I know Deputy Murphy believes I am right, because that is what we are trying to do. The Minister, in reply to a parliamentary question, underlines what I said by stating that it is important that a significant proportion of the proceeds would be ring-fenced for reinvestment in the economy to underpin jobs, investment and growth. That is very important. That is why we are here today and that is what we are trying to do. That is what the Minister of State, Deputy O’Dowd, and the Minister, Deputy Rabbitte, are trying to do, namely, get the country back working again.
We must learn from the Eircom debacle. Those of us who were not involved in politics then as public representatives who saw what happened with Eircom are wary, have questions and want to see this process done in a different way to that sale. I am amazed that the former Minister, whom I will not name in the House, is now seen as a genius by all commentators. When one turns on local radio stations across the country the former Minister is to be heard. Yet, let us look at the legacy the Minister left behind in terms of Eircom. We must learn from the sale of Eircom. That is why this sale is different to what transpired then.
The Bill is to provide for the restructuring of Bord Gáis to allow for the sale of the retail arm of the business and Bord Gáis Energy and to establish a gas network subsidiary company that will remain in State ownership. That is very different from what happened previously and what has been said by others. It is important that the Government has secured the agreement of the troika to allow half of the money obtained from the sale of Bord Gáis Energy to be invested in job creation. The biggest task that faces all of us in public life today, irrespective of ideology or how we achieve the outcome, is to get people back to work. We must create stimulus in the local economy and get rid of the stigma of the troika. In addition, we must get banks to work with small and medium enterprises, families and mortgage holders in distress. I accept we had a Private Members’ motion earlier on the latter issue. It is time the banks in particular listened to those of us in public life who deal with constituents every day of the week. I hope the Central Bank will take on the banks.
The sale will secure between €500 million and €750 million for investment in jobs. That is something we should all support. I encourage the Members opposite to support the creation of jobs and investment in infrastructural development and stimulus that will get people back to work. That is what we are about.
In America yesterday, everything Mr. Ben Bernanke of the Federal Reserve said was underpinned by a belief in job creation and sustaining the economy. That is what this Government is about.
Selling the retail arm of Bord Gáis and ensuring the network and physical infrastructure will remain in State ownership were recommended by the Review Group on State Assets and Liabilities. It is important to keep the network and physical infrastructure in State ownership. That demonstrates that we have learned from the failure of the Eircom privatisation. When every asset of Eircom was sold, no provision was made for the future development of the telecommunications network. Deputy Humphreys is correct in respect of Wi-Fi and deficits across the country. The Government has learned from the Eircom debacle.
We have seen a lot of scaremongering by political opportunists regarding Irish Water and its privatisation. This Bill demonstrates again that it is not the Government's intention to privatise Irish Water. The only arm of the Bord Gáis group that will be sold is the retail arm, Bord Gáis Energy. All the other sections will be kept in State ownership. It is a question of ensuring that strategic infrastructure remains in State ownership so it can be used and retained for the public good. I hope the Members opposite will acknowledge this point. It is a question of securing funding for investment and growth in the economy.
A recent survey carried out by the Commission for Energy Regulation showed that gas prices for the average householder have increased by 12.1% in the past 12 months or more. In 2012, the average household spent almost €990 - almost €1,000 - on gas. This year, the figure will be €1,100. Almost two weeks ago, the regulator gave Bord Gáis permission to further increase residential gas prices from 1 October. This will amount to a price increase of 2.04% over the figure for October 2012. Bord Gáis Energy requested a 7.2% increase but I am very happy it did not get its way. I am disappointed that the regulator acceded to the request to increase the price of gas for the home owner. An increase of 2% might seem modest to the regulator and some social and economic commentators, but it is difficult to imagine it at a time when an increasing number of people are struggling to pay bills. Householders are now deciding not to put the heat on.
I question not the motivation of the regulator but the rationale for the decision to increase energy prices. I am not criticising the regulator personally or the office, which is independent. I accept its independence. In this case, it is a matter of the householder being asked again to pay more for gas when we see the profits Bord Gáis Energy has made. It really forces one to question such price increases. The energy price increase at this time contrasts with the decision of the regulator to reduce prices on two occasions during 2009. The unit rate for the standard domestic tariff fell to €4.27 in October 2009 but since then we have seen a 24% increase. From 1 October next, it will cost €5.29. If we are talking about money to stimulate the local economy and jobs, which are necessary to sustain and grow the economy, and money to invest in infrastructure, the householder or home owner needs to be included in the equation. I am disappointed by the increase. Operating profits increased by approximately 19%. This is a huge figure by any standards. For the Bord Gáis Energy section of the business, the increase in profits has been even greater. Between 2011 and 2012, operating profits increased by almost 80%, from €44.3 million to €79.4 million. At a time when the profitability of the retail arm of the business is growing, it is very difficult to understand how the regulator can decide to increase costs.
Will the Minister of State tell us whether there has been a change in policy since 2009, when the regulator acted in the interest of consumers and reduced prices? Why are we seeing an increase now? The Minister of State may argue that the increase is because of extenuating circumstances in certain parts of the world, strife, the transportability of certain fuels, etc., but we need to give the home owner a break. According to the regulator's survey this year, the average household will spend €92.50 per month. We need to encourage householders to consider not just switching providers in order to save money but also to give them a meaningful break.
I renewed my car insurance in recent weeks. Let me give an example of how the whole system is skewed against the consumer. I received a quote of €590 in the post. I spent half a day ringing various brokers and agents and then got a quote of €400. If I had accepted the initial quotation from my broker, I would not have saved €190. Where is the action on behalf of the consumer, the citizen, the ordinary person who deserves a break? We need to return to considering how we can look after the ordinary person. In supporting this legislation, I am mindful that we need to consider looking after the citizen while saving money as a State. The regulator has approved two websites, www.uswitch.ie and www.bonkers.ie, which allow one to compare the prices of various providers to determine whether it is possible to save money. The system should be transparent and open so one will not have to take a whole week making endless telephone calls to renew a policy. For the average person paying the standard Bord Gáis tariff by direct debit, it is possible to switch and save up to €145 per year. For the average householder on standard rates receiving gas from Bord Gáis Energy and electricity from Electric Ireland, up to €254 can be saved over the course of one year by switching providers. It is important that these issues be highlighted.
Most importantly, we should focus on the consumer. That is why I was very pleased with the remarks of the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, on the issue of Bord Gáis staff. Bord Gáis has been a very strong employer in the Cork region since it first came to the county. The employees are key to the continuing growth of the company. That is why it is important that, in the transfer, any issues regarding pensions, entitlements or staff conditions should be addressed in the affirmative for the staff and others who have given great service to our State.
This is very important legislation. Its aim is to demonstrate that the Government has the ability to renegotiate with the troika. If one had listened to "Six One News" some nights ago and heard the former Minister whose various Ministries included education, foreign affairs and health, and another that I cannot remember, one would have sworn he had never been in government, because he maintained that the current Government could never renegotiate successfully with the troika. It has done so.
It is important that the aim of the sale of the energy business, Bord Gáis Energy, will be to ensure we invest in job creation and getting people back to work. Every single week in my office I meet people who are seeking to go back to work. They do not want to be dependent on social welfare. They were self-employed or worked in many parts of the private sector. They want to see the Government creating more jobs. They acknowledge that we have made progress in the two and a half years during which we have been in government. They see that the foundation is being rebuilt properly, but they believe it must be underpinned by a stimulus to create sustainable jobs that will not be built on just one arm of the economy, as happened before.
That is why this Bill is important. That is why today we are saying to the Irish people and the rest of the world that this Government is serious about job creation and about Irish citizens. Having said that, there is an onus on the Government to recognise that it is not good enough for the cost of energy to the householder to be increased as it has been. I am worried about that issue.