Dáil Éireann debate -
Thursday, 3 Mar 1960

Vol. 179 No. 8

Adjournment Debate. - Bread Price Increases.

Mr. O.J. Flanagan

This afternoon, I addressed a question to the Minister for Industry and Commerce in relation to increases in the price of bread, with particular reference to the increase in the price of bread since March, 1957. In the course of his reply, the Minister stated:

An increase in the price of bread in May, 1957, followed the removal of the subsidy on flour. Bread prices were freed from control in August, 1957, and I am, therefore, not in a position to give the precise reasons for increases since then, but I understand they were due to increased costs of production.

The policy of the inter-Party Government, which has been criticised severely by members of the Government, was one of keeping down the price of bread. They realised that bread was the principal item of diet of the great majority of our people. No matter how the inter-Party Government may be criticised, it cannot be said that they deliberately increased the price of bread for the poor of this country. When the Government took office in 1957, the price of the 2-lb. loaf was 9d. Because of the deliberate policy of the Government, the price of that loaf is now 1/2½d., an increase of 5½d. That is due to the deliberate policy of the Government in removing the subsidy on flour and bread. We must bear in mind also that the price of every other commodity needed by the housewife and by the poor and the sick in order to keep body and soul together has also increased. The price of butter was increased——

An Leas-Cheann Comhairle

The question relates entirely to the price of bread.

Mr. O.J. Flanagan

The vast majority of the poor people of the country, widows, orphans, home assistance recipients and low wage earners, were compelled to use dry bread or bread and margarine. Now they are faced with a continual increase in the price of bread. I want to accuse the Government of deliberately allowing these increases to continue, increases which are imposing great hardship on the working class people and the middle-class wage-earners in our towns and cities, particularly those wage-earners with large families. It also places an increased burden indirectly on the ratepayers because an increase in the price of bread means an increase in the costs of local authorities who have to purchase supplies for institutions and hospitals. The resulting increase is passed on to the ratepayers.

Despite the fact that the price of bread has increased and that the price of flour has increased from 4/10 per stone to 7/6 per stone, there has been a reduction in the price the farmer gets for producing wheat. Have the Government entirely forgotten the conditions of the working class people, the aged and the poor of the country, or are they living on the moon? The vast majority of our people have to live entirely on bread They have not got vegetables and they cannot afford to buy meat Meat is a luxury in most of their homes Where you have large families of young children going out to school, it is customary for them to take bread with them So also in the case of forestry workers, road workers, mill workers, factory workers and those engaged in night shift work, bread is an essential part of their meals.

Of all the increases we have had, such as that in regard to transport and so on, none has impacted so severely on the people as the increase in the price of bread. I want to accuse the Government of deliberately freeing the price of bread from control in 1957. The price of bread was recently increased. What is to stop those responsible increasing the price next week or within the next three months when they have succeeded in getting away, with Government approval and support, with increasing the price of the 2-lb. loaf by 5½d.? What is to stop them increasing it by 1/- if they wish, when the Government allow that state of affairs to exist?

The Government should view the matter of bread prices with greater concern. Why not have a public inquiry? If the increased price is due to increased costs of production, let the bakers or whoever are responsible make their case, so that the consumer will know exactly what items are responsible for the increase. I view this matter with the greatest possible concern and I accuse the Government of deliberately neglecting to protect the majority of our people who depend on bread for their food. Bread and flour have to be purchased by every household, rich and poor. It shows great carelessness on the part of the Government that they did not have more regard for the masses of the people, who are put to the pin of their collars to eke out an existence without having to face an increase in the price of such an essential commodity as bread. I protest most vigorously and determinedly against the Government's lack of concern for the poor.

I want to hear from the Minister what the Government's future policy in relation to bread is to be. Will they allow this position to continue? Was it a wise policy for the Government to free bread prices from control in 1957? I think there should be control by someone over bread prices. No concern, no monopoly or nobody in authority should hold the people up to ransom in increasing the price of bread beyond their capacity to pay. Is it not merely an indirect method of starving the people out? When they have not the money to pay for it, it means they have no alternative but to starve and do without it. This is too important a matter to allow to pass without a protest from some part of the House. It is the duty of the House to take the necessary steps to see that bread prices will not be allowed to increase at the whim of whoever is responsible, without justification for it being put forward before a public inquiry.

I should also like to know from the Minister, in view of the fact that our people are not now in a position to pay for bread, does he propose to re-establish control over the price of bread or does he propose to make an Order whereby an increase in price will not be permitted, unless a sound case is put forward to justify such an increase by whoever is concerned? The general public are in the dark. They have been given no facts or figures in relation to the cost of production responsible for the increased price of 5½d. for the 2lb. loaf since 1957. One of the main causes, however, was the removal of the food subsidies.

That was a mistaken policy, an ill-considered policy, which brought severe hardship to the poorer sections of our people. It is a policy which we on this side of the House condemned, and a policy of which we are prepared to renew our condemnation today. It put a severe burden on every section of our people, in particular on the old age pensioners, the widows, and all those in retirement, including civil servants. It was a mistake and I believe that in the next general election, the Government will have brought home to them the folly of that mistake, particularly having regard to the fact that the Leader of the Fianna Fáil Party at that time made a misleading reference to bread prices.

When the inter-Party Government were in office, Fianna Fáil were envious because the price of bread was kept down, but, during the last general election, a rumour went through the country that the inter-Party Government were about to increase the price of bread. That was denied and at the same time, a guarantee and pledge was given to the people by the Leader of Fianna Fáil, when it was suggested that if there were a change of Government, one of his first actions would be to remove the food subsidies, with the result that bread would be one of the items that would suffer, that that would not happen.

He said:

You know the record of Fianna Fáil in the past. You know that we have never done the things they said we would do.

He was referring there to the inter-Party Government.

They have told you that you would be paying more for your bread. We did not cut them

that is, the food subsidies—

all out before because we did not want the price of bread—so important an article of diet for the poor—to be increased.

An Leas-Cheann Comhairle

Would the Deputy please give the reference?

Mr. O.J. Flanagan

The former Taoiseach, Mr. de Valera, speaking at Belmullet, Co. Mayo, on 1st March, 1957, and I am quoting from the Irish Press. The Leader of Fianna Fáil was speaking on behalf of his Party, giving an honest pledge to the people that whatever else he might do, there would be no attempt to interfere with the price of bread, because, in his own words, it was “so important an article of diet for the poor.” I ask the House to judge the sincerity of that statement now and to judge the sincerity of that Party which, having captured the votes of the gullible people of the country by undertakings of that kind, immediately proceeded to take bread out of the mouths of the poorer sections of the community.

I want to ask Fianna Fáil and the Minister how they can reconcile their behaviour in regard to bread prices since 1957? If this Government are to be judged by their conduct in relation to the price of bread alone, then there is a severe shock awaiting them. Does the Minister now face up to the fact that his Party were dishonest in the last general election in pledging themselves never to increase the price of bread? Let us hear from him why he did two things: why the food subsidies were removed and why he then proceeded to give away his right or authority in freeing bread prices from control?

The price of bread has now put it out of the reach of many people and severe hardship has been imposed on large sections of our community who have to stay hungry for want of it. That is a sad commentary on 1960, and it is a sad state of affairs that the Minister should allow such a condition to develop.

Can the Minister hold any hope that there will be no further increase in the price of bread and flour, and can the consuming public rest assured that, having laboured under the present burden of high bread prices, they will not face any further increase? Will he now take steps to prevent any concern, or any monopoly in the bread, flour and baking industry from increasing the price further without showing that an increase is justified?

I should also like to hear from the Minister what proposals were put forward to him by the parties seeking the increase. Surely they did not take it upon themselves to increase the price of bread without consulting the Department of Industry and Commerce the principal Department of the State, and surely the Minister was given an opportunity of expressing his opinion on any such proposition? I should like to know what reply he made to any such representations, and what objection he has to the setting up of a public inquiry at which the consuming public, the bakeries, the Department of Industry and Commerce and particularly the farmers, who are producing wheat at a loss, can give evidence.

Lastly, is there not an apology due from the Minister and the Fianna Fáil Party for the disgraceful manner in which the Irish people were so successfully gulled in relation to bread prices when a solemn undertaking and pledge was given to them in the last general election that there would be no question of increasing the price of bread?

Mr. O'Sullivan rose.

An Leas-Cheann Comhairle

The Deputy has a little over two minutes.

Mr. O'Sullivan

In those few minutes, I should like to say that within the past hour, the Government have conceded the point made by Deputy O.J. Flanagan when two Ministers in succession came in with Supplementary Estimates to provide for institutions the increased money necessary for their running, due to the withdrawal of food subsidies. It will cost more to run barracks for the Department of Defence and institutions for the old and sick, due to the increase in the cost of living.

There are other indications also that the action which the Government took in 1957 has resulted in a substantial reduction in the consumption of bread. The price of bread had gone so far beyond the reach of the people that in my own constituency, a mill was closed down in Mallow and 40 men were put out of employment. The head of the company said that, due to the increased price of bread, consumption had gone down so far that they could no longer keep those mills in operation. In addition, we know of the efforts being made by the big millers throughout the country to squeeze out the small concerns because of the increased difficulty of securing a market for the flour processed in their mills.

Further point has been given to our argument by the fact that, notwithstanding the reduction in the acreage of wheat this year, in the Book of Estimates supplied this morning there is evidence that it is also the opinion of the Government that there will be a further reduction in the production of wheat next year. That will be in line with the contraction in the consumption of flour. In the Government's attempt to make up to the people for what they did to them in the Budget of 1957 there was no equity or justice because people who eat meat three times a day got substantial increases in their incomes while many self-employed people and the poorer categories did not receive sufficient to guard them against the impact of the reduction in the subsidy on flour and bread.

Minister for Industry and Commerce (Mr. J. Lynch)

The concern expressed by Deputy Flanagan and Deputy O'Sullivan for the people who consume bread is less than the concern they have now for the success of Fine Gael in the local elections and questions such as this are brought before the House, I have no doubt, with that end in view.

The price of bread did increase as a result of the withdrawal of the subsidies. Subsidies were reduced following the first inter-Party Government and were almost completely withdrawn following the second inter-Party Government. On each occasion the reason was that the Exchequer was so committed by each of these Governments to the expenditure of money which to the knowledge of the outgoing Government was not available, that it was necessary, in order to keep the finances of the country in order, to provide the necessary moneys for such purpose.

If the inter-Party Government had been returned on either of these two occasions, May, 1951, or March, 1957, they would have found themselves, as a result of their deliberate policy of over-spending, without the necessary financial provisions to meet that overspending, in such a position as to have to seek the money necessary to carry on the work of the State from some quarter, if they did not reduce the subsidies, at least by some form of extra taxation. I do not think anyone can doubt that.

Secondly, may I ask why, since the same cry was made after the reduction of the subsidies in 1952, when the inter-Party Government returned to power in 1953 they did not then reintroduce the full subsidy as it obtained when they left office?

Mr. O'Sullivan

There is an answer to that.

Mr. J. Lynch

If there is an answer to it I should like to hear it. It has been a long time coming. On the abolition of the subsidies, let me say that nobody ever envisaged the food subsidies as a permanent measure in this country.

Mr. O.J. Flanagan

The Leader of Fianna Fáil did at the last general election.

Mr. J. Lynch

On the abolition of the subsidies, price control on bread was, in fact, freed. Since then prices have been dictated mainly by the cost of wheat and largely as a result of competition between bakers. I do not think anybody can suggest that there is not competition between bakers in this country. The facilities available to me now for the fixing of a minimum price for bread are under the Prices Act, 1958 and in the case of flour it would be necessary to form a committee under that Act to examine the cost of production. In the case of bread it is not statutorily imposed on me to do so but it would be necessary to have such an inquiry.

My predecessor stated, when control was freed, that if it appeared to him necessary at any time, having regard to the fair cost of production and existing price of bread, to reimpose control, he would not hesitate to do so. I am satisfied that there is in the bakery trade a reasonable degree of competition and that to impose a maximum price now would in effect make that maximum price a minimum price and would not leave room for that competition which at present operates.

There is in Dublin alone—if Deputies care to inquire—a varied range of prices of bread. Different bakers charge different prices, which indicates that there is that degree of competition prevailing at the present time. If bread prices increase to the extent that I feel it will be unfair to the public, from the point of view of cost of production, I certainly will not hesitate to take action under the Prices Act, 1958 to ensure that the public will be protected from any unfair price maintenance or lack of competition. As I said, I am satisfied that there is such competition at the present time.

Deputy Flanagan said in a very general way that the cost of everything has gone up. The fact is that the cost of living has been maintained stable for the past 15 or 12 months and if the Deputy will consult the consumer price index as available during the whole of 1959 he will see that in the June-March quarter 1959 the index was 147, taking mid-August, 1947 as base 100. It was maintained in the April-June quarter; reduced to 144—by three points—in the July-September quarter and still maintained at that level in the October-December quarter.

Mr. O'Sullivan

Were the three points reductions in food?

Mr. J. Lynch

It is completely false to suggest that the price of all ranges of commodities has increased.

Mr. O.J. Flanagan

The Minister will agree that statistics are one thing.

Mr. J. Lynch

I did not interrupt any of the statements made by the two Deputies, however extravagant. My statements are statements of fact.

Mr. O.J. Flanagan

The general public do not think that. Prices have gone up.

Mr. J. Lynch

The Deputy, on the other hand, started to plead for the farmers as well. He knows as well as I do that the price is related to the price paid to farmers for wheat. In the White Paper there is, in the interests of the farmer, a certain minimum target of millable wheat which the millers are required to take for the production of flour. Is the Deputy suggesting that the price of wheat to the farmer should be further reduced in order to reduce the price of bread? I doubt if he is.

Mr. O.J. Flanagan

The price of wheat should be increased.

Mr. J. Lynch

If the price of wheat is increased, as the Deputy suggests, it will, in present circumstances, inevitably result in an increase in the price of bread.

Reference was made to the increase before the present one, the increase which took place last autumn. As a result of the poor yield of wheat in this country in 1958, it was necessary to import large quantities of foreign wheat, which is cheaper than native produced wheat. As a result of the use of that wheat for flour milling purposes it was possible to reduce the price of bread. As a result of the bumper harvest, it was necessary, in 1959, to restore the price of bread to that which obtained in the previous year. Therefore, it is not fair to suggest that only increases take place. When it was possible, a decrease in the price of bread and flour was effected. The recent increase of a farthing has been, to my knowledge, attributed to the increase in the price of wages granted to bakery workers. The increase in the 2-lb. batch loaf is a farthing. I have been given to understand that even that farthing does not take into account fully the increased wages that have been given to bakery workers recently.

I want to repeat that if it appears to me that there is not reasonable competition—and I am satisfied that there is—in the price of bread, I shall not hesitate to use the powers that are given to me under the Prices Act, 1958.

The Dáil adjourned at 5.30 p.m. until 3 p.m. on Tuesday, 8th March, 1960.