Ibec weighs measures to ease winter energy bills that act as 'tax on households and businesses'

The group expects the cost pressures on businesses from energy price spikes and global supply chain disruptions to alleviate but that the Omicron variant could prolong the crisis
Ibec weighs measures to ease winter energy bills that act as 'tax on households and businesses'

Ibec chief economist Gerard Brady: 'The short-term maintenance of the employment wage subsidy scheme is crucial.'

Ireland's main business group Ibec may examine measures the Government could take to help businesses ride out the winter storm of higher energy bills.

It comes as wholesale energy costs, including European gas and global crude oil prices, jumped on Tuesday, suggesting there will be little let up in the potential of further hikes in retail energy costs for Irish businesses and households this winter. 

In its latest quarterly economic outlook, Ibec said that energy price inflation for power, lighting, and heating will act "as a sort of time-limited tax on households and businesses" over the winter months.

Like many other analyses, Ibec expects the cost pressures bearing down on businesses from energy price spikes and global supply chain disruptions that are evident across the world to alleviate but, nonetheless, that the new Omicron variant has the potential to prolong the crisis for a longer period than once thought.              

Ibec at this time is not specifically calling for Government measures to help insulate businesses from the worst effects of the energy crunch, but is believed to be weighing such a call. 

Meanwhile, the business group wants the Government to reinstate in full the measures under the employment wage subsidy scheme (EWSS) until the full effects of the Omicron variant on multiple businesses can be assessed and the economic threat has passed. 

'Changed circumstances'

Its chief economist Gerard Brady said that Ibec had supported the Government's plans over business supports, such as EWSS, but with the Omicron variant having emerged that "circumstances have changed".

"The short-term maintenance of the EWSS is crucial given that it is well understood, targeted to those with major losses in revenue, and is designed to keep people in contact with their employer," Mr Brady said. 

He added that Ibec has already made the point that the public finances are in good shape to support extending any such measures.

Overall, the report finds that the Irish economy has emerged very strongly from the pandemic this year but warns there are "more significant challenges ahead". 

 "2022 will see structural competitiveness challenges such as labour shortages, the low carbon transition, Brexit, and OECD tax reform dominate our competitiveness landscape," it said. 

                      

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