Phil Hogan (Carlow-Kilkenny, Fine Gael)

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.

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