Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

It is worth putting a number of facts on the record in connection with section 61, which I understand Senators are opposing. From 1 May 2013, an increase in price of ¤1.20 is proposed in the case of a 40kg bag of coal and 26 cent in the case of a bale of peat briquettes, based on current prices. This represents, in the case of coal, an 8% increase and in the case of briquettes, a 6.7% increase. The argument we are making for this relatively high increase, in percentage terms, is reflected in two facts. First, there is currently no excise duty applying to these fuels, prior to the carbon tax. Second, these are the dirtiest fuels available. Solid fuels have the highest carbon content of all fossil fuels and there is an environmental argument at play here in terms of why we are pitching this as we have.

In fairness to the Minister for Finance, what he said on budget day and since then is that this will only come in after the winter period, from 1 May this year. Also, he is phasing it in over a two year period. The charge will be ¤10 per tonne this year, from 1 May and then ¤10 per tonne next year, in May 2014. He is spreading the effect of this over a two year period, in view of the comments made by colleagues about the difficulties being faced by people.

It is also worth saying that we have a national fuel scheme which provides ¤20 per household per week over a 26 week period from August to April. That money will continue to be paid, obviously. That is not an insignificant amount and the budget for the fuel allowance scheme for this year alone is estimated to be ¤210 million. The scheme provides help to those who need it and that is the way it should be. To date, since 2000, more than ¤115 million has been paid in grant support towards 270,000 upgrade measures in 110,000 homes under the Better Energy Warmer Homes scheme.

Therefore, from an environmental perspective and on the basis that excise duty did not apply up to now, the increase is relatively sharp but we have mitigated that somewhat through the phased increase over a two year period. Also, the fact that the measure will not take effect until after the winter should make some difference to people. Having said that, I do appreciate the points Senators have made. We do not want to do this but in the current circumstances, where we are trying to balance the books and get a fair spread across the various tax headings, we were left with no other option.