Seán Barrett (Dún Laoghaire, Fine Gael)

To try to wriggle out of accepting this motion on spurious grounds is absurd and I hope the public sees this.

This is a simple matter of principle that relates to the State recouping that part of a generator's income that is attributable to the free allocation of carbon allowances. It has nothing to do with energy policy but is about the ESB collecting money — it was supposed to pay for emissions through the emissions trading scheme, ETS, but it has free allowances allocated by the State. The regulator has calculated that electricity is approximately 10% more expensive due to this additional charge. It is a charge the ESB does not have to carry and we are simply suggesting that this money belongs to the taxpayer. The ESB has been given a free allocation of credits and we are saying money should be returned to the taxpayer. It is outrageous that anyone could suggest this might increase the price of electricity.

The ESB recently had the cheek to put us on notice of a possible further increase in electricity prices of 16%. We are suggesting the 10% mentioned, approximately €300 million, belongs to the taxpayer. It is a question of taking it back, in these difficult times, and redistributing it back to the taxpayer. The best way to do this is not reducing the top rate of VAT from 21% to 20% but by reducing the 13.5% rate to 12.5%. People dependent on heat, light and fuel, including old age pensioners and those on low incomes, are affected by the 13.5% rate. We are trying to reduce the costs affecting such people.

Two nights ago I spent my time on the board of management of a secondary school doing next year's budget. The heating and lighting bill is going up from around €25,000 to an estimated €55,000 — this is an increase of approximately €30,000 in one school with around 400 pupils. We must get real on this matter. Of course we want to cut emissions, make changes and introduce more renewable sources of energy — we are all in favour of this — but we must bring the public with us. The public must not be conned — it is paying for something the supplier does not have to pay for. What is wrong with Fine Gael proposing we take back this money and return it through a reduction in indirect taxes?

The Government has suggested, nonsensically, that it tried to reduce VAT by 1% previously but it did not work. We all know the answer to this and my colleague will address it when he speaks on this issue. If the VAT rate is reduced from 13.5% to 12.5% it is the Government's responsibility to ensure the reduction is passed on to the consumer. If the Government is not prepared to do this there are people on this side of the House only too delighted to take up the challenge. It is nonsense to suggest we should not reduce taxation because savings will not be passed on to the public. Should VAT be left at 13.5%, although we can afford to reduce it to 12.5%? I would love to reduce this rate to 10% and make this country more competitive.

Is the Government to bury its head in the sand on the basis that all of our economic difficulties originated in George Bush land? Does the Government somehow feel that this is a problem from the US? Are we codding ourselves? Young people in this country had to take out larger mortgages because the Government did nothing while the price of a three bedroom terraced house in Dublin went from €420,000 to €525,000 in the space of ten months. Members of the Government sat on their side of the House and did nothing. The real problem in this country is people are up to their necks in debt due to huge mortgages. The knock-on effect on the competitiveness of our economy is the result of Government inaction.

The Government has tried to lambaste Fine Gael in this House for tabling a motion seeking to return moneys to the taxpayer that were collected but were not due to the generator. We feel this €300 million should be redistributed. In case people do not realise, when money is returned buoyancy is created in the tax system. It is not necessary to give the full amount because allowances should be made for buoyancy. The money we seek to give back is, more or less, exactly in line with the cost of reducing VAT from 13.5% to 12.5%.

I am a long time in politics and this is the first time I have ever heard a Government argue that a reduction in taxes would be bad for the electorate and the economy. This is especially strange coming from a Government that has boasted of how it reduced taxes over the past ten years. It is absolute nonsense. If the Government had a better way to redistribute this money I would have hoped it would table a proper amendment to the motion suggesting this alternative. Instead we have received a diatribe suggesting that nobody but the Government cares about addressing energy security and climate change. Why did the Government not table an amendment stating that it would prefer to reduce income tax or the top rate of VAT or use the money for another purpose beneficial to the consumer? The amendment tabled is just a blanket attack on Fine Gael, as if we do not care about climate change. I take grave exception to this. I like a proper debate and if people disagree with our viewpoint, so be it. The Government has instead waffled and made totally inaccurate statements and I find this unacceptable.

Fine Gael's proposal is not unusual. Denmark recently introduced a package of taxes on sulphur dioxide, carbon dioxide, fossil fuels and electricity and the revenues raised amounted to approximately 3% of GDP. The additional taxes have been used to lower personal taxes and VAT and to provide incentives for energy efficiency. The principle of charging a tax, taking it back and reducing direct taxes works well in Denmark but apparently this Government has difficulty with the principle of returning to people something that was wrongly taken from them.

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