I ask the Minister to begin with Question No. 2 because Deputy Ó Cuív has not arrived.
Priority Questions
Níl an Teachta Ó Cuív anseo.
Níl go fóill, ach tá sé ag teacht. However, I have called Question No. 2 so the Minister of State should continue.
Government Programmes
Martin Ferris
Question:2 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources when it is proposed to establish the NewERA Programme to oversee State investment in energy, broadband, forestry and water. [11070/11]
The Government has clearly set out its intention to ensure the semi-State sector plays a full role in Ireland's economic recovery. The State companies are engaged in a wide range of strategic activities and have significant investment programmes in place. We want to ensure these investment programmes are delivered to best effect in the interests of jobs and growth. The New Economic and Recovery Authority, NewERA, is the planned vehicle whereby the State's holdings of the key State companies will be managed to ensure cost effective investment in key priority areas. These include the energy networks, broadband, water and the bioenergy sector.
Under the NewERA plan, a sharper focus and more structured shareholder engagement will ensure the State companies will make the necessary and appropriate strategic investments over the coming years in these key sectors of the economy. Such investment will not only ensure the delivery of the key economic infrastructure required but will also ensure an economic and jobs stimulus for the country. This is essential and our country is entitled to it.
I am totally committed to ensuring speedy progress is made in establishing the NewERA entity. To that end intensive work is under way to shape the programme in my Department and in the Department of the Environment, Community and Local Government. I am working with the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, and the Minister for the Environment, Community and Local Government, Deputy Hogan, and all other relevant ministerial colleagues to deliver effectively on the Government's ambition.
A key issue is the opportunity for the State companies to channel the necessary funding at the best cost achievable to the energy, broadband, water and forestry sectors. The structure of the NewERA model must deliver on that objective. As we refocus and restructure across the relevant State companies, it is important to ensure their capability to access additional funding for new and existing investment priorities. We are also examining how best to leverage the National Pensions Reserve Fund and shape the new national development plan to ensure indigenous jobs and growth through the NewERA entity. This is a key priority for the Departments concerned to work on collectively in the short term.
I thank the Minister of State for his response. I am sure such a NewERA programme would be welcome but wonder how it might be affected by the downgrading of State companies and the sale of the assets of such companies, as recommended by the report on State assets and liabilities. Will the Minister of State provide assurance that the programme investment will go ahead and nothing will be done in respect of the two component parts of the proposed State bioenergy companies, Coillte and Bord na Móna, that would prevent that taking place?
In the light of what has happened in Greece, whose Government has been pressurised by the IMF and the European Union into selling off some €15 billion of state assets, can the Minister of State provide assurance this will not affect the NewERA programme, given the concerns that exist, especially in one part of the Government which is opposed to selling off any State assets?
The key point is that the Government is ad idem, of one mind, on this. I refer the Deputy to page 14 of the programme for Government which makes very clear that, after due consideration, there will be a sale of State assets amounting to up to €2 billion which will be part of, and in addition to, the national development plan. We need to keep the State companies focused on what they do best. If there are investments or companies as subsets of those State companies which can be sold off because they are not essential, the key point being that non-essential State assets are intended, these could be used productively to get a stream of revenue into the State companies and, through NewERA, create thousands of jobs. If we do not get the wake-up call across clearly to everyone that this must be done, we will not be able to recover in this recession or be able to create the jobs that are so essential in broadband, water, bioenergy and so on. This is the situation and that is exactly what we will do. We are united and absolutely committed and dedicated on that principle.
Do I take it the Minister of State is giving a commitment that the €2 billion figure mentioned in the programme for Government is the maximum?
The programme for Government states that up to €2 billion will be invested in NewERA. The key point is that the McCarthy report is being considered by Government and each Department will have its proposals in that regard. However, NewERA is predicated on getting investment from the sale of non-essential State assets.
Broadcasting Services
Éamon Ó Cuív
Question:1 Deputy Éamon Ó Cuív asked the Minister for Communications, Energy and Natural Resources the definition of public service broadcasting used by him in allocating the resources from the television licence; if he feels that this requires further examination; and if he will make a statement on the matter. [11072/11]
Part 7 of the Broadcasting Act 2009 provides for public service broadcasting in Ireland and the provisions relating to the public service broadcasting corporations, RTE and TG4, including their principal objects. These objects provide the companies' statutory mandates and encapsulate national policy in terms of public service broadcasting. They include the specific objective of providing for national, free-to-air public service broadcasting services as well as the provision of a broad range of other additional services that are seen as fundamental to the role of the public service broadcaster. In their pursuit of these objects, the provisions of the Act subject the public service broadcasting corporations to a range of additional requirements. These statutory objects and requirements clearly set the State-owned public service broadcasters apart from their commercial counterparts who, while bringing choice and competition to the market, are privately owned and funded companies that have entered the market on the basis of a commercial proposition.
The funding of the public service broadcasters, RTE and TG4, is met through a mix of licence fee revenues, Exchequer grant-in-aid and commercial revenues obtained largely from advertising. The rationale for providing State funding for public service broadcasting is to provide an independent and reliable income flow that allows these corporations to attain their public service objects while ensuring they can maintain editorial independence. This is especially important in the context of news and current affairs.
In regard to the television licence fee moneys, I point out that not all these are allocated to the public service broadcasters and that a proportion is available to both public and independent broadcasters through the broadcasting funding scheme. The purpose of this scheme is to encourage the inclusion of additional programming of a particular character in broadcasters' programme schedules. The scheme is open to independent producers and all free-to-air broadcasters. It is funded by way of a payment of 7% of net licence fee receipts which is paid to the Broadcasting Authority of Ireland in respect of this scheme. This amount was increased from 5% to 7% under the Broadcasting Act 2009. I am aware that the funding of the public service broadcasters has been subject to criticism by private sector broadcasters and, in particular, that there has been criticism of the dual public and commercial funding model as applied to RTE and that there have been calls to extend the current scope of funding.
Additional information not given on the floor of the House.
The broadcasting sector in general has faced a challenging funding environment in recent years with a large fall in commercial advertising revenues. In addition, change in the way content can be transmitted is adding to the challenging environment. It is understandable in such a situation that extending further the scope of funding of public service content would seem attractive to some. However, great care should be taken in considering any such course of action. The provision of balanced, adequately resourced and independent public broadcasting services is fundamental to democratic society.
Therefore, we must ensure that the ability of our public service broadcasters to deliver on their remits and obligations is not undermined through decisions that cause a slow but certain erosion of their economic base. As the Deputy may be aware, the importance of ensuring continued and appropriate funding for public service broadcasting is recognised in the programme for Government. In this document, the Government commits to examining the role and collection of the television licence fee in light of existing and projected convergence of broadcasting technologies and to transform the television licence into a household-based public broadcasting charge to be applied to all households and applicable businesses, regardless of the device they use to access content.
In line with this commitment, my Department is currently undertaking an exercise whereby it is examining the effectiveness and efficiency of the current model of television licence fee collection in the context of the changing technological environment, and examining the efficiency of various international models for the funding of public service broadcasting. The results of the exercise will be an analysis of the most effective models in terms of efficiency, capability to fund our public service broadcasting service and equity of applicability.
The scope of work being carried out under this review is extensive. Nevertheless, I expect to receive recommendations arising out of this review by the year end. Following this, work will begin on developing any legislation that may be required to facilitate implementation of any recommendations that I decide to take forward. I accept that the broadcasting sector, in common with other sectors, is facing challenging economic circumstances. I recognise these challenges and I look forward to working with all broadcasters, including public, commercial and community, to ensure that broadcasting can continue to play its important and distinctive role in society and maintain quality standards in the process.
I congratulate the Minister as this is the first time we have had Priority Questions here since I became the spokesperson for Fianna Fáil. I thank him for a comprehensive, if somewhat predictable, answer from the Department. The nub of the matter is that I agree with the idea of public service broadcasting and I fully support the Minister in this. Has the Minister any ideas on how to ensure measurement of the public service output compared to the commercial output of the public service broadcasters? How can the Minister ensure that in allocating the licence fee between the various public service broadcasters the moneys are allocated for public service broadcasting and do not subsidise commercial output within those companies?
I thank Deputy Ó Cuív for his remarks. I doubt if there is much difference between his philosophy and mine on this issue. There are specific statutory obligations in respect of the public service broadcasters, including TG4. They must fund the service without fear of intrusion into their independence. Public service broadcasting is about more than funding. It is about content and structures as well. The broadcasting fund has been successful. It has spawned a not-insignificant number of independent producers who have carried out some quality work. Given the current climate, perhaps the commercial sector is finding it more difficult to remunerate those independent producers. However, in terms of innovation and imagination in the sector they have made a valuable contribution and it represents a beneficial use of the money. The Deputy will be aware that the last budget allocated some €10 million of the broadcasting fund directly to TG4. I intend to give effect to that.
I welcome the commitment from the Minister today. I have always believed from the time TG4 was set up, including when I was Minister and since, that TG4 should be funded from the same fund as RTE and that if there is to be an Exchequer subvention, the lot should go into one ball of wax and then be spread out. We give a licence fee to public service broadcasters. Let us leave aside the broadcasting fund, or the fund that goes to bidding and concentrate on TG4, RTE and its various manifestations. Is there any measurement by the Department of the application of the funds in terms of public service broadcasting to ensure that what we get back in terms of public service broadcasting from the licence fee money is a good return and an equitable return on the money?
Will the Minister clarify whether any of the licence fee is used to pay inflated salaries and fees to broadcasters in RTE? The licence holders would be upset if they believed this was the definition of public service broadcasting, that is to say, paying people €600,000 and €700,000 per year in a time of economic downturn. Will the Minister clarify whether any mechanism exists between the giver of the money, that is, the Department, and the recipient to ensure that public service broadcasting money is put to public service broadcasting and not to the enrichment of private individuals?
Are we getting value for money or could it be reapportioned to specific programming types within the broadcaster? To some extent, that is in the eye of the beholder. Deputy Ó Cuív may take the view that RTE does an immense job in public affairs, especially were it to recognise his inherent outstanding qualities, but were it to decide to apply the same to this side of the House he may believe it is not so great. We all react more or less like that. In particular, the broadcaster's coverage of public affairs is in the eye of the beholder.
I am keen to see the quality content of RTE being the focus of RTE all the time. I realise that in comparison with the broadcasters across the water RTE's budget is small. None the less, it has produced quality output, although perhaps not enough of it. Some of the stuff imported from outside the jurisdiction is pretty terrible. Perhaps that is a subjective view. However, if one tunes in to any of the other channels one gets the same pap. I am unsure whether it does anything to raise the intelligence quotient in the country.
Regarding the inflated salaries aspect of Deputy Ó Cuív's question, the honest answer is that some of the moneys must, inevitably, go towards the remuneration of contract staff because they are all paid from the same purse. I do not disagree with Deputy Ó Cuív. Given the times we are in and that RTE is projecting a deficit at the end of the year in excess of €30 million, it would be appropriate to consider all levels of salary and remuneration packages in the corporation because it must survive in a more difficult climate. There has been a dramatic collapse in its commercial revenues in the past two years. I have discussed the financial provision of RTE with the management and sought assurances that quality will not suffer as a result.
May I ask a brief supplementary question?
I have been very generous, Deputy. Perhaps you can put down another question.
I know that, but this is fundamental.
I call Deputy Clare Daly.
Will the Minister consider making it a condition of the licence that no one would be paid more than a Minister's salary, which, we would all agree, is rather generous?
I will not call on the Minister to reply.
It is not as generous as when the former Minister Deputy Ó Cuív was over here.
Electricity Transmission Network
Clare Daly
Question:3 Deputy Clare Daly asked the Minister for Communications, Energy and Natural Resources if he will re-route the Eirgrid high voltage DC cable away from the main street of Rush, County Dublin, in view of commitments (details supplied) given to the local community; and the present status of this issue. [11148/11]
EirGrid, the State-owned independent electricity transmission system company, is building the east-west interconnector between Ireland and Britain. The construction of this vital strategic infrastructure by EirGrid is on budget and on schedule for completion next year.
I have no role in the planning and construction of transmission infrastructure, which are operational matters for EirGrid. The planning process for strategic energy infrastructure is a matter for An Bord Pleanála under the Strategic Infrastructure Act. It would not be appropriate for me or any Minister to intervene in respect of the planning process.
The interconnector obtained full planning permission from An Bord Pleanála in September 2009. This approval followed a comprehensive assessment process, including an oral hearing, at which all stakeholders were present including Rush Community Council. It is being developed and constructed in line with all relevant national, EU and international guidelines for health, safety and the environment. EirGrid has advised that construction of the ducts for the cable is well advanced with approximately 75% of the construction of the ducting in Rush now completed.
The Minister could have saved himself a lot of time and just said "no", which seems to be the short answer to the question as to whether he would consider the rerouting of the cable away from the population of Rush. It is irrelevant that the project has been through the planning process. In many instances, ventures that are given planning permission have the permission altered and Eirgrid, as the Minister has acknowledged, is State-owned.
Rush is the only populated area through which this high voltage cable has been laid and while the ducting is largely underground, the cable itself has not been inserted. Could the Minister comment on the status of the Kema report into the safety concerns of residents about the cable, why it has not been factored in and why he has not instructed Eirgrid to wait for the report to be done? Crucially, why did his ministerial and party colleagues, while in opposition, give a commitment to the people in that town that if they were in Government after the election, they would ensure the cable was rerouted?
I have been unable to find any colleagues who gave any such undertakings before or since the election. After all that has happened in the past 30 years, the idea of the Minister interfering in the planning process is an extraordinary proposition for Deputy Daly to advance. If I interfered in a project like this, why should I not interfere in one of Deputy Wallace's construction projects? What sort of accusations would that leave me open to from Deputy Daly?
There is a bit of a difference.
I am sure there is a measure of agreement between Deputy Daly and myself that this is vital strategic national infrastructure. It is imperative this is concluded. I am glad it is coming in on budget and on time. The ducting is already in place and I am confident it will meet the targets.
No one opposes the cable; the issue is that it is being inserted in a heavily populated area, feet away from schools, crèches and houses. The fact that a State organisation seeks and is granted planning permission for a project is neither here nor there. The organisation falls under the Minister's jurisdiction and he can instruct it to seek an alternative planning route that will take it away from densely populated areas. That is all that is being sought.
The Minister did not comment on the safety report that has not been commissioned yet. It is becoming the norm for Eirgrid to not bother waiting for reports to be commissioned, it just ploughs ahead regardless. Ultimately Eirgrid reports to the Minister and it is not good enough.
I assure the Deputy that I have gone to considerable lengths to establish if there is a safety risk and I am absolutely, and I stress that, assured that no risk exists. I agree that just because this is a State body making a planning application, it does not make it right. The proposition, however, that I should interfere is wrong; it is a matter for the planning authorities to decide if it is right, if it is in compliance or if it is a health risk. The planning authorities have gone through all of this and I am assured there is no health risk, that this is a project of profound value to everyone on the island because of concerns of security of supply and ensuring we have an energy supply in the future, and the hope that it will bring down prices. This is vital national infrastructure and if I thought there was a 0.1% risk to health as a result of the project, I might take a different view.
Community Forum
Éamon Ó Cuív
Question:4 Deputy Éamon Ó Cuív asked the Minister for Communications, Energy and Natural Resources when the next meeting of the North West Mayo Forum, Erris, is due to take place; the agenda for this meeting; if he intends changing the membership of the forum; and if he will make a statement on the matter. [11073/11]
The North West Mayo Forum was established in 2008 with the dual objectives of providing an opportunity for dialogue between parties with an interest in the Corrib gas project and offering an opportunity for furthering the socio-economic development of the north-west Mayo region. While it was intended that membership of the forum would include a broad representation from local community groups, those groups opposed to the Corrib gas project declined to participate in it.
Over the course of its first year, five meetings of the forum were held. In the past 18 months the forum met only once, and that was just over a year ago. A decision has not been taken to convene a further meeting of the forum at this time.
The construction phase of the project is well advanced, with construction of the gas terminal, the offshore pipeline and the sub-sea facilities almost complete. The principal remaining element of the development is the construction of the onshore section of the pipeline. That work is due to commence this summer.
The consent conditions monitoring committee, being established by my Department to monitor implementation of the conditions of the section 40 gas pipeline consent, will provide an opportunity for representatives of the local community to engage in a meaningful way on the construction of the onshore pipeline.
I am disappointed to hear there is no plan to have a meeting of the forum. Does the Minister accept that the forum was a good way to resolve issues on the ground and that it did extraordinarily good work? Does the Minister agree the challenge was to secure greater participation, although some of the groups who were opposed to it in various forms attended the meetings as observers?
Does the Minister agree that one of the roles of the forum was to ensure the area would benefit from the development and that issues of conflict within the community would be resolved? Does he accept there was wide community participation in the forum by many groups and that it helped to resolve problems on the ground? I ask the Minister to reconsider calling a meeting of the forum in the near future as it was doing very good work.
I do not dispute it was a good idea. Unfortunately, it has not been the success all of us might have hoped. There has not been a meeting for more than a year and Deputy Ó Cuív is aware that on the last couple of occasions, when great efforts were made to convene a meeting, it broke up in some disarray because of the activities of a small number of people who are not representative of the area.
Deputy Ó Cuív properly raises the issue of the benefits that might redound to the local area. That is a useful aspect of the dialogue. A great deal has happened since Peter Cassells was brought in by my predecessor. I was involved in that decision myself. He went to do a task that was very useful with tangible, beneficial spin offs for the area as a result of the Cassells report. I do not intend to disband the forum, I will be briefed by its chairman within the next couple of weeks and I will listen to what he has to say.
Who does the Minister think is representative of the area? The issue in north-west Mayo is that people have very different views on this project and those views vary from area to area of the Erris region, a huge geographical area. Those who were opposed to the gas pipeline comprise both outsiders and local people and they must be respected for their views. Will the Minister accept that the only way forward in such situations is continuous and slow dialogue? He is absolutely correct that some of the meetings were acrimonious but some of the most productive meetings we had were quite acrimonious; my view was we were making progress. Considering what the Minister said about the deep-freezing of the forum in some limbo, will he reconsider reverting to the situation where it would be proactively driving reconciliation and also development within the Erris area? Is it intended to make natural gas available in Ballycroy, Carrowteige and Belmullet?
It is beyond my powers to answer the Deputy's first question about who represents the area. It is, unfortunately, very divided. I acknowledge the patient work done by the members of the forum under the chairmanship of Mr. Joe Brosnan but I would have to draw attention to the fact that three of the groups opposed to the project for one reason or another did not attend and this is a great pity. I do not know who represents the area and I suppose the best yardstick would be the results in the ballot box but they did not seem to bear out or were not directly related to the groups that can raise most decibels in the area.
I heard what Deputy Ó Cuív said and I have told him it is my intention to talk to the chairman and to weigh up the advice he gives me.
Energy Prices
Martin Ferris
Question:5 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources his views on the application by An Bórd Gáis for an increase in the prices it charges to its customers; and if he will make a statement on the matter. [11071/11]
Responsibility for the regulation of gas prices is a matter for the Commission for Energy Regulation which is an independent statutory body. Bord Gáis Energy's gas tariffs for domestic customers and small businesses are still regulated by the Commission for Energy Regulation and reviewed each year. I have no function in the matter. Decisions on gas prices by the commission involves reviewing all the controllable cost inputs and forecasting the likely wholesale gas costs. The objective is to ensure that tariffs are cost reflective.
The largest component of gas prices is the wholesale global cost of gas. The last increase of 20% in regulated gas prices was in September 2008. Wholesale gas prices moved downwards from autumn 2008 until recent months. This has resulted in consistent reductions in gas tariffs for domestic and small business customers. However, wholesale gas prices have been trending significantly upwards in Europe in recent months. This is driven by geopolitical events in the Middle East and North Africa and high demand in Asia, including Japan, in the wake of the nuclear crisis. The regulator and Bord Gáis Energy estimate that increases in wholesale prices in October are likely to result in a significant increase in tariffs for Irish customers. The extent of the increase has not been quantified as yet but this should be seen in the context of a cumulative decrease of 27% for consumers since January 2009.
The regulator will undertake its detailed annual review of the Bord Gáis energy tariff during the summer months. This will involve assessment of Bord Gáis Energy's own submission on gas prices which will be made in June or July, followed by a consultation process. A decision by the regulator will follow in early September on whether any variation should be applied to the tariff from 1 October next.
The continued entry of new suppliers into the residential gas market, offering discounts on the BGE rates, shows that regulatory policy to encourage the growth of competition in gas supply pays dividends for consumers. Customers can also help to reduce the impact of rising prices by shopping around for the best deal. They can also take steps to improve the efficiency of their gas usage as this will deliver demonstrable savings.
The regulator is currently considering the timing for complete deregulation of the residential and small business segment of the gas market, as has happened in the electricity market. Full deregulation leading to further competition will keep downward pressure on prices for consumers. However, Ireland is a price-taker for gas and the outlook for the European gas market is for a continued rise in the commodity price.
I do not believe the application by Bord Gáis Energy for an increase of 20% in gas prices and 10% in electricity prices is justified. As the Minister correctly stated, the company has cited global prices as a mitigating factor, despite the fact that the company made €120 million profit last year. The company also admits that many of its customers are in arrears. The obvious knock-on effect of an increase in prices will mean more people will fall into arrears of payment.
When the Minister sat on this side of the House he tabled a Private Members' motion on the issue. Does he intend to fulfil the Labour Party's election commitments to introduce a fuel poverty Bill? Will that Bill include criteria to deal with exorbitant increases such as Bord Gáis's 20% and 10% increases in order to ensure that people on low incomes will have adequate fuel and heating and will not be cut off as has happened to ESB and Bord Gáis customers?
The Deputy is correct in that I responded to the huge increases in 2008. Since then, the cumulative decline in prices has been 27% which does not mean that for the consumer the prospect of Bord Gáis raising its consumer price in the coming winter will be welcome. I have expressed this view to the company and to the regulator. I have been working with my colleague, the Minister for Social Protection, Deputy Joan Burton, on the fuel poverty dimension. Deputy Ferris will understand the difficulty is that 95% of our gas is imported. The Kinsale field is winding down and notwithstanding all that gas which Deputy Ferris and his colleagues discovered out there — I asked him to tell me where it is exactly so I can bring it ashore——
That is the gas the Minister is giving away for nothing.
We need to be able to pin it down because the extent of our reliance on a gas pipeline from elsewhere is not the ideal situation to be in. If we could get the liquified natural gas project under way down in the Deputy's neck of the woods in Tarbert this would be a contribution and bringing the Corrib gas on stream would also make a contribution. However, unfortunately, at the moment, because of events in Libya, the nuclear accident in Japan — a country which will have a voracious appetite for gas — because nuclear reactors are being shut down in mainland Europe and because China has an endless demand for gas, therefore, unlike the situation in the other Continent, in the United States, prices are trending upwards here. The use of shale gas in the US means prices have come down there. It does not seem to be having any effect on Europe, where market power is continuing to keep prices up.
Will the Minister try to ensure the proposed fuel poverty Bill, which he has made a commitment to introduce, includes a provision that would prevent substantial price hikes like those being experienced at present? He made the point that prices have decreased by 27% since 2008, but I make the point that people are far worse off than they were in 2008. Given that Bord Gáis made a profit of €120 million last year, it is grotesque that it should be seeking gas and electricity price increases of 20% and 10% respectively at this time.
The Deputy has made a fair point. He is right to say that those who are in distress are in more acute distress now than they were in 2008. I do not advance the fact that gas prices have decreased by 27% since then as any kind of excuse for them to increase. I do not know how much it is intended they will rise by as no figure has been set. The companies have put figures out there in broad terms. It is ultimately a matter for the regulator. It is true there are people in distress. I have raised this directly with the chief executive and chairman of the company. They have argued that they are going to great pains to introduce pay-as-you-go meters and other strategies to help those who find themselves in these circumstances. I hope we will be able to soften the blow. I do not know how severe the blow will be when it will come. I imagine the regulator will take all factors, not just submissions from the companies, into account.