On the motion for the Adjournment, Deputy Casey gave notice that he would raise the subject matter of Question No. 64 on today's Order Paper.
Adjournment Debate. - Bread and Flour Prices.
On a point of order, Sir, would you explain why you refused to allow me to raise the subject matter of Question No. 3 on the Adjournment?
That has already been explained to the Deputy. If the Deputy wishes to challenge a ruling of the Chair, there are means by which that can be done. It may not be done in a casual fashion.
The Chair is under a misapprehension as regards——
The Chair is not.
The Taoiseach——
The Deputy will please resume his seat.
It must be that the Taoiseach is afraid to discuss this question openly in the House.
Deputy Casey.
On today's Order Paper I asked the Minister for Industry and Commerce whether, in view of the increases in bread and flour prices, he will constitute a Prices Advisory Committee under the Prices Act, 1958, to enquire into and report to him as to whether such increases are warranted. In answer to that, I got the extraordinary reply from the Minister who said that he did not propose to constitute a Prices Advisory Committee to inquire into and report on the recent increases. He went on to say he considered that in present circumstances it was better to continue to rely on the prices of the flour and bread being settled by competition rather than by official regulation. He added that he was keeping the situation under close observation and that if the circumstances should seem to arise which would justify such a course, he would implement the Prices Act of 1958.
I find it very difficult to understand the Minister's approach to this very serious problem. He is aware, of course, that bread forms the major portion of the basic diet of the majority of the population in this country and that any increase in the price of that basic commodity has a greater impact on the less well-off sections of our community. Any increase in the price of bread hits the lower income group. People who consume more bread than those who are better off are hit more strongly and forcibly than any other section of the community.
I would have thought that the Minister would avail himself of the powers he has under the 1958 Act or any other Act to ensure that, when the millers and the bakers proceeded to increase the price of bread, he would at least give an opportunity to all other interested parties to state their case. I can remember well, reflecting on the Prices Act, 1958, the political climate under which that Bill was enacted in this House.
We had a general election in 1957 and the present Government Party went to the country and invited the electorate to return them to power on several scores—not the least of them being the question of prices. Amongst other things, they referred to the unemployment situation and the building industry but I can well remember in my own constituency in the City of Cork, which is the Minister's constituency as well, that prices were brought to the fore and the implication was that the Government at that time had failed to live up to their responsibility in curtailing prices.
We know that the people fell for that line of argument at the time but the Government's record since in that respect is a pretty dismal one. They were not hot in office when they did away with the food subsidies and since that date I think I am not incorrect in saying—I think we got this information arising out of a Parliamentary Question—that something like 140 to 150 consumer prices have increased.
That Government came into office with the Prices Advisory Body there. The machinery was there and it was set up by Deputy Norton who was then the Minister for Industry and Commerce. The machinery in question was the Prices Advisory Body before which anybody who wanted any increase in any prices would be compelled to appear and prove beyond yea or nay that the increase in the price of whatever commodity under discussion was warranted.
The Taoiseach, who was then Minister for Industry and Commerce, decided he would scrap that. He said it was healthier economically to let prices find their own level but he also said, as a kind of face-saver at the time, that he would introduce the Prices Bill which would give him or any of his successors power at any time, if they thought the situation warranted it, to set up a Prices Advisory Committee to inquire into the retail price of any commodity. It is not without significance, a Cheann Comhairle, that not on one single occasion since the passing of that Act have the powers which are vested in the Minister being utilised.
I remember well when the Bill was passed through this House some Deputies forecast that that would be the situation; that there was complete abandonment of price control and that, whatever the particular Prices Act of 1958 said the Minister had no intention at all of utilising it. He threw up his hands in horror at any such suggestion. He insisted that the Act was there and that it would be taken down out of the pigeon hole at any time he felt that the conditions warranted it and that it would be used to the full.
Accepting his statement at its face value, I am now suggesting to the Minister for Industry and Commerce that I can conceive of no more appropriate occasion when the powers he has under that Act might be utilised. I have already referred to the impact that any increase in the price of bread has on the vast majority of our people. I would have thought that would appeal to the Minister as well and that if there is a case for an increase—I do not know whether there is or not—that everybody else concerned outside the millers and the bakers, the consumers and every person concerned, would have ample opportunity of going before a public tribunal and putting their case.
I do not know whether the increase in the price of bread is warranted or not. My question was designed to impress on the Minister the desirability of having this public tribunal to inquire into the price of bread and the price of flour.
It seems futile to me that this House should go to the trouble of enacting a statute, the Prices Act of 1958, if we never intend to apply it. The Minister says he considers that in present circumstances it is better not to use that Act and I should like to know what present circumstances appeal to him in making that decision. There are more people concerned with the price of bread and flour than the millers and bakers. If the operatives in the baking and flour milling industry decide next week, or the week after, that they require an increase of 5/- or 10/- a week in their wages, the machinery established by law would be brought into play. The bakers' trade union, and any other union involved, would have to appear before the Labour Court and there produce facts and figures on which their case would stand or fall and the employers would have an opportunity of making their case against them. I am sure that procedure commends itself to the Minister and, if that is so, why should there not be the same procedure in respect of price increases in the baking and milling industry?
This question of the price of bread should appeal particularly to the Minister for Industry and Commerce because I can reflect back to the General Election of 1957 when, in our common constituency in the City of Cork he, then Deputy Lynch, had quite a lot to say about the price of bread. He even went to the trouble of getting a loaf of bread and attaching it to a stick.
Do not tell lies.
Is it in order to say that a Deputy is telling lies?
I withdraw that but the incident did not happen.
A statement made in this House cannot be characterised as a lie. The Deputy will withdraw the word "lies".
I withdraw it but it did not happen that the Minister carried around a loaf of bread on a stick.
May I ask Deputy Casey to withdraw that allegation? The Deputy should know, as I do, it is an untruth and it is less than I would expect of him to make that allegation.
I am sure Deputy Barrett would confirm that it never happened.
Deputy Casey understands well why this reference annoys the Minister so much, and why it particularly annoys Deputy Galvin.
Does the Deputy still maintain what he said, that I went around Cork with a loaf of bread on a stick?
I maintain that the Minister's Party——
Again the Deputy should know well that is an untruth.
The Minister for Industry and Commerce never went around Cork with a loaf of bread on a stick. That is unfounded and it is terribly wrong for the Deputy to say such a thing.
Deputy Casey is making a political charge. There is no personal charge against the Minister.
Just in case there is any mix up, I say that the Minister's Party and supporters in Cork went around with loaves of bread on sticks and were referring to the price of bread.
That is completely wrong.
It is the truth.
I am surprised at the Deputy making that charge.
I am surprised that Deputy Barrett does not stand up and say it is not true.
I do not know whether it is the truth.
We know.
I am sure Deputy MacCarthy knows it is true.
The people of Cork know whether it is true or not.
Withdraw that remark.
I am not withdrawing anything.
I am very surprised at Deputy Casey.
There was a personal allegation made against me.
I wish Deputy Casey would withdraw that remark.
Am I to understand from Deputy MacCarthy and Deputy Galvin that there was no criticism about the price of bread at that time?
That is on another line.
I would ask Deputy Casey to withdraw the allegation.
But sure the Deputy carried it all over the city. You yourself——
I am surprised at Deputy Casey.
Deputy Casey made a remark that the Minister went around with a loaf of bread on a stick, and that is denied. That is a political statement. If the Deputy wishes to withdraw it, that is a matter for himself. The Chair has no function in the matter.
At the time, to which I am referring, the price of the 2-lb loaf was 9d. It is now 1/3d. My question today was designed to invite the Minister to use the powers he has under the 1958 Act to carry out an inquiry as to whether the increase is warranted or not. I do not know if it is warranted or not, but I would have thought the Minister would have availed himself of all the powers that are available to him to inquire into the matter so that a tribunal would report back to him. He would then be in a position, which he was not in today, to say if the increase was warranted or not. Even at this late stage, I invite him to carry out an investigation into this matter.
I have been appealed to as a judge and I certainly never remember the Minister going around with a loaf of bread on a stick, but I do endorse everything else Deputy Casey said, and I think there is a fair case for the Minister to invoke the Act. However, I certainly never remember the Minister going around like that.
Thank you.
It is quite true the Minister never went around with a loaf of bread on a stick, except by implication.
I do not think I am called upon to reply to Deputy Casey's unfounded allegation, one which he should know is not true about me or any member of my Party, that we were going around Cork with loaves of bread on sticks. That never arose and I cannot help expressing my supreme surprise at Deputy Casey making such an unfounded allegation here.
If he is not too young. Deputy Casey may remember when there were small premises on the quays of Cork to which flour was imported from Birkenhead in the 1930s. I do not think he is too young to remember that, or that in the interests of the national economy the Government introduced a policy of growing wheat at home for the purpose of manufacturing bread for our own people. That policy has stood the test of time. It has withstood the advent of several successive Governments, two of which were not Fianna Fáil Governments, and, therefore, we can take it that the growing of wheat for milling into flour is national policy of the best kind. However, we have to accept the fact that the cost of Irish grown wheat is higher than the cost of imported wheat.
It is true that if we decided to import all our wheat, rather than grow it here at home, we could put bread on the tables of our consumers at a much lower price, but it is equally true that we would then lose to the national economy several million pounds a year which the farmers get for growing wheat. The figure runs into £6 million, £7 million, or perhaps more a year and, as a consequence of importing all the wheat we need, that money would not be available to be channelled into our economy where it is available for the purchase of other consumer goods that bread consumers themselves contribute to make. I do not think Deputy Casey would deny the soundness of that national policy.
It is also true that, together with the growing of wheat at home, we have to import a certain amount because imported wheat has certain qualities which, mixed with home grown wheat, make bread more palatable. At the present time the national policy is that we grow enough wheat to produce 300,000 tons a year. This is intended to represent at least 75 per cent. of the gross amount of wheat to be used for milling into flour in this country. The 25 per cent. extra is imported, admittedly at a lower cost, particularly from the North American continent where they have vast tracts of wheat and where, as a consequence, it can be grown much cheaper than here.
If we accept it is good national policy to grow a certain quantity of wheat here, as much as is possible to make our bread palatable to the Irish consumer, then we have to accept the fact that we have to pay a higher price for that wheat and, consequently, for our flour and bread. In the year 1958, it was necessary, by reason of a bad harvest year and a consequent decrease in the amount of wheat sent to the mills for conversion into flour, to import an unduly high quantity of wheat from abroad. That resulted in lower milling costs. That was passed on ultimately to the consumer, but a certain portion was held to compensate the farmers who suffered badly in that 1958 harvest year.
In the following year when the harvest improved and more of our home wheat had to be put into the grist, the prices of bread and flour reverted to what they had been prior to the 1958 harvest. That was one of the increases imposed after the abolition of the subsidies in 1957. Another increase came following the increase in pay to bakery operatives. If Deputy Casey suggests that that increase was subject to some price review or review by an authority like the Labour Court, that is not the position. The increase was given by the bakers and, consequently, they increased the price of bread by, I think, a farthing per 2-lb loaf. The bakers alleged that that was not even sufficient to compensate them for the increase in wages. There was at that time no inquiry and no question of an inquiry into the increase in the price of flour.
Last year 260,000 tons of native wheat were used in the production of flour here. That fell short of the amount expected to be brought to the mills from home sources. But this year, and in conformity with the Programme for Economic Expansion, it was decided that the mills would take 300,000 tons of wheat for milling into flour. It was on that basis the mills decided that the proportion of Irish wheat in the grist would have to be increased from 70 per cent., on the basis of 260,000 tons, to 80 per cent., on the basis of 300,000 tons. That caused an increase of 5/9d. per sack for bakers' flour and 7/9d. per sack for retail flour. Since the bakers had to pay an increased price, their costs of production went up and, as a result, they increased the price of bread by a half-penny per 21b. loaf. That is the position and these are the circumstances of the current increase in flour and bread prices.
There are two courses open to us whereby we could reduce the price of bread. There is, first of all, the reintroduction of subsidisation, or a depressing of the price paid for Irish farmers' wheat, or, perhaps a depressing of the acreage to be grown. What course Deputy Casey would suggest, I do not know, but he will remember that during the period of the subsidies, allegations were widely made that subsidised bread was being fed to greyhounds or used by people who did not need subsidisation of any kind. As the Committee set up in 1956 found, it was impossible to divert the subsidy to one particular section only, that is, to the benefit of the poorer sections of the community. Therefore, they decided it would have to be an overall subsidy, except to the extent that they tried to enforce a differential in the case of hotels and other catering establishments. But they found that that, too, would not work. If there is to be subsidisation, it will have to be universal.
In any event, subsidisation was only a temporary measure to deal with a sudden uprise in prices in 1947. Even the Labour Party realised at the time, and so expressed themselves in the Dáil, that it would be a temporary measure only. It was never intended it would continue when stabilisation of prices was reached. I should like to suggest to Deputy Casey that stabilisation of prices has been achieved, in the main, over the past one and a half or two years. It is true that the prices of bread and butter have increased by reason of the withdrawal of the subsidies, but, apart from that, there has been relative price stability over that period.
The Prices Act, 1958, was introduced for the purpose of giving the Minister for Industry and Commerce power to control prices but that control was to be used in times of shortage of a particular commodity, or——
Is that stated in the Act? I do not think it is.
It was stated in the course of the debates here.
Is the Minister stating it was to be used only in times of shortages?
The Minister for Industry and Commerce at the time said he envisaged it being used——
Is it in the Act?
I did not say that it is in the Act. I said the then Minister stated it.
The Minister could invoke the Act if he wished. The Minister stated that the Act was to be used in times of shortage—that is not true.
I am not saying anything that is not true.
I do not mean to say the Minister is saying anything untrue.
The Minister at the time said it would be invoked in times of shortage or when it was manifest there were restrictive practices either in management or labour which had the effect of increasing prices. Neither, I think, operates at present. The then Minister said the best price control was free competition. He also said— and I think this is a fact generally accepted—that experience shows that maximum prices tend to become minimum prices. As soon as a maximum price is imposed, everybody charges that irrespective of what the commodity can be produced for or marketed at, with the result that there is only one price and there is no room for competition or, rather that there is room for competition but it is not availed of.
I am suggesting that there is room for competition at present. When the last increase, brought about by the raising of the amount of Irish wheat going into the grist, took place, I made some enquiries in Dublin following a suggestion in the House that there was no competition and that there was no price differential in the case of retail bread. I discovered that the price at the time for a 2-lb. loaf varied from one and a penny farthing to one and twopence half-penny. I think that that price differential still operates, allowing for the increase which has taken place in the meantime.
I should like to point out that that competition must operate on the milling side, because here, in common with other countries, when the standard of living has increased, the consumption of bread has fallen. Before the war, 2.8 million sacks were being milled here each year. Since then, that amount has dropped to 2.25 million sacks. Therefore, it is in the interests of the millers themselves that they put their flour on the market at the cheapest possible price in order to conserve the saleability of flour. I am satisfied that they are doing this. Their methods of production are as good as any that operate in the world and I know from comparisons I have made that they are, in fact, much better and cheaper.
I mentioned that the consumption of bread falls as the standard of living increases. I think the F.A.O. Reports verify that that is not peculiar to this country but is common to every country in Europe where there has been an increase in the standards of living. Therefore, I am suggesting that because of the increased use of Irish wheat in the grist, brought about by the increased acreage, there are reasonable grounds for an increase in the price of flour and that there is reasonable competition at the millers' level by reason of their desire to maintain consumption of flour. Further, by reason of the differential in price for the 2-lb. batch loaf, I am satisfied that there is reasonable competition at the bakers' level as well.
Not in Cork city.
The Dáil adjourned at 11 p.m. until 10.30 a.m. on Thursday, 27th October, 1960.