Deputy O'Toole has ten minutes left.
Private Members' Business. - Gas Prices: Motion (Resumed).
The following motion was moved by Deputy Enright on Tuesday, 13 May 1980:
That Dáil Éireann, seriously concerned at the escalating price of bottled and town gas because of the serious hardship it is causing to large families and elderly people who use this fuel for cooking and heating, calls upon the Government to take steps to reduce the price of gas to consumers.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:—
"appreciates the stringent control exercised by the Minister for Industry, Commerce and Tourism on bottled and town gas prices and recognises that the price increases approved for these commodities were fully justified and were necessary to maintain supplies."
—(Minister of State at the Department of Industry, Commerce and Tourism.)
Last night I outlined the problem facing consumers of bottled and town gas in relation to the massive price increases that have been allowed in the recent past. One might admit and confront the reality that there are external factors involved but the solution to the problem must be found within our shores and action must be taken by the Government. The litany of increases which encouraged headlines like "now gas prices rocket again", "price shock for bottled gas consumers", "a further 3.8 per cent rise in the price of Dublin gas", "another 9 per cent on gas at least" will have to be stopped at some stage. We realise that the rising cost of raw materials is beyond our control but we must find a solution. We cannot allow this trend to continue. If price increases are allowed to escalate at the same rate, by 1984 the price of the average 25 lb. gas cylinder will be approaching £20. Even to think about this is ludicrous but that is the reality starting us in the face unless somebody intervenes on behalf of the consumer.
We introduced a system of substantial subsidies in somewhat similar circumstances because we felt it was the only way possible for us to cushion consumers against the impact of the then large increases even though they were not as large as those that have taken place in the recent past. The people who use most of the town gas are people in old houses and the people using bottled gas in many cases are the people whom the State were unable to supply with power. We are talking about a category of people who would normally be described as being in the low income group. If we accept that, and there is no reason why we should not accept it, surely the intervention of the Government in the form of a realistic subsidy is the only answer.
The Minister for Industry, Commerce and Tourism has in the past been very critical indeed on the national radio network and publicly about town gas suppliers and Dublin Gas in particular, in a way that one normally does not hear in relation to this type of company. The Minister may or may not be telling the truth in relation to the management, control and services given within the industry. However, that is the Minister's view of gas suppliers. At the same time the Minister allows them price increases which indicates that while he says that he does not condone their actions, he condones their actions in a practical way by allowing increases which allow them to persist in their inadequate service, as he described it. The whole thing seems rather ludicrous. While there is now a suggestion that we would have a national gas grid making gas supplies available from Kinsale to Dublin in particular, the question of what happened in the interim must be faced, because of the nature of the demand and the length of time it will take to provide a service. Are we to allow consumers to stagger on under this enormous burden, facing shock after shock of further price increases? If we are, it is unfair to them and the burden of this commodity for people who have to use it exclusively is becoming intolerable and is out of line with the burden of other sources of energy by their neighbours. Until such time as they get an adequate supply of natural gas, their situation should be reappraised realistically and the appropriate level of subsidy should be made available. The ratio of the subsidy to the cost of the product has been halved since this Government took office.
We have had long lectures and dissertations from Government benches on the whole principle of subsidies and on when and how much should be applied and in what circumstances. Using the Government's definition there is no time more appropriate than now, because all the characteristics and all the circumstances that would necessitate the introduction of a subsidy are now present to an extreme degree in the case of inflation, and in the case of economic trends and falling living standards. We must be realistic and while the Government may have to face economic stringencies, one section of society, gas users, particularly the people who use town gas supplies and are stuck with them, should not be discriminated against because of external factors. We all realise the economic stringencies which were given very practical expression to in budgetary calculations and in the Finance Bill. However, if any group in the country were singled out for harsh treatment because of external factors, the Government would be justified and would be expected to move in and cushion them from the hardship.
The Deputy should conclude.
In this case that has not been done to the degree it should be done and prices are about to escalate indiscriminately thereby causing hardship to this group of people. I strongly urge that action be taken now to try to solve this problem.
I read with interest the transcript of last night's proceedings in relation to the motion being debated and listened again this evening to Deputy O'Toole's contribution. I noticed the dearth of constructive suggestions made by the Opposition speakers. I cannot let pass without comment some of the baseless allegations made last night and again tonight by Deputy O'Toole in relation to the Government's attitude to price control with particular reference to the operation of the Dublin Gas Company. In the course of his speech last night Deputy O'Toole referred to the attack made by the Minister for Industry, Commerce and Tourism on the performance of the Dublin Gas Company while at the same time he had consented to price increases by that company. This type of garbled rhetoric is typical of that emanating from the Opposition who do not have to face the reality of the present situation. It is true that the Minister has had some hard things to say about the operations of the Dublin Gas Company and has pointed to the fact that the company were being bolstered by the payment of an annual Exchequer subsidy in the region of £4.5 million. It is worth noting that the town gas industry review committee have concluded, following a detailed assessment of the Dublin Gas Company's operation, that neither the technical nor the organisational conditions for the acceptance of natural gas are being met by the company at present. Last night my colleague, the Minister of State, Deputy Meaney, gave the reasons for the increase in the Dublin Gas Company's prices which were announced on 2 May 1980. He pointed out that this special price increase was granted to prevent further trading losses and to fund capital expenditure which was designed to achieve significant improvement in feed stocks utilisation. The Government saw no alternative to granting this price increase which had been recommended by the NPC.
However, the Government recognised that the granting of this special price increase was not the total solution to the company's problems. Accordingly, as a condition to the price increase, the Minister for Energy, Deputy Colley, has asked the Dublin Gas Company to prepare within six weeks a detailed development programme aimed at securing the long-term viability of the company. To put it bluntly, without this special price increase there was a real danger that the Dublin Gas Company would have faced possible closure. In such an eventuality I have no doubt that Deputy O'Toole and his colleagues on the Opposition benches would be tabling motions condemning the Government's inactivity and asking why efforts had not been made to save the company. If I am to follow Deputy O'Toole's logic, then the Minister while he is critical of the operation of the Dublin Gas Company should not approve any price increases for the company.
The Deputy might be interested to know that during the past 12 months the cost of naphtha to the Dublin Gas Company on an annual basis has increased by approximately £7.5 million. Bearing in mind that the company incurred losses in 1979 and but for the special price increases to which I have referred, would have incurred further losses in 1980, there is no possible way in which the Dublin Gas Company could have financed the purchase of their basic raw material without compensatory price increases. Without these compensatory price increases the company would have been long since out of business. The question I must ask then is, am I to understand that Deputy O'Toole would wish to see price control operated in this manner?
Last night Deputy O'Toole accused the Government of using the NPC as a shield against criticism of various price increases. On numerous occasions I and some of my colleagues in Government have praised the work and commitment of the NPC. The amendment to the present motion tabled by the Minister for Industry, Commerce and Tourism refers to the stringent price control exercised by him on bottled and town gas. However, in view of Deputy O'Toole's statement it is highly desirable that the record be put straight and that I outline for the House the role of the NPC in relation to the operation of the Government's price control system. I propose to demonstrate clearly to the House that this Government have lived up to their commitments on price control.
Deputies no doubt are aware that the NPC were established by a Fianna Fáil Government in October 1971. The commission are a statutory body whose principal function is to keep under review the prices of commodities and the charges for rendering services and for carrying out work or processes, and to advise the Minister in relation to such prices and charges. Therefore, it is clear that the commission are merely an advisory body with no powers to grant or refuse price increases. However, this Government accept that, being representative of the interests of industry, traders, workers and consumers, the commission can in exercise of their statutory functions take a broad view of the factors at issue. There is a real danger, however, that the public at large will expect too much of the commission, and this aspect was adverted to by the commission when they were established in October 1971. Their first report stated explicitly that in the area of price control there are no miracles. Prices must bear some relation to the cost of production, a point which has been lost apparently on the Opposition benches.
When examining price increases the commission work within a set of guidelines laid down by the Government. In the case of labour costs the commission must have regard to specific Government guidelines on labour cost, and increases in line with the terms of national wage agreements and the national understanding must be allowed. Incurred unavoidable increases in raw material and overhead costs verified by documentary evidence must be allowed for price compensation purposes. If price increases were not to be conceded at all, then increases in costs would have to be met either by improvement in efficiency or from profits. Profits cannot be allowed to fall below the level necessary for the survival of the applicant firm if very necessary employment is to be maintained. We should not delude ourselves into thinking that there is much scope for higher costs to be absorbed by profits. In this regard it is worth noting that the commission have on a number of occasions expressed alarm at the generally low rates of return earned on sales and on capital employed by most firms applying for price increases.
On previous occasions I have referred to the fact that attention invariably is focussed on the price increases recommended by the commission because they are regarded as newsworthy, and not on that part of the price increases sought that was prevented from occurring. While Opposition Deputies, as is their right, will leave no stone unturned to browbeat the consumer with stories of never-ending price increases, little prominence is every given to the substantial savings which have accrued to the consumer as a result of this Government's stringent price control system. However, I should like to attempt to put the record straight in this matter this evening.
In the 12-month period from February 1979 to January 1980 the commission considered price increase proposals from 541 applicants. They claimed increases totalling £441.9 million on an annualised basis. Of this total, £360.5 million was actually allowed. This means that as a result of the proper operation of price control procedures as laid down by this Government the prices of the products and services covered by these 541 applications rose by about 22 per cent less than they would have risen if the applications had not been subject to detailed price control. This is something that we are proud of. In monetary terms it means that because of the strict operation of the price control mechanism by this Government there was a saving to the consumer of almost £80 million in the last 12 months.
At the outset when speaking of the National Prices Commission I pointed out that the commission was an advisory body who made recommendations on price increase proposals. This means that the final say on all price increase proposals rests with the Minister for Industry, Commerce and Tourism. Unlike his predecessor, the present Minister has not shirked his responsibility on price control matters. While appreciating the excellent work being done by the commission the Minister accepts that the ultimate decision on price increases must be made by himself and the Government. With this in mind the Minister, on assuming office, initiated a review of the operations of the National Prices Commission which resulted in a far more vigorous examination of price proposals.
The Minister's concern and interest in price matters is also demonstrated by the fact that a number of recommendations by the commission on essential commodities such as bottled gas, milk, flour, building materials and petroleum products have been reduced or cut by him. Finally, on this point I should like to correct a totally misleading and untrue statement made by Deputy O'Toole last night when he said that press statements issued by the Government Information Service on the occasion of the publication of the National Prices Commission's monthly report merely say that the price increases have been recommended by the Prices Commission and no mention is made of the Minister's function in this matter. Press statements issued in relation to the monthly reports of the commission state clearly whether or not the Minister has accepted the recommendations of the commission in relation to price increase proposals. In cases where the Minister has refused or cut back on price increase recommendations by the commission this is also clearly stated. I have here copies of the press statements issued in relation to the most recently published reports of the commission and I shall make these available to Deputy O'Toole or other Deputies if he wishes.
The amendment and the motion deal with gas prices.
The Government cannot exercise control over what the media may publish but I assure Deputies that the Minister has not abdicated and will not abdicate his personal responsibility for price control whether in gas or in other matters.
Various questions were raised by Deputy Enright in this debate about the Gas Committee Report on the town gas industry. He indicated his wish that the press release dealing with it should be explained to the House. I do not consider it appropriate to deal with these matters in this motion; they are matters which are the subject if the Deputy wishes, of a separate debate but, with the permission of the Chair, I shall deal briefly with certain of them. Deputy Enright asked why the pipe grid was dependent on the Dublin Gas Company. The answer should be evident. It is universally accepted that consumption of gas by direct burning rather than for electrical generation is a much more economic and appropriate method of consumption. The Dublin area is by far the greatest single town gas unit in the country. With over 156,000 consumers and very considerable potential for expansion it is clear that the pipeline must cover this if it exists at all. But that is not to say that other areas on the route of the pipeline or within economic reach of it will not be considered. Quite the contrary, as the Minister for Energy, Deputy Colley made clear at his press conference.
A town, whether it has or intends to have a town gas supply, which would lie within criteria to be decided upon and which can show that it can handle a supply of town gas effectively and economically, will be considered. The cost, of course, will be evaluated as an accretion of the cost of a Cork-Dublin pipeline. Bearing in mind the massive cost involved—over £100 million in 1979 terms— and the quantity of gas which it is envisaged should be utilised in this way it is not conceivable that the project should go ahead if there was not a supply of natural gas to Dublin City.
The House should also bear in mind that the question of the lay-on of natural gas to Dublin in the first instance, and to qualifying towns on the route, is a very important element in an overall national energy policy. Peak loads on electricity required to meet the cooking hours for the Dublin area imposes a serious burden on electrical generation. A natural gas lay-on will shave off these peaks while at the same time allowing the ESB to devote less to peak load servicing and more to base load servicing. That is a much more useful employment of capital and resources for the ESB also.
The energy policy also takes into account security of supplies and control over distribution which would arise with the product in question. Seeing that this debate is concerned with the cost of energy, particularly both pipe and bottled gas, let me say that there is little future, save at virtually unbearable cost, for a town gas industry anywhere which is based on using naphtha which is the current feedstock. The skyrocketing and highly volatile prices of this feedstock are the root cause of this discussion. While no one is promising cheap gas, at least stability and a less volatile price situation and probably considerable containment of price rises should ensue from the lay-on of natural gas.
While we are talking of costs and of capital outlay on the project I should like it to be clear that these are not the only costs involved. At the receiving end of gas there is the question of the strengthening and refurbishing of the mains systems, with the extension of the system itself to new customers, new housing estates and so on, and the changeover of the gas burning appliances which, because of the different nature of the gas, will require adjustment. There are significant capital costs involved to any gas utility in carrying out these changes. It is well that these facts should be kept in mind.
Deputy Enright said that the cost of the changeover was not substantial. I hope he is right. It is true to say the cost of the conversion of gas appliances is not very substantial, but that is only a small part of the picture. Bearing in mind the considerable gains in the short and medium term for consumers, and bearing in mind the very much higher cost which would have to be borne in gas utilities run on other feedstocks, those costs should be economic and worth while.
The interim period for town gas utilities will strain all our ingenuity, that of the Government and the industry in general. I need to do no more tonight than quote the words of the chief executive of the Dublin Gas Company in yesterday's press interview. He indicated that without this prospect the Dublin Gas Company could not carry on and would have to close. The underlying financial situation and current loss rate would force this conclusion on any sensible person.
I would remind the House that a gas utility almost on the same scale and in the same circumstances as that of the Dublin City utility has been the subject of the Belfast city council's decision to close it. In the case of Limerick we have another critical situation. It is so critical that it is doubtful that even the prospect—and I underline that it is only a prospect—of a supply of natural gas would be sufficient to avoid its closure in the very near future, as has been announced.
In Limerick the broad picture is that costs and loan servicing charges are bearing so heavily on the small-scale Limerick utility that a price increase of the order of well over 100p per therm would be needed to bring the company to break-even point. It is hardly to be expected that the consumer could meet such an increase, or that the Limerick Gas Utility could sell any gas at that increased price. A very fundamental and thorough examination of the whole situation is being undertaken. I can say, however, that the problems are so serious that only a very radical approach will avoid a closure. The harsh conclusion must be faced that there would have to be a very good and sound justification in economic terms before a decision to close could be avoided. The Minister for Energy and his colleagues in Government, together with the Limerick Corporation who operate this utility, have the task of assessing in all its aspects the question as to whether this utility can or should continue in existence.
I repeat that the laying on of natural gas, should it prove to be economically and technically feasible on the criteria which will be laid down, is not to be seen as a simple panacea. It affords nothing more than one hypothesis on which a plan to deal with the problem might be devised. In the last analysis, there will still remain the hurdle, as for any other gas utility seeking natural gas, that a full productivity development and marketing plan justifying the supply of natural gas will still have to be produced and accepted by the Government.
I wish to reiterate the view that effective price control cannot mean rejection of all price increases while cost increases continue to occur. To say otherwise, as has been said by the Opposition, is engaging in mere rhetoric. The measures adopted by the Government with a view to curbing the rate of inflation have been evolved in response to the actualities of our economic situation, with due regard to the requirements of social justice.
The counter-inflationary policy, therefore, allows for a fair measure of freedom for market forces while seeking to ensure that only the absolute minimum levels of cost increases are reflected in prices. At the same time, the policy must be such as to ensure that imported raw materials, so essential for our continued industrial growth and improved standards of living, are available. The price control policies adopted by the Government, and continually reviewed by them, are geared to meet this objective with the minimum of inconvenience to any sector of our community.
When I refer to imported raw materials, it is interesting to note that in the 12 months period up to February last, of all price increases, over 60 per cent were attributable directly to increased costs of fuel or raw materials. This can also be passed on into greater percentages in the cost of gas. To enable our industry to continue, this industrial base which we have striven so hard to provide for the people and the industrial jobs we have striven so hard to provide, at the rate at which we would wish it to continue and, to be fair, at the rate at which the Opposition would wish it to continue, we must deal with the problem of imported raw materials and energy costs. We have to face the situation and we have to be prepared to accept it.
There is no point in trying to run away and say, as the Opposition have said, that we should reject all price increases while allowing cost increases to occur. That is a recipe for redundancies and job losses at a time when, as a Government and as a community, we should be very much involved in the business of job maintenance as well as job creation. It is vitally important that we enable our existing industries to survive and continue to prosper. The line taken by Deputy O'Toole and Deputy Enright and other speakers would suggest that this basic reality has not been grasped by the Opposition Parties.
We on this side of the House are prepared to do our duty by the Irish people. I have no doubt the Irish people will recognise the task we have undertaken. I also have no doubt that when members of the House consider the facts I have outlined tonight, and which were outlined by my colleague, Deputy Meaney, last night, the amendment moved in the name of the Minister for Industry, Commerce and Tourism will be carried, and the motion put down by the Opposition, which comes to us on a regular basis about once every three months, will be rejected as was the fate of its predecessors.
This is an important debate and it has not been given the importance it deserves by the Government who failed to send in any member of the Government to justify their outrageous failure in the area of prices, and gas prices in particular. One of the great promises of the Fianna Fáil manifesto was that there would be a prince of prices in the Cabinet, that there would be a Minister for prices, but instead we get Deputies Meaney and Burke, two lovely gentlemen——
Two Ministers of State.
They are also two gentlemen.
We would take the Deputy on any day and leave him well behind.
So far as the Chair is concerned, the two Deputies should be referred to as Ministers of State.
They are sent in to defend an appalling record in prices because the Minister and the Government as a whole have no defence to offer in this regard. Nothing highlights more the abandonment of the prices question than the absence this evening of the Minister and of the failure of any Minister to attempt to defend the Government's record in this area. The Minister should be here. It is not as if he were absent from the country because he was here today in the Taoiseach's procession, unusual as that is for him. The Minister is a Messiah of misery. He sends in the junior boys to take part in the debate.
With respect, a Leas-Cheann Comhairle——
There is not a word of hope for all those poor people who depend solely on gas for heating and cooking. For the past three years I have been arguing that we have a Government who are robbing the poor in order to subsidise the rich. This is an apt opportunity to highlight again the anti-social and the perverse unsocial policies of this Government. The Minister of State would seem never to have heard the word "subsidy". He talked about redundancies, about job losses and about job maintenance but I wish to refer him to the record of the Coalition.
If I were the Deputy I would not do that because it should be embarrassing for him.
In 1977 the inflation rate was reduced dramatically to single figures for the first time.
The Coalition had left office then.
In 1980 inflation figures have escalated to more than 20 per cent.
The motion before the House deals solely with gas prices. I have allowed a certain amount of latitude to deal with the bringing of natural gas from Kinsale to Dublin but I need not have done that because the motion deals with the question of gas prices and of subsidies.
I was coming to the question of subsidies. The Government have phased out part of the subsidies on food and gas that we introduced. We succeeded in bringing inflation under control as a result of those subsidies. They were the means also of our bringing about social justice because we realise that subsidisation is essential for the poor.
The public made their own assessment of the Coalition's record.
We brought down the rate of price increases and we managed to bring about good national pay agreements. In this way jobs are created and maintained.
We are not discussing pay agreements on this motion.
They are related to the motion.
They are not related to it in any way. All the other speakers have dealt with gas and with gas prices.
The Minister of State referred to job maintenance, a subject that is connected very much with prices and with national pay agreements. I am comparing the miserable record of this anti-social Government with the record of the government of social justice, in other words, the National Coalition.
What amazes me is that on every occasion on which a few jobs are created by the IDA we have the Minister making the relevant announcement at press conferences but he is never here to tell us when price rises occur or to defend any such rises. If the Minister is an concerned about job maintenance as he says he is, he might think in terms of subsidies. For instance, subsidisation to the extent of £10 million would go a long way to easing the problem while £20 million would make a tremendous difference. Neither of these amounts is huge in terms of Government spending. Indeed, they represent only a small part of total national spending. The 100 per cent price increases in the past couple of years in respect of gas have proved a penal imposition to the captive market of consumers who have no alternative to gas. The recent budget increased prices by between 4 and 6 per cent and general prices rises are now heading towards the 20 per cent mark. More than 75 per cent of the problem is due to domestic factors. These factors are lack of Government control and misguided Government policies.
If the Minister had come in and told us that the Government are really concerned about the poor and that, consequently, they were prepared to agree to subsidisation to the gas users to the extent of £10 million, the people concerned would have been relieved. They would have been thankful for such a small mercy but there has been no indication of any such concern on the part of the Minister. This is an appalling indictment of the Government especially when one thinks of their actions in other areas involving the well-to-do. The Government have abandoned the poor.
Another area which is connected with the whole energy problem is the area of home improvements especially in terms of insulation and of conversion to solid fuel heating. There are many people who are in a position to undertake such work without any help from the Government but there are many others who are not so lucky.
This must have a tenuous link to the debate.
It is an important link and the Minister's concern is obvious when he refers to it as being a tenuous link. There are many thousands of people living in local authority houses without fireplaces built by Fianna Fáil, under their cheap housing policy, who have now been robbed of the grant to convert from gas—which is the only heating in these houses—to back boilers, and the Minister says there is a tenuous link——
Very tenuous actually. If the Deputy looks at the motion before the House he will see that it deals simply with two matters, gas prices and their subsidisation.
That is what I am arguing for. There is here a captive market with no choice because of Fianna Fáil policies past and present. There are thousands of houses in this city and country with no other means of being heated. They have no fireplaces. That was one of the things the Coalition changed.
The Deputy should tell us what they were going to do about naphtha prices.
I did not interrupt the Minister and, if I had, I would have been told to keep quiet. I am now asking for the Chair's protection.
There is to be no interruption of any Deputy in this House. There is to be no departure—certainly not in Private Members' Time—from the motion before the House. We are not going to debate everything under the sun on this motion. I would again request the Deputy to read his own motion before going into all these other extraneous matters.
I shall not fall out with the Chair.
It would not be much use anyway.
No, Sir, it would not be much use to this House if Deputies are not allowed speak their minds on issues of the day.
That is a charge against the Chair and the Deputy will not make it. The Deputy has been told that he must speak to the motion on the Order Paper in his name and that of his colleagues. As long as he does that there will be no interference from the Chair, not in the least. Every other Deputy has spoken to the motion.
I am pointing out that there are many thousands of people in this city and country who have no choice but to use gas. They have been placed in that position because of misguided Fianna Fáil policies in the past and they are being clobbered because of present misguided Fianna Fáil policies. Up to a few weeks ago some of them might have said: gas prices are rising enormously; we had better go to the credit union to get a loan—the Government will give us £600—and convert to a back boiler. They cannot now do that, the £600 subsidy having been abolished. These are undeniable achievements of Fianna Fáil. They have plastered the poor.
I regret to note that the Minister for Energy was unable to be present for this debate but I would ask the Minister of State present to take back to him——
This is a matter for the Department of Industry, Commerce and Tourism; not for the Minister for Energy.
Gas is one facet of energy.
It is the price of the material that is referred to in the motion.
Yes, it has to do with the price and the use of gas. I would ask the Minister of State to take back to the Minister of Energy the hope that he will consider what the lack of house improvement grants does to the consumption of gas; that we could reduce dramatically the use of gas if we had reinstated a home improvements grant of some sort, perhaps confined to this area of insulation and conversion.
Another area in which something could be done about the overall consumption of gas and its adverse effect on our balance of payments is that of current house design. Are we still designing houses, or approving housing grants with gas heating? Should we not be looking at that question? I would ask the Minister of State to draw the attention of the Minister for the Environment to that point. Having said that, the fact is there are thousands of homes captive to gas; they must use gas for cooking or heating, or both. This week it was hinted that the Dublin Gas Company might not continue in certain circumstances. If that implied threat were to come to pass it would have a devastating effect on thousands upon thousands of people. I should like to have an absolute gilt-edged guarantee from the Government that, come hell or high water, a Dublin Gas Company of one form or another will continue, that the Minister will guarantee the security of supply of town gas in the Dublin area; that, if necessary, the Government will nationalise the Dublin Gas Company, or allow the local authorities to municipalise it to ensure security of supply. We did not hear any such assurance from the Minister this evening.
Actually it does not arise on the motion.
It does, of course.
Deputy Enright tabled this motion and knows what it contains.
This is a very important point. Many houses would be greatly devalued, many people greatly threatened if that security of supply is not guaranteed absolutely and the time has come for a clear declaration by the Government in this regard.
I do not intend to take up the time of the House much longer except to say that in no area of Government policy has there been such conspicuous failure than that of price control. The Minister of State, Deputy Burke, admitted this evening that this was a Ministerial function, that the Minister was responsible for price rises.
No.
Yes, he said the National Prices Commission were not responsible, that the Minister was responsible. I say the Government are responsible for price rises and for allowing them to continue to rise. I do not have to make stark promises about the future on behalf of this side of the House as to what we would do——
The Deputy would choke on them if he tried.
All I would say is that one should look at the record; just compare the record. What did we do in the period 1973 to 1977? What did Fianna Fáil do in the period 1977 to 1980? The record speaks for itself.
The Deputy is dead right.
Nothing speaks louder about gas prices and prices generally than the absence from this House of the Minister responsible for prices who was absent yesterday evening also.
I know the Chair will allow me make some brief comments that may be somewhat extraneous to what we are meant to be talking about, but as the Chair allowed Deputy Mitchell to make——
Only in keeping with what has been mentioned in the House.
Only in keeping with the motion and what Deputy Mitchell has already referred to.
Does Deputy Ahern support gas price rises or not?
What the Minister of State said last evening and again this evening regarding the Government's policy on stringent control of prices and the reasons associated with such increases as have been implemented since Christmas—which in fact are a cut-back on what the National Prices Commission recommended—illustrate that the Government are very conscious of these matters. The fact that energy prices have risen so substantially, the fact that Opposition Deputies have managed successfully to forget the words naptha, butane and propane, products used in the formation of gas, has been very convenient for them. It is only right to bring them back to some of the realities of 1974, 1975 and 1976 when prices rose by 17 per cent, 21 per cent and 18 per cent, respectively.
Deputy Mitchell referred to the years this Government have been in office in an endeavour to justify his arguments. The fact that the price of Arabian crude oil which was 12.95 US dollars in January 1978 has risen 100 per cent and is now about 26 US dollars shows the massive increases which have occurred. The matter was raised that when the Coalition Government were in office the increases were only 25 per cent and that the percentage increases in the cost of living in those years were very substantially higher than at present. This defeats the purported argument. Mention was made of the damage we were doing to the social welfare classes. This year the increases were bigger than ever—between October 1979 and April 1980 amounting to 31 per cent. How in the name of commonsense can this argument be put forward by Deputy Mitchell who then leaves the House rather than listen to the reply from the Government side?
The Deputy had to attend a front bench meeting, in fairness to him.
I accept that. Deputy Mitchell knows that the argument put forward does not stand up and his front bench colleague must realise that. I am as aware as anyone else that price increases have damaging effects for the community. The Government do not lack any awareness on that score and are not oblivious of the feelings of the constituents among whom they stand for election.
It is only fair to put on the record of the House that the Government have put control on price increases in the last few years which were four times more in the Coalition period. In the last few days the Minister for Energy has given detailed recommendations to improve the situation of the Alliance and Dublin Consumers Gas Company. He is putting pressure on that Company, which is accepted by them, to try and improve the situation and there have been detailed plans, involving a number of Departments, in trying to overcome the problem of the gas company and prevent them from closing down. The increases given, as Deputy Mitchell appears to forget, were to prevent the closing down and to allow time for examination. These are the facts. It is too easy to come in here and say that this Government have done this, that or the other. They are tackling this problem in a sensible and well-organised fashion.
I refer briefly, as everyone else seems to have done, to the work of the Minister for Energy and to the findings of the inter-Departmental committee on the question of the allocation of natural gas to the Dublin area, which takes up 90 per cent of the gas requirements of the entire country, and the various ways in which the Minister hopes the use of natural gas will improve the situation. He mentioned that a more effective and efficient use of natural gas could be got, instead of the alternative usage which is electricity generation. Over the last number of years during the Coalition period and during this Government's term in office it is clear that energy costs have increased substantially. These are outside factors which, because of our small economy and the fact that we do not have at present our own energy resources, create difficulties which must be dealt with in the best way possible. Any way which can be found of using natural gas to cut the cost of electricity generation will be of obvious benefit. The Minister for Energy and the Minister of State at the Department of Industry, Commerce and Tourism made it clear that this would have to be looked at in detail. Nobody can jump in and say "Here is the solution. Now we shall put it into operation". The cost of bringing natural gas from Kinsale would be very substantial and if the market is not there to ensure a viable and feasible package, there is no point in doing it. The Dublin Gas Company realise this and for their own future must achieve something in the next six weeks while their position is being examined.
The Minister for Energy said that the significant net saving on required energy investment of capital in respect of gas and electricity would, it is hoped, be cheaper with natural gas rather than with electricity plants. Naturally, the significant saving on the import bill and our energy products and the effects that they would have on the balance of payments must be taken into account. Any way in which the use of natural gas will improve the balance of payments in regard to energy cost would be of benefit. A significant saving would arise from the eventual closure of the town gas industry, if that were to be the case, and all these factors including flexibility and diversification in meeting the country's energy requirements can be achieved if it is possible to bring natural gas to the city. I am sure that the Minister for Energy will look at all these areas and that the cost to the consumer will be of prime importance in any decision made on the use of natural gas. The town gas consumption in 1979 amounted to something like 7,500 million cubic feet. Consumption in Dublin accounts for 90 per cent of this.
As Deputy Mitchell has said, of course, it is of prime importance to this city that nothing happens to the gas industry. I reiterate Government policy on bringing in natural gas to the city. Price increases were granted to the Alliance and Dublin Consumers Gas Company to bore for gas. Some increase had to be allowed to keep the company viable. It is unfair of any Deputy to be critical of the Dublin Gas Company. They were dealing with something that could not have been predicted, massive increases in the cost of naphtha. If the price of component parts of any product increases, it is only fair that that increase should be handed back to the firm otherwise you go into the massive subsidisation which Deputy Mitchell was talking about, which is unfair and leads to taxation. Subsidies are discriminatory. They are given to people whether they need them or not. This year almost £6 million was given in subsidies, so subsidisation has not been eliminated. The increases in the social welfare benefits are putting money back into the pockets of the people who require it most. Those who can afford pay. This has been Government policy all along. The increases of 25 per cent and 31 per cent which I have mentioned were higher than the increases in the cost of living.
Any allegations that the National Prices Commission are not strictly and stringently dealing with every application and only allowing increases which are necessary for the viability of these firms is unfair. It is clear that the policy of the Opposition party is, as is their duty, to put down these motions continually. However, they also have a responsibility to accept that if there are large outside increases it is impossible for companies to deal with them and continue on without increasing the cost of their product. It is unfair not to put this fact across, particularly about energy costs which are affecting every country, with the exception of the oil-producing ones.
When the inter-Departmental report is examined in further detail and when the technicalities concerning people like the IIRS are dealt with, It should be possible to bring natural gas from Cork. This should allow gas consumption in Dublin to increase fourfold, which is necessary for the Dublin Gas Company to continue as a growing concern. If this is not possible, it is something that will have to be faced up to at that stage. The gas company feel that if the projections that have been based on the inter-Departmental Committee findings are followed they should be a viable concern. I would like to praise the Minister of State for the control he has endeavoured to keep on price increases. Time and again prices lower than those recommended by the Prices Commission have been granted.
In relation to what Deputy Mitchell said about the grants I am sure every Deputy in the House knows that people who were considering changing to alternative forms of energy had their applications in prior to the closing date. It was left open to people to have some time to get their applications in and get the work done at a later date. It is wrong to say that all this work was cut-off. Deputy Mitchell knows that as well as other Deputies from the amount of correspondence they have with the Department of the Environment and the number of applications that particular ruling brought in. I am sure that it will probably be well into 1981 before the companies concerned get around to doing the work.
I am confident that the Government are looking at the whole area of energy and how best the price of energy can be controlled within the limited control we have over it. I know, in relation to the price increase of gas that the Minister has examined this matter and has allowed only what is essential to keep the Dublin Gas Company in business until the overall review takes place. I know that then the Government will do everything possible to protect the consumers of that particular company.
The motion I tabled yesterday on behalf of the Fine Gael Party is a reasonable one. I want to draw the Minister's attention to the fact that in 1977 there was a subsidy on Dublin town gas of approximately 33 per cent. The gross price of a therm of cooking gas in 1977 was 66.23p and there was a subsidy of 21.20p on it. The net price of a therm of cooking gas at that time was 45.03p. It was a very significant subsidy and it made the price of gas reasonable. The gross price at the moment is 126.43p with a subsidy of 16.70p leaving the net price at 109.73p. The subsidy now is approximately 12 per cent and has been reduced from approximately 33 per cent.
This is a very significant reduction, but the subsidy on cooking gas must be restored to what it was. If this was done it would mean that a therm of gas would cost approximately 84p. In the view of our party a similar subsidy should be brought in on the heating rate also. This would significantly reduce the price for the heating rate also. It is also necessary to provide a subsidy for bottled gas, because the price of a cylinder of bottled gas is frightening.
Gas is used mainly by elderly people, people with large families, people in flats and houses where there are no other cooking or heating facilities. While gas is used in some wealthy homes, the vast bulk of gas supply is used in the houses of ordinary working people, widows and pensioners. I believe the Government's argument that the subsidy would only help the better-off people is a wrong argument. I ask the Minister to consider this in the near future, because I believe if he looks at it seriously he will see the merit of what I am saying.
I live in rural Ireland and I visit many of the homes of elderly people. Many of them use briquettes and timber, but the vast majority of them use bottled gas for heating and cooking. The price of a cylinder of gas for those people is a major hole in their incomes. A 25 pound gas cylinder costs £4.33. When we add to that the delivery charge it makes the price of this gas enormous for those people. In thousands of flats and houses around this city there are no cooking or heating facilities available except gas. The Government are speaking about everybody using energy as if it was a real luxury. Every person who switches on a gas fire, burns briquettes, burns oil or petrol is not using it as a luxury. The Government should realise that the vast majority of people need to use gas, petrol, oil, briquettes and timber because they have no choice. They need it for cooking and heating. If the Minister provides a subsidy it will not mean that everybody will turn it on waste it and use it as a luxury, it would just help to alleviate the difficulties and the hardship which many people are experiencing. Many people, particularly in the city, are unable to pay the increased price for gas. Old people will have to face a hard winter because they will not be able to afford to pay for the gas. Many of them will end up in hospital suffering from pneumonia and that will cost the State money. I know the Minister does not want that to happen. This is a serious matter and is a cause for concern. If it is not dealt with it will have frightening repercussions. Young families also will suffer because of the scarcity of hot meals and heating unless the Government alleviate the situation.
The motion before the House calls upon the Government to take steps to reduce the price of gas to consumers. The Government could do a number of things. They could restore the subsidy to the rate of approximately 33 per cent as it was when Fianna Fáil returned to office. The Minister could remove the duty payable on town gas. The 22p duty that is being charged on bottled gas could be removed as well. That would be a start, and it would bring the price of gas to approaching a normal level if a reasonable subsidy were introduced along with these improvements. I do not blame the Minister for everything, but he is to blame for a certain amount of it, and that is the reason why this motion was put down. I hope the Government will try to get back to some sort of a realistic price.
I know the House is concerned about the frightening escalating cost of fuel, particularly gas. The price of briquettes has increased too, and I understand that Bord na Móna have an application in for a further price increase. Petrol prices have also gone up, but that is somewhat different. All heating fuels including briquettes, turf, gas and coal have been increased, and it is important that the Government realise the seriousness of this.
The Deputy realises that gas is also a derivative of oil. The Deputy backed off the petrol prices so he might back off the gas prices as well.
I have no time now. I listened to the Minister and I will be reading about what he said.
The Deputy backed off petrol prices and he might as well back off gas.
Deputy Enright is in possession on gas prices.
I am just keeping the Deputy going until 8.30 p.m.
The Deputy does not need any help. The Deputy can stop any time he likes, I will be happy to put the question.
It is wrong that a sketchy condensed report of the inter-Departmental committee on gas was published. I would urge the Minister to publish the full report of the inter-departmental committee.
The Deputy raised that matter last night, and it is really a matter for another Minister.
I appreciate that, and I am just asking that it be published in full. Today's Irish Independent says that the gas link to 150,000 Dublin homes is threatened. The paper says that the Dublin Gas Company face closure if imately 100 feet high. The lift was in-from Kinsale Head. This report concludes that the future of the town gas industry in general hinges largely on the future of the Dublin Gas Company, which accounts for over 90 per cent of the sales of the industry excluding Cork. That is very important. From that it appears that it is only if the Dublin Gas Company can adapt that this natural gas supply will be provided for the country. I would ask the Tánaiste and the Government to clarify that situation.
It was clarified earlier on in the House and the Deputy would have heard it if he were here.
Deputy Enright to conclude, although all the points he is raising now are really for another Minister but I am allowing him to raise them.
I answered that earlier on, as the Deputy raised it last night.
Approximately £70 million was the figure quoted 12 or 18 months ago to supply a pipeline from Cork to Dublin. The cost now is around £100 million. The provision of natural gas for cooking and heating should not hinge solely on the Dublin Gas Company. There should be a supply of gas in the larger centres of population, in towns like Galway, Limerick, Wexford, Dundalk, Portlaoise, Tullamore and Birr. The Confederation of Irish Industry in last Monday's Evening Herald called for the construction of a £100 million gas pipeline to carry the gas not only to Dublin but throughout the country. Gas can and should be provided to all of these towns throughout the country. Holland is an example where this has been done. It has also been done in Japan, and Britain have divided their country into 12 different parts to facilitate the supply of gas throughout the country.
We have a challenge to meet in regard to this. When Bord na Móna was first established, Russians came across to County Offaly to see our briquette factories working. That was an example of what we could do with initiative. Similarly the ESB have given us an example and Bord Gáis, given the strength and the personnel, can meet the challenge facing them in this area and it will have enormous repercussions for everybody. In case the Chair thinks I am straying from the motion——
The Deputy has not touched on it in the last quarter of an hour.
The Deputy has about half a minute to stray back to his seat.
This is the answer to providing a better supply of gas at a more reasonable price for the consumers. This is something that could change the whole face of Ireland as we know it.
Amendment put.
The Dáil divided: Tá, 66, Níl, 43.
Tá
- Ahern, Bertie.
- Ahern, Kit.
- Allen, Lorcan.
- Andrews, David.
- Andrews, Niall.
- Aylward, Liam.
- Barrett, Sylvester.
- Brady, Vincent.
- Briscoe, Ben.
- Browne, Seán.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Cogan, Barry.
- Colley, George.
- Fox, Christopher J.
- French, Seán.
- Gallagher, Dennis.
- Haughey, Charles J.
- Herbert, Michael.
- Hussey, Thomas.
- Keegan, Seán.
- Kenneally, William.
- Kileen, Tim.
- Killilea, Mark.
- Lawlor, Liam.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- Leyden, Terry.
- Loughnane, William.
- Lynch, Jack.
- McCreevy, Charlie.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Gerard.
- Cowen, Bernard.
- Crinion, Brendan.
- Daly, Brendan.
- de Valera, Vivion.
- Doherty, Seán.
- Faulkner, Pádraig.
- Filgate, Eddie.
- Fitzgerald, Gene.
- Fitzpatrick, Tom (Dublin South Central).
- Fitzsimons, James N.
- Fitzsimons, James N.
- Flynn, Pádraig.
- McEllistrim, Thomas.
- MacSharry, Ray.
- Molloy, Robert.
- Moore, Seán.
- Morley, P. J.
- Nolan, Tom.
- Noonan, Michael.
- O'Connor, Timothy C.
- O'Hanlon, Rory.
- O'Kennedy, Michael.
- O'Malley, Desmond.
- Power, Paddy.
- Smith, Michael.
- Tunney, Jim.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Níl
- Barry, Myra.
- Barry, Peter.
- Barry, Richard.
- Begley, Michael.
- Belton, Luke.
- Bermingham, Joseph.
- Bruton, John.
- Burke, Joan.
- Burke, Liam.
- Cluskey, Frank.
- Conlan, John F.
- Cosgrave, Liam.
- Cosgrave, Michael J.
- Creed, Donal.
- Crotty, Kieran.
- D'Arcy, Michael J.
- Deasy, Martin A.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John F.
- Enright, Thomas W.
- FitzGerald, Garret.
- Fitzpatrick, Tom (Cavan-Monaghan).
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Horgan, John.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- Lipper, Mick.
- McMahon, Larry.
- Mannion, John M.
- Mitchell, Jim.
- O'Brien, Fergus.
- O'Brien, William.
- O'Toole, Paddy.
- Pattison, Séamus.
- Quinn, Ruairí.
- Taylor, Frank.
- Timmins, Godfrey.
- Tully, James.
- White, James.
Tellers: Tá, Deputies Moore and Briscoe: Níl, Deputies L'Estrange and B. Desmond.
Amendment declared carried.
Motion, as amended, agreed to.