First we should consider what the increase is, because there was a time when a Minister for Finance when proposing changes in duty would tell the House what would be the ultimate net effect to the consumer. We have not been given any such information today. The Minister for Finance is seeking in this instance, as in others that we have dealt with already, to wash his hands of the direct consequences of the changes in duty. The immediate change that will have to be made in margins for retailers in relation to petrol, which is one of the two principal items here, will be something more than 2p per gallon. This means that in effect the increase is not 13.4p but slightly in excess of 15.5p.
The Taoiseach made what I considered to be a remarkably weak argument in replying to Deputy Fitzgerald on this point. The Taoiseach said that the proportion of tax in the price of oil is less than it was 18 months or two years ago. We know the way in which taxes have increased, but the point made by the Taoiseach demonstrates how much the inherent price of oil has gone up and the difficulties that this is creating for so many businesses and individuals. In that situation, a situation which is demonstrated in the Taoiseach's figures, one would have thought that the last thing a Government who wished to stimulate the economy would do would be to increase further the price of an item that is being pushed up in price all the time anyway from outside sources. Therefore, the Taoiseach's argument defeats the point he is trying to make.
This resolution is divided into six parts. It seems to be very technically worded and I am not sure which paragraph refers to which oil. However, I should like to refer in particular to what I call heavy oil, which is black oil as distinct from petrol, diesel or any of the light oils. The House will recall that in the budget of, I think, January 1980, an additional duty of 5p per gallon was put on that oil. That increase was the subject of a good deal of criticism at the time. As one might expect also, it was the subject of much debate within the Cabinet as to whether such an increase—an increase which had been imposed originally by the previous Government in 1975—should be made having regard to the damage it would do to industry. But when the yield of the additional 5p per gallon was pointed out there was a compelling case from the point of view of the Exchequer and of the Department of Finance that it should be included and, albeit very reluctantly, I went along with it.
In 1980 the yield in that respect was £45 million. I would estimate that the yield in 1981 in respect of this proposal will be of the order of £50 million to £60 million. I do not think anyone will be in a position to put an exact figure on it until the end of the year. The Minister tells us that he is halving that additional 5p, but if the House cares to refer to his speech, it will find that he will save £6 million in a full year and £500,000 in this year. Apparently he considers that he has fulfilled his promise, but how can one fulfil one's promise to remove a level of taxation which runs at almost £30 million by removing £6 million worth of revenue? It seems to me to be perfectly evident that when we see the Finance Bill that is to follow on this budget—that is, if we ever see such a document — we will have a very long section which will begin by halving the rate of duty and then going on to state that, for instance, subsection (a) does not apply to the following, the following being a list as long as one's arm.
Late last year because of the concern I had in relation to the effects which this unfortunate duty was having on all industries and because of the very serious effects it was having on some industries, the then Government devised a scheme of energy conservation grants whereby reliefs might be given to some of the hardest hit industries by way of their devising energy conservation schemes. In effect this was a way of trying to relieve them of some of the hardships caused by the taxes. This hardship was particularly evident in those industries in which a high proportion of costs was due to the cost of energy. That scheme cost the Exchequer £2 million but it benefited only a handful of firms. Indeed, only one firm got any worth-while benefit from it while about eight others derived limited benefit from it. Under this hydrocarbon arrangement we are to get a rebate of £6 million. On the basis of the experience I have just outlined I estimate that about 24 companies will derive some benefit from this scheme while most of the others will get very little. Is that not a flagrant denial again of the undertaking that was given to halve that tax? We will not know how the whole thing is to operate until we see the Finance Bill.
The proposal before us is to come into operation straight away but I wonder how it is to be administered. There is no section of a Finance Act to guide the Revenue Commissioners. Yet, administrative action is to be taken. How is the whole system to be worked out? Some of these changes become effective tomorrow but this one will not come in until later. I am dealing with the resolution on excise on hydrocarbon oils of which there are six types.
On 10 June last, Fine Gael supported The Irish Times to the extent of a one-third page advertisement. The advertisement stated: “Fine Gael Nail the Big Lie”. On the top left hand corner, top of the left, was a picture of a nail in a wall, with the word “lie”. The advertisement stated: “Lie: There will be huge increases on petrol, beer and spirits. Answer: Fine Gael will strictly control the prices of these items”. An event happened the following day which was a poor thing for the Irish people. The advertisement dealt with housewives and what they would get within weeks of the budget, the £9.60p. That was lie No. 2 that was nailed. “Everybody will pay more tax”. That was another lie they nailed. With Fine Gael, only people earning more than £50,000 a year would suffer. The next one was about VAT. I do not think the nailing of that lie catered for the 50 per cent increase in VAT which we have seen today. The remainder of that historic advertisement can be discussed on a more suitable occasion than this when we are discussing only increases in the prices of various types of oil.
We will now have the dearest petrol in Europe. It is a distinction which changes from country to country from time to time. We are now in that situation. We certainly will have the dearest motoring in Europe because this budget is unique. It does not just increase the price of petrol: it increases the cost of new motor cars by increasing the excise duty on them, by increasing VAT on them. It re-imposes road tax on cars and at the same time imposes a substantial increase in duty.
One would worry less about it if we had an efficient public transport system, but since this Government came into office the public transport system has not operated in the capital city. When the strike has been settled finally, somebody should go out and take a film or a photograph of a bus moving in Dublin because if it happens between now and the end of July it will be the first bus that has moved in Dublin since Fine Gael and Labour came to office in the year of our Lord, 1981.
Every one of these resolutions will have a deep and heavy impact on the tourism industry, not least this resolution in relation to petrol. Having started the year not with prospects but with bookings which indicated that this year would be the most successful year ever for tourism, we are now unhappily in the situation, thanks to the H-block people and their sympathisers, that we are having the worst tourist season ever. Nails in walls and in coffins seem to be fashionable with the Government, and these eight resolutions dealing with drink, motor cars, petrol and various other things that are of concern to tourists are the final nail in the coffin of that unfortunate industry which, because of currency differentials between here and Britain, this year could have had its best year ever.
