pay the rent, to pay for groceries, who have to make the choice between heating and eating. And when you look at the figures for deaths from cold-related diseases, excess winter deaths as a consequence of the cold, and people not being able to heat properly, they are astounding. 2,800 people per year. Put that in the context of COVID. And, you know, we were in favour of taking the best possible approach to minimise the impact of COVID and to minimise the deaths. Between 2,300 excess deaths were recorded during the worst of the COVID pandemic, between March 2020 and February 2021. So it is higher than COVID deaths or excess winter deaths. And, contrary to what Deputy Cowan suggested earlier, the roots of the kind of Irish aspect of this problem lie precisely in the direction of privatisation, deregulation that had been going on. And the answer is to move in the opposite direction, as opposed to what Deputy Cowan was suggesting. From the 1990s onwards, the EU sought to break up state-run energy companies right across Europe, such as the ESB and Borde-Gauch. In 1996 and 1998, the EU introduced the first electricity and gas directives, which forced states to open up their energy systems and sell off power plants and infrastructure to private capitalists. The Irish government then did not seek derogations from these directives, even though the small size of the Irish market would exacerbate the worst effects of privatisation. Then, in 1999, Fianna Fáil introduced the Electricity Regulation Bill, opening the market to competition. Two years later, they removed the not-for-profit mandate of the ESB. Formerly, public companies that ran on a not-for-profit basis are now forced into a market, requiring them to behave instead like private capitalists seeking higher rates of profits. And the consequence has been predictably disastrous. Prices rose dramatically. Energy poverty rose dramatically. Disconnections rose dramatically. And the number of coal-related debts rose dramatically. Privatisation, or unbundling, also brought inordinate costs. Each private company involved expects a rate of profit of about 8% on its investment. So when the prices of its inputs go up, it passes those prices on to maintain its rate of profit. Secondly, energy supplier companies are charged for moving energy throughout the system. Those charges are then passed down to ordinary energy users, making up one-third of the household bill. There are special transmission use of system charges paid by suppliers to AirGrid and Gas Networks Ireland for using their transmission network, and distribution use of system tariffs paid to ESB networks and Gas Networks Ireland to distribute energy. These charges are the third highest in the EU, and like I said, are a third of a user's bill. Each company seeks to maximise their profit in a specific field, and does not adopt a holistic approach to energy consumption. A reduction in energy usage runs counter to their economic interests. And that means their economic interests are counterposed, or opposite of the interests of our society at large. The first renewable energy, in a sense, is energy efficiency. It is to reduce the amount of energy that we are using, therefore to avoid and get off the track of huge expansion of data centres, which the Government unfortunately still seems to be committed to. Encouraging users to reduce energy usage, those sort of measures are not being adopted, and instead the focus is on enforcing households to remain locked in to high energy use and prices. You look at Irish homes, consuming 7% more energy than the EU average, due to years of hands-off housing policy, low-quality standards and a painfully slow retrofitting programme. What is the alternative? As Deputy Boyd Barrett outlined, immediately, price controls. The Government has the power to do it, refuses to do it. Price controls could be imposed tomorrow at the stroke of two Ministerial pens to say this is the maximum unit price for gas, for electricity, for oil and so on. Secondly, renationalisation of the energy sector, using that as a lever for a rapid transition to renewable energy. And the third thing I would say is massive State investment in retrofitting. The State should borrow their money at low cost and do it up front for households at zero cost. And then over time, the benefit accrues back to the State and to the household and it's an absolute win for everybody in society and our environment. Thank you.
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