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Dáil Éireann debate -
Thursday, 19 Apr 2012

Vol. 762 No. 1

Topical Issue Debate (Resumed)

Pupil-Teacher Ratio

I thank the Ceann Comhairle for the opportunity to raise this extremely important issue. It is very important given that yesterday was the final day for receipt of appeals from the small schools that face losing a teacher and face increased class sizes in September 2012. This cut to the pupil-teacher ratio is a cut to front-line services which will predominantly affect small rural schools, schools of minority faith and Gaelscoileanna. The Government tells us that this decision is based primarily on value for money and not on the ideology of the Minister, which I find hard to believe. I am disappointed the Minister is not here, with all due to the respect to the Minister of State, given that he will be in the Chamber in an hour to take questions.

This is a very important and emotive issue and it is being discussed the length and breadth of this country. We all agree that savings need to be made across all Departments because the country cannot continue to run the deficit that currently exists. However, why has the Minister put forward these proposals before he has consulted the value for money review which so many schools, boards of management and so on, lodged in March 2011? These reviews allowed teaching staff and boards of management to highlight where the necessary savings could be made.

Small rural schools are the lifeblood of rural Ireland. The Department's own whole school evaluation report clearly demonstrates that small schools throughout the country meet the needs of pupils, parents and teachers. One school in the report is described as a "warm, welcoming, inclusive school, where all pupils are cherished equally". Another school is described as providing "very good quality learning experiences". Another quote in the report praises "the total commitment and professionalism of the teacher and her staff in delivering a broad and balanced curriculum". There are references to the school buildings and grounds being exceptionally well maintained as a location for the education of children, along with parents' efforts and willingness to fund raise for school infrastructure such as additional accommodation and so on.

The Minister has been disingenuous when he compares the pupil-teacher ratio in small rural schools and small schools with the larger schools. He is not taking cognisance of the multi-class setting in the one classroom. He also talks about increasing the choice of patronage. The Church of Ireland bishops stated that "No single issue has in recent years caused such a degree of anxiety amongst our communities as this one." A number of schools in the Longford-Westmeath constituency are affected by this.

My local school is Ballynacargy national school, which faces losing a teacher in September due to a decrease in the number of pupils by one. There are excellent teaching staff in the school. Huge resources have been pumped in through the Department's summer works programme over the last few years, and also through local fund raising. It is a fabulous school and it risks losing one teacher for one pupil. I am a member of the management committee at the local playschool and we have increased our opening hours there in a bid to ensure that people from the locality do not move elsewhere to send their kids to preschool and as a possible result, sending them to alternative primary schools in the county. We have looked at that and we believe that in a short space of time, the pupil numbers will be back up. In the space of 12 months, that will cause a lot of disruption to the school and I ask the Minister of State to look sympathetically on this appeal.

I thank the Deputy for raising the matter. He says we all agree that savings need to be made. If he agrees with that premise, then it is not enough to suggest that he change the pupil-teacher ratio without providing an alternative to make savings.

I thank the Deputy for giving me the opportunity to outline to the House the position on the budgetary measure relating to the staffing of small primary schools, to which I assume he is referring. There is no scope in this year's departmental budget to reverse this measure or indeed any of the budget measures concerning teacher allocation at second level. Furthermore, the unallocated deficit in the education budget for 2013 is €77 million, and €147 million for 2014. There are no easy solutions to this challenge.

The Government has protected education as much as it can. Far greater reductions in the number of public servants are being made in other sectors relative to those in schools, but there are limits on the number of teaching posts we can afford. In the case of primary schools, there is no increase in the staffing schedule general average of 28:1 for the allocation of classroom teachers at primary level. However, there is a phased increase in the pupil threshold for the allocation of classroom teachers in small primary schools. As part of the budget decisions announced, the number of pupils required to gain and retain a teaching post in small primary schools will be gradually increased between September 2012 and September 2014.

The schools concerned are those with four or fewer classroom teachers with enrolments of fewer than 86 pupils.

All schools are being treated equally irrespective of the type of patronage. The Government recognises that small schools are an important part of the social fabric of rural communities. With the notable exception of those Deputies who are in larger conurbations, we all represent constituencies where there are strong and viable rural communities, so we are very conscious of this issue as well. The small schools will continue to be a feature of our education landscape. However, this does not mean that small schools can stand still or never have their staffing levels changed to something that is more affordable and sustainable for these difficult and challenging times.

The teachers in small schools cannot be immune from the requirement that is being asked of all public servants to deliver our public services on a reduced level of resources. Even after all these budget measures are implemented, small schools will, in relative terms, be better staffed than medium to larger schools, which are currently operating at a general average of one classroom teacher for every 28 pupils.

The phasing of these measures can provide the schools concerned with time to consider the potential for amalgamation with other schools where this is feasible. If amalgamations take place, they will be voluntary and follow decisions taken by local communities and not by the Department. The Department has expanded the existing appeals process so that it is accessible to the 73 small schools that are losing a classroom post as a result of the budget measure. These schools will not lose their classroom post if any of them are projecting increased enrolments in September 2012 that would be sufficient to allow them to retain their existing classroom posts over the longer term. The detailed arrangements are set out in the Department's staffing circular that is published on the Department's website. The appeals board meeting is taking place this week and schools will be notified of the outcome as soon as possible.

A value for money examination of small schools, to which the Deputy referred, has been carried out and the Department expects to publish the analysis and findings of that in the near future. I hope this report will foster constructive engagement both in the Oireachtas and among all interested parties in examining the challenges ahead and how best to provide for primary education in rural and dispersed communities.

The value for money report will be published in the near future but it is disappointing that this decision has already been made. The Minister of State said that it is not fair to say that savings need to be made without saying where the savings should be made. I wish to point to a school, Glen national school, Edgeworthstown, County Longford, which faces losing a teacher. Its nearest school is bursting at the seams and without a shadow of a doubt in the near future people will be coming out from that school. Instead of closing and amalgamating schools why does the Department not consider the possibility of repopulating existing schools rather than constantly expanding already large schools? Why does it not propose taking pupils out of schools that are bursting at the seams and repopulating rural schools?

We have talked about abolishing quangos. The Minister's predecessor abolished a quango, the National University of Ireland, but the Minister reinstated it at a cost of €3 million per year. Why was that done? Maybe it was done to pacify and satisfy the Minister's academic friends.

Who will make the decision in the appeals process? Will it be made by the Minister or will he abdicate his responsibility and pass it over to somebody else?

The Minister of State compared small schools and schools with a pupil-teacher ratio of 28:1 but that is not a fair comparison. There are multi-talented children in multi-class settings in smaller schools. The Minister of State knows that, as he, like I, represents a rural constituency.

I ask the Minister of State to refer to this issue in the context of the discussion on opening up the patronage of many schools. The Church of Ireland and other minority faiths have come out quite publicly and said that this will have a detrimental effect on small schools.

We talk about making savings but only yesterday we saw another ministerial adviser has been appointed and once again the salary cap, which the Government promised it would introduce when it came to power, has been exceeded. These are areas where savings could be made. That can be contrasted with a position where schools are at the risk of losing a teacher for the sake of one additional pupil being enrolled for one year. I hope the Minister of State will take on board what I have said.

With due respect to the Deputy, if he wanted to speak about a particular school in his constituency, I respectfully suggest he should have put that into wording of the text of the matter.

I reiterate that the unallocated deficit in the education budget for 2013 is €77 million and it is €147 million for 2014. If I understand the Deputy correctly, he said that there is a school in his constituency that is bursting at the seams and he asked why do we not take some of pupils out of that school and populate a smaller school in the constituency with them. We are not in the business in this country of engineering solutions whereby we would go into people's houses and say they must put their son or daughter into a particular school because one school is bursting at the seams and another one is just about thriving. We do not interfere with parental decisions.

If schools are closed, the Government will interfere with parental decisions.

We do not interfere with parental decisions as to where they decide to send their children to school. That would set a dangerous precedent if that is what the Deputy is suggesting.

I did not suggest that we populate.

If the Deputy is talking about taking pupils out of schools and putting them into other schools, he is setting a dangerous precedent.

I am talking about repopulating by way of transport.

Parental choice as to where one sends one's child to school is paramount. It is important we recognise that within this State.

The Minister of State is misrepresenting me. I am talking about repopulating.

There is not much else I can say. I have said it all.

Fuel Prices

Commuters, small businesses, hauliers, farmers and families are now are being screwed by the rise in fuel prices for diesel, petrol and home heating oil. The cost of filling an average car is approximately €112, which is making life extremely difficult for a great number of people. The Government is making a windfall from price increases, as it takes in excess of one cent for every five cent increase in the fuel prices. At current rates the projection is that the Government will take in an extra €64 million in VAT because of the price increases. However, to date there has been an outright rejection by Government of any proposal to assist those who are struggling to put fuel in their car to get to work to pay for the septic tank charge, the household charge, the forthcoming water charges and the forthcoming property tax, never mind the small little issue of paying the mortgage on a house that is in negative equity.

I acknowledge that international influences have forced an increase in the price of fuel on a worldwide scale but the domestic price of fuel has now reached an unsustainable level for many families. In March 2012 fuel price inflation in the United States reduced by 4.3% yet in Ireland in the same period we have seen an increase in the price of fuel of 8.7%.

Crude oil prices are now at a much lower than they were in July 2008 but the cost of fuel in Ireland is much higher and the cost of keeping a car is climbing on a daily basis. In July 2008 when oil prices peaked, a litre of petrol here cost €1.36, which is 34 cent less than it costs today.

I am aware the Irish Road Haulage Association, has proposed a fuel rebate scheme for excise. I understand a working group has been established between the IRHA and the Department of Finance to discuss this matter and I hope the Minister can outline the progress in those talks to date.

We cannot ignore the fact that the price of petrol and diesel consists mainly of taxes levied by the Government, including excise, VAT and the carbon tax. That is in no small way facilitating the fuel laundering industry that we have seen develop here in recent years. There were a number of instances of fuel laundering in my constituency and in adjoining constituencies last year. That trend is continuing this year, with fuel laundering becoming a major factor and problem in the economy. It is taking money out of our economy, out of the Exchequer, and forcing the Government into a situation where further taxes have to be increased. That also needs to be addressed.

According to AA Ireland, the average motorist will require 150 litres of petrol per month which, at a rate of €1.70 per litre, costs each motorist €255. The bulk of this goes in Government taxes. In fact, it is €1,628 per annum in tax alone. We cannot ignore the impact this is having on the spending of individuals, the price of goods and the cost of doing business.

Higher fuel costs impose a greater financial burden on the poor relative to the rich. They are least able to afford the cost involved in a changeover to more energy efficient fuels. The bad news is that things are likely to get worse, with some forecasters predicting the cost of a litre of petrol could hit €2 by the end of the year, delivering a windfall in fuel tax revenue.

Rather than using the taxation system to run the economy into the ground, I am appealing to the Government to use the extra VAT generated from increasing fuel prices to reduce the overall cost of petrol and diesel. The Exchequer would be no worse off, but it would help struggling families and the economy.

I am pleased to take the opportunity to speak on matters relating to the high cost of fuel on behalf of the Minister for Finance. In this regard, Ireland, like other countries, has experienced a significant increase in the cost of petrol and auto-diesel in recent years. The increase in fuel prices is an international phenomenon. Fuel prices are driven by a number of factors, including the price of oil on international markets, exchange rates, production and refining costs. The rise in oil prices in recent periods reflected additional factors such as geopolitical uncertainty in northern Africa and the Middle East, with potential supply disruptions. For example, the average price of auto-diesel in 2010 was €1.23 per litre compared to today's average price of €1.61 per litre, a difference of 38 cents per litre. During this period increases in excise in the budget last year and carbon tax in the budget for this year raised excise on auto-diesel by just over 3.5 cents per litre, VAT inclusive. The increase in the price of auto-diesel, therefore, is largely due to external factors outside the Government's control.

The excise rates, including the carbon charge, in Ireland on motor fuels are 58.8 cent on a litre of petrol and 47.9 cent on a litre of auto-diesel. When VAT is taken into account, the total Exchequer take as a percentage of the total price is 53.7% and 48.5%, respectively, based on current average prices of €1.68 and €1.61 per litre for petrol and auto-diesel respectively. While the tax increases are within the control of the Government, these increases must be seen in the context of very difficult budgetary decisions. Nevertheless, it should be noted that our rates remain lower than those of many of our main trading partners and significantly lower than those of our nearest neighbour, Britain. The price of auto-diesel is around 20 cents per litre cheaper in the State compared to that in Britain, while the price of petrol is around 10 cents per litre cheaper.

The Exchequer yield from excise, as excise is set at a nominal amount, does not increase as the price of fuels increase. On the other hand, the yield from VAT per litre of fuel, as VAT is set as a percentage of the price, increases as the price of fuels increase. Accordingly, any increase in the tax take as a consequence of increasing fuel prices is confined to VAT. It should also be noted that businesses are, of course, entitled to reclaim VAT incurred on their business inputs, including VAT incurred on fuel. For example, VAT incurred on auto-diesel and marked gas oil, or green diesel as it commonly known, used in the course of business is a deductible credit for business in the Irish VAT system. VAT on petrol cannot be deducted or reclaimed.

Given the current pressure on the public finances, there are no plans for temporary taxation adjustments, as to do so could lead to significant costs to the Exchequer. In the Minister for Finance's Budget Statement in December he pointed out that the programme for Government stated there would be no increases in income tax. The Government carefully considered the options open to it, given our commitments under the EU-IMF programme. Indirect taxes have a lower impact on economic growth and jobs. The decision to increase the carbon tax by €5 per tonne meant a lower increase across all fuels than if an increase had been applied just to the excise duties on petrol and diesel.

Rising costs of fuel are an international phenomenon. In 2005 and again in 2008, when oil prices last spiked, the matter was considered at ECOFIN. Given impact of high oil prices on growth rates, it considered an appropriate policy response to the price increase at its meeting of 3 June 2008. It confirmed the agreement reached in Manchester in 2005 that the discretionary fiscal and other policy interventions that had prevented the necessary adjustments by economic agencies should be avoided. On 15 March 2011 the issue of rising fuel prices was briefly discussed by EU Finance Ministers and they reconfirmed the approach taken in 2005 and 2008.

I ask the Minister of State to update me on what is happening in the case of the road haulage industry. What is the position on fuel laundering? There are cowboys who are running riot in this industry. Each tanker of fuel costs the Exchequer €20,000. As the fine is just over €126,000, with six loads, the launderers have already made a profit. Securing a conviction in the first place is difficult. Does the Minister of State agree that this must be tightened, with a stronger approach being taken to fuel laundering? If fuel prices are maintained at current levels for the rest of the year, the Government will take in an extra €64 million in VAT. It will argue that as fuel prices increase, consumer demand is dampened and that, therefore, there is no net benefit to the Exchequer. Higher fuel prices, however, have an impact on disposable income and consumer demand; therefore, the opposite is also the case. While there would be no substantial impact on the overall tax take for the Government, the benefit for the economy would lie in taking that €64 million and including it in a refund system for consumers. The money would be spent on consumer goods in the economy, helping to support existing jobs. It makes more sense to support jobs rather than balancing the books and taking the easy option, leaving people and families struggling.

In addition to the ongoing enforcement action, legislative changes that will enable more effective control in this sector have been included in this year's Finance Bill. They include the introduction of new licensing requirements for marked fuel traders. The new arrangements will, for the first time, require any person dealing in marked fuel to hold a licence for the purpose. The granting of a licence will be subject to tax clearance requirements and the applicant will have to show to Revenue that any conditions subject to which the licence may be granted will be complied with. Revenue will be empowered to revoke a licence. In parallel with the introduction of this new licensing system, the regulations that lay down the detailed rules and requirements in mineral oil matters are being reviewed. It is intended that the requirements for record keeping will be strengthened and that a new requirement to make periodic returns to Revenue will be introduced. All mineral oil traders, including traders in marked fuels, will have to make regular returns.

Steps are being taken, in close co-operation with the British authorities, to acquire a more effective fuel marker. Revenue is planning to go to the market shortly, with the British authorities, to seek a new marker. A good deal of preparatory research has been undertaken both here and in Britain and we expect to proceed with this project shortly.

The problem of fuel laundering and smuggling is a serious one and the extensive enforcement action being taken on an ongoing basis highlights Revenue's commitment to combat it. The new legislative steps being taken, together with the work being done on the development of a more effective fuel marker, will serve to enhance the effectiveness of this action.

With regard to alleviating the problems being experienced by the haulage industry, a working group was set up involving officials from the Department of Finance, representatives of the Irish Road Haulage Association, IRHA, and some Members of the Oireachtas. This working group is discussing a number of issues of concern to the haulage industry, and the Deputy will understand that I cannot pre-empt the outcome of those ongoing discussions. A fuel rebate system, as sought by the IRHA, could not under EU law be restricted to Irish licensed hauliers but would have to be extended to all vehicles intended exclusively for the carriage of goods by road, with a maximum permissible gross laden weight of not less than 7.5 tonnes. In addition, the rebate would have to include the carriage of passengers by a motor vehicle of category M2.

My final point relates to the gain of €64 million. The amount of money lost to the Exchequer as a result of fuel laundering is considerable, in excess of €250 million per year, and the Government is very conscious of that and the need to deal with it effectively. The gain is in excess of €1 million per week due to the increase in VAT, not in excise. The IMF restrictions and the fact that we are borrowing €41 million per day to run the economy show the scale of the challenge currently facing the Government. Any income to the Exchequer at present is being spent in a very effective way on behalf of the taxpayer, but we are under immense pressure to secure tax take at present. However, I accept the point made by the Deputy.

The Government is being very decisive on the fuel laundering issue. It is also conscious of the cost of doing business and the importance of lowering those costs. Being from a business background, I am aware it is important to reduce costs for people in the delivery trade. Hauliers are under huge pressure at present. The job of the Government is to reduce the regulatory and other costs of doing business and the Minister for Finance is very conscious of that in all the actions he takes that impact on the creation of jobs.

Water Services

I accept the assurances given this morning by the Tánaiste that it is his and the Labour Party's intention to retain the new water company that is due to be established in public ownership. However, we must be conscious that after the new company is established, at some point in the future, God forbid, Fianna Fáil might be back in power or Fine Gael might be governing alone and the option of privatising it will still exist.

I commend the Minister of State, Deputy Jan O'Sullivan, on the excellent work she is doing in the area of planning and housing. She is driving a very positive and strong reform agenda.

Wherever water charges have been introduced they have been regressive. That is evident from the statistics provided by the OECD. In England, 3.7% of the incomes of the bottom 10% of the population goes on water charges, whereas for the top 10% it is only 0.4% of their income. The same applies in France, Holland and Mexico. In the 1990s, KPMG assessed the economic rationale for installing water meters and found it to be uneconomic. It will cost approximately €800 million to install water meters. I ask the Government to review that expenditure and consider using that €800 million to invest in water infrastructure. That was done by Dublin City Council over the last few years and leakages have been reduced from 43% in the late 1990s to 28% now. It would also create jobs.

We should shift the balance in our approach to taxation. Unlike the Minister of State, Deputy John Perry, I believe indirect taxation is the most unfair form of taxation. It takes no account of people's incomes. We must move to a progressive taxation system, which means introducing a higher rate of tax for those earning more than €100,000 per annum and introducing the wealth tax which the Minister for Finance, Deputy Michael Noonan, told the House could bring in between €450 million and €500 million per year. There must also be recognition that, unlike what some people suggest, the citizens of Ireland are very responsible. They do not leave taps on left, right and centre.

We should use the funds in the National Pensions Reserve Fund to invest in water infrastructure and, where necessary, progressively increase taxation on incomes to pay for services. There must be a change of policy and direction, and that would be a progressive step. We should not introduce water charges.

This week saw the announcement by the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, of the establishment of Irish Water. This comes at a time when the working group of the Oireachtas committee on the environment and local government was in the process of concluding a report. The fact that it was made before that committee concluded its report is most undemocratic and shows a total lack of respect for the institutions of the Dáil.

The establishment of Irish Water will destroy local government and local democracy. We are told it will be a subsidiary of Bord Gáis, a semi-State company. It will not have any democratic accountability. Perhaps the Minister will explain how we could achieve democratic accountability for this body either to this House or to local councillors. The public will not have access to it; all people will have is an 1890 telephone number for it.

I am flabbergasted at the cost of the metering. A figure of €780 has been mentioned, or €39 per year over a period of 20 years. That is very expensive metering. Over 100 million holes will be dug in footpaths outside houses to fit meters that will not stop one drop of water from being leaked or conserved. Usage in England, where there are meters, and usage in this country are the same; in fact, it is slightly higher in many parts of England. It is far more effective to have district metering, which is already being used by county councils. Is the Minister aware of that? It is being used by councils such as those in Laois and Offaly to identify leaks in neighbourhoods and to manage the network. It is a far more effective way of doing it.

Yesterday, the Taoiseach said water services would be cut off to households who are unable to pay or will not pay the charges. This morning, the Tánaiste twice refused to distance himself from that comment when he was asked if he agreed with it. He refused to clarify that he opposed it. The conclusion one must draw is that people will have their water service cut off. This is really serious. Does the Minister not agree that the control and operation of these services would be better left with the local authorities? If we are going to create jobs, let them be jobs that have the positive legacy of fixing leaks and saving the taxpayers money. We must move to district metering, which is almost 100% complete in some local authority areas. We should also put in place proper building regulations to harvest and conserve water through methods such as dual flushes.

I thank Deputies for raising this issue and I am happy to respond on behalf of the Government.

The overarching objective of our water reform programme is to put in place structures and funding arrangements that will ensure we have a world class water and waste-water infrastructure that meets all environmental and public health standards, can attract foreign direct investment and support job creation and maintenance in key sectors such as pharma-chem, IT and food and drink. Last December, on the basis of the recommendations of an independent assessment, the Government decided to establish a public water utility company, Irish Water, to take over the operational and capacity delivery functions of local authorities in the water services area. Further consideration has been given since then to whether Irish Water should be established as a new entity or whether existing bodies in the semi-State sector could undertake the functions. The outcome of this analysis is that Irish Water should be established as an independent, State-owned company within the Bord Gáis group. Irish Water will be a public utility, wholly owned by the State. I am anxious to reassure Deputy Nulty in that regard.

Establishing a new water utility under the umbrella of a mature semi-State company makes best use of existing resources and capabilities. This approach is also in line with Government plans to support economic growth by eliminating waste and duplication in public spending through rationalising State agencies. Bord Gáis Éireann has key capabilities that can be brought to bear in the establishment of Irish Water, including experience in operating as a utility in a regulated environment and a track record in raising finance, and has specific skills from its experience of transformation, customer relations, network management, metering and utility operation that can be quickly deployed to assist in the successful establishment and operation of Irish Water. The skills within the Bord Gáis group will be paired with experience and commitment to service in local authorities and the specific water and waste water capabilities that exist in local government to build the new organisation. In the initial phase, Irish Water will work largely through service level agreements with local authorities. It is envisaged that these arrangements would end in 2017 at the earliest. This will ensure a smooth transition to the new model and guard against the loss of local expertise. It will also mean the majority of staff will remain in the direct employment of local authorities for a considerable period.

The Government has decided that when charges are introduced, they should be based on usage, reflect a free allowance and have specific measures for people with affordability issues. This is the fairest and most equitable way to introduce charging.

Meter infrastructure installation will commence by the end of the year and the programme will be rolled out on an accelerated basis. This programme will create up to 2,000 jobs. Households will not be asked to pay for these meters or their installation through an upfront charge.

The details of the funding model, including decisions relating to the precise charging framework, the level of charges, the free allowance and measures to address the needs of those with affordability issues or medical needs, have yet to be finalised. These will be a matter for the regulator, who will be required to act in the best interests of the consumer and will engage in appropriate public consultation as the process develops, and for Government through the budgetary and Estimates process.

I thank the Minister of State for her response. I will make two brief points. With regard to charges and the alteration in people's water usage, the people whose behaviour will alter least are those on the highest incomes. They will be able to afford the charge and, as economic actors, will be less sensitive to the introduction of a charge. By its very nature, the charge will have a greater impact on middle and lower income households.

Second, no member country of the OECD has introduced a water charge and done so in a progressive way. This type of tax must hit people on middle and lower incomes hardest. I encourage the Government to review its position before we go too far down this line. There is €4.7 billion in the National Pensions Reserve Fund. Using that money strategically over three or four years to invest in water infrastructure, in a child care system or in rolling out broadband would generate economic activity and allow us to deal with long-term infrastructural projects.

This initiative is being driven by Fine Gael. In its general election manifesto, the Labour Party, which was my own party, made it clear that it was not in favour of water charges. We need to make it clear to the Minister for the Environment, Community and Local Government that this is an unfair charge and to revise the position on it.

It is good to hear from Deputy Nulty that at least one member of the Labour Party remembers the commitments given before the election. A huge amount of money will be spent without saving one drop of water. That is the fact. This very expensive process of putting meters outside every household will not stop the leaks in the system.

The Minister of State said why Bord Gáis is a suitable holder of this contract and why it is the most appropriate company to be the parent company of the subsidiary that will look after this service. In recent weeks, Sierra Support Services, a company owned by Mr. Denis O'Brien, secured a contract worth up to €60 million to become the sole provider for the installation, maintenance and testing of domestic boilers for Bord Gáis Energy. Can the Minister of State confirm that no discussions took place between Mr. Denis O'Brien's company and the Taoiseach or any Minister during the Taoiseach's recent visit to New York or at any time regarding the installation and maintenance of water or gas meters or any of the fittings associated with them?

I disagree with both Deputies when they say this will not save water. I absolutely disagree with their contention that charging, over a certain level of free water, will not concentrate people's minds on saving water. People who are better off will not necessarily leave the taps on because they have a bit more money. One could not say the better-off are not engaged in recycling and the use of bottle banks, for example. Being responsible has nothing to do with being well off or not. I reject that contention. If people are tight for money and if turning off the tap will save money, they will do so. People I know who are tight for money will use whatever method they can to save money for themselves and their household. I reject the contention that this measure will not save water.

I can reassure Deputy Nulty that the Labour Party, and the Government in general, is committed to retaining this in public ownership. I can counteract what Deputy Boyd Barrett said this morning. There is not an EU liberalisation directive in this area. There are many examples throughout Europe of water as a public utility, such as Scottish Water and Eau de Paris. I reject the suggestion that this will lead to privatisation.

Bord Gáis Éireann is an independent semi-State company. The question raised by Deputy Stanley has nothing to do with what we are talking about today. I do not know what Mr. Denis O'Brien or anyone else has to do with the question.

I thank the Deputies for raising this matter. There has been a consultation programme and there will now be a detailed implementation plan. Any views expressed in the Dáil will be taken on board. There will be a long lead-in period when the various issues and constructive suggestions will be considered. I thank the Deputies and assure them that this is about providing good quality water, protecting consumers and ensuring we can create and maintain jobs.

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