Richard Bruton
Question:15 Mr. R. Bruton asked the Minister for Energy whether he has had discussions with the ESB regarding their capacity to reduce electricity prices in the run-up to 1992.
Ceisteanna—Questions. Oral Answers. - Electicity Prices.
Jim O'Keeffe
Question:31 Mr. J. O'Keeffe asked the Minister for Energy whether he has had discussions with the ESB regarding their capacity to reduce electricity prices in the run-up to 1992.
Dinny McGinley
Question:72 Mr. McGinley asked the Minister for Energy whether he has had any discussions with the ESB regarding their tariff structures; and if he has satisfied himself that they are efficient and equitable to consumers.
I propose to take Questions Nos. 15, 31 and 72 together.
My Department monitor ESB costs on a continuous basis and have an early and clear view of any opportunities for price reductions. In view of this, I do not see any need for additional discussions with the ESB about prices or their tariff structures.
The latest comparison of EC electricity prices shows that Irish industrial prices are on a par with the European average while domestic prices are below the European average. The objective now is to hold prices at their present levels at least up to 1992.
Will the Minister agree that the Government's decision, which effectively robs the ESB of their opportunity to cut electricity prices, is hampering the development of the company? If the Minister had an early and clear view of the capacity for price reductions why is it that he did not implement them before the announcement in the budget to increase the tax take?
The Deputy, his party and the House know that there is an obligation to achieve tax harmonisation. All electricity utilities in Europe, with the exception of two, carry a tax similar to VAT. In view of tax harmonisation requirements by 1992 the Government considered it prudent to begin moves towards achieving that.
The EC band is lower than the proposed Irish band.
The Deputy should relax. The House should offer its congratulations to the staff of the ESB on achieving the level of cost efficiencies within their organisation which have allowed over a period of two years for the imposition of a 10 per cent rate of VAT without any resulting price increase across the board. That was a major achievement and, as Minister for Energy, I should like to extend my congratulations to everybody involved in the ESB. They enabled us achieve that happy move.
A financial miracle.
There have been substantial decreases in the cost of electricity to consumers, particularly industrial consumers, in comparison to the price a number of years ago. The House should recognise that and pay due tribute to the ESB.
Is it not the case that the Irish decision to have 10 per cent VAT on electricity means that we are higher than the maximum rate proposed by the EC Commission for electricity?
There is not a maximum rate as yet.
There is a 4 to 9 per cent band.
There are proposals but there is no agreement as yet. As the Deputy is aware, that matter is still in a state of flux.
Why did the Minister mention tax harmonisation?
I have given our rates.
They are above the others.
Only marginally. The Deputy is nit-picking.
I am not.
The Minister for Finance pulled the wool over the Minister's eyes.
The Deputies know that whatever the level is we will be obliged to help the ESB.
There was no bonus for the consumers.
We have VAT in place now and if a lower level is introduced there will be a bonus for us and we can achieve a reduction at that stage.
There was no bonus for the consumer.
That is a different tune to the one the Opposition were playing on budget day. On that day they said that electricity would have to be increased but that has not taken place.
Consumers were entitled to a reduction but the Government denied it to them.
Time will tell what the position will be.