Nicky McFadden (Fine Gael)

I welcome the Minister of State. I will speak on two issues relating to contradictory policies being pursued by the Government. There is also an idea that people will no longer be able to pay for their electricity usage in the post office because they will not be allowed to pay less than €20. Like Senator Coffey I am a former employee of the ESB and I know many people paid €5 from their ESB bill on a weekly basis and maintained their budget as a result.

One policy I wish to speak on is the public service obligation, PSO, which is a classic example of one hand not knowing what the other is doing, with policies cancelling each other out. The objective of this Government should be to reduce carbon dioxide emissions and our dependency on fossil fuels. The levy will not achieve this. We should also consider business, and small businesses in particular, which will end up paying €100 extra. I wonder how that will help small businesses to be competitive. The small boys will end up paying for the big boys yet again, which I object to.

Fairness, in my estimation, is about making those who are better off pay more but this is not necessarily the case with this PSO levy. As I mentioned, the big boys will get away with it and the smaller people will end up having to pay for big business. How will another levy on small business help them in competitiveness? It will bring them in the opposite direction.

Professor Richard Tol from the ESRI, an environmental economist, has indicated that the PSO levy will cancel out what people hope to gain from it. He spoke about how the money will be spent, with the levy raising €157 million. Some 9% of this will go to the public service, with €78 million going to subsidised peat-powered electricity. The remaining €43 million will go to wind power. Although we all agree wind power is the way to go, it is horrendously expensive but has the benefit of reducing our carbon footprint, which we are desperate to achieve. It is worth paving the way for reductions in carbon emissions by investing in wind power.

That €78 million invested from the PSO levy to be invested in peat is extraordinary. I agree with Senator Coffey in asking why we cannot invest in cheap interconnectors to Europe to access nuclear power, which is much cheaper. If that came about, we would not have to invest as much in wind power.

Other speakers mentioned how €33 will impinge on household budgets. I am aware of so many households having their electricity cut off as we speak, and I am canvassing houses where there is no light or heat. I welcome the introduction of a grant by the Minister for Social Protection that will help some of these people but those on middle incomes of approximately €20,000 per year who are just about managing will be penalised. There is a grandiose campaign about "The Power of One", which encourages people to leave appliances unplugged or only boil a cup of water, which is to be commended, but a levy of €33 per annum is being put on these unfortunate people. It is wrong.

We should postpone the introduction of the levy until the economy recovers and we are more competitive or the people are able to make ends meet. That it will cost somebody €99.88 to have their electricity disconnected is bizarre. I do not understand how the Government can stand over that. The Department of Social Protection has to bail out those on low incomes while another Department increases the PSO levy. That makes no sense and is not sound economics. It is daft.

I have a concern with regard to jobs and competitiveness. How will the levy create more jobs? If we are serious about creating more jobs, how will a PSO levy to this extent help create more jobs? It will not do so as businesses cannot be competitive while paying it.