Private Members’ Business.

Energy Resources: Motion.

I move:

That Dáil Éireann,


the likelihood of major job losses in both the manufacturing and services sectors in the wake of recently approved gas and electricity price increases;

the damage to national competitiveness that will ensue; and

the recent international trends indicating a reduction in oils and gas prices,

calls on the Minister for Communications, Marine and Natural Resources:

to initiate a full review of the regulatory arrangements which approve huge price increases in gas and electricity at a time when international energy prices are falling; and

as an interim measure, bring forward legislation to enable the Oireachtas compel the Commission for Energy Regulation to instigate a review of prices at any time the Oireachtas so decides so that the latest international price movements can be factored into the cost of energy charged to Irish customers.

I propose to share time with my colleagues, Deputies Hogan, Naughten, Crawford, Gerard Murphy, Neville and Perry. After eight minutes or so, the Acting Chairman might rein me in.

I will. Is that agreed? Agreed.

We should begin by identifying the sequence of events regarding energy prices in the past year or so. Political instability throughout the world, tempests, storms and hurricanes affected the availability of oil, gas and fuels in general, but any close observer of the industry would have noticed an abundance of those fuels on international markets in the past six months. The knock-on effect was an obvious necessity for prices to reduce. Despite the best efforts of those with vested and financial interests in the oil and gas industries, such as stockbrokers, financial services centres and oil companies, to talk up the prices of oil and gas during a long period, those prices reached a zenith and began to fall.

At a time when the price was on a downward trajectory, there were sounds from the ESB and Bord Gáis seeking price increases. They were bound to do so if they could get the increases and I do not blame them for that. The regulator, having duly considered the merits and factors of the Bord Gáis case, decided to approve serious gas price increases of 34%. However, gas was available for free on the London market that day. The decision was extraordinary against such a backdrop. Despite everyone's best efforts to talk up the price and declare a shortage, gas was free. None the less, the price here was increased.

Similarly, the ESB believes a price increase is merited, but this depends on what the Government has in mind for the ESB. Does it want to fatten the ESB for sale like a number of other semi-State and State bodies and make consumers continue to pay through the nose? A significant price increase has been awarded for 1 January 2007, which will be a major hit on consumers heavily overburdened with child care costs, commuting costs, mortgages, interest rate increases and so on.

A number of events will take place between August 2006 and June 2007, hidden in the middle of which will be two considerable hits on consumers if this is allowed to continue. I have spoken about what will affect domestic consumers, but the costs for industrial consumers will undergo a major hike. Regarding the effects on manufacturing and service industries, my colleagues rather than I will go into the same level of detail as the Joint Committee on Communications, Marine and Natural Resources. I am amazed and appalled that the Minister allowed the regulatory system to take an action of this nature against consumers when they can ill afford it. The increases will affect competitiveness. Some 34,000 jobs have been relocated from our economy because of a lack of competitiveness. If this is allowed to continue, we will lose more jobs. The Government's much vaunted high-wage economy will be for naught, because our manufacturing jobs will be located elsewhere. Where will the Government's accidental high-wage economy be then?

I want to dismiss in its entirety the ráiméis of the Government's amendment to this motion because it chronicles the Government's failures in recent years, including its failure to develop and invest in proper alternative energy resources. We recognise that 90% of our energy is imported. In the past five years, the Government should have invested money in research and development to ensure we put in place alternatives, become economically independent and provide from our own resources a major amount of the energy currently imported. It would have made good, sound economic sense.

The Minister has a number of choices, namely, he can tell the regulator that the increases are not currently sustainable and that he needs to know more about them or he can dismiss the regulator. The regulatory system affecting consumers, industrial or domestic, is not working. The Minister could declare there will be no more increases without his authority or he could abdicate his responsibilities and do nothing, the consequences of which would be colossal. I say this in due deference to the Minister to give him a fair warning about the consequences.

For some unknown reason, regulation in Ireland seems to drive up energy costs and make people compete at a higher level. My colleagues will go into detail on our energy costs compared to other European countries. The difference is significant and I leave it to the House to consider the matter.

I thank Deputy Durkan for allowing me to share time to speak on this important motion, which signals a crippling issue for households and businesses. In recent years, a worrying trend has developed in energy costs. After nine years in office, the Minister's policy is directly responsible for the significant increases in energy prices for businesses and household consumers. He set up——

That is not fair.

Acting Chairman

Allow the Deputy to continue.

He should tell the truth.

The Minister has been in office for nine years and is directly responsible for energy policy.

He has no control over prices.

Deputy O'Flynn will get his chance. He is there long enough. The Minister is directly responsible for policy inactivity and an abdication of responsibility in respect of energy prices. In recent years, we have seen considerable increases in the prices of gas and electricity, which is having an impact on employment costs and household budgets.

Recently, I was in contact with a small firms association that carried out its annual business survey of costs. Second only to labour costs, energy costs have been cited as one of the greatest issues in terms of employing people.

Hear, hear.

Major businesses have indicated to me that there has been a 77% increase in their energy bills in the past four years.

That is right.

It is bound to have an impact on how and where one employs people and how one does business. The National Competitiveness Council has reiterated this issue and confirmed the trend in its recent report on the cost of doing business in Ireland.

We have seen the Government standing idly by as the Commission for Energy Regulation continued to heap on additional energy costs for the supposed purpose of introducing more competition to the sector. Mr. Reeves, former assistant secretary at the Department of Public Enterprise and now one of the commissioners for energy regulation, stated on a number of occasions that he needs to increase energy costs to introduce more competition. Competition is brought in to reduce prices, not to lead to the massive increases we have seen in the past couple of years. Energy costs in Ireland are now, on average, 20% higher than for our EU neighbours. Not taking into account the latest increases, there have been increases since 2003 of 50% in gas, 30% in electricity and 40% in diesel oil.

There is a good reason for the Government to stand idly by in these matters because it is the biggest beneficiary of the increases in terms of Exchequer returns. It has reaped significant benefit from VAT collected on foot of the increase in energy costs with an additional €1 billion receipted in the past five years, while the excise rate on diesel oil is currently 48% higher than in 2001.

This motion is to ask the Minister to act once and for all to get the Commission for Energy Regulation to see sense. The Government must compel it to consider the price of oil and review its tariff structure accordingly, not just on an annual basis but more regularly, to deal with this type of situation instead of standing idly by, as it seems to be doing at the moment. I predict that the recent increases granted for gas and electricity will contribute to arrears of ESB and gas bills this winter such as we have not seen for many years. That is exactly what will arise from the decisions of the CER, whose remit and policy needs to change to allow for a much more regular review of these matters.

The ESB is a very effective tax collector for the Government. In the interest of saving our manufacturing base and ensuring we have a competitive economy, so that disposable household incomes are not eroded further on top of the recent mortgage rate increases, energy prices need an adequate structure and policies and the Minister must put in place the structural changes needed to make us competitive again.

It is unbelievable to be in the House debating this issue at a time when oil and gas prices are falling internationally. We are debating proposed increases in electricity and gas prices which are making this country extremely uncompetitive in comparison to our European neighbours.

The reality for many households is that the rise in electricity prices alone will increase the bimonthly bill from ESB by 20%, or €147, amounting to a total increase over a year of €882. As domestic customers reel under the increases that have taken place already under this Government there have been dramatic increases in the costs of living, in mortgage costs, commute times and child care costs, and now there is to be a further increase in energy costs. As my colleagues have said, they are in the Government's interest because it is the biggest beneficiary of higher energy costs, owing to the VAT take, which from electricity and gas almost doubled between 2001 and 2005. It is projected that this year the Government will take in a massive €362 million on VAT alone, not including the large tax take on the profits from the ESB and Bord Gáis Éireann.

People are struggling at the moment, especially the elderly, who cannot survive. The same applies to manufacturing and the food industry. It may come as a surprise to the Government but manufacturing and the food industry are the backbone of our indigenous economy. They have been ignored in recent years because of the Government's policy but they will be the backbone of the economy in the future and it is critically important to support them.

A recent survey of small indigenous companies carried out in County Roscommon by the county enterprise board shows that one third of those surveyed believed energy costs were the single biggest issue affecting their business, yet it is ignored by the Government. As Deputy Durkan said, it is creating huge pressure. Some 34,000 manufacturing jobs have been lost and something needs to be done.

The regulators in this country, including the CER, are literally running roughshod over the domestic and industrial cost base and the ability of manufacturing businesses to operate and compete profitably is seriously undermined by rising energy costs, which are now by far the highest in Europe. Irish companies must now pay an increase of 20% on their ESB bill, which puts huge pressure on their competitiveness. It is critically important for the Minister to immediately issue a directive to the CER to ensure this increase does not go through. In tandem with that, it is about time the Government reviewed its policy on the regulator.

The Commission for Energy Regulation has deliberately increased prices in recent years, ostensibly to bring in competition, in which it has failed dismally. What has the Minister done about it? He has sat back, ignored it and passed the issue on to the CER. Energy costs are decimating Irish industry and it is critically important the Minister takes ownership of the issue. He must come out with a definitive energy policy for the future. The Green Paper on Energy does not set out the direction that needs to be taken. Fine Gael has proposed a comprehensive policy document on the biofuel industry but the only thing the Government has done for the biofuel industry is to put the kibosh on it by not allowing the sugar industry in Carlow and Mallow to develop it. Instead the Government, particularly the Minister for Agriculture and Food and the Minister for Communications, Marine and Natural Resources, has deliberately closed off that avenue when it should have opened it up.

I commend the motion to the House.

I thank Deputy Durkan for providing this opportunity to speak to a very important motion, namely, the urgent need to review the regulatory arrangements which have resulted in approval of huge price increases in gas and electricity at a time when international energy prices are falling.

I will raise a different but related issue. How can the Government justify providing grant aid for the installation of storage heaters in the homes of the elderly and disabled yet allow the ESB to charge such individuals €800 or more for connections? The ESB claims it needs heavier wiring to install such heaters and the elderly must pay for it. I attended the launch of the Society of St. Vincent de Paul annual review last week and its members spoke of how elderly people in particular had to deal with crippling ESB arrears. Only yesterday I attended the annual general meeting of the Irish Co-operative Organisation Society and one of the main issues raised at that conference was the cost of energy, which is causing serious problems for the entire food industry.

Some people in this House are not very worried today about agriculture or the food industry. They believe their best options are in the property market and the benefits that can accrue from it. However, agriculture and the food industry are still extremely important. The food industry is one of the few industries that can provide a base in rural Ireland and much needed employment. Also, the raw material is available on the ground.

It is difficult to explain to those involved in the food industry how the Government can allow the price of gas and electricity to increase so dramatically out of line with our nearest neighbours. There is at least a 20% difference. Many food companies have industries in the UK and other areas and know at first hand the significant difference in price and how this affects their competitiveness. The fact that the price of oil has decreased on the international market makes it vital that the change we seek tonight is introduced immediately and the price here is re-examined.

Last year I asked the Government to look specifically at the possibility of a change in its VAT take on electricity and gas as a small gesture towards industry and the private sector, but it ignored my suggestion and said it was impossible. In the year 2005, the Government took in €223 million compared to €116 million in 2001. It is clear that at the current rate of VAT, the Government will collect up to €360 million this year, yet old age pensioners and those on disability payments cannot raise the necessary lump sum to fill their oil tanks.

The Government failure to encourage alternative energy production is also part of the problem. It has produced many papers on the issue, but many people interested in alternative energy have had to go to Scotland and other places to produce power abroad rather than here. These are facts. I have talked to those involved in the industry and know this is the case.

The past ten years have seen major improvements in employment here, especially in the building industry, but many jobs have been lost in manufacturing. Unfortunately, this trend has escalated due to the Government's failure to deal with the energy crisis. It is vital that action is taken and that the regulator's proposal to increase electricity prices on 1 January 2007 is dealt with and that we ensure our prices are no dearer than our European counterparts.

The current situation is untenable. I urge the Minister to take whatever action he can on the issue. He can do it through VAT or through the regulator. He has many options. He is in control and should show that.

There is much talk by the Government about the strength of our economy, which has been buoyant over the past 12 years. These 12 years of boom should have provided the opportunity to develop the two basic building blocks that would secure continued economic growth in the future, good infrastructure and an affordable and secure energy supply.

We all know where we stand on the good infrastructure. Delay after delay on meeting deadlines, with corresponding budget overruns, have left our transport system little better than that of a third world country. People face hours on end stuck in traffic, a Luas system that does not connect and an outdated train system. Also, we have totally abandoned the concept of carrying goods by rail. So much for the first pillar needed to maintain our economic growth into the future.

The second pillar of economic growth is a secure, affordable, environmentally friendly source of energy that could save our economy hundreds of millions of euro in carbon taxes. We could have begun to solve this problem by taking a serious look at the beet industry, particularly that at the Mallow and Carlow factories. In addition to contributing to our fuel security, the saving of the Mallow factory could have gone some way towards providing an alternative crop to help our hard-pressed farmers. Not only has the Government failed to secure our economic future through the lack of adequate infrastructure, roads and rail, it has failed to make any effort to secure our energy needs.

By failing to make any progress in these two fundamental areas, the Government has allowed our agriculture industry to die. Some foresight and planning could have gone a long way to securing energy for our future and could at the same time have revitalised our agriculture sector. There would then have been no need for former sugar factory workers from the Mallow sugar factory to spend another day picketing outside Greencore yesterday seeking their just redundancy entitlements, a claim the Labour Court has upheld no fewer than three times. It is time the Government intervened with Greencore to ensure that workers who worked hard in the industry over the past 30 years get proper and just compensation.

The Government's lack of planning and foresight represents a lost opportunity for the economy to secure a start in producing a native source of environmentally friendly fuel and to provide an alternative viable crop for our farming community. Also, the Government continues to fail to ensure that a small proportion of the money Greencore is getting from EU taxpayers is put towards paying proper redundancy payments for the workers of the Mallow factory.

After the closure of the Mallow beet factory, Cork County Council commissioned a study with the objective of providing a factual evaluation of the technical and financial viability of ethanol production from beet and wheat at the former sugar factory. The following areas were addressed in the study: Irish and international policy on renewable energy, ethanol market dynamics, the process and economics of ethanol production, the viability of the Mallow site for ethanol production and the macro-economic and environmental effects of ethanol production.

The European Union biofuel directive states that member states must replace 5.75% of petrol and diesel with biofuels by 2010. This would be the equivalent of 220 million litres of ethanol. Therefore, a market for fuel that could be produced from the sugar factory already existed and all that was needed was for the Minister to put a tax relief scheme in place to make the proposition viable.

The council study proved that the supply of wheat and beet would be available to the factory. Some 10,000 hectares were likely to be available for beet production and 12,000 hectares for wheat. These would have produced more than 220 million litres of ethanol. The level of economic support required would be 26 cent per litre produced from beet and 14 cent per litre produced from wheat. In total, it would only cost the Exchequer €40 million per annum to run the plant to full capacity. This support would enable reasonable prices of €40 per tonne for beet and €145 per tonne for wheat to be paid to farmers. Sugar beet grown for the production of ethanol would also provide an ideal rotation crop for cereals such as winter wheat and spring barley.

The ethanol production process would help our economy overcome significant dependence on a foreign energy supply and improve the balance of trade and payments in the energy area. Ethanol burns more cleanly than petrol and produces fewer emissions. A reduction in greenhouse gas emissions of up to two thirds can be achieved through the substitution of ethanol for petrol as a transport fuel.

Everybody and every area wins in the ethanol production scenario. The environment, the economy, security of supply and our balance of payments all benefit. Less carbon taxes will be payable, farmers will have a viable crop and industry will create environmentally friendly jobs. As far as I am concerned the ethanol proposal was a "no-brainer", but we have failed to act on it.

I compliment Deputy Durkan on tabling this important motion. This economy has moved from fifth most competitive to 89th in the world. That gives a clear indication of the stacked up costs of doing business. Regarding power, the stacked up costs are 9%, which is very high. While VAT can be reclaimed on commercial property, it is an injustice that it should be charged on domestic use. It is a huge taxation on those who can ill afford to pay, particularly the elderly.

During the past five years, more than 33,000 manufacturing jobs have relocated to more competitive economies. It is disappointing to hear the IDA acknowledge that we are seeking added value jobs which puts paid to the possibility of retaining jobs. We all hear about the boom in the economy, which is driven by the construction industry. Recent job announcements have been few and far between, bar high-tech jobs. All the graduates in the north west have to leave the region. That Ireland has moved from fifth place to 89th in terms of competitiveness indicates a problem.

The latest ESB price increases are 19.4% for residential consumers, 19.6% for SMEs and 21% for large industrial consumers. Such increases have a direct impact on large companies such as Abbott Laboratories in Sligo, which employes a large number of people. A gas price increase of 34% will add up to €300 to the average domestic annual bill. The net losers are the consumers but equally important are employers who create jobs. Given the enlarged Europe, one can relocate in a lower priced economy. That is the point made by my colleague, Deputy Hogan, who has the review of the State regulators. In respect of every job here, there is delegated responsibility. The Minister is not responsible; he passes the buck to somebody else who has been appointed.

The report of the National Competitiveness Council is a damning account of the Government's failure to address spiralling business costs and the decline in competitiveness of the economy. It shows that the Government has made little progress in addressing spiralling business costs in recent years. This has resulted in the collapse of certain export markets and the repatriation to America of €18 billion per year in profits. As we speak, interest charges, which were 6%, are being increased. All these increases are stacked up costs. For every €100 million borrowed from the banks, the State indirectly gets €30 million arising from tax on tax as this is very much a taxation economy.

That VAT on power supply in the UK is less than half the rate here is an indication of how wrong is our taxation system. The problem arises when trying to generate jobs, especially in small companies, and ultimately their survival. A new company, Mayo Power Plate, which will open shortly in Mayo and is backed by a consortium of investors, will be of major benefit to County Sligo. The plant should provide a major source of employment to farmers who will use the wood and other products as a major field source. This will be of substantial benefit to the region. A massive area of ground is under afforestation. It will take the thinnings of afforestation and wants to be backed as an alternative energy supplier in Mayo.

I welcome the opportunity to speak and congratulate Deputy Durkan on tabling the motion. The first line refers to the likelihood of major job losses in both the manufacturing and services sectors in the wake of recently approved gas and electricity price increases. I can speak of job losses in my constituency of Limerick West — 400 in Castlemahon, 300 in Kantoher and 50 in Microtherm Limited in Bruff — during the past 12 months. We have proposals to develop bio alternative energy in our constituency, which is an opportunity for the Government to support replacement jobs.

Capway Bioenergy is proposing to set up a bioenergy facility in Foynes which would employ more than 50 people. There is Government support for this project. I raised this matter on the Adjournment last week and I ask the Minister for Finance to look favourably on this project because it will counteract in some small way the job losses in Limerick West. In Adare, we have a project for the growing of Miscanthus grass. There are great opportunities in this project as we have seen in the UK and Europe where this environmentally friendly system could support farmers in the area whose life has changed dramatically during the past ten years——

There is no doubt about that.

——and encourage alternative crops. I have raised both issues on the Adjournment on several occasions and will not rehearse them now.

I wish to speak about bioenergy policy. The level of funding available to energy action and all those similarly engaged with the specific focus of bringing existing housing stock up to the insulation standards of newly built houses is totally inadequate. The grant should be extended to householders who wish to convert existing home heating technology to renewable energy up to the value of between €500 and €3,500. The grant aid to householders who wish to properly insulate their homes should be up to the value of €500.

We should move towards a target of 33% of Ireland's electricity needs from renewable sources by 2025 through a mix of direct State investment and a regulatory regime that gives access to the national grid to renewable energy sources above all others. The State should prioritise the creation of a network of wind turbines to harness the potential of wind energy, especially offshore wind energy. Our potential to do this is the best in the EU.

Investment and commitment will ensure the putting in place of the necessary interconnecting infrastructure which will ensure continuity of supply in the event of a reduction in wind supply. Consideration should be given to the separation of the ESB from the national grid, a matter on which I would like to hear the Minister's view. This would ensure a level playing field for all energy suppliers. In my council area, there is a massive 200 acre landfill. There is an opportunity to recover landfill gas in all landfill sites and waste water treatment plants as far as practicable for the generation of electricity to be fed into the national grid and for private use. Bord na Móna should be included in the overall development of energy policy, given its expertise as an energy provider and its ability to play a meaningful role.

With regard to the project for west County Limerick, all excise duty on biofuels produced from renewable crops should be removed. That is key to developing a biofuel industry.

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:


that ongoing volatility in energy prices is an EU wide problem with the EU being the largest importer and second largest consumer of energy in the world and that some Member States have substantial indigenous energy resources unlike Ireland;

that natural gas and oil are internationally traded commodities and Ireland is essentially a price taker;

the dependence of BGE on gas imported from the UK, over 86% of our national requirement and that natural gas is the major fuel used in power generation;

that the average cost of procurement of gas for BGE had increased by some 50% over the last 12 months due to the increase in international wholesale gas prices;

the UK market which we share is increasingly reliant on gas and oil sourced internationally;

the geopolitical risk in oil and gas producing countries which must be addressed by the EU collectively;

that energy prices can adversely affect competition and jobs; and

Ireland's strong support for the development of a new common European strategy for energy underpinned by the principles of sustainability, competitiveness and security;

commends the Government on:

its commitment to delivering on energy policy priorities, including ongoing investment in energy infrastructure, ambitious targets for renewable energy, a substantive increase in energy efficiency and the continued opening up of gas and electricity markets to competition, with resultant benefits to consumers;

the publication of the energy policy Green Paper, Towards a Sustainable Energy Future for Ireland, which is informed by input from public bodies and organisations, including the National Competitiveness Council, Forfás, IBEC, the ESRI and the Enterprise Strategy Group;

its commitment to developing an all-island energy market which is designed to deliver, over time, some of the cost efficiencies and investments needed to promote an efficient energy market which contributes to competitiveness;

its liberalisation of the electricity and gas markets, with full electricity market opening introduced in advance of EU targets and steadily increasing levels of competition in that market as well as the gas market;

its strategy of providing increased electricity and gas interconnection capacity, including the development of a 500 MW east-west electricity interconnector and the doubling of north-south interconnection capacity, in order to underpin security of supply and continued economic competitiveness;

its policy of mitigating our exposure to volatile international fuel prices through enhanced fuel diversity, including the setting of ambitious targets and supports for renewable generation and indigenous supply sources;

the launch of a major national awareness campaign focussing on energy efficiency and the benefits to consumers which highlights actions that can lead to energy savings, increased competitiveness and enhanced security of supply;

enabling competition by reforming institutional arrangements and market structure and specifically reducing the market power held by any one player in price-setting generator plant; and

the proposed creation of a state-owned landbank of current and potential generating sites, thus removing a significant barrier to new entrants;


the fact that Fine Gael refused the opportunity to constructively participate in an all-party approach to developing energy policies for the future;

the CER's commitment to consult on a fuel variation mechanism in tariffs by the end of this year and a possible mid-term review of energy tariffs in 2007 should international fuel prices continue to trend downwards;

the CER's approach to cost reflective tariff setting which is designed to ensure the short and long-term financial viability of the energy sector and to ensure adequate investment in energy infrastructure. A secure and reliable electricity system is a prerequisite for economic stability and to attract the type of industries favoured by the Irish economy; and

the Energy Policy Green Paper commitment to undertaking a comprehensive sectoral review of the energy regulatory framework following the introduction of the Single Electricity Market in 2007.

I wish to share time with Deputy O'Flynn, by agreement.

Acting Chairman

Is that agreed? Agreed.

I thank Fine Gael for tabling this motion, as it gives me an opportunity to educate Deputies of that party on recent developments in this Government's energy policies and to respond to their latest efforts to preach gloom and doom.

We need to educate the Minister.

Fine Gael Deputies alluded to the loss of 34,000 jobs over the past few years, while ignoring the 90,000 new jobs which were created last year and the fact that we are heading for a similar figure this year.

Some 1,000 jobs were lost in west County Limerick in the past 12 months.

This Government is committed to creating the conditions to keep energy price rises to a minimum. We are committed to a strong, vibrant and competitive economy. While any increase in energy prices is unwelcome, these are primarily a function of an upward shift in global commodity prices, particularly in respect of oil and gas. They are also a result of our location and of our dependence on imported fossil fuels. The motion gives me the opportunity to outline the concrete steps which the Government has taken and is taking to mitigate the vulnerability we face as an island nation on the periphery of Europe with few interconnections and a heavy dependence on foreign fossil fuels. This backdrop highlights the hypocrisy of Fine Gael Deputies in tabling this motion and reveals their tunnel vision and insular perspective on the global challenges we face. It also reveals their short-sightedness in refusing to contribute positively to the development of an agreed policy on such important areas as renewable energy and a vision for the future on an all-party basis, as proposed by Deputy Eamon Ryan of the Green Party.

The Minister would love that. Does he want all-party agreement on high energy costs?

I have suffered Opposition speeches for the past 40 minutes in an effort to glean at least one idea from the Fine Gael benches on energy policy.

The Minister's constituents are suffering from high energy prices.

Acting Chairman

Allow the Minister to continue.

It is probably just as well that they did not agree to an all-party committee because they would not have much to offer.

The Minister wants a high cost energy policy.

The policy was suggested by the rainbow Government.

We are all in agreement that the continued success of the Irish economy can only be guaranteed if it is underpinned by sound energy policies. Fine Gael should not be playing political games with an issue critical to the well-being of our people, especially given that its Deputies know little about the issue.

The Minister should not be playing, either. He does not need to prove his ineptitude any further.

A recent programme of investment in the electricity networks has sought to address the need to meet ever increasing demands. Further investment is required in areas such as interconnection and will have to be paid for by the consumer or, indirectly, by the taxpayer. Ireland's main energy challenges are largely a consequence of its geographical situation. As an island on the western edge of Europe, lacking significant confirmed hydrocarbon deposits and subject to rapid economic growth, it is inevitable that Ireland's reliance on external sources of fuel will, at least in the short term, exceed the average European level. Over the longer term, however, our geography is also a source of opportunity for Ireland, particularly in regard to the potential for more intensive exploitation of renewable energy. Success will require that the technologies involved are economical compared to traditional sources of energy and that market conditions provide appropriate incentives for producers.

I commend the Government on its continued commitment to delivering on energy policy priorities and meeting national and international energy challenges. As a direct result of Government policy, Ireland is well positioned to manage these challenges. The Government's commitment was underlined by the launch of the energy Green Paper, Towards a Sustainable Energy Future for Ireland, which addresses the challenges for Irish energy to 2020 and beyond and sets out both the policy actions currently underway and the policy options for the future.

The Government's policies are all in the future. It could not even produce a White Paper.

The Green Paper sets out the Government's priorities and forms a basis for consultation with the public and stakeholders. It aims to engender serious, constructive and structured debate on energy policy. The Government is open to considering all proposals for ensuring competitive, sustainable and secure supplies of energy to 2020 and beyond.

The all-island energy market, which was not mentioned by any Fine Gael speaker, is a cornerstone of energy policy, in line with EU priorities on market integration and interconnection. This project represents a co-ordinated approach to energy policy North and South. The framework was developed by the authorities on both sides of the Border in the context of continuing co-operation between both Governments on common energy issues. The all-island energy market will deliver a range of benefits, including a larger, single market with more competitive energy prices; open and transparent competition at all levels in the marketplace and for all energy sources, including combined heat and power and renewables; a more stable and attractive investment location and consequential improvements to national and international competitiveness of the wider industrial sector; greater security of supply; a robust, integrated infrastructure; a more diverse energy mix; greater energy efficiency; better consumer choice of supplier of energy or of energy services; longer term savings through rationalisation of functions in regulation, system operation and transmission asset planning and ownership; and improved organisation of energy research through the emergence of an all-island network of academic and industry expertise.

In that case, why is the Minister raising energy prices?

The all-island energy market will also serve as a stepping stone towards the development of European regional energy markets. To ensure that Ireland reaps the benefits in terms of competition and security of supply from market integration, the Government has committed to enhanced physical interconnection with our neighbouring energy markets. As a result of this policy, electricity interconnection capacity with Northern Ireland will be doubled by 2012. The Government also approved an Exchequer contribution of €12.7 million towards completion of the gas network in Northern Ireland, which will include an extension of the natural gas pipeline from Belfast to Derry and construction of a North-South interconnector. The State's contribution recognises that cross-Border gas infrastructure is an essential part of the agreed North-South aspiration of an integrated all-island energy market.

On foot of a recent Government decision, a new 500 MW east to west electricity interconnector between Wales and Ireland will be completed by 2012. In its progressive decision to secure the construction of the east to west interconnector, the Government noted the advice of the Commission for Energy Regulation on the potential benefits to Ireland of interconnection with the UK market, which include enhanced security of supply, the promotion of competition in the electricity supply market and integration of Ireland's small, and largely isolated, electricity system into the wider European electricity market. East-west interconnection will afford Ireland direct and secure access to the UK and EU mainland energy markets. It will also offer potential opportunities for export of Irish wind generated electricity and to assist that sector.

It should also be noted in this context that the Government has made specific provision for electricity interconnectors in the Planning and Development (Strategic Infrastructure) Act 2006. This Act provides for a more streamlined planning procedure for a range of strategic infrastructure developments, including energy infrastructure such as interconnectors. The Government policy of interconnection and integration with neighbouring markets goes hand in hand with its progressive approach to the liberalisation of the Irish electricity and gas markets.

In 2005, we introduced a statutory instrument, SI 60 of 2005, which provided for the implementation of a suite of liberalisation measures, including the full opening of the retail electricity market in Ireland. This occurred on 19 February 2005, when all 1.8 million customers became free to shop around for their electricity supplier. This date is well in advance of the July 2007 deadline for full liberalisation of the electricity markets as set down by the EU in the Second Electricity Directive.

To underpin and accelerate electricity market liberalisation, I asked Deloitte & Touche, in the context of preparing the Green Paper, to undertake a review of the Irish electricity sector and provide a comprehensive in-depth analysis of institutional arrangements and market structures. It found that the size of the Irish market is a significant factor as is the dominance of ESB arising from its ownership of a large and diverse portfolio of plant and particularly from its ability to set prices.

The Deloitte & Touche report states that without changing the current structure, we will continue to face difficulties in attracting new entrants to develop competition and choice for consumers. The market will evolve slowly without a competitive downward pressure on prices. There will be few opportunities to break the current cycle of market evolution. None of the Fine Gael speeches referred to this matter. This scenario is not in the interests of market players or consumers, nor is it in the interests of the competitiveness of energy costs and the economy. The Deloitte & Touche report is a useful contribution to the energy debate and the analysis is incorporated in the Green Paper.

The Government recognises the fundamental role played by the ESB in the economic and social development of the State and the strategic value of maintaining the ESB as a strong and commercially viable company into the future. The retention of natural monopoly networks in State ownership is also a core policy tenet for the Government. What the electricity market needs is more competition, more innovation and more choice for consumers. Threatening to sack the regulator, as Fine Gael has asked me to do tonight, will not enhance the market. It will do nothing for confidence in the market and certainly will not increase competition.

Why does the Minister not justify the reasons?

Structural reform is necessary in the interests of the market, the consumer and the ESB. Enhanced competition in generation will act as a catalyst for improvements in operation and maintenance costs, productivity, availability, flexibility and innovation. The ESB's dominance in mid-merit price-setting generation increases the potential for abuse of market power and thereby does little to incentivise investment by independent players. I am very conscious that new players need to be encouraged to invest in this market segment to redress this position. I am confident that the establishment of the single electricity market, with its proposed use of a capacity payment mechanism, helps the process of beginning to deal with this issue in a positive way.

I am also proposing the option of creating a "land bank" of suitable power generation sites to offer a predictable pattern of access to suitable generation sites in Ireland for new entrants to this market. This would remove a significant barrier to new entry and has been used successfully elsewhere to encourage new entry. This option would see all suitable sites being effectively controlled by an independent body, such as CER or the TSO, which is EirGrid, and being made available to new entrants to the market as necessary. These new structural and institutional arrangements are important features of the evolution of a truly liberalised and competitive electricity market in Ireland. In this context I also welcome the establishment of EirGrid as a fully-fledged legally independent transmission system operator on 1 July. This is another critical milestone in the process of opening up the Irish electricity market in line with Government policy and with the EU internal energy market.

The Government has embarked on a process of opening the natural gas market progressively. As of 1 July 2004, all industrial and commercial consumers are free to shop around for their own natural gas supplier. The final stage in this process, the full opening of the gas market to the domestic level, is provided for in the Energy (Miscellaneous Provisions) Bill 2006, which is currently on Report Stage in this House.

I have already outlined the challenges faced by all EU member states and the wider international community in dealing with increasingly volatile international fuel prices. While it is clearly not within the power of any one country to impact upon this market volatility, we can take steps to mitigate our exposure to fuel price fluctuations through enhanced fuel diversity and energy efficiency, and this will be addressed fully in the White Paper.

The Government has a long-term and ongoing commitment to encouraging and supporting indigenous fuel sources, exemplified by the public service obligation imposed on ESB to utilise peat for power generation. The Government is committed to progress a full range of policy options to ensure that Ireland is not excessively exposed to any single fuel or supply source. The Green Paper outlines a number of options, including co-firing, clean-coal technology and a significant expansion of the use of renewable sources. While the Green Paper sets specific and ambitious targets, they are ultimately achievable for the proportion of electricity consumption the Government aims to have generated from renewable sources by 2020. We have proposed a 30% target, which represents a doubling of the 2010 target. We have set about supporting this objective by the new €119 million renewable energy feed in tariff, which is a vital component of Government policy, representing the most important incentive mechanism for the construction of new renewable energy generation. The REFIT scheme critically underpins the ambitious targets we have set. As outlined in our programme, we are also committed to the use of wind and tidal energy.

We can show real evidence of practical actions in other areas on the renewable side, including the comprehensive range of grant supports to develop greener homes, commercial bioheat, the CHP and the biofuels initiative. The Government recently launched a major national awareness campaign focusing on energy efficiency, which is positive.

The Fine Gael motion calls on me to do two things, to initiate a full review of the regulatory arrangements which approve price increases for electricity and gas and to introduce legislation to enable the Oireachtas to compel the CER to instigate a review of prices at any time so that price movements can be factored into the cost of energy. Last April Fine Gael published what purported to be a national plan for alternative energy as its response to what it sees as the energy crisis that faces us. That threadbare review makes no mention of regulation.

It is the only constructive report published so far.

It is way ahead of the Government's.

That party has suddenly discovered the new policy imperatives on regulation.

The Minister should be ashamed of himself. What about the cost for industry?

Was it aware of the world of regulation that existed?

What about the cost for domestic consumers? What is the Minister doing for them?

The sole mention of regulation is its wish to have a public transport regulator.

The Minister tells the consumer that the regulator told him.

On the one hand it wants to introduce more regulators and regulation and, on the other, suggests in the House tonight that we should sack the regulator we have. Turning to the two calls Fine Gael made on me, the Green Paper already provides for a comprehensive review of the regulatory framework after the single electricity market North and South is operational in 2007.

It should have been reviewed ten years ago.

For the Deputy's information, he has only been in place for four years. The timing of the review is critical and it would be premature to carry it out before the arrival of the single electricity market and full identification of energy policy challenges and measures.

The people will be starving by then.

The Government remains committed fully to such a root and branch review of the energy regulatory framework.

As regards the call for legislative measures, the Fine Gael party has to decide whether the regulator is to remain independent in the discharge of its functions without interference from the Oireachtas in terms of pricing decisions or timing issues on pricing reviews.

So that the Minister can duck and dive and take no responsibility.

Introducing such uncertainly in the market would be counter-productive. What Fine Gael is proposing would be counter-productive. It would defer investment and undermine progress to a single all-island electricity market——

The Minister better read the writing on the wall.

Deputy Durkan, allow the Minister to conclude.

——and it would be very bad for consumers. For all these reasons I reject these calls which are not thought out fully.

Famous last words.

They are simply a knee-jerk reaction to the real issue of proper, effective, necessary, proportional, transparent, accountable and consistent regulation of the electricity and gas sectors in the interests of the economy, consumers and security of supply.

There will be a knee-jerk reaction on the opposite side of the House when the truth suddenly dawns.

I want to speak directly about the issues of electricity and gas price increases and the regulatory framework.

As chairman of the Joint Committee on Communications, Marine and Natural Resources, I have operated in an open and constructive way at all times. All of the industry stakeholders have been given their chance before the committee to have their say on energy policy and on issues such as prices, the need to keep the lights on and to keep industry in business with secure supplies, and the way the energy regulator operates.

I am not entirely happy with some of the CER's decisions. People cannot understand why electricity and gas prices are so high.

Hear, hear.

The CER is accountable to the committee which I chair and has been brought before the committee on numerous occasions to explain its decisions and its actions, in line with the statutory duties and responsibilities given to it by the Oireachtas under the Electricity Regulation Act 1999, various other amending legislation in 2002 and all other statutory instruments introduced in recent years.

The reality is that the Minister does not have a function regarding electricity and gas pricing. If the Oireachtas decides otherwise, so be it but I have not heard many calls in our committee to reverse that decision.

The CER is given responsibility for regulating ESB's public electricity supply tariffs under the Electricity Regulation Act 1999. Prior to CER regulation, the ESB, by custom and practice, sought Government approval before increasing its tariffs.

Confusion may exist about the relationship between the opening of the electricity market and the rebalancing of tariffs. Tariffs rose by only 3.5% in nominal terms between 1986 and 2001 compared to 52.5% inflation in the same period. That led eventually to generation costs being under-recovered and grid investment was postponed.

The Government has undertaken a major investment programme on the electricity transmission and distribution systems to create the environment for additional generation capacity to meet increasing demand. In this regard, it is worth noting that energy infrastructure is currently paid for by the users and not the State as is the case, for example, in regard to roads and water.

The multi-billion euro infrastructure investment programme represents a trebling of the investment in the transmission system and a doubling in the distribution system in the period 2001-05 compared with previous years.

The CER reviews ESB costs when assessing ESB applications for changes to its tariff prices. As part of this process, the CER also operates a consultation process. Regarding Bord Gáis Éireann's natural gas tariffs, which are also regulated by the CER since 2002, it is important to keep in mind that natural gas is traded worldwide and prices are determined by supply and demand.

Until 2002, natural gas tariffs had effectively remained unchanged in Ireland since the mid-1990s, despite a steep rise in the cost of natural gas during that period. The price freeze was based on favourable long-term contracts negotiated by Bord Gáis Éireann with suppliers and, as these have gradually run out, the price increases have come on-stream to ensure that BGE's supply costs are realistically reflected in the prices being charged. We owe a great debt of gratitude to the management and the board of Bord Gáis Éireann for being able to keep those prices and for putting in place long-term contracts with suppliers over many years.

I remind the Deputies that the challenge Ireland faces in managing increasing energy costs are not unique. The European Union Green Paper, A European Strategy for Sustainable, Competitive and Secure Energy, notes that oil and gas prices are rising and have nearly doubled in the EU over the past two years, with electricity prices following. It is important to note that two years ago the price of a barrel of oil was $35. It went to a high of $78 and is back to $60 today. OPEC said today it would reduce the supply by 1.2 million barrels a day to keep the prices as high as possible.

The EU Green Paper points to greater energy efficiency and innovation as the means by which member states may realistically address rising energy costs. In this context, I heartily commend the Government for its initiatives on both of these fronts, exemplified by the recent launch of the energy efficiency Power of One campaign and of the new Charles Parsons Energy Research Awards. I commend the Minister for his Power of One initiative. I encourage every citizen in the State to take notice of that programme and to be energy effective and efficient. No Deputy is happy with the CER approved price increases, despite the fact that we are essentially price takers in this market.

The Government's approach on energy policy is to be commended. It is dealing with issues such as security of supply, energy pricing, fuel diversity, the environment, renewable sources of energy, infrastructure development and the all-island energy agenda. Sterling work is being done and must be recognised. I am disappointed that the Members on the opposite side of the House do not recognise that.

The introduction of the single electricity market, SEM, has the potential to drive cost efficiency in the electricity industry which in turn can lead to consequential improvements to the national and international competitiveness of the wider industrial and commercial sectors of the economy. I commend the Government for its planned contribution of €12.7 million to the completion of the gas network in Northern Ireland in recognition that cross-Border gas infrastructure is an essential part of the agreed North-South aspiration of an integrated all-Ireland energy market. I am pleased to note that the Government's decision to pursue east-west electricity interconnection will afford Ireland direct and secure access to the United Kingdom energy markets and onwards to the EU mainland market.

My committee's energy report published last June contained 38 recommendations, following 18 days of hearings, and a detailed road map to energy policy development. I thank my colleague on the opposite bench, Deputy Durkan, and Deputy Broughan for their valuable contribution to those 38 recommendations. I am pleased to note, and I hope I have been reading the same Green Paper as Deputy Durkan, that the Green Paper absorbed many of the committee's recommendations and informed much of the Government's thinking on the new policy.

It did, which it read in our paper and transcribed.

I am particularly pleased that issues such as security of supply, competitiveness, market development and the whole renewable energy area have received attention, as well as the need for consumers and business voices to be heard in the interface with the regulator.

I support with enthusiasm the Government's intention to bring forward a review of the energy regulatory framework. The public needs to understand how and why price decisions are taken. The public also needs to be satisfied that if fuel prices decrease, their bills will reflect that as quickly as possible.

I therefore welcome the undertaking made by the energy regulator at a meeting of our joint committee on 4 October to consider the option of a fuel cost variation mechanism within energy tariffs. I understand that the CER has now indicated that it will hold a public consultation on this issue by the end of this year. I welcome that initiative.

Who is the Minister? Who dictates policy, the regulator or the Government?

I also welcome the statement by the regulator on that day that he will revisit the price increases already granted by him if prices fall for oil and gas.

Next year.

No. He is committed to doing that. Let it be done, and I hope it will be done before the expiry of the one year price increase they have given.

Fine Gael has not called for the regulator to be abolished and neither have other members of the joint committee. That is not to say that the general view of the committee is that they are happy with what is happening in energy regulation——

They are totally unhappy, and the Deputy knows it.

Acting Chairman

Allow the Deputy to continue.

——and that the consumer's interest is protected. The National Consumer Agency established by the Minister, Deputy Martin, will provide a stronger voice to the consumer. That is to be welcomed.

The question is whether we should remain with our current cost base regulation which we, as Members of this House, passed in this Oireachtas or move to incentive based regulation. Those are the questions that must be put to Members when we review the regulator's role because the regulator has a function to ensure costs are recovered by the ESB. We have laid out that role for the regulator.

The Government has functions also and ripping off the ESB is not one of them.

It is time for a review of energy regulation and I believe the Government initiative——

The Government has had its hand in the till also. It took €77 million last year.

——will give both the Oireachtas and the public an opportunity to reconsider the regulation of the sector and suggest where improvements are necessary.

The regulator's instructions from the Oireachtas are to ensure that tariffs are cost-reflective and do not discriminate unfairly between licensed operators in the State sector, such as the ESB and Bord Gáis, and the private sector.

What about the cost to other economies? We do not have a closed society.

It must exercise its functions in a manner that protects the interests of final customers of electricity and natural gas. It must promote competition in the generation of supply, ensure security of electricity supply and ensure that tariffs are cost-reflective. This is what the regulator has done. The House has given the regulator a set of rules——

The cost could be reduced by handing back the €77 million the Government took from the ESB last year.

I wish to share time with Deputy Lynch.

Acting Chairman

Is that agreed? Agreed.

I commend Deputy Durkan and the Fine Gael Party for tabling this very important motion.

Energy and energy price rises are probably the most important issues on the political agenda now and for the foreseeable future. Since 2000, householders and businesses have been hit with unprecedented increases in energy prices. Since then, there have been year-on-year price hikes of exceptional magnitude. Electricity prices for domestic consumers have increased by more than 66% overall since 2002. They increased by 13.2% in 2002, 5% in 2003, 8.6% in 2004, 4% in 2005 and 3.1% in 2006. They will increase by 19.4% this coming January. The cost of gas increased by 9.1% in 2003, 10.7% in 2004 and 25.26% in 2005. There was an astonishing increase of 34% on 31 October 2006. This has meant an incredible increase of 102% in gas prices since 2002.

Despite the bluster of the Chairman of the Joint Committee on Communications, Marine and Natural Resources, Deputy O'Flynn, it is clear the Irish experience of deregulation has been an unmitigated disaster in terms of securing lower prices for consumers.

It has been appalling. Hear, hear.

IBEC called on the Government this morning to address the serious issues that are now facing the food and drink industry, which it described as one of the most important to the economy. I back this call but I am sorry Government action was not instigated before the recent devastating announcement by Cadbury Ireland that 450 jobs are to be lost over the coming years in Coolock, which is in my constituency of Dublin North East. The company stated one of the key reasons for the cuts is skyrocketing energy costs and the accompanying loss of competitiveness. This constitutes another body blow for Coolock and the north side of the city. The Acting Chairman and I have worked long and hard on a number of initiatives to try to reverse unemployment trends in the region. Sadly, due to the incompetence of the Government, the jobs at the Cadbury plant are being placed in jeopardy.

This week, we all received a very interesting document from Forfás, Statement on the Costs of Doing Business in Ireland. It states utility costs, especially the cost of electricity, comprise a key business input cost that weakens Ireland's overall cost competitiveness. It emphasises that "Food processing (23 per cent of total costs) and biopharmaceutical manufacturing (22 per cent) are particularly sensitive to utility costs". This is very worrying as the pharmaceutical and food processing sectors play such important roles in our manufacturing industry.

An interesting statistic in the Forfás document is that Cork, Dublin and Galway rank as having more expensive electricity, gas, water and waste disposal costs than any other city surveyed across the world, apart from Maastricht in Holland. The National Competitiveness Council's publication must now act as an urgent wake-up call for the lethargic outgoing Government with regard to energy.

The Joint Committee on Communications, Marine and Natural Resources recently received correspondence from Mr. R. G. Budden, the managing director of Wellman International Limited, a fibres manufacturer in Kells, which is in the Minister's backyard. Mr. Budden stated: "I should like to make abundantly clear the very serious consequences for my company, and for employment in manufacturing in Ireland that arise from the current malaise on government energy policy." He refers to the "wilful destructiveness" of the energy regulator and states, astonishingly, that "the increases in electricity costs currently foreseen for 2007 could be sufficient of themselves to force this company (employing 300 people) into liquidation". If the Minister is not prepared to take care of his own constituency, he will not care for any. Deputy Carty will agree with me in this regard.

He is well able to take care of it.

He will need to be.

I hope he will.

The Irish Small and Medium Enterprises Association, ISME, has claimed the cost of electricity for SMEs has risen by 89% in the past five years. It also claimed energy costs are now the "number one enemy" for SMEs. ISME reported that the recently sanctioned 34% increase in the price of gas will result in an additional energy bill of €13,000 per annum and that a "typical SME will have to increase turnover by €250,000" to pay for the increased cost of gas. Clearly, across the spectrum of opinion, business leaders believe the Minister and CER have totally failed to address the devastating impact of increases in energy costs, especially in respect of electricity and gas.

In his motion, Deputy Durkan rightly dealt with the pernicious impact of soaring energy costs on national competitiveness. Let me highlight the devastating problem of fuel poverty which these increases have caused throughout the country. During my walkabouts and at my information clinics, it has become clear to me that the terrible financial burden price rises have imposed on families represents a disaster. The Acting Chairman has had a similar experience in his constituency, which is beside mine.

During last year's bitterly cold winter, I talked to numerous senior citizens who were wearing big overcoats in their homes during the day to stave off the cold and damp because they were so fearful of the bills that would accrue if they turned up their heating. The past two winters were the coldest I can remember and it appears the coming winter will be similar. In spite of this, energy prices are going through the roof as we are beginning to deal with the possibly disastrous impact of climate change.

Earlier this year, I raised the very serious matter of energy poverty with the Minister for Health and Children, Deputy Harney, on behalf of some very vulnerable senior citizens in my constituency. Eastern Community Works Limited, with which Deputy Carey will be familiar, is an agency of the Health Service Executive that assists senior citizens and citizens with disabilities to carry out essential improvements to their homes. When we contacted the organisation last May, we discovered its total budget to assist senior citizens and vulnerable families in 2006 had run out in the middle of April. This shows the concern the heartless outgoing Administration has for the most vulnerable families in our HSE region. This is an appalling state of affairs.

We were told recently by the Society of St. Vincent de Paul that a massive €3.5 million of its annual budget will be used over the coming winter months to help families to pay gas and electricity bills. The society also warned that far too few people are eligible to claim supports for fuel bills and that too many people will be left struggling to pay their heating and light bills this summer.

I have quoted many times in this House the famous report of the sociology department in UCD which states excess mortality in this city and every county in the State could be directly attributable to fuel poverty. Nevertheless, the Minister of State, Deputy Browne, published a Green Paper on energy that contained only a single page on energy poverty. This indicated his concern for the poor and vulnerable families. This is totally unacceptable. The Deloitte & Touche report, which was published on the same day as the Green Paper, states almost one in five Irish people is defined as "fuel poor". This is an astonishing legacy for any Government. One in five of our citizens will deliberately cut back on their energy use tonight and every night during the coming winter, which could be as cold as the last two winters, because they cannot afford the prices set by the Government. We have gone through the rigmarole of hearing the bluster of the chairman of the Joint Committee on Communications, Marine and Natural Resources about CER and regulation.

Who is responsible for energy price rises? I refer to the sky-rocketing prices of gas and electricity. The Minister of State, Deputy Browne, the Minister, Deputy Noel Dempsey, and the Taoiseach are responsible. The Fianna Fáil and Progressive Democrats Administration is totally responsible for the suffering that will ensue this winter.

Hear, hear.

I urge the Minister to address this matter post haste and, in particular, to examine what can be done in the budget. He should consider the miserable fuel allowance of €14, the low number of fuel units that people are allowed in respect of electricity and the appalling response of the Government to those who need assistance with their fuel bills. It is not just low-income families who are being pummelled by soaring fuel prices. Families with relatively comfortable incomes are also feeling the increasing pinch on household budgets as family fuel costs soar above €2,000. If one adds the various costs together, they are heading for €3,000. This issue was discussed when I was on a radio programme with one of the Acting Chairman's colleagues. When we spoke on 98FM about the size of household gas bills, for example, people came on the airwaves to read from their bills, citing figures of over €1,500 per annum. The Government's response has been to act like a bemused bystander. It wants the electorate to think there is nothing it can do, but the electorate will remember.

It is trying to hypnotise the people.

I believe that the people will hold Government Deputies and Ministers to account in this regard. It is clear that the current ministerial directives to CER urgently need to be reviewed.

Hear, hear.

I support this aspect of Deputy Durkan's motion. I have tried to propose a number of key changes to the National Oil Reserves Agency Bill 2006, which we considered last week and which will come before the House again shortly, to try to ensure that the needs of consumers — small businesses and householders — are taken into account. I have tabled an amendment to propose that a key consumer panel be established within CER. Under the proposal, the three commissioners — there are just two at present — would have to take the views of the panel strongly into account. They should not be able to gloss over concerns of this nature. They should not be able to tell the joint committee that they are basically giving money to the utilities for increases last year and the year before. It has to be said that profitable companies seem to have been able to manage such matters. The ESB and Bord Gáis Éireann have made bumper profits in recent years, despite the so-called oil increases.

I strongly back Deputy Durkan's call for a full review of the regulatory arrangements which have led to the sanctioning of unjustified price increases. A number of organisations in the United Kingdom have been established by the Government there to represent the people in respect of energy costs, particularly in a deregulated market. One of these interesting bodies is Energywatch, which has been put in place on a statutory basis on behalf of the people. It is able to draw constant attention to what is happening in the gas, electricity, oil and car fuel sectors. The Labour Party has long advocated the inclusion of a consumer panel and other mechanisms within the institutional structure of CER to ensure there is an adequate reflection of consumer views in energy pricing policy. That is something we will ask the House to vote on over the next week or so.

Hear, hear.

Before I hand over to my colleague, Deputy Lynch, I have to say that the Government's performance on energy pricing has been a disaster. The Government, rather than the regulator, is responsible for this matter. It has been a disaster for business in this country. It is eroding our competitiveness. It has been a disaster for householders, in particular.

You supported it.

We did not.

You did.

No, we did not.

It has been a disaster for the 20% of our citizens who are vulnerable. I refer to senior citizens, other vulnerable families and families on welfare. The Minister has to act by taking the necessary steps. Perhaps he should just support the motion.

Hear, hear.

Deputy Durkan's party supported it.

I thank Fine Gael for tabling this motion and I thank my colleague, Deputy Broughan, for sharing his time with me, which I appreciate. This is a fundamental issue. We sometimes forget what people fundamentally need to lead healthy and comfortable lives. The Members of this House are particularly likely to forget such matters, as we often become isolated. At this stage of the country's development, we are right to expect certain things, especially in light of the buoyancy of our economy and the extent to which wealth is created in this country.

That is right.

If one is to exist in a reasonable fashion, one needs a roof over one's head, a good diet and warmth. They are basic and fundamental requirements. The Government has ensured that people cannot afford to put a roof over their heads. Most people are staying at home for far longer than they ever did before. When people manage to put a roof over their heads, they have to work longer hours at an exorbitant rate to ensure it stays there. They have to endure the constant worry that it will be lost. I could go through the 30 stealth taxes which have been introduced by the Government since 2002.

We also need to consider the compound effect of how much it costs to heat one's home. People will be put to the pin of their collar this year to meet the cost of that compound effect, on top of their mortgages. There was a very interesting programme on television last night, called "In Search of the Pope's Children". I compliment the producers and presenter of the programme. While it showed an Ireland that we all recognise, the combined effect of the programme was to show us that we are in a new Ireland. The fundamental things I mentioned, such as a roof over one's head, warmth, a good diet and a health service are still needed in the new Ireland. People need more than BMWs and yummy mummies.

What about ministerial cars?

I must admit that there were no yummy mummies when I was a mummy. Other things are needed as well. Local authorities are installing central heating in all their old properties, starting with houses occupied by people over the age of 60, which is a very good idea. As someone who was born and reared in a corporation house, I can tell the House that it can be quite cold when a three-bedroom house has just one fire, which is an open coal fire with no back boiler. It is essential to have central heating in such houses. However, I was shocked a few months ago to discover that local authorities are installing central heating systems in houses which have had their gas supplies cut off for the past year, and the residents of which cannot afford to have the supplies turned back on.

That is correct.

Such houses now have a central heating system with no supply because people cannot afford it. People living in such houses are turning to the Society of St. Vincent de Paul.

That is right.

At this stage in our development, I would have thought that the Society of St. Vincent de Paul should be out of business. Its philosophy is to put itself out of business when people no longer need its services. The society has said it will spend half its budget this year on ensuring that people have sufficient heat and will not die of hypothermia. If people cannot heat very humble homes in this day and age, where are we going? There are families who are worried about the arrival of the next bill. I refer not only to families which depend on social welfare.

That is right.

People are worried that they will not be able to afford to heat their homes or will not be able to afford the hot water needed to bath their children. Such families are operating with one fire in the sitting room. I see television advertisements every winter reminding people to check on their elderly neighbours and to make sure they have enough heat. It is a good thing to check on one's neighbour, but it should not be one's job as a neighbour to ensure that one's elderly next door neighbour has enough heat to stay alive. That is the Government's job. It appears we are asking our elderly people, who made the sacrifices that created the Celtic tiger, to make further sacrifices. I am not an economist, but I find it staggering to read certain figures. Even though the ESB made a profit of €250 million last year, it is being given an increase of the size we are seeing here. Of that €250 million, the Government took between €70 million and €72 million, and yet the fuel allowance is €14. The allowance does not buy a bag of smokeless coal anymore, and it definitely will not pay one's gas or ESB bills. The Government is a disgrace. It cannot keep the roofs over people heads or a fire in the hearth.

Debate adjourned.