Ireland

Energy price hikes will drive industry abroad - FG

The Government's policy of approving huge price increases for gas and electricity will drive major manufacturing and service …

Elaine Edwards
Sun Nov 05 2006 - 00:00

The Government's policy of approving huge price increases for gas and electricity will drive major manufacturing and service industries overseas, Fine Gael has claimed.

The party accused the Government of "turning a deaf ear" to consumer concerns about increases in gas and electricity prices.

To grant such increases when it was quite clear that oil and gas prices on the international markets were falling was bad enough, to do nothing to address the issue when there is considerable and growing evidence that prices will fall further still is irresponsible
Bernard Durkan, Fine Gael

Fine Gael will table a motion in the Dáil next week calling for a full review of the State's regulatory regime following recent green light for high increases in energy prices.

The party's spokesman on communications and natural Resources, Bernard Durkan, said the "obstinacy with which the Government and the Minister for Communications, Marine and Natural Resources is turning a deaf ear to consumer concerns about increases for gas and electricity is truly amazing".

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"To grant such increases when it was quite clear that oil and gas prices on the international markets were falling was bad enough, to do nothing to address the issue when there is considerable and growing evidence that prices will fall further still is irresponsible," he said.

"This is especially true when you consider that there have been very substantial price increases over the past four years, with electricity prices rising by 50 per cent for domestic customers since 2002.

"The Government's policy in approving massive price hikes in gas and electricity, allegedly to encourage new entrants into the energy market is intrinsically unsound. Unfortunately, pursuit of this policy will drive major manufacturing and service industries overseas as a result of our economy becoming less competitive."

Mr Durkan said the Government's annual VAT take on electricity and gas had almost doubled between 2001 and 2005 - rising from from €116 million to €223 million.

"If current trends continue the Government will collect a massive €362 million in VAT on energy bills by the end of 2006," he said.

He called for "serious investment" in research into indigenous alternative energy sources so Ireland can reduce its dependence on imported energy and "the whims of international markets".