James Bannon (Longford-Westmeath, Fine Gael)

I join my colleagues, Deputies Deenihan and Connaughton, in highlighting the need for the Minister for Transport to outline his plans to alleviate the hardship caused by the sudden removal of the refund of excise duty on fuel used in passenger transport services, which will seriously impact on the private transport industry and lead to increased fares and the closure of many businesses.

It is outrageous that a plan to remove a tax relief worth €29 million to public and private bus operators in order to comply with an EU directive should be kept from the private bus industry. Every effort was made to keep them in the dark. Shame on the Minister and his colleagues for creating a situation whereby private operators accidentally discovered that the rebate was to be removed. So much for transparency and openness. The Minister has placed the private transport industry in a grave situation, yet the Government is once again hiding its head in the sand.

I have been approached by a number of private bus operators in Longford-Westmeath who were devastated by the news which came to them by rumour rather than direct communication from the Government. Of course, the Government did not fail to make the situation clear to CIE, which has the ability to hold an entire city to ransom. The private sector is the only sector that will suffer from the removal of the refund of excise duty on fuel used in passenger transport service. The removal of the tax relief will be cost neutral to CIE and the Exchequer but the private transport sector will bear the brunt as its costs cannot be absorbed. Many companies will be forced out of business. They were not even given the courtesy of official notification by the Government. These companies have benefitted from the lower rate of excise duty of 2.3 cent per litre of fuel compared with the EU's minimum rate of 30.2 cent. Removal of tax relief will result in an increase in the price of a litre of diesel and impact on operational costs, which will be reflected in increased fares and excessive operational costs. Can the Minister of State even begin to imagine the panic among private bus operators who have already signed contracts for 2008, having agreed rates for schools and set fare levels on scheduled services which reflect the refund of excise duty? Much of the fault lies with the usual passing of the buck between Departments. The Department of Finance has stated that the EU viewed the fuel excise derogation as a form of state aid and there is now no tax solution. It has transferred the matter to Transport where, if there is any justice, it will force the resignation of the Minister — it is more likely to fade from sight.

The removal of tax relief would be a death sentence for private coach operators and would deliver an appalling blow to rural communities, particularly those in remote areas who do not have regular public services and rely heavily on private coach companies. Shame on the Minister.

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