Gas Regulation Bill 2013- 19th September

It merits brief repetition that the Bill facilitates the splitting of Bord Gáis Energy and Bord Gáis Networks and allows for the sale of Bord Gáis Energy. The sale arises from what is called the troika deal, or the deal between this country and the EU-IMF, and it is a condition of that deal that we have a sale of State assets.

We will certainly seek to get the best deal possible for the country, in the context of the concession we obtained that a portion of the moneys can be retained, but the sale is not an optional extra. It is a condition of the deal we agreed with the troika.
To the Members who spoke against these proposals from an ideological or any other perspective, I challenge them to produce a menu of alternative fund-raising options for providing the moneys that must be repaid as part of the bailout agreement. The reality is that we made a commitment under that agreement, which was sadly necessary to keep our public services running, that part of the moneys to be paid back will be raised through the sale of State assets. The onus, therefore, is on Members on the Opposition benches – notably the Independent benches – to come up with alternative money-raising measures. If the assets are not sold, we must offer the troika an alternative means of raising the funds, most likely through taxation. I challenge Deputies opposite to present their proposals in this regard.

The Government won an enormous concession in securing the agreement of the troika that a portion of the proceeds of the sale of the State assets will be retained by the State for the purposes of job creation. It would be churlish of anybody on the other side of the House to refuse to acknowledge the magnitude of that achievement. It is a major concession that was won on the back of competent Government performances, concentrated diplomacy and an upping of Ireland’s game internationally. It is a great tribute to the relevant Ministers and we must use it wisely. As I said, the sale of State assets is compulsory under the bailout deal which followed years of wanton wastage of public moneys. Within that deal, however, we have won the right to use a substantial portion of the moneys for job creation.

In the case of Bord Gáis, it is important to note that the network will remain in State ownership. We have learned something, after all, from the sale of Eircom. There was some perspicacity in the reference by a Member opposite to the importance of the maintenance of the network. It is a fair point. The Minister of State, Deputy Fergus O’Dowd, is a person of tremendous ability and I know he will do his best in this regard. I urge him to work with the Minister, Deputy Pat Rabbitte, to secure a commitment from the eventual purchaser of Bord Gáis Energy in regard to the maintenance of the network while it remains in State ownership. There should be some type of contribution or undertaking sought in the context of the sale. It is not an unreasonable proposition that there be such a linkage.

Part 3 of the Bill offers legislative protection to the 1,000 employees of Bord Gáis Energy as part of any sale. That is an important provision of which we should be proud.

The profitability of Bord Gáis Energy has increased from €44.3 million in 2011 to €79.4 million in 2012. That makes it an attractive prospect and offers the likelihood that it will make in the region of €1 billion to €1.5 billion. Despite the degree of pessimism expressed by my good friend and erudite colleague, Deputy Terence Flanagan, I am confident we will achieve close to the higher figure on the basis of the company’s profitability. I agree with Deputy Jerry Buttimer’s well articulated point that there should be no increase in the retail price of gas in the context of those profit levels. While acknowledging the primacy of our system of independent regulation, I echo his point that this issue does merit closer scrutiny by the Oireachtas.

We must create sustainable jobs from the portion of money to be retained by the State from the sale of Bord Gáis Energy. There should be an emphasis on shovel-ready projects that are not merely follies, to use an ancient historical term, but which actually create enduring employment. I am sure the Minister and his civil servants will devise a range of options in this regard, but I take this opportunity to recommend suggestions of my own. There is great scope in the area of energy conservation, with potential, for example, for a national insulation programme. Retrofitting grants for owners of older houses are an option that is line with the desired focus on green energy. It is also worth examining options such as micro-generators and community and private wind farms. Community wind farms are a particularly interesting concept, and I understand the Minister opened one the other day in the midlands. Blanket provision of high-speed broadband throughout the country is a vital requirement which certainly merits consideration in the context of these moneys. Gas exploration is another area for consideration. I also agree with Deputy Denis Naughten’s point that extending the gas network would offer the advantage of being labour intensive while also having a positive impact for domestic industry and in terms of attracting inward investment.

The Irish Presidency won a significant success in securing in the region of €6 billion to €8 billion from the multi-annual financial framework for the youth guarantee fund. Under the scheme, young people aged between 18 and 25 who are unemployed for more than four months will now receive critical intervention and support in the form of training and so on. The experience in Finland and elsewhere shows that such schemes can have a significant impact in terms of youth unemployment. I other speakers in applauding the creation of 625 jobs per week in this country. Of course it is not enough, but it is nevertheless an enormous achievement in the context of the loss of more than 275,000 jobs in the three years before we came into government. The country was effectively in a position that was beyond bankruptcy. This and other signs of a revitalised economy are indeed to be applauded.

A major difficulty that must be addressed is that because so many construction companies have collapsed, there is no opportunity for young people to do apprenticeships, as I have found through my constituency work, in carpentry, plumbing, electrics and so on. There are simply no local contractors to take them on. In the context of the moneys to be retained by the State from the sale of State assets, the youth guarantee funding and the Government’s broader job creation initiatives, might consideration be given to creating simulated environments in third level settings which would allow young people to complete their apprenticeships? In so far as is possible, such training should include work that activities that are constructive and have a long-term sustainability, such as constructing new schools, for instance. That would be all the better. However, even if that is not possible and the things they build must be destroyed, there would nevertheless be merit in such a scheme. We cannot have young people denied apprenticeships because of the dearth of contracting employers. It is a real issue in my constituency and, I am sure, throughout the country.

Another problem is that the vocational sector in this country has became excessively academic over the years. We went over the top in trying to push training into the third level sector instead of focusing on what could be done in secondary or community schools in local parishes. The result is that we have lost much of the vocational ethos and dimension of second level education, an aspect in which we contrast greatly with Germany, for example. It never does one good to ignore what is being done in that country, given its economic success. The vocational dimension has been retained there; likewise it retained its manufacturing industry at a time when that industry was being destroyed in Britain. There is much to consider in that.

In the context of spending these moneys, the Minister should look at opportunities for young people to develop traditional apprenticeships. I commend the job creation considerations to the Minister and I applaud the achievement of the Government in securing discretion for us in that respect. I applaud the wisdom of maintaining the networks in public ownership and I commend the sale once we are using it strategically. Whether I commend it or not, there is no escaping the reality that we owe the truth to the public – the taxpayers who fund this operation and who own this House, the people’s assembly. The truth is that a sovereign agreement was entered into by this country in the bailout. The nonsense talk that we can avoid it is not sustainable.

Senator Joe O'Reilly representing Cavan & Monaghan 2010. | An ExSite website