Private Members' Business. - Investigation and Control of Price Increases: Motion. – Dáil Éireann (17th Dáil) – Wednesday, 4 Dec 1963

Private Members' Business. - Investigation and Control of Price Increases: Motion.

Mr. Kyne

I move:

That Dáil Éireann is of the opinion that, in view of the many recent increases in the prices of essential foodstuffs and services, and in view of the fact that no satisfactory explanation of the necessity for such rises in prices is available either to Dáil Éireann or to the general public, the Government should without delay set up, under the Prices Act, 1958, machinery for the public investigation and, where necessary, control, of any such increases in the prices of essential goods and services.

This motion was put down by the Labour Party to get information from the Minister and from the Government as to their intention of seeing that only the 2½ per cent increase justified by the turnover tax is, in fact, extracted from the public and that prices are controlled or discovering what exactly the Government intend to do to keep prices at the level at which they stood prior to 1st November. On a number of occasions prior to the introduction of the tax, the Labour Party endeavoured to secure from the Minister information as to what would happen when the turnover tax came into effect, should prices rise unduly. On 23rd October, 1963, at column 48 of volume 205, in reply to a question tabled by Deputy Norton as to whether the Minister was aware of the general increases in prices forecast in the papers, the Minister stated:

I have seen various press reports of the kind mentioned by Deputy Norton.

In reply to a question on prices on 17th July, 1963, I explained that the circumstances in which my powers in regard to price control may be exercised are laid down in the Prices Act, 1958. I stated that I believed that the ordinary course of competition should apply to ensure that no excessive increase will take place in the price of any commodity but that, if circumstances required any action under the Prices Act, I would take it. I reaffirm that I will not hesitate to take action if any undue increases take place. Deputies will appreciate, of course, that increases in prices in consequence of increases imposed abroad on commodities which we must import are outside the possibility of control by me.

On 30th October, immediately prior to the introduction of the tax, Deputy Norton asked the Minister if he would state categorically whether the Government proposed to establish a Prices Tribunal for the purpose of controlling prices and thus preventing any exploitation of the consumers. The Minister replied:

I made it clear in reply to questions on prices on 23rd October, 1963, volume 205, column 48 of the Dáil Debates, that I will not hesitate to take action under the Prices Act, 1958 if any undue increases take place.

I have nothing to add to that statement.

Again, on Tuesday, 12th November, at column 1239 of volume 205, the Minister again indicated that he would in time, if he saw fit, introduce price control. On 24th October and 21st November in reply to questions put down by Deputy S. Dunne in relation to the price of coal, the Minister indicated that, should the need arise at any time, he would be prepared to see what he could do to control prices, but indicated that the price of coal was not a factor over which he had control. It was pointed out to him by Deputy S. Dunne that he had information that something like 20,000 tons of coal were already in the country prior to 1st November and that, notwithstanding that fact, the price of coal had been increased, apparently to compensate for the turnover tax.

The Minister has met all efforts by the Labour Party with vague generalities and promises. He has one stock reply: competition will keep down prices. Another Minister stated there would be no increase at all. A third Minister stated that retailers will be free to take whatever steps they like to recoup themselves for the cost of the turnover tax. These three diametrically-opposed opinions seem to me very unusual. They show a note of discord as between three different Ministers in the same Government.

We did not, of course, have to wait until 1st November for price increases to occur. Since the eighth round wage increase concluded, there has been a rise of some ten points in the cost of living index. The cost of living index relates to essential services and commodities used by the ordinary working people. By 1st November, the date on which the increase consequent on the turnover tax took place, the cost of living had increased to the extent of ten points. The full effects of the turnover tax are not yet known but anyone living in the country, and not isolated from the conversations of ordinary people, must be well aware that instead of 2½ per cent being added to the various commodities, in actual fact, the increases range between 7½ per cent and ten per cent. Neither I nor anybody else can prove an actual national figure because every different commodity in every different shop in every different locality has a different price. It is practically impossible to give the average so the Minister will understand if I give him the prices I am aware of in Waterford.

Milk has increased by 1/8d. per gallon while 6d. per gallon would be an increase of 2½ per cent. I suggest that 1/8d., which is fixed by United Dairies Ltd., operating in west Waterford, has, without any doubt, completely violated the principle of endeavouring to collect the amount of tax for which they will be responsible to the Government, plus a small amount for administrative costs. Nobody can suggest that 1/8d. per gallon is a reasonable increase when 6d. is the amount which they can legally charge.

The price of bread has increased. I have not the particulars of the amount of the increase in the loaf but I am aware that it is substantially more than 2½ per cent. In the case of the cwt. of loose turf sold by the merchants in Dungarvan for 7/-, they have added 6d. for the turnover tax and you have the choice of taking or leaving it. The merchants have apparently got together and decided to fix the charge so that the people have no choice but to pay it. Coal has increased by 1/- per cwt. not only as supplied by those merchants but throughout the whole county.

I have named but a few commodities in the price of which there have been these increases but it is true to say that every single commodity one purchases, everything in excess of 6d. in price, has added to it a halfpenny or a penny, all making an increase not only of 2½ per cent but in excess of five per cent. Cigarettes have been nationally increased by 2d. on the packet of 20. Drink has been increased by 1d. per pint in some cases and in other cases by 2d. per pint.

The Minister has had power under the 1958 Act, and he still has power, to control prices, if he so decides. He has power under the 1958 Act to set up a Prices Advisory Committee and I would like to quote from that Act what power is given to him. The Act states in part II, section 9:

(1) The Minister may from time to time by warrant under his hand constitute such and so many bodies of persons as he thinks fit, each of which bodies shall be called a Prices Advisory Committee and is in this Act referred to as an Advisory Committee.

(2) The warrant constituting an Advisory Committee shall state the names of the persons who are to be members of it.

In section 10, the functions of an Advisory Committee are described as follows:

(1) The functions of an Advisory Committee shall be to enquire into, and report to the Minister upon, such of the following matters as may be specified in the warrant constituting it, namely—

(a) the prices charged for the commodity specified in the warrant by manufacturers thereof,

(b) the methods of marketing that commodity by manufacturers thereof,

(d) the methods of rendering that service by persons rendering it.

(2) An enquiry by an Advisory Committee shall, as may be specified in the warrant constituting it, be—

(a) general, or

(b) relate to a particular area or to prices charged or charges made under particular conditions, or be otherwise limited in its scope.

It is quite clear from that that the Advisory Committee would have full powers to advise the Minister and that he would have full powers, having got their advice, to fix a price. If he had not the power, it is given to him quite clearly in section 13 of Part III which says:

(1) Where the Minister, having considered a report of the Fair Trade Commission under the Act of 1953 is of opinion that—

(a) restrictive practices, in connection with the supply or distribution of any commodity, exist, and

(b) by reason of the existence of such restrictive practices are being or may be charged for that commodity,

the Minister may by order fix the maximum price at which that commodity may be sold.

I suggest that the Minister has ample powers under that Act and that he is well aware of them. For his Prices Advisory Committee—and it is now five years since the introduction of the Act—he proposed to the Irish Congress of Trade Unions that they should nominate a number of persons. The Irish Congress of Trade Unions, believing that stability of price is more important than increased wages, nominated certain people, but, because of the fact that the Committee was never called on to function for the past five years, the Irish Congress of Trade Unions never nominated anybody else to act on it, believing that the Minister had no intention of using the powers given to him. The fact that there have been no meetings in the five years since that power was given to the Minister indicates that the Irish Congress of Trade Unions was right in that assumption.

The Minister is reluctant to exercise the powers given to him under that Act but he must be living in isolation if he has not heard in Cork and in Dublin and anywhere else he may travel, that prices have increased and that they have increased not only by 2½ per cent but by as much as ten per cent. The Minister's only contribution to this problem that I am aware of is that he advised manufacturers to state publicly why they have increased their prices. That is very little consolation to the consumer. It may save the face of the Government but it is suggested that the manufacturers have increased prices to recoup themselves for the corporation profits tax they have had to pay retrospectively. It is more than likely that that is part of it but that is very little comfort to the consumer.

Another suggestion of the Minister was that price lists should be displayed by retailers. That suggestion has been observed in a number of shops, but, again, it is very little use unless the trader is compelled to sell at the price listed. Supply and demand govern most things. If you go into a shop for a commodity that is not available elsewhere or if you are seeking credit until the end of the week, you are compelled to buy at whatever price that retailer demands. Advice was given to the people by the Minister and the Government to go round the shops and to deal with the retailer who had the lowest price. If a man is a county council worker and paid by the fortnight, or if he is an industrial worker, he has very little left at the end of the week to give to his wife for her shopping. His wife has to look for credit and there is very little use in telling her to go around and look for the best prices. That is all right for people with cash in their pockets but it is very far from being any use to the working people in the country towns and villages.

The present increase in prices is 2½ per cent, plus the administrative cost to the retailers of implementing the tax. What will happen when the ninth round wage increase comes into operation? The Taoiseach suggested to the trade unions that they would now be justified in seeking a readjustment of wages. I am sure the trade unions are alive to when and how they should secure a wage increase. Discussions are taking place with the employers in the hope of fixing a national wage increase. I am sure the trade unions know how much compensation will be necessary to offset the steady increase in prices.

Judging from individual wage demands of which I have knowledge, I shall be surprised if a national wage agreement is reached or, if it is, I believe it will not be less than 20 per cent, not to talk about 2½ per cent plus certain additions. The unions do not want increased wages purely to offset increased costs. I believe any honest trade unionist would advise his members that stability of prices is more desirable than a steady spiral of wages chasing costs and then costs catching up with wages. The unions would be loath to upset the wage structure and would seek, as they did last year, fringe benefits. such as reduced working hours, increased holidays and certain other concessions that would not of themselves, if taken with increased output, lead to increased costs of production.

The unions are as aware as the Government that we can only get from the employers what we give to them and that it is in the interests of both that prices are kept at a minimum. It is because the unions are interested that prices are kept at a minimum. The unions have always given the deepest consideration to the effect of their demands on the less fortunate sections of the community. If the unions bear these people in mind and restrain themselves from making excessive claims, then the Government have a responsibility, too. The unions can take care of their members, but what happens to the social welfare classes? It is true the Minister can say that the benefits for old age pensioners, widows and orphans and sick and disabled have been increased. State pensioners may get increases, but there are many pensioners from industrial concerns, people living on fixed incomes, who through no fault of their own are forced to exist on annuities which provided a fairly comfortable income when they were first fixed but which now have been reduced to a fraction of their value.

The ninth round wage increase, plus the further increase in the prices of essential commodities, will bear on these people and on the social welfare group—indeed, on anybody living on a fixed income. The Minister must take cognisance of that and act quickly. I would ask him to accept his responsibility to the public. He has the power and the means. I ask him to indicate what he intends to do and when he intends to do it. He should either do that or admit that this talk of a 2½ per cent increase is a myth to coat the pill of the turnover tax.

Mr. Corish

I second the motion, Sir, and reserve the right to speak later.

Mr. Mullen

We must consider what has been offered as a substitute for price control. The Minister has repeatedly referred to the fact that the Fair Trade Commission are there, but it is reasonable to ask him what they have done about the increase in prices. What have they done about the increase in butter of 2d. per lb, the increase in potatoes of 4d. per stone, in 2 lbs of sugar of 1d., in the small Procea pan of 1½d., in the lb of rib steak—the cheapest kind you can buy —of 4d., in the lb of rashers of 4d., in the bar of toilet soap of 2d.? Those increases amount to a total of 10 per cent. It is significant that some of those increases took place before the implementation of the turnover tax. People who have had to have recourse to hire-purchase to buy necessities for their homes have also had to face an increase of 2½ per cent, although the contracts might have been entered into a long time ago. This is another argument for price control.

When can we have something positive done about increased prices? We are told there is provision in the Act for a prices advisory body. Deputy Kyne has indicated that a panel was established under the Act to do something about price control. As far as I know, however, that panel has never met. As a result, the Irish Congress of Trade Unions decided not to submit any more names for it for the last two years. Talks are going on between the trade unions and the Federated Union of Employers on what increase in wages should be given to workers. These talks may result in an agreed formula or a free-for-all. The trade union movement will be able to take care of their members so far as prices are concerned, but what of the other people who have not got a trade union organisation to look after them? Surely it is imperative that something be done to ensure that those people are not exploited any more?

There is evidence that the increase in social benefits of half a crown to compensate for the turnover tax has been insufficient to meet the increase in prices. The people I am referring to are old age pensioners, people living on small incomes—indeed, the CIE pensioners who were knocked out last night—as well as the unemployed and the sick. If the present situation continues these people will be ground further down, and I believe nobody here wants that. Some people are inclined to blame all these happenings on the turnover tax, but before the introduction of the tax there was a tendency—perhaps in anticipation of it—for prices to increase.

It is not long since the Dublin Council of Trade Unions, representing 40,000 organised workers, decided to request the Minister to introduce price control. They were concerned because they knew that while the ninth round was about to come into operation, it was terribly important, if the ninth round were to be any good to anybody in eliminating the effect of recent increases in prices, that there should be price control. The situation at the moment is that the eighth round of wage increases, which was brought about in order to give people an improved standard of living, has been nullified by the increase in prices.

That decision was passed unanimously. Indeed, it was not a political decision. A Deputy from the Fianna Fáil Party was a delegate on the council and voted in favour of price control at the meeting. But, while the resolution and the motion were passed on to the Department of Industry and Commerce, nothing has been done and up to recently there has not been even an acknowledgment of receipt of that motion.

There is another aspect that must be taken into consideration. Deputy Kyne referred to the making of an order by the Minister in connection with the display of prices in shops. That does not mean a thing in so far as price control is concerned. People can still charge what they like, when they like. As I have said here before, there are six shops in Finglas West and there are approximately 15,000 people depending on those shops for practically everything they buy. The shopkeepers can open when they like, and display whatever prices they like in their windows. That does not prevent them from charging what they like. The people want some form of price control. They want an assurance that they will be able to get goods at reasonable prices and will not have to pay exorbitant prices for essential commodities simply because they live some distance from the big marketing centres.

There are many thousands of working class people who deal in particular shops and have weekly or monthly accounts. I must say that in some cases the shopkeepers are very often found to be friends and reliable people during a time of hardship caused by a trade dispute or unemployment. While that is so, the customers of the shops feel that they are under an obligation not to complain, not to report, not to say anything about the increases in prices that take place. The Minister may say that he is not getting many complaints. I do not know whether he is or not. I would expect that he would be inundated with them. The fact must be taken into account that it is not everybody who finds time to make a complaint or who knows how to make a claim. A simple canvass of working class areas will satisfy any departmental official that prices have increased far in excess of 2½ per cent. Indeed, there is proof positive that prices have increased in excess of ten per cent. That being so, the opportunity and the reason exist to do something about controlling prices. It will not suffice for the Minister to say that he is awaiting reports from the Fair Trade Commission or some such body. We cannot say to those living on social welfare benefits or on small salaries that they must endure hardship until these bodies make up their minds. The matter is far too serious.

It is rather significant that within the past few days one very large store in Dublin, which has a reputation for selling goods at reasonable prices and which sells all types of goods, ceased selling butter. I presume that is as a result of pressure. The store had been selling butter at less than 4/7d. a lb. I phoned that store this evening to ask if they were selling butter and I was told that they were not. It is the general belief that that store is not selling butter now because the people who really control prices got at it.

Mr. McQuillan

I should like to support the motion and to say, first of all, that it is a very reasonable motion from the consumer's point of view. I hope that at this late stage the Government will have sufficient regard for the general public as to take immediate steps to implement the motion and bring in price control.

I realise how difficult a task this is and how difficult a conversion it will be on the part of a Government which has declared time and again that price control machinery is a complete waste of time, that the proper method of controlling prices is by competition. I heard the Taoiseach, Deputy Lemass, on numerous occasions in this House over the last ten years sneer at the suggestion of price control by State interference. I do not wish to bore the House by producing the quotations but I think even the Minister for Industry and Commerce, as a loyal supporter of the Taoiseach, will admit that his Taoiseach has no faith whatever in price control machinery for the purposes suggested in the motion. Therefore, as one who believes in the setting up of machinery such as is suggested in the motion, I find it very difficult to know how a Government like Fianna Fáil could be serious about price control if they do not believe in the methods suggested.

Deputies, if they have not sufficiently long memories, can have recourse to the Dáil Debates to refresh their memories as to what their colleagues said in this House. I see Deputy Colley in the House. I should like to remind him and his colleagues of the confident way in which they spoke when the turnover tax was being discussed. They suggested that the law of competition would solve the problem created by overcharging. I wonder what Deputy Colley and his colleagues in the Government Party think today of their expression of belief, their supposed belief, during the debate on the turnover tax?

Mr. Colley

They have been proved right, of course, in Dublin.

Mr. McQuillan

I am sure Deputy Colley will intervene in the debate. I must say that that is the most pleasant news I have heard yet. According to Deputy Colley now, competition between traders has been sufficient to bring down the increase in prices to the 2½ per cent turnover tax which was imposed by the Government. If that is true, according to what Deputy Colley says, then there is no need for his Minister for Industry and Commerce to threaten to bring in price control and there is no need, in fact, for this motion to be discussed at all.

Mr. Colley

Dublin is not the whole country.

Mr. McQuillan

I am speaking now as a person who has a little experience of shopping in Dublin, especially of window-shopping. Having done a fair amount of that and worn out a pair of shoes on the job, for the replacement of which I presume I will pay not 2½ per cent but at least nine per cent of an increase, I am satisfied, both from my window-shopping in Dublin and from practical experience down the country, that price control through competition is a myth.

I am satisfied that, while the debate on the turnover tax was being conducted in this House not so many months ago, the manufacturers and the wholesalers were already preparing new prices, irrespective of the turnover tax. Those prices were submitted to traders over the weeks prior to the turnover tax coming in as the new prices for various commodities to be imposed, irrespective of the turnover tax. When the turnover tax itself came into operation, not alone had the 2½ per cent come in but what the Minister for Finance described as a little bit of help to the business man himself came in on top of it.

The Government are getting this 2½ per cent but the manufacturer and the wholesaler, and, shall we say, the retailer in a minor way, are getting between them anything from five to 15 per cent. I do not want to talk about the turnover tax but I will say that if ever there was a wasteful way of collecting money, we have it in this instance of the turnover tax. It is the most wasteful method of collecting money that was ever adopted by any Government and it would only and could only be adopted by a Government who had no regard whatever for the public and were too lazy to go to the trouble of working out a proper tax.

The Minister for Finance pointed out here on a number of occasions in connection with the turnover tax that all he was concerned with was getting the 2½ per cent; it did not matter what happened to the consumer. We know that Fianna Fáil misjudged this whole issue and that it will bring political disaster on their heads. All they are fighting now is a retreat and they are trying to make the best of that. Let them not do harm to the country at this stage. I hope they realise that if this free rein is given in regard to prices, it will mean that this country will be priced out of the limited markets they have abroad. There is no use in the Taoiseach appearing on a television programme and telling the public that prices are rising in other countries as well, that because they are rising in other countries, it is justification for allowing prices to rise here and that our position in the export market will not be worsened as a result of the increase in prices here. That is the statement he made the other night on the programme "Celtic Challenge". There is no doubt that it is a twilight programme as far as the Taoiseach is concerned, the twilight before darkness descends on his Party in the form of a disastrous electoral defeat which will come to them before the next six months are out.

No matter what increases in price take place, the organised sections of our community will be able to recompense themselves financially. There is strength in organisation and that strength exercised through the trade unions will ensure that an increased income will be given to workers because of the disastrous effects on the cost of living of the turnover tax. What will happen the remainder of the community? Is it seriously suggested that those sections to whom Deputy Mullen referred, the old age pensioners, the widows, the orphans and other social welfare recipients, will be recompensed by the miserable increases which have been given? Is it not a fact that the increases in social welfare allowances were absorbed by the increases in price which came even prior to the turnover tax being implemented?

What about the other unorganised sections in our community? What about the people who are living in rural Ireland? What will happen to the people, for instance, in Connacht who live on small holdings under £15 valuation and who depend, as many of them do, on a local authority or a State Department to give them work for a period of the year in order to supplement their meagre earnings on a small farm? Through the use of machinery and modern methods of work in State Departments and local authorities, those people are now out of work. How will they fare as regards living costs with the huge increase in the cost of living that has taken place and without work? They are the unorganised, forgotten people and there are thousands of them in the country. The unemployment figures this week have topped the 50,000 mark and if you want to find out from where the increase in the unemployment figures has come, go down to any exchange in rural Ireland and you will find out.

How are those people to live? Who is to speak for them? Who is to ensure their organised strength or who is to ensure they will get the same benefits as their colleagues who are organised in strength? There is no means by which they can be helped. In fact, as a result of the Government's failure to impose a standstill on prices, there is no alternative for many people in these areas but to get out of the country as fast as they can. One of the first things we will find in the New Year is an increased impetus to emigration.

The Government speak with divers tongues on this question of the cost of living and how to keep it down. Some of the young Deputies talk about competition amongst traders doing it. How does competition among traders affect prices when the wholesaler and the manufacturer have put up their prices by three and four per cent prior to the implementation of the turnover tax? Is it not a fact— and I challenge contradiction on this —that big business in this country has taken on Fianna Fáil at this stage? Is it not a fact that the Taoiseach and the Minister for Industry and Commerce are as sore as scalded cats because big business did not wait for another six months to put up its prices? I know for a fact that the Fianna Fáil "top notchers" in this House have been in contact with the leading industrialists in the country, criticising them for raising their prices at this stage and suggesting to them that if they had any regard for Fianna Fáil who had fathered them over the years, they would have waited for about six months before increasing their prices and then they could have brought in their increases gradually.

Dáil Éireann debate - Wednesday, 4 Dec 1963

Private Members' Business. - Investigation and Control of Price Increases: Motion.

Dáil Éireann debate -
Wednesday, 4 Dec 1963