We will allow Senator Cassidy to raise an issue of concern to all members. The committee should have no bother in dealing with the issue.
Business of Joint Committee.
I thank the Chairman. Last Monday in Dublin, the chairman of the Commission for Energy Regulation spoke at a public forum on the price hikes sought by the ESB and Bord Gáis. He stated that any further changes to energy costs in the coming weeks would be taken into account in determining what prices will be sanctioned by the CER. The increases sought by the ESB and Bord Gáis are 5.8% and 4.2%, respectively. So far this year, the ESB has been granted an increase of 17.5% and prices at Bord Gáis have risen by 20%.
The domestic and international economies are in crisis, the world economy is quickly heading into a recession and economic activity will decline in Ireland, as elsewhere, in 2009. Businesses face losses and falling prices and many of our business friends are being threatened with imminent closures. The energy monopolies cannot be allowed to continue as if nothing has changed since the time of the Celtic tiger. Seeking price increases is unacceptable.
The price of energy will decline as world demand declines. The sought after price increases should be deferred for at least one year to allow businesses to breathe and continue providing employment. The committee's greatest priority during the coming two years will be to sustain jobs and to assist the Government in creating more. I propose an embargo of at least one year on all price increases, especially as they relate to energy costs. Increases of 17.5% and 20% are not good enough for the ESB and Bord Gáis, but business profits are declining by at least 20%.
I second the proposal. Increasingly, I am being approached by small businesses in particular because they are being pressured from all angles, including energy costs. Given that increases have already been granted this year, it is essential that we review and discuss the relevant issues. The proposal is reasonable and I will support it.
I also support Senator Cassidy's proposal, as it is particularly appropriate to the Joint Committee on Enterprise, Trade and Employment. Businesses are already suffering and the proposed increases will have a detrimental effect. Energy is a major cost factor. I ask the Chairman to contact the CER and determine whether its chairman is aware of the effect of the increases on business. It would be an important intervention.
I will not repeat what has been stated, but our energy spokesperson, Deputy McManus, has in recent days called for a halt on the granting of price increases. The Labour Party supports Senator Cassidy's proposal fully.
If the organisations are poor buyers in the forward market, the consumer should not be penalised. Oil and gas prices are at their lowest since 2002. The former is at $55 per barrel today. If the organisations do not have sufficient expertise to watch the market, citizens and industry, which is on its knees due to the recession, should not be penalised with high gas and electricity prices. The organisations should be more protective of the consumer in their purchasing and expertise.
I add my voice and that of my party to the proposal. Notwithstanding contacts with the regulator, the Chairman should discuss the matter with the Minister on behalf of the committee. The increases cannot be allowed. The committee is doing a great deal of work to try to create jobs, but job and business protection is a serious issue. Businesses, be they small, medium or large, are under considerable pressure and do not need increased costs. Given that the committee has already made progress in respect of energy costs, although prior to our membership, these increases must be stopped.
Senator Cassidy's idea is a good one. So that progress might be made, would it be appropriate to invite the Minister for Communications, Energy and Natural Resources to explain his ongoing discussions with the regulator and energy providers?
I will look into it.
The regulator should be invited to attend.
While the price of oil has fallen from above $100 per barrel to $65 and $70, there does not seem to be any underlying merit in proposing further increases. It is a perplexing issue for me and others in my constituency. Deputy English mentioned small to medium-sized enterprises. The manufacturing area is being hit badly, as Deputy English and I know from a company in our area. Any increase in energy costs could be a fatal blow.
All parties represented on this committee have called on the regulator. When I contact Mr. Tom Reeves, the regulator and a Mullingar man, I will impress upon him the committee's opinion. We are the primary committee addressing enterprise, trade and employment issues and we have a wide remit in terms of employment protection and generation.
I will contact the Minister, Deputy Ryan, who I am sure is acutely aware of the issue. I will propose a formal motion calling on the regulator to defer and review price increases that were first planned owing to the situation obtaining in July or August. We carried the can in September. From our dealings with the elderly, we know what energy costs mean. Let us consider the issue. While we have known of fuel poverty for some time, we now know of its imposition on business. Perhaps Deputy Calleary or Deputy Cyprian Brady could second the formal motion.
I will issue a press release also on behalf of the committee, as our press officer is present. Our unanimous opinion would be put on the air to ensure the public is aware that the committee has tentacles on the ground to deal with the issues affecting them. We intend to pursue the matter in a vigorous fashion. Pending the regulator's response, I may ask him to appear before the committee. Part of our remit is to consider energy as an important cost component of employment generation and protection. As a courtesy, we must first write to him to indicate our unanimous opinion. Every member supports that. We will communicate with the Minister for Communications, Energy and Natural Resources, Deputy Ryan. I am sure he will know our views within the next hour because Deputy Mary White will contact him but we must communicate with him in a formal sense as a matter of courtesy.
I thank committee members for allowing the suspension of Standing Orders, the first such occasion for a considerable period of time, to discuss something that is of the utmost gravity in respect of the protection and defence of businesses in this area. We ask for a moratorium or embargo on further increases while a realistic appraisal is taken of the current economic crisis and that we do not add to it.