Michael McCarthy (Cork South West, Labour)

I am grateful for the opportunity to speak on tonight's motion. The cost of fuel and the corresponding arguments in respect of excise duty are issues which matter to most households around the country now more than ever, given the changed social landscape of reduced household budgets and the increased awareness of discretionary spending. We cannot fudge the forecourt issue any longer. We must have a real and robust debate on the matter and examine ways in which penal rates being imposed on motorists can be addressed in a manner that is responsible and responsive to consumer sentiment. In this context, I welcome Fianna Fáil's initiative on bringing this matter before the House this evening.

Recent motorist surveys have demonstrated how the cost of fuel in Ireland continues to become more expensive. Just this month the AA estimated that the average motorist spends €249 a month on petrol, which equates to just under €3,000 per annum. According to the organisation, in January 2009 people were paying 95 cent a litre for petrol. Last month, that had crept up to an average of €1.62. This means that somebody, who was paying €142 a month for petrol in January 2009, is now paying €300.

I agree with the opposing party's view that such punitive costs are counterproductive because they mean less money in people's pockets and therefore less money circulating in a local economy. At its most basic level, higher fuel costs reduce people's spending power, thereby dissuading them from making discretionary journeys and forcing them to cancel spending in their local area. In short, the higher costs effectively negate the effect of extra revenue brought into the Exchequer by increased excise duty.

Most affected are parents who drive their children to school, people who use their cars regularly, and those who are trapped in the perfect commuter storm - caught between struggling to make mortgage repayments and pay for petrol to run their commuting lifestyles. This week The Irish Times reported that one commuting couple are spending the equivalent of four mortgage repayments a year on fuel alone.

The business and SME community are also suffering. Truckers, hauliers, fishermen and plant hire businesses are just some of the fuel-dependent industries here being disproportionately affected by higher fuel costs, which experts say are having a major impact on operating costs for firms of all sizes. Many Members of this House from all sides can attest to that. A recent survey by Close Business Barometer showed that 46% of Irish firms cited fuel costs as one of their main daily concerns. Some 26% of businesses are being forced to pass some of these costs on to the customer, further hitting the pockets of already cash-strapped households.

With respect, however, this was an issue against which Fianna Fáil repeatedly turned its face while in power. As the Minister for Finance, Deputy Noonan, has already pointed out, the same party made an agreement in Europe a few years ago not to react to spikes in the price of diesel and petrol by making distortionary fiscal adjustments, instead agreeing that prices would be allowed to come down again in a co-ordinated fashion over the course of the cycle.

I commend Deputy Timmy Dooley, who moved this Bill, on his new-found concern for hard-pressed households. I draw his attention to a Labour Private Members' motion debated in this House on 12 October 2010 against which he voted, and which dealt with the effect of electricity prices increases and fuel poverty on households on low incomes. His sudden interest in the financial hardship of these families is belated and indeed amusing.

Furthermore, Fianna Fáil has acknowledged that the tax adjustment would give rise to an initial marginal net cost to the Exchequer, creating an effective hole of €145 million. While I broadly agree that adjusting fuel prices would in time be beneficial because it would encourage consumers to spend money in other sectors of the economy, Fianna Fáil's has failed to come up with any revenue-raising alternative. What does it propose replace that €145 million if the Bill were accepted?

As Deputy Tom Hayes has pointed out, much of problem relates to international factors, including the crude oil issue, the war in Libya - some Members of this House could give us some intimate detail of what went on there - and Western tensions with Iran. We must understand and acknowledge that many of the issues affecting this topic are not domestic but international. In that context and in the absence of any alternative proposal it is very difficult to expect other Members of this House to support Fianna Fáil's Bill. I broadly support the thrust of the Bill and it is important for us to recognise when the Opposition comes up with a proposal. Regardless of how nuanced it might be, it deserves to be mentioned.

Deputy Heather Humphreys, who knows more about this issue than the rest of us, has pointed to the criminality in Border areas. The thugs and mindless criminals, who launder fuel, take the money out of the ordinary law-abiding forecourt owner. Such criminal activity is having a major effect on legitimate tax-compliant business in the Border areas. Just as the international dimension affects this issue here, we must recognise that criminality in Border areas is placing hardship in disproportionate terms on other people who are law-abiding and respectful citizens of our Republic.

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