Private Members' Business. - Control of Prices: Motion (Resumed).

Wednesday, 1 March 1978

Dáil Eireann Debate
Vol. 304 No. 4

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The following motion was moved by Deputy O'Toole on Tuesday, 28 February 1978:

That Dáil Éireann notes with concern the Government's failure to control prices of basic commodities, especially the withdrawal of subsidies on the necessities of life which hit the poorest of the community hardest.

Debate resumed on the following amendment:

To delete all words after “Dáil Éireann” and substitute the following:—

“approves the measures being taken by the Government to control the prices and charges for goods and services and to subsidise the prices of certain essential items and notes with satisfaction the significant decrease in the rate of inflation in the past six months.”

—(Minister for Industry, Commerce and Energy).

Minister of State at the Department of Industry, Commerce and Energy (Mrs. Geoghegan-Quinn): Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Bhí sé suimiúil bheith im shuí sa taobh seo den Teach aréir agus bheith ag éisteacht leis na Teachtaí Desmond agus O'Toole ag cur síos ar an gceist seo. Bheadh sé an-ghreannmhar, dá mba údar grinn é, bheith ag éisteacht leis na focail a bhí á rá acu faoi na praghsanna a hardaí ó tháinig Fianna Fáil i gcumhacht, ach níor chualamar mórán i rith an achair ar fad faoi na praghsanna a híslíodh go dtí gur éirigh an tAire é féin le labhairt linn i lár na hoíche.

Tá rud amháin déanta ag Fianna Fáil [653] a thaispeánann go dtuigeann siad an tábhacht mhór atá le ceannsú praghsanna agus leis an ráta boillsciú a ísliú, agus sin gur shocruigh an Rialtas gur ball den Rialtas a bheadh i gceannas feasta ar phraghsanna agus ar cheannsú praghsanna agus gur shocraíodar gurb é an tAire sa Roinn Tionscail, Tráchtála agus Fuinnimh a mbeadh an cumhacht sin aige.

Tá a fhios agam go bhfuil sé andeacair ag na Teachtaí atá os mo chomhair amach an t-athrú a thárla agus atá tárluithe ó Mhí Iúil a thógái ach molaimse dhóibh gur cóir é a thógáil.

I rise here tonight to support the amendment in the name of the Minister for Industry, Commerce and Energy. He stated himself here last night that the Fianna Fáil manifesto was now becoming the most quoted document since the Bible. There is another document in existence I think —maybe it has gone out of existence now for reasons which the Deputies opposite will realise—which I would like to refer to at the outset. That document is a rather infamous one which was brought out before the 1973 General Election. It was the 14-point programme presented by the Coalition, as they were at that time and the Coalition Government as they became, consisting of 14 points which they felt would help to bring about changes in our country. It was entitled There is an Alternative. Indeed, as we know, looking back with hindsight, there was an alternative to the prosperity and stability that this country had been experiencing for several years under a Fianna Fáil Government. In relation to prices this document stated that the immediate economic aim of the new Government would be to stabilise prices, halt redundancies and reduce unemployment under a programme of planned economic development. The document went on to say that it was essential to control prices if these important aims were to be realised, and that therefore the Government would introduce strict price control. These statements were believed at the time by a significant number of the Irish people. Of the 14 points in that programme the one which helped [654] most perhaps to bring about a change of Government was the one on prices and price control. It made the greatest impact on all of us and it was a pledge which was sadly forgotten in the four-and-a-half years of Coalition Government. We discovered as we went into the last six months of the Coalition reign that a certain degree of fatalism had set in in the minds of Irish people: they felt there was nothing the Government of the time could do to try to control prices. This was right at the time, because the Coalition Government did not make any significant effort in this regard. Sad to say, some members of the public got the impression that any alternative to the Coalition Government would achieve relatively the same results as that Government had up to then.

Last night Deputy Barry Desmond referred to the excellent work which has been undertaken by the National Prices Commission. Here tonight on behalf of the people of this country I would like to take this opportunity of expressing our sincere appreciation for the devoted service which has been given by the National Prices Commission since their establishment by a Fianna Fáil Government in 1971. The volume of work they have undertaken and which goes through their hands is evident from the very many pages of detailed study and report they present to the Minister each month. The reports themselves are a very valuable guide to many aspects of price control and economic trends. I am speaking for all of the Irish people when I say we are deeply indebted to them for their excellent work.

The NPC are an independent body. They comprise representatives of industry, of trade unions and of the consumers. They can make any recommendation they wish on a price increase, which must go to them before it is approved or even considered by the Minister, and the NPC have it at their disposal to ensure that their recommendation is not only an independent one but one which is well researched and based on concrete evidence. They have resources to help them to ensure that the cost increases claimed by the manufacturer have [655] actually occurred and that therefore the increase in price which the manufacturer is looking for is justified. The commission have not only a large consultancy unit of their own but also the power and money to engage independent consultants if they feel that their own substantial consultancy unit is insufficient for the type of work and detailed study which they wish to do before making a recommendation to the Minister.

A criticism which has probably frequently been made—and has been void—is that the Minister of the day acts merely as a rubber stamp accepting recommendations of the NPC for price increases. I would like to avail of this opportunity to assure not only the House but also the members of the public at large that since assuming office early in July last year this Government have taken all possible steps to ensure that only a minimum of price increases has been passed on to the consumer. This has meant that all recommendations for price increases by the NPC have been under stringent examination and control by the Minister himself. That is why I say that the commitment of the Fianna Fáil Government to stabilising and controlling prices was brought a step further when the Government insisted that we revert to the pre-1973 position in that a member of the Government would be directly responsible for all price control.

Deputy O'Toole was here last night when the Minister spoke, and, as he knows now, there were quite a significant number of price increases awaiting the Minister's approval which had been shelved by my predecessor.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  Eleven.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  We all know why. I said “quite a significant number”. I suggest that 11 price increases in our community at any time is a significant number. One of those was a proposal to increase significantly the price of building materials. The Minister decided that in order to avoid a rapid escalation in the price of building [656] materials, which would have its consequent effect on employment within the industry, he would refuse in full the price increases which had been recommended by the commission. Since then the Minister has cut back the commission's recommendations for increases in the prices of tea, flour, wheatmeal and bottled gas. These I would consider are all basic commodities, and the cutbacks which have been made by the Minister resulted in significant savings to the consumer generally. In all of the cases where the Minister refused increases or where cutbacks were made he was confident that the firms concerned were capable of bearing the increased costs involved without any damage to their viability.

This Government are committed to ensuring that only the minimum price increases are passed on to the consumer. The results of the Government's vigilance have already been reflected in the consumer price index. The annual rate of inflation recorded in November 1977 was down to 10.8 per cent. This means that in a little more than one year the annual rate of inflation of 20.6 per cent recorded in November 1976 has been almost halved.

Of vital importance to the consumer is the increase in the food heading in the consumer price index. In this connection I am very pleased to note that the annual rate of increase in the food index for November 1977 was the lowest recorded since May 1974. Like the Minister and all of us on this side of the House, I had to listen to people who scoffed at the promises and the pledges given in our election manifesto when we said we could achieve single figure inflation in 1978.

Our estimates—based, of course, on the acceptance of the national wage agreement—are for inflation rates for February of 8.6 per cent and for May of this year of 6.6 per cent. It is in the interest of all of us, and of our country, that those of us who have power—as all of us here have—should call on trade union members and urge the trade unions generally to accept the proposals in the national wage agreement. It is despicable that some prominent Members of the far side of [657] the House should have felt the necessity to do a somersault on some of their statements in this regard over the past couple of weeks.

One does not need to have a tremendous memory to remember times in 1974 and 1975 when annual inflation was running at well in excess of 20 per cent, and when it achieved an all time record of 24½ per cent in the year to May 1975. Last night the Minister informed the House of major reductions in the prices of petrol, home heating oils, other petroleum products, margarine, cooking fats, electricity charges, tea, coffee and frozen vegetables. I do not intend to go into that list of price reductions again.

The Minister also announced a further substantial reduction in the price of electricity. This further reduction in electricity costs will have a significant effect on production costs particularly for our larger industries. It will make its contribution to the Government's plan and programme for the reduction of massive unemployment which unfortunately we on this side of the House had to inherit. After many long lean years of Coalition Government, it is refreshing for us as consumers to hear of price reductions. It is reassuring for all members of the public to be told about them.

At the Minister's request, the National Prices Commission are keeping under review—a subject which was introduced here last night by Deputy Desmond—the cost of imported materials and goods, particularly those which affect consumer prices. The object of this review is to ensure that reductions in import prices are speedily reflected in the prices which have to be paid by consumers. The Minister asked the commission to pay particular attention to this matter. In the light of certain circumstances the price of many commodities on the world market are dropping either through a drop in the producer countries' prices in some cases or as a result of the appreciation of sterling. The Minister's action will ensure that all benefits from reduced imported prices will be passed on to the consumer as quickly as possible.

The Opposition tried unsuccessfully in the past—and they tried it again [658] last night—to make capital out of the removal of the consumer subsidy on cheese and the reduction in the town gas subsidy. It bears repeating here tonight that these reductions were more than offset by an increase in the consumer subsidy on butter and milk. Furthermore, as the Minister pointed out last night, the expenditure on subsidies on essential commodities will amount to £69.8 million in 1978, which is an increase in excess of £8 million over actual expenditure in 1977.

The Government have succeeded in a relatively short period of time in halting the mad gallop of inflation to which this country had become accustomed and which prevailed under the previous Government. I now call upon all consumers to help the Government in their fight against inflation. Consumers can act as watchdogs on the prices charged by different traders. I should like to encourage all consumers to bring complaints of over-charging or seemingly excessive prices to the notice of my Department so that they can be investigated immediately.

I was glad Deputy O'Toole acted as a responsible consumer here last night when he suggested that excessive prices seemed to have been charged in two supermarket chains in his own constituency. As we know, complaints of this nature can be brought to the Minister's attention, to the attention of the Department, or the attention of the prices inspectors in the Priceline offices located in various centres throughout the country. The value of the Priceline service to the consumer is illustrated by the fact that, during the year ended 31 December 1977, more than 4,000 complaints were received at the Priceline centres. It is interesting to note that, as a direct result of the work being done by the price inspectorate, refunds were made in 1,515 cases in the past year.

One part of the Fianna Fáil manifesto states:

full dissemination at least once a week, to radio, television and newspapers of comparative prices of the most frequently purchased consumer goods in supermarkets etc., in different parts of the country.

[659] We have always stressed the role of consumer information on prices, promoting price competition and, of course, helping to reduce excessive variations in prices at local and retail level.

The National Prices Commission have provided a good deal of that in their monthly reports. The reports can run into very large volumes with very many pages. Very often the information in these reports gets to the consumer too late. To achieve maximum effect, any information we give the consumer must be available quickly and speedily, so that people can use that information about prices in their daily shopping routines. This probably applies most importantly of all to grocery items which are the basic commodities all of us as consumers buy each week. Because it takes time to prepare and publish the monthly report of the National Prices Commission, it is not always possible to get this information to the consumer in time.

As the Minister stated last night, RTE now provide a short price survey programme on the radio each Friday morning before 10 a.m. It was decided that the prices information on this programme should be concentrated initially on fruit and vegetable prices in the Dublin area. It was felt that as this is an experiment, if you like, in consumer information, it was best to start on a small scale and see how successful the idea would be. The retail prices used by RTE are collected by prices inspectors in various centres throughout the Dublin area on each Thursday morning. These outlets include supermarkets, greengrocers and ordinary general grocery outlets. Prices are analysed for eight areas of the city, and details of the range of prices in each area are provided to RTE together with a short commentary on the prices and quality of each fruit and vegetable. The data on prices are supplemented in the commentary by isolating the most common price being charged.

The Department are also supplying details each month of retail meat prices taken from a regular meat price [660] survey which has been in existence since 1974. Average retail prices are collected for various cuts of beef, lamb, bacon and pork and, of course, for chickens in Athlone, Cork, Dublin, Galway, Kilkenny, Limerick, Sligo and Waterford. These prices are submitted to RTE together with a brief commentary comparing supermarket meat prices with meat prices in ordinary butchers' shops. I would like to refer consumers and housewives in general to this price information which is at present being disseminated on radio.

The success of failure of this type of consumer service depends entirely on the response we get from housewives and consumers in general. It depends on the consumer reaction we get. I urge consumer groups, individuals, traders or trade associations to give their comments to us or to RTE. It is only from the comments we will receive that we will realise whether or not the service is sufficient or where it can be improved. Deputies opposite will recall that last November I answered a question about the dissemination of information and spoke of our plan in connection with this and consumer education generally. I hope to be in a position in the near future to introduce what I consider to be a comprehensive programme of consumer information and education generally. I am assured of the full support of the Consumer Association of Ireland, the Irish Housewives Association and all other responsible consumers and bodies who represent them in preparing this.

The House has already been told by the Minister of the other measures we have taken to ensure the control of prices and the charges for goods and services. Those measures are worth support. Therefore, I feel that the Opposition would look very foolish were they to suggest that the Government have not kept their promise or will not in future fulfil their promises fully. Before I conclude I should like to refer briefly to two matters dealt with by Deputy Barry Desmond last night. He said that the Minister's contribution was totally irrelevant. The press and the public were present when he made that statement and I am sure [661] they all agree that the headlines in today's newspapers prove the total inaccuracy of his contribution. The Minister gave truthful figures last night, but of course the truth is often a bitter pill to swallow.

Deputy Desmond also referred to the Minister's statement about putting revised guidelines to the National Prices Commission. He said there was not a thought in the Minister's head of what those guidelines should be and told the House that the Minister was making an untrue statement. While Deputy Desmond did not deliberately intend to tell a lie or state that the Minister was making an untrue statement, he fully realises that the Government, and in particular the Minister responsible for controlling prices, are firmly committed to the control of prices and the charges for goods and services and to subsidising the price of certain essential items. I am sure the House will note with satisfaction the significant decrease in inflation in the past six months.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  A couple of weeks ago the House heard a speech from the Minister for Economic Planning and Development from which one could be forgiven for drawing the conclusion that a sort of political Salvation Army had made its appearance among the ranks of Irish politicians and was going to play on street corners, figuratively speaking, until they had converted us all to the light. He gave the impression that there was going to be an end to tendentious statistics, an end to the abuse of figures, an end to the half-truths. The Minister said it made him sick to hear people with an academic background giving an account of a situation which was misleadingly incomplete. I have had occasion since then to decline to take lectures from that Minister, or any other Minister, along those lines. The reason I will not take such a lecture is because I find examples daily from people on his side of the House which prove to me that he made no converts near at hand. The rest of his Government have not enrolled in his personal Salvation Army. When I find that the other members of his Government, and his backbenchers, have enrolled under his [662] generalship I will look into my heart and ask myself if I should join it.

An example of what I mean by that was provided last night by the Minister for Industry, Commerce and Energy. It was not possible for me to attend to listen to the Minister but I read his speech in the unrevised Official Report. I find that in support of his amendment—this gives me an excuse for saying this because I would not have had that excuse had we been confined to the terms of the motion— which refers to a significant decrease in the rate of inflation in the last six months, he cited the inflation figures for this country over the last months and years without the slightest or remotest reference either to world conditions or to the factors which produced it or those which are now very happily making it decrease.

I said before that the Minister for Economic Planning and Development appears to be developing the not very lovable political habit of choosing what he wants to defend and slipping away from the dirty work. I want the House to believe that I do not intend to begin a personal vendetta against a man for whom I have a great regard but when he lectures us along those lines, taking damn good care not to fall in behind tendentious statements uttered by his own people, I confess a certain amount of a lessening of that regard. The Minister for Industry, Commerce and Energy spoke about inflation, about the glory of getting back, as he said, to 6½ per cent by the middle of May. He told us that that was the prediction of one of his officials. Of course we have not got those figures yet and the Minister admitted that his official was making the best guess he could. He pointed out that he was an experienced official. He anticipated that the figure for mid-February will be about 8½ per cent and that by May it will be down to about 6½ per cent. I think the Minister is right. That is the kind of figure we will get. That is what my Government stated a year ago but it did not prevent us being contradicted even when we pointed to the economic indicators which showed that we were moving in that direction.

[663] Those figures are turning out as we predicted, to within a fraction of a point of what we predicted. There is no reference to the large scale long-term trends which made that likely and which were visible 12 or 18 months ago. Is there any reference to the fact that they were the figures we predicted and that they largely rested on events which had taken place in the lifetime of our Government, some of which we had no control over like the rise in the value of the pound which has been more strongly marked since then? Some items occurred during our time in office like the very painstaking though successfully negotiated national wage agreement which was achieved in the beginning of 1977. We did not hear a reference to those matters from a Minister who occupies a senior economic ministry. He made no reference whatever to what happened in the rest of the world, particularly among our trading partners from whom we import. There was no reference by him to the factors which operated in other infinitely larger economies and which tend to determine the overwhelming portion of our inflation, or lack of it as the case may be.

A Minister like Deputy O'Malley advancing the kind of stuff he did last night in a parliament anywhere else in the EEC would make a public show of himself, because the people would not permit themselves to be fooled by the insinuation that inflation was a product purely of Government action. Undoubtedly, some forms of Government action will aggravate inflation. Some forms of Government action, which may be unavoidable for political or social reasons, will temporarily aggravate inflation; but, equally, some Government measures may improve inflation but at a cost in employment, at a cost in human misery. I am not saying that inflation is completely outside the powers of Government but a large portion of the factors which create inflation, particularly in a small economy like ours, are imported. We must remember that the entire industrial world went through a most appalling economic typhoon in the [664] years which fell in the middle of the period of office of the National Coalition and when one looks at the curbs in the inflation figures in other economies one must recognise that we came out of that situation relatively good.

These figures are widely available. Let me quote a few to the House in order to dispel, if I can, the sort of mí-ádh there is in this country on truth and straightness. I will quote from OECD and EEC figures. In the “beano” years of Fianna Fáil, from 1963 to 1973, the average inflation rate in the entire EEC was 4.6 per cent. In Britain in the same period the average was 5.6 per cent, and in Ireland, in those golden years we are being asked to look back on with nostalgia by Deputy Geoghegan-Quinn and which, she would have us believe, are here again, the inflation rate was 6.7 per cent. In the orthodoxies of the 1960s that was a damnable inflation rate. Those figures, which were very high according to the standards of those days, were deliberately and recklessly contributed to in 1964 by an unheard of wage round in this country of 12 per cent which had not even been sought but was gratuitously handed out in order to win two miserable by-elections, one for Deputy Boylan in Kildare and another in Cork.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  What about West Mayo?

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I am talking about 1964. So that these two seats could be won for the Taoiseach, Seán Lemass, we were committed to an inflation path which cost this country thousands of jobs in the ten years that followed.

Mr. Killilea: Information on Mark Killilea Jnr.  Zoom on Mark Killilea Jnr.  How did we get it back to 6 per cent in six or seven months?

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  The Deputy has been put in to try to put off their stride people who might say something damaging. I wonder will the Minister for Economic Planning and Development stand over Deputy Killilea when he comes in and behaves like this? I am used to him. Thousands of jobs were sacrificed by embarking us on an inflation rate from which we have never recovered. That is the record of [665] the golden years, the Lemass era, the rising tide lifting all boats.

I will tell something else about a somewhat longer spell, from 1960 to 1973. In 1960 there were 100,000 more people at work here than in 1973. It is true that new industrial jobs had been created, but they went nowhere near picking up the shortfall and the slack in lost agricultural employment. One of the reasons was our inflation rate which was a difficult one and a damaging one by the standards of those days. It made our manufactured goods less competitive than they otherwise might have been.

In 1974 the EEC average inflation rate was 12.7 per cent, needless to say in the wake of the oil crisis. In 1975 the rate was 12.9 per cent. It tailed off in 1976 and in that year it was down to 10.3 per cent. In the year to October 1977, it was 9.3 per cent. In Britain the curve was more drastic but it was of a similar shape. The inflation rate there was up to 16 per cent in 1974 and 24.2 per cent in 1975. In 1976 it dropped back sharply to 16.5 per cent. In the months to October 1977 it was 14.1 per cent and from January 1977 to January 1978 it has gone down to 9.9 per cent.

The British are celebrating now like everybody else the drop below 10 per cent in their inflation rate. It is the first time in years it has been below 10 per cent, but the point I am trying to impress on the House is that all those countries have had a similar inflation curve in the last years, triggered off by the oil crisis and by the rise in commodity prices. We have had the same kind of curve and we are a much more defenceless economy. When people were thrown out of work here it was in a situation where we already had a high unemployment rate, far higher than any of the EEC countries, three times the rate of many of them.

Suddenly, in the middle of 1974 and in 1975 people were thrown out of work by the tens of thousands. That became an immediate burden on the Exchequer and we were forced to continue our programme of improving social welfare payments for all categories. Never had the old age pension age been lowered until we got into office.

[666]An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  The Deputy is getting completely away from the motion. You are fully entitled to deal with inflation but we cannot get into a debate on social welfare.

Mr. Killilea: Information on Mark Killilea Jnr.  Zoom on Mark Killilea Jnr.  Rambling, as usual.

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  Deputy Killilea will be given an opportunity to reply.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  He has nothing to say but by way of interruption. He said last night that we were back, thanks to Fianna Fáil, to the 1973 inflation figure. I do not thank him for that. We were heading for that anyway even if there had not been a Government in the country in the last year. It could not have been avoided once the £ strengthened. There was only one way a Government, whether Deputy Geoghegan-Quinn's or mine, could possibly have avoided the inflation figure from coming down, and that was by printing money, and I believe this Government are embarked on a course which will end up with them printing money. I believe we will see a progression which will end in monetary measures never seen before here.

There are the facts about inflation. The course which the curve of inflation has taken is a benign one and we are all happy about that. I expect to see the figures mentioned by the Minister borne out in a couple of weeks' time and I would not be surprised if his figure of 6.6 per cent is borne out in May. That was all predictable and predicted a year ago, and the amount this Government have contributed towards it is absolutely marginal. The amount which any Government can contribute, except by going mad and printing money, to a long-term development of that kind is very slight. I will leave the question of inflation, which was so dishonestly treated here last night. A myth is in creation under our eyes that all one has to do is vote Fianna Fáil into office and the inflation rate will fall.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Confidence comes back.

[667]Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  The inflation figures, which were bad to start with in 1973, rose in 1974 under the impact of the oil crisis to 17 per cent and rose in 1975 to 20.9 per cent. In 1976 they were comparable with the British figures and a good deal better than the figures in other European countries and stood at 18 per cent. In October 1977 the figure had fallen to 13.5 per cent and I scarcely imagine that the Fianna Fáil Government will take credit for a figure resulting last October. We said at the beginning of the year that inflation figures would keep going down and would be below 10 per cent in 1978. That has happened. I know it is politics—and I do not whinge about it—that a Government should try to claim the credit for something they did not do. The degree to which any Government can influence long-term developments of this type is very slight.

There is one area of this whole matter in which the National Coalition are vulnerable. It is an area in which I will willingly admit we made a mistake. I said this even when we were in office. We should never have made the promise in regard to controlling prices. It was a rash promise. The only thing I can urge on the House in mitigation is that it was a promise made in the heat of an unexpected election. It should not have been made. I hope that no Government or prospective Government will ever again make such a promise. The Government in a country like this cannot control prices. The Minister of State describes mechanisms which were set up by my Government for monitoring prices and giving consumers the chance to obtain refunds. A certain amount can be done but the broad spectrum of price increases is not within the control of the Government unless they exercise the same iron control over wages and other costs. Some of these are commodity costs on goods which are imported and would be outside the control of the greatest tyranny that ever existed.

Supposing this country were self-sufficient in commodities and raw materials, which it is not, certainly one could control prices if one could [668] dictate and make stick wage rates and if one did not mind locking up people who would picket and demonstrate against those measures. There would not be any problem here if we had a system such as they have in Rumania. In Eastern Europe inflation is virtually unknown. They control their costs at the expense of people and the way people live. Certainly we can control prices if we live under such a system, but I would not want it and I am sure Deputies opposite would not wish it either. Unless such measures are possible and ordinary ways of doing business are thrown out of the window, price control is not possible except within a very restricted range.

That being so, the House may wonder why the motion is phrased as it is. I will try to explain that. I believe that prices over the large spectrum cannot be controlled except in a marginal way with Priceline monitoring and that sort of thing. We could, however, select sections of the population which are relatively defenceless and control prices for them, either by directly controlling prices in their special category, which means an administratively complicated system of vouchers or tokens, or effectively control the price by a proper system of social welfare payments. Either form of control will amount to the same number of pounds and pence in their pockets.

I very much object to being told that merely because the general inflation rate is sinking the social welfare improvements of the kind put forward by the Minister for Finance at the beginning of last month are justified and adequate. That is not so. The inflation rate is based on calculations which take into account many goods. services and commodities which are not of any use or interest to the poorer sections of the community. The poorer and more deprived old age pensioners and other social welfare recipients are, the less use they will have for these commodities. This motion was inspired by recent increases in bread, the staple of poor people. We were met with a triumphalistic roar from the Minister for Industry, Commerce and Energy, as though he had personally seen to it that [669] the inflation rate would fall into single figures. It was a shameful reaction.

An increase in social welfare payments of 10 per cent across the board this year is not enough for the poorest classes of the community who are hit by increases in commodities like bread and by the removal of the subsidy on town gas. It is not enough to maintain the standard of living which was maintained by the Coalition in the worst of times, faced with the oil crisis and carrying an unprecedented number of unemployed. The Coalition never shirked. They looked after first the people who most needed help.

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  It does not arise on the motion.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  The less said about children's allowances the better. They are not being increased this year at all.

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  Deputy Kelly has five minutes left. Children's allowances and social welfare payments do not arise on this motion.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I was trying to drag them in anyway because I wanted to say something about this.

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  It does not arise.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  The necessaries of life for some families are bought essentially by the mother because the father, through personal inadequacy or for some other reason, contributes nothing or next to nothing. I trust this does not happen in too many families. The only money on which some mothers can count is that which reaches them in the form of children's allowances.

Mr. Killilea: Information on Mark Killilea Jnr.  Zoom on Mark Killilea Jnr.  A shocking statement.

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  Deputy Kelly should not deal with children's allowances on a motion which does not deal with this in any way.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I recognise that an overall control is not workable. This Government do not attempt to apply even selective control in regard to the staple commodities of the most helpless sections of the community. At the same [670] time they expect to be complimented on a budget which hands out zero social welfare increases in some cases and 10 per cent in other cases and they also abolish the wealth tax.

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  We are dealing with prices, subsidies, control of prices and inflation. Deputy Kelly has four minutes left and he is wasting it on something which does not arise on this motion.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I want to end with a constructive suggestion which I hope the Minister will take to heart. There ought to be a separate CPI for a class of person which I know one would have to construct artificially. There should be a separate CPI for the most helpless members of the community, particularly pensioners. I can see the administrative difficulties in controlling prices selectively for sections of the community like that. If it is not possible to do it there should be a price index according to which their social welfare benefits are adjusted rather than the consumer price index or the inflation rate. I said that in other words during the budget debate or on some other recent occasion. When we are invited to admire, as though it were something sent down from heaven by special intercession of the Fianna Fáil Party, one-figure inflation rates, which were largely created by developments which occurred during the time of the Government's predecessor, and at the same time expected not to complain about price rises, which hit the very poorest and most helpless section of the community, then it is time we looked seriously at whether or not there is anything radical that can be done to improve the situation for them. My suggestion is that we should have a separate price index, in which things which are no use to them and which do not interest them, are left out and we would have a price index which is intended to reflect the needs of the people at the bottom of the heap, and that price index would give the Government some guidance in regard to the calculation of social welfare increases and would also perhaps direct their attention to the possibility of some kind of selective [671] price control for those sections of the community, if not for the community at large.

Mr. L. Lawlor: Information on Liam Lawlor  Zoom on Liam Lawlor  I assumed this motion was on prices and subsidies but it appears we have been treated to a range of items which I cannot quite reconcile as having anything to do with prices. It is a sad situation for that reason that the Opposition should put down a motion and then have so little concrete facts and figures to produce on this subject. Deputy Kelly mentioned the word “beano”. As I recall it that was a comic. This motion is a comic.

We have also been treated to a recall of what happened in 1964 and 1969 and how inflation is controlled in Rumania and many other diverse aspects of a wide ranging number of subjects which have nothing at all to do with prices. Deputy Desmond last night pinpointed a number of areas during the Coalition period of office and highlighted the fact that inflation got as high as 25 per cent. It is an indictment of that Government's handling of the country's affairs that inflation was allowed to rise to that high percentage.

Price control has been discussed. We all know that is a very complex subject. There is only one way to control prices, confidence in the economy. When the overall development of the economy is going along on a controlled basis one can readily get co-operative price control. I believe this motion was put down for a very sinister reason at a very crucial time as we watch the responsible members of trade unions assess the recent National Pay Agreement. The Government have urged members of trade unions to support the package. We have gone to great lengths to explain why this package should be accepted in its present form.

We have an 8 per cent wage increase. The Minister last night was able to inform the House that he hopes to see a reduction in ESB charges in the near future. That is a bonus which was not forthcoming during the negotiations for the national pay agreement. [672] We suggest to the country at large that the acceptance of this agreement is a most positive step in ensuring that the forecasted inflation rate of 6.6 per cent will be achieved by May. The Minister for Industry, Commerce and Energy, for the first time in many years, is in a position to look forward and to be confident of achieving the plans which his Department have laid before the House since coming into office.

I cannot see the relevance of the comments we had about the budget. A scare situation has been introduced by the Opposition in discussing this motion. The trend of their comments was very far removed from actual prices. One feels that empty vessels make most sound. One can find very little constructive detail on facts and figures to back up the motion. It is very hard to understand the Opposition's real reason for putting down the motion. I feel they are timing the motion for when members of trade unions go to vote on the national pay agreement. It is the height of irresponsible opposition to do so. I urge the trade union members to look very closely at the very well-constructed package put before the people for this financial year. It is a forward-looking and a rewarding period when we have controlled prices not by gimmicks as we have been led to believe were available during the Coalition period but by restoring confidence in the economy.

Deputy Kelly went on to highlight isolated incidents where a couple of items have recently been increased. He also criticised the fact that a 10 per cent increase for social welfare payments was introduced in the recent budget. The recipients of that percentage can look forward to a financial year which will see that amount of money in their pockets and allow them to make necessary purchases. We, hopefully, do not propose to have a budget a week, as was the order of the day by the previous Government. We, therefore, are in a position to feel we can control prices constructively, as has been the case since taking office last June.

We have seen petrol reduced by 5p [673] a gallon and with the impending ESB reductions this will have a tremendous spin-off benefit for the domestic user, the employer, the commercial farmer, the co-operative and many other people. Every organisation and individual need electricity or it affects their overall butget in some way. We can see an invisible benefit for the people when this price reduction takes effect.

Deputy O'Toole highlighted the motor insurance increase yesterday. When one looks at the details of this particular increase one sees that the accident-free driver is not subjected to a very substantial increase. It is scare tactics on behalf of the Opposition and not very responsible. I believe the work of this House is to charter the course of the country and provide the people with the leadership and example which are so necessary to bring about an improvement.

This motion has done nothing but show the lack of research by the Opposition in coming forward with a motion which they could not really back up in great detail. It is a waste of Dáil time to have this motion down for discussion at all. We have Ministers who are quite busy in job creation and involved in consumer affairs tied up here listening to speeches that have no relevance to prices. We have been treated to a whole range of different topics having nothing to do with the motion. We on this side of the House are confident that prices will stabilise and that whatever increases must be granted will be of an acceptable percentage or level. Never again will we have the type of increases which this country experienced during the National Coalition period in office.

Mr. O'Toole: Information on Patrick O'Toole  Zoom on Patrick O'Toole  I hope that what Deputy Lawlor said about being irrelevant will not apply to what I have to say. To my mind, his reference to all speeches from this side of the House being irrelevant is a reflection on the handling of the debate by the Chair, something with which I do not agree.

Last night in my opening remarks I commented, I hope with some relevance, on actual price increases. Subsequently, [674] the Minister made at least one statement to the effect that I had made fraudulent claims in the figures quoted. That is a very serious allegation. I can now say categorically that any figures I gave were given in good faith and at no time was any fraudulent comment by me intended. I do not think that the allegation of fraudulent comment has been proved against me.

The Minister chose to ignore any reference to price increases. He did give, and I was glad to hear it, some information on what our inflation rate would be in the not too distant future. He gave us some information on price reductions which I was also delighted to hear about. But despite what Deputy Lawlor has said, we have had price increases. Let me endorse what Deputy Kelly said some time ago, that many of those price increases have come about due to causes over which the present Government or any Government could have no control. The fact is that they have come about and the Government of the day must take responsibility for them regardless of whether or not they are responsible. That is the name of the game; that is what being in Government means.

We have had published as recommended and sanctioned 182 price increases so far, 11 of which we are told were inherited by the present Minister from the previous administration. These 182 price increases are for the period up to the end of October 1977. The Minister referred to price decreases, a decrease in the price of petrol which was also mentioned by Deputy Lawlor, and further reductions in the price of tea and coffee. What Deputy Kelly said tonight here is borne out exactly and very accurately in the commodities which have shown a reduction in prices. These are commodities the prices of which are not controlled by the Government here, regardless of which Government that may be. We import oil; we import coffee and tea, and if the price of tea were to go to £5 per pound in the morning, as it nearly did some months ago, would the Government of the day claim responsibility for it in the same way as they claim that they are responsible for reductions when these [675] happen? I do not think so, because it would be politically unsound to do so.

The price levels of these commodities are dictated by factors operating many thousands of miles from our shores. I do not think the Minister himself believes that our people are as naive and gullible as to accept that kind of implication that he and his Government must be thanked for reductions in the prices of these commodities. There are external factors; we all know that; let us leave it at that.

The Minister chose to avail of the debate to announce—I was glad to hear it—the reduction in the price of electricity. He said it was a substantial decrease and, if I remember correctly, a very substantial one. I expected something in the region of 15 or 20 per cent. It transpires that it was 5 per cent: that is the expected reduction. We should be thankful for small mercies and I am grateful for that news but in announcing the reduction the Minister indulged in what I can only regard as a cosmetic exercise in verbiage. He said, and the record will show, that the price reduction came about as a result of discussions he had with the chairman of the ESB. The implication is obvious to everybody; I do not think there is a man, woman or child who would not see the blatant implication that it was the Minister himself who went to the chairman of the ESB and said: “Reduce prices by 5 per cent. So be it.” We all know that is not so. If it were so I would make a very sensible suggestion to the Minister. He should meet, consult and discuss with every board chairman of every semi-State body as quickly as possible, and hopefully the same results will ensue if what he said last night is true.

The facts concerning the reduction in the price of ESB charges are well known to anybody who takes the trouble to find them out. The ESB for some time back have had an arrangement with the National Prices Commission to have a fuel cost variation revised, I think, twice yearly. That has been going on for some time. We all know that the fuel variation cost is [676] one of the elements in our ESB bills. It so happens that at present due to the pound, vis-à-vis the US dollar, a position has been reached whereby a reduction can be brought about in this fuel variation charge. It is as simple as that and I am glad that this is so.

The fact is the ESB purchase their oil at a price in US dollars and because of that system they get the benefits which are now accruing because of the upward strengthening of the pound as against the dollar. Hence the reduction in the fuel variation charge and the overall reduction, hopefully, in our ESB bills in the near future.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  What would Deputy O'Donoghue think of that kind of prevarication——

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  Deputy O'Toole is in possession.

Mr. Begley: Information on Michael Begley  Zoom on Michael Begley  What about the cost of tea and coffee?

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  Deputy O'Toole without interruption.

Mr. Begley: Information on Michael Begley  Zoom on Michael Begley  I am only trying to help him.

An Leas-Cheann Comhairle: Information on Seán Browne  Zoom on Seán Browne  He does not need any help.

Mr. O'Toole: Information on Patrick O'Toole  Zoom on Patrick O'Toole  Last night I mentioned the enormous increase which came about last week in the cost of car insurance which is a very basic commodity, because nowadays most people have cars. Cars are essential and are no longer looked upon as luxuries. The cost of that increase must be borne by the consumer. In announcing the increase the Minister made vague references to three factors which necessitated the level of increase of 35 per cent: first, an overall increase in administration cost, which is acceptable, justifiable and understandable; second, statutory requirements, and third, EEC regulations.

The last two factors have been left hanging in mid-air. They have not been explained. What were the statutory requirements which brought about the necessity to increase insurance premiums to this level? What were the EEC directives which brought about this position? Unless the Minister is prepared to give a full explanation [677] why this position was reached, unless he gives an itemised account of the reasons for this increase, and in the light of his Ard-Fheis reference to this company which set the people up to expect what was later to come when he mentioned that the PMPA were the only insurance company genuinely open for business and castigated other companies for not being interested in competition——

Mr. Begley: Information on Michael Begley  Zoom on Michael Begley  They will probably get a good subscription.

Mr. O'Toole: Information on Patrick O'Toole  Zoom on Patrick O'Toole  ——a public inquiry must be sought to clear the air. I appreciate that this increase came through the normal channels recommended by the National Prices Commission for whom I have the greatest respect, but they are not the agency involved. They are not expected by the general public to explain why the increase was recommended. Ultimately the final say rests with the Minister. As his Minister for State pointed out, the Minister for Industry, Commerce and Energy, Deputy O'Malley, is no rubber stamp. While he saw fit to cut down on the demands made by other companies looking for price increases, he did not do it in the case of this insurance company which has what could be regarded as something approaching a monopoly of insurance business. They reached the situation of carrying 60 per cent of the insurance car cover in the country by dangling the carrot of the low premiums. Fine, but having dangled that carrot and having had 60 per cent of insured motorists reacting favourably to it, we are now faced with the position where a Minister has to come in and save that company from itself by allowing an increase of an enormous level. Who pays? The consumer. This is something to which the Minister did not refer last night.

The position with regard to prices in general is very plain. As Deputy Kelly said we are a small open economy subject to fluctuations which take place outside the country. The strange thing is that when good news is being disseminated the Minister makes sure he is there to do it and takes credit for it despite the fact that it is obvious [678] to everybody that he is not in a position to do so because conditions further afield have brought about the position where he can make this announcement. If and when the items now being reduced in price are put up in price again—I hope it will not happen—I hope the Minister will not stand opposite me and say he is not responsible because factors outside his control were the cause.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  That is the Coalition line, not ours.

Mr. O'Toole: Information on Patrick O'Toole  Zoom on Patrick O'Toole  Deputy Kelly clarified the position of the economy during the Coalition's time in office. He gave figures from the EEC as a whole and from the UK to show that they suffered badly from inflation caused by world forces. How could anybody suggest that we could have come scotfree out of it?

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  Fianna Fáil have always thrived on ignorance.

Mr. O'Toole: Information on Patrick O'Toole  Zoom on Patrick O'Toole  We put down this motion because we realised price increases were occurring while there was a conspiracy of silence on that side of the House. When they were over here I can recall the noise they made day after day. Now we are being castigated for putting down a motion. Deputy Lawlor said we had some ulterior motive in putting it down at this time. He suggested we are trying to wreck the national pay agreement. There is no ulterior motive——

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  What about the somersault?

Mr. O'Toole: Information on Patrick O'Toole  Zoom on Patrick O'Toole  Deputy FitzGerald last week appealed for acceptance of the agreement at the rates negotiated in the interests of the people of the nation and of the economy.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  He did a somersault.

Mr. O'Toole: Information on Patrick O'Toole  Zoom on Patrick O'Toole  There are no gremlins on this side trying to wreck the pay agreement. I should be delighted if I were to read tomorrow morning that the agreement had been ratified at rates acceptable to the Minister for [679] Labour and his Cabinet colleagues because it would be in the interest of us all. The arrogance displayed on the Government side suggests that we have not a right to put down a motion, that we have no right to discuss prices which have been increasing because the Government have not taken what we would regard as satisfactory remedial action.

On this side we have conceded that there have been price increases over which the Government have no control, [680] in the same way as they have no control over the price reductions announced last night by the Minister for Industry, Commerce and Energy. Our motion was tabled in the hope that the Minister would take notice. I am putting him on notice that I will put down another motion if I find prices still going up quietly without attention being drawn to them. I have a right to do it, and I will defend that right regardless of what has been said from the Government benches.

Amendment put.

Ahern, Bertie
Ahern, Kit.
Allen, Lorcan..
Andrews, David.
Andrews, Niall.
Aylward, Liam.
Barrett, Sylvester.
Brady, Gerard.
Brady, Vincent.
Browne, Seán.
Burke, Raphael P.
Callanan, John.
Calleary, Seán.
Cogan, Barry.
Colley, George.
Collins, Gerard.
Conaghan, Hugh.
Connolly, Gerard.
Cowen, Bernard.
Crinion, Brendan.
Cronin, Jerry.
Daly, Brendan.
Davern, Noel.
de Valera, Vivion.
Doherty, Seán.
Fahey, Jackie.
Farrell, Joe.
Faulkner, Pádraig.
Fitzgerald, Gene.
Fitzsimons, James N.
Flynn, Pádraig.
Fox, Christopher J.
Gallagher, Dennis.
Gallagher, James.
Geoghegan-Quinn, Máire.
Gibbons, Jim.
Haughey, Charles J.
Hussey, Thomas.
Keegan, Seán.
Kenneally, William.
Killeen, Tim.
Killilea, Mark.
Lalor, Patrick J.
Lawlor, Liam.
Lemass, Eileen.
Lenihan, Brian.
Leonard, Jimmy.
Leonard, Tom.
Leyden, Terry.
McCreevy, Charlie.
McEllistrim, Thomas.
MacSharry, Ray.
Molloy, Robert.
Moore, Seán.
Morley, P.J.
Murphy, Ciarán P.
Noonan, Michael.
O'Connor, Timothy C.
O'Donoghue, Martin.
O'Kennedy, Michael.
O'Leary, John.
Reynolds, Albert.
Smith, Michael.
Tunney, Jim.
Walsh, Joe.
Walsh, Seán.
Wilson, John P.
Woods, Michael J.
Wyse, Pearse.

Barry, Peter.
Begley, Michael.
Belton, Luke.
Bermingham, Joseph.
Boland, John.
Bruton, John.
Byrne, Hugh.
Cluskey, Frank.
Collins, Edward.
Conlan, John F. [681]FitzGerald, Garret.
Fitzpatrick, Tom (Cavan-Monaghan).
Gilhawley, Eugene.
Griffin, Brendan.
Horgan, John.
Keating, Michael.
Kelly, John.
Kenny, Enda.
Kerrigan, Pat.
L'Estrange, Gerry.
Lipper, Mick.
McMahon, Larry.
Mitchell, Jim.
O'Brien, Fergus.
Corish, Brendan.
Cosgrave, Liam.
Cosgrave, Michael J.
Creed, Donal.
D'Arcy, Michael J.
Deasy, Martin A.
Desmond, Barry.
Desmond, Eileen.
Donnellan, John F.
Enright, Thomas W. [682]O'Brien, William.
O'Connell, John.
O'Keeffe, Jim.
O'Toole, Paddy.
Pattison, Séamus.
Quinn, Ruairí.
Ryan, John J.
Spring, Dan.
Taylor, Frank.
Timmins, Godfrey.
Treacy, Seán.
Tully, James.
White, James.

Amendment declared carried.

Motion, as amended, agreed to.

The Dáil adjourned at 8.40 p.m. until 10.30 a.m. on Thursday, 2 March 1978.


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