Dáil Éireann debate -
Tuesday, 10 Dec 1963

Vol. 206 No. 7

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

Debate resumed on the following motion:

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.—Deputy Kyne.

Mr. S. Dunne

Last week, in the course of the few seconds left to me to speak on this motion, I referred to the Minister's statement on that occasion in regard specifically to inquiries which he said he had instituted concerning the allegations of undue increases in the prices of drink in the Dublin area. In his remarks, the Minister said as reported at column 563 of Volume 206 of the Official Report:

To refer in more detail to the Fair Trade Commission's activities, through their authorised officers, this general survey was carried out in certain places. In Dublin, for example, there was one particular complaint about the price of intoxicating liquor. It was suggested that the trade organisation catering for licensed premises had issued a list of recommended prices. Authorised officers visited a number of licensed premises in and around Dublin. In some cases, traders had adhered to the recommended prices for a while and then brought them down, while some traders had never adopted the recommended prices.

After some interruptions, the Minister, referring to the activities of the authorised officers, said:

They told me that prices had been reduced to a level consistent with the 2½ per cent increase. It has happened to my own knowledge in parts of the country.

I tried to draw attention to the fact that if we are to accept this statement of the Minister as an indication of the standard of examination which these authorised officers or other officials apply when investigating complaints of profiteering arising out of the turnover tax, it is a very poor standard and the Minister has been grossly misinformed in the matter. It is not to be expected that the Minister would personally investigate these complaints but members of his Party, the Labour Party and of other Parties who travel in Dublin city and county are well aware that these recommended prices, a list of which was sent out by the association concerned, were adopted by 99.9 per cent of the licensed trade in Dublin city and county and these recommended price increases bear no relation whatever to the turnover tax. In fact, the increases which have been imposed on the people are a multiplication of the turnover tax. It seems to me that the apparatus available to the Minister for the determination of complaints such as this must be very defective when he can be persuaded, as he obviously has been, that there is no ground for serious complaint.

There has been profiteering, gross profiteering, at the expense of the ordinary people of the city, principally those who drink the wine of the country, the ordinary pint of stout, and the excuse being made by the trade organisation concerned is that it is in anticipation of wage increases for the staff, in spite of the fact that any cursory look at the profits accruing nowadays in this trade will prove that without any further imposition on the public in the shape of increased drink prices, those who engage in that trade could very well afford substantial increases for their staffs.

This is where we take issue with the Minister. He said in his preliminary remarks, in reply to Labour speakers on this motion, that he saw no difficulty in accepting the terms of the motion but that seems to me a very empty observation if it is not backed up by vigorous action on the part of the Department to secure that there will not be, and should not be, profiteering as a result of the turnover tax. I suggest that profiteering, apart from the drink trade which, I suppose, is to some extent a secondary consideration, has occurred and is occurring where essentials of life are concerned, such as food and medicine. To my knowledge, old people of very limited means, old age pensioners, especially those living on non-contributory pensions without any other income whatever, except, perhaps, a few shillings from the assistance authorities, people with a total income of, say, £2 per week, have been the greatest sufferers.

In many cases, such people are forced by circumstances, as I suppose half our working population are, to run weekly accounts with grocers and while it has been correctly said that there are many thousands of decent people who would not take advantage of people in that category, we must realise that there are also many people who would take advantage of any situation to get themselves a few shillings no matter whom they were robbing. This House has a special obligation to safeguard, so far as it can, the old people, the social welfare groups particularly and the old age pensioners who have nothing except the contributory old age pension and many of whom live a lonesome and dreary life near the borderline of starvation.

These people, as I say, are peculiarly open to exploitation and my information is that they have been, and are being, in certain instances exploited. They are the last people who can complain because they are the most terrorised section of the population, the people who have little or no hope of improvement except the shameful annual halfcrown which we in our munificence and our magnanimity give them—the halfcrown of which we should be ashamed. That is the only thing they have but what little they have they are afraid of losing. They do not like to complain. They are people who are of a conservative nature; they have worked hard all their lives and are trying to live out their last years respectably. How, in the name of God, are they doing that and facing at the same time exploitation and profiteering which undoubtedly are going on, not in the case of every shopkeeper, but certainly in the case of a large number of them?

We take issue, too, with the Minister in his general approach to the question of prices. He says, the Minister for Finance says, and the Government have said that the determinant of price levels must be competition and that competition will resolve everything, the forces of competition will produce a situation wherein prices will be kept at a reasonable level and wherein exploitation will be wiped out. Of course, that argument rings strangely in my ears with the argument advanced by the Leader of the main Opposition Party who is as Victorian as they come. It was as if we were not living in an age where practically every aspect of our lives is organised. It is based upon the idea that every person operating in trade and commerce is an independent agent, that he can determine prices and cut his cloth according to his own measure. That is not so. In these modern times, practically every trade is organised. These organisations and trade groupings, wholesale and retail, might determine prices, impose these prices upon one another and eventually upon the public. These are much more what might be called little cartels—a contradiction in terms. How then can competition determine price levels? How can it equitably determine price levels in such a situation? That argument of competition falls to the ground. The price of practically every item sold to the public is predetermined by the conspiracies, if you call them that, of the various interested groups who want to see the last possible halfpenny wrung from the pockets of the ordinary people.

An odd thing has come out of this morass which the turnover tax has created. It relates to a semi-State body, the ESB. The ESB, it is said, does not propose to pass on the turnover tax. They would be able to handle it within their existing income. Does that not suggest a peculiar situation? Does it not suggest that the ESB must have been profiteering for quite a while if it can do without having to pass on the tax? I always thought, having listened to the Government, that the policies laid down for semi-State bodies were so fashioned as to ensure that the cost passed on to the public would be a minimum cost and that there would be no element whatsoever of profiteering. Of course, we have all known and the people have known for a long time that the ESB was selling current at a figure which was beggaring many people. That is true to-day and here is proof of it. The ESB say: "This turnover tax is no trouble to us; we do not have to pass it on to the consumer; we can deal with it out of what we are getting at the present time". That suggests to me that the ESB would bear close scrutiny as to the profits it is making and it shows up the fact that it should have been scrutinised long before now.

I should also like to mention the fact that when the Minister says that competition will secure equity in prices, he is making a claim to the profiteers and telling them in effect they can come together—although he did use some strong words last week in his speech which they can read—and he is giving them carte blanche to get themselves together. I suppose no matter how highly geared and controlled machinery you have, if the people whom you are trying to bring into conformity with the law, if the profiteers combine against you, it will be very hard to get a satisfactory result. It will be very hard to get a situation where you can impose justice upon such people. Nevertheless, our duty is there to do that.

What about the position of the vast mass of rural workers through the length and breadth of the country who are dependent on wages for their existence? What about the farm labourers, an ever-diminishing social group who will shortly be no more than a memory due to the fact that they are so badly treated and have been so badly treated since Michael Davitt's fight for the land for the people? One wonders how the county council workers, the national average of whose wages is not much more than £6 a week, can possibly cope with any increase in the cost of living.

It may be suggested, and undoubtedly will be, that people living in rural areas have advantages in the matter of obtaining vegetables and agricultural produce which are not available to workers living in the cities and towns. That, to my mind, is largely a fallacy. I have had a lot of experience in organising such workers and in fact the benefits, which accrued to them as a result of what they may get from the farm and what they may get cheaply by buying from a neighbouring farmer, are very slight.

A number of them have written to me from various counties since the turnover tax came into operation asking what is to be done for them. There is some measure of hope, I suppose, for industrial workers in Dublin city particularly, who are under the protection of well organised unions. They will get compensation which may not entirely be a help in the matter of the increased cost of living resulting from the turnover tax, but what of this vast mass who are not organised in any trade union and who are at the very lowest possible level in the matter of wages? These are most important people, people we should aim at keeping on the land.

Instead of that, by the neglect and the contempt which has been offered to them down the years, the land is being denuded of them. Here we have another example of encouraging the flight from the land and encouraging people to make the long trek to the Holyhead and Liverpool boats. Price control could be of some assistance, but, as has been indicated, the Minister is not well served in this matter by the agents he sends out to look at these things if we are to take the case of the Dublin public as an example. They are not as observant as they should be, or it may be a case that there are none so blind as those who do not wish to see.

I remember reading in the Irish Independent of 17th October a report of a meeting of a group of traders in Drumshambo and it was said that they had agreed on the following increased prices to be paid after the turnover tax was introduced: 1d on the lb of sugar, 2d on the lb of butter, 1d on the oz of tobacco, 1d on the pint, 2d on all spirits per glass, 4d on brandy per glass. The average of these increases represents an increase of six per cent. I should like to know if the Minister has taken note of that meeting or has had the matter investigated or what has happened in that area. It is an example which came to light and one which was followed in many districts throughout the country.

I suppose traders could argue that because of the trouble caused to them by this tax, because they have been made collectors of the tax, they are entitled to some percentage for the servicing of this tax. They might argue that instead of charging 2½ per cent they should charge something like 2¾ per cent, but there is no justification whatever for an increase of six per cent in prices. As we all know, when the Statistics Office, or whatever body determines these matters, eventually does determine the actual all round increase in the cost of living which has resulted from this tax, it will be found to stand at anything from 10 per cent to 12 per cent. I should like to know what really effective action the Minister proposes to take in this matter.

The Labour Party have put down this motion in order to voice the feelings of the vast bulk of the people on this question of prices. You do not get housewives parading this city, as they have been doing for weeks, just to kill time or just for fun. There is definitely grave disquiet over these prices and the fact that the Government are conscious of this disquiet is proved by the coyness with which they regard by-elections and the anxiety they have displayed to avoid by-elections at all costs and to live on in the hope that the day will come when this iniquity like many of the other iniquities will have been forgotten. That is a mistaken hope because it is probably the last fatal act on the part of the Government. Because of the imposition of this tax the people will express their voice very forcibly when they get the opportunity—be it in the next three months, or 12 months, or in two years' time—and when the Government Party comes back it will be in a very attenuated form.

Mr. Cosgrave

A good deal of the discussion on this motion appears to me to have been wide of the mark in so far as responsibility for the recent rise in prices is concerned. With a few limited exceptions, some of which have already been mentioned, such as coal and the raw material used in the manufacture of soap, the recent rise in prices has been due to the turnover tax which was introduced by the Government and which has had a most dramatic effect on prices and will ultimately have far reaching consequences on the nation's economy. This rise in prices was Government inspired and Government initiated.

In the course of the discussion on this motion last week the Minister for Industry and Commerce quoted some remarks I made in the debate on the Prices Bill in 1958. I accept fully the import of those remarks made then and as being true generally in the circumstances and conditions in which price control and price levels operate. In the main in the past price increases were due to factors outside the control of whatever Government were in office, with certain exceptions. In the main, price rises were due to increases in the imported costs of either the finished commodity or the raw materials which were subsequently manufactured or assembled into goods or commodities sold.

For instance, the most recent case of price rises was because of the effect on prices—particularly on oil and fuel and a variety of other imported commodities—of the Suez crisis. It will be recollected that at that time, in 1956, the cost of fuel not only in this country but in other European countries increased substantially. The effect of that increase was not merely to increase the cost of fuel, oil and petrol but there was a consequential effect on goods either manufactured here or imported and which were affected by the price element in so far as fuel and fuel oil and other transport charges were concerned. The present price increases differ fundamentally from these increases due in the past to rises in import prices. The prices increase on this occasion has been due to the introduction of the turnover tax. When this tax was introduced it was claimed by the Government and by the Minister for Finance that it was to apply at 2½ per cent or 6d. in the £. Subsequently the Revenue Commissioners issued two booklets to traders and business people explaining how the tax would operate and how it would be recovered by the traders from the public. It is interesting, when we now see that the effect of the turnover tax and the rise in prices far exceeds 2½ per cent. Indeed, a Deputy would have difficulty in finding a case in which the turnover tax operates at the rate of 2½ per cent or 6d. in the £. It either does not operate at all or it operates at varying rates from ten per cent to 15 per cent and, in some cases, beyond that percentage increase.

On page 7 of the first publication issued by the Department of Finance on the turnover tax, Pr. 7136, it is said:

Registered persons may adjust their prices so as to recover the amount of tax payable on their turnover. They may do this in any way they please and need not apply the tax separately to each transaction.

There was a later document issued by the Revenue Commissioners called Guide to the Turnover Tax which says:

Suppliers will normally provide for the tax by increasing prices to the consumer. This may be done in a variety of ways and in most cases the supplier will be the best judge of the procedures suited to his particular line of business. It should, however, be borne in mind that the tax is a tax on gross receipts and gross receipts will include the amounts added to provide for the tax itself. Accordingly, if a supplier wishes to compensate himself fully for the tax, he will adjust his prices to allow for tax at slightly more than 6d. in the £. The additional amount required is very small— less than one-sixth of a penny in the £—and, in the case of monthly turnovers up to £3,575 would be fully covered by the relief allowed for the first £100 of turnover each month.

These two publications indicate the advice offered to traders and business people. Is it any wonder that when there is confusion and difficulty, with prices rising in excess of 2½ per cent, people tend to forget the advice tendered to traders by the Government? Is it not unrealistic to suggest that the additional amount is very small? Is there any known coin by which traders could recompense themselves by the addition of one-sixth of a penny?

It is true to say that if the commodity is of sufficient size and costs sufficient money it is readily possible to calculate the increase and it has been so calculated to provide the 2½ per cent. It is equally true that traders, when dealing with turnover tax over a certain period, will be capable of charging it to the account or bill at the rate of 2½ per cent and of assessing their liability in respect of turnover tax by adding at the rate of 6d. in the £ or 2½ per cent. But that fails to take into account that the majority of transactions in this country are individual transactions, transactions dealing in the prices of various commodities ranging from goods sold in groceries, hardware shops, drapery shops and chemists' shops as well as drink.

In nearly all these cases individual customers come into the shop and buy their individual needs. They resent it when in one case a trader is charging, not 2½ per cent, but anything ranging from five per cent to 15 per cent. No individual trader can devise a system which will allow him to operate a 2½ per cent tax when he is dealing with a small individual transaction. Take the case of razor blades. Where a trader sells a packet of razor blades he can apply the 2½ per cent tax but what is to happen if individual razor blades are sold, as they are sold? That example can be multiplied one thousand times in individual transactions in which traders are in a dilemma. If he does not charge the tax he has to make it up on something else and other people will resent it when they are obliged to pay somebody else's tax.

If traders propose to charge the tax on every individual sale, it is obvious that there is no coin available which they can use. One of the defects of this tax is that it is ill-conceived, illconsidered and that no adequate calculation was made of its full economic consequences. It seemed readily available as a means of raising revenue, a scheme which would not merely bring in substantial revenue but which would, for the first time, bring within the net of the tax gatherer a wide range of goods, an almost limitless range of commodities never before subject to tax.

One of the arguments in favour of this tax was that the existing traditional methods of raising revenue would not supply adequate revenue for the future, although already, according to the figures published by the Minister for Finance, the revenue from traditional taxation for the full year is from £6 million to £7 million extra.

An Ceann Comhairle

The merits of the turnover tax do not arise on this motion. In so far as the tax affects the cost of goods, it does arise.

Mr. Cosgrave

The tax affects the whole range of goods. Not only are the traditional goods that were always the subject of taxation affected by it but also commodities not previously subject to taxation such as fuel, clothing and food. One of the defects of the tax is that it makes no distinction between essential commodities and the less essential commodities. On the basis of the information given to us goods not previously subject to tax will carry proportionately a greater share of the total tax.

One of the facts stated in the course of this discussion is that those who can secure wage and salary increases, those who are in a position to exert pressure either through trade union organisations or other bodies, will secure compensation. Their circumstances will be relatively eased by the improvement in wages and salaries which will be effected as a result of the operation of the machinery I have mentioned. Undoubtedly those organised industrial workers, the whitecollar workers who have unions to act for them, State employees who will benefit from arbitration and conciliation machinery introduced some years ago and other public servants who have available the benefits of conciliation and arbitration, in whatever form it may be, or who secured comparable increases as a result of direct negotiation will all, to some extent, be cushioned against the rise in prices and the impact of this tax as it affects the day to day living of every family and every individual.

Probably for the size of our population, compared with that of any other country in Europe, certainly that of any country in close proximity to this country, we have a larger proportion of retired personnel, of people living on pensions, on fixed incomes. Remember, even those who received the benefit of some social welfare improvements received it on the basis of a 2½ per cent tax, not on the basis of 5, 10 or 15 per cent increase.

But, outside altogether those who have got these benefits, there are people living on fixed incomes. There are people who have no resources other than whatever they have accumulated from past exertions or who have available some modest contribution from the home assistance officers or some other semi-benevolent organisation. These people cannot compensate themselves for and cannot offset the rise in prices and the rise in the cost of essential commodities.

It seems to me illusory to talk of better social welfare aims and objectives. It is fair enough to talk about them so long as they are regarded in that light but consider the matter of the improvement of social welfare benefits. Consider the position if we are to give a wider opportunity to people who are already the weaker sections in the community—unorganised people, retired personnel and, even leaving aside, for the moment, retired people, pensioners and people living on fixed incomes, we have in this community a great number of unorganised workers; workers who, because of their particular type of employment, are unable to get into trade unions or are unable to get adequate representation; workers who are employed in small concerns, self-employed persons. All of these categories are almost outside the scope of any wage or salary adjustment which will compensate them for any rise in the cost of living. It seems to me that this whole discussion about prices turns entirely on the responsibility which the Government have, an inescapable responsibility, for initiating the turnover tax without adequately contemplating the consequences or the repercussions on prices and salaries.

One of the matters which have given rise to concern in recent weeks has been not merely the rise in prices but the consequential rise which will follow when wage and salary adjustments are made. Rumour has it that the Taoiseach has expressed concern at the extent to which wage and salary demands have been presented. Is it any wonder, when the Taoiseach's own letter gave the green light—as if any need were there to indicate to the vast majority of people in this country who would seek the only legitimate way they could to compensate themselves for the rise in prices by an increase in wages or salaries? However, the consequential effect of wage and salary increases may compensate, to some extent, those who get them—but what about the effect on prices? What about the effect on the cost of production, the effect on our ability to compete effectively and efficiently in export markets and to maintain effectively our trading position? This turnover tax has set off a chain reaction the end of which nobody can foresee and which no economist has been able adequately to estimate or accurately to foretell.

One of the criticisms expressed when this matter was considered by the Commission on Income Taxation, which has been quoted before, was that by Mr. David O'Mahony, Lecturer in Economics, University College, Cork. In the Third Interim Report of the Commission on Income Taxation he said that the purchase tax would tend to raise the cost of living and thus stimulate demands for increases in money income which would, in turn, increase costs and thus impair our competitive position.

This tax affects every individual and every household. One of the criticisms previously made of it is that it taxes at the same rate the essentials of life as well as those not in that category. It taxes food, clothing, footwear, medicines. In addition, it taxes the traditional commodities which are taxed—beer, tobacco, petrol. The inevitable result of this tax has been the widespread demand by trade unions and organisations representing workers and salary earners for some compensation to be made. But there are, as has been clearly said, sections in the community—retired people, people living on fixed incomes, self-employed people, people employed in small undertakings—almost all of whom will be unable to compensate or cushion themselves against this price rise.

If this tax had been imposed in a specific way, as were previous taxes in this country, the consequences which we are now discussing would not have occurred. One of the most effective and strongest critics of this type of tax in the past was the present Taoiseach. Speaking in May, 1956, according to the Official Report, he said that Government intervention for tax-raising purposes in business always results in waste and is a cause of higher costs as well as of higher prices. He said that furthermore the smaller the yield from any tax the higher will be the proportion of that yield absorbed in collection expenses and the wider the number of taxes the greater the possibility of successful evasion by individuals.

One of the criticisms during this discussion is that different traders and different shopkeepers charge different prices for the same commodity. I believe the advice tendered—it was not a direction: it was advice—in the booklet issued by the Revenue Commissioners and the booklet issued by the Minister for Finance is responsible for that situation. It is responsible for it because it stated that traders — shopkeepers—were to recover the tax and a little more. But when you come to operate that the little more becomes impossible to achieve——

Mr. Booth

On a point of order. Is this relevant to the motion before the House at the moment? It appears to be a discussion on the turnover tax.

An Ceann Comhairle

I pointed out to the Deputy that the merits or demerits of the tax are not in order.

Mr. Cosgrave

The motion refers to the turnover tax. I can understand the sensitivity of the Government on this matter. They are extraordinarily sensitive. They do not want to face discussion of this tax in a by-election. They do not want to face discussion in this House, but, so long as this tax is in operation, the Government will hear about it.

An Ceann Comhairle

It is not relevant to this motion, except in so far as it increases the cost of commodities. Otherwise, as a tax qua tax, or in comparison with some other tax, it does not fall for discussion here.

Mr. Cosgrave

The turnover tax is responsible for increasing the cost of bread, butter, tea, sugar, petrol, beer, tobacco, clothing, footwear, fuel.

Mr. Booth

That is not the point at issue.

An Ceann Comhairle

That is perfectly relevant.

Mr. Cosgrave

So long as Deputies opposite understand I am relevant on your ruling Sir, I am satisfied. I shall be guided by the Ceann Comhairle. I cannot attempt to soothe the sensitivity of Deputies opposite. I know they are sensitive about this tax. That is clearly shown by the fact that it was found necessary to publish a full-scale, costly advertisement, outside of election times, an exercise which must be unique in this country.

An Ceann Comhairle

That, surely, is not relevant.

Mr. Cosgrave

When one is interrupted, one is bound to digress. I will keep within your ruling, Sir. As I was saying, the effect of this tax is to raise the cost of living on every individual and on every householder as well as on the business community and those employed in industry and agriculture.

Mr. Booth

We never denied that.

Mr. Cosgrave

No one can suggest that this tax can be operated without raising the cost of living. It has caused a steep rise in the cost of living, a steep rise in the price of essentials and non-essentials. To suggest that price control could be effective, that there is any adequate system of price control which could prevent prices rising, a system Government initiated, Government inspired, and Government directed, seems to me to portray an evasion of responsibility. Responsibility in this case rests solely on the Government responsible for introducing this tax. So far as I am concerned, so far as we on this side of the House are concerned, we believe that, when the people have an opportunity of rejecting this policy, they will reject it emphatically, clearly and quickly.

Mr. Colley

I find it a little difficult, having listened to Deputy Cosgrave, to bring my mind back to the motion before the House. As I understand it, the motion deals with price control and the machinery which should be adopted towards that end. Price increases, in my opinion, fall under three different headings. There is the situation in Dublin and other large cities and towns; there is the situation in small towns and villages in rural Ireland; and there is the situation in which a small number of manufacturers may get together to increase prices to a level which could be described as profiteering.

Taking the first category—Dublin and the other cities and large towns— we on these benches contend, and the Minister has made the case here, that there is no more effective method of controlling prices than competition. Any Deputy familiar with what is happening in Dublin can give numerous instances of shops, particularly in the grocery line, which is what we are mainly concerned with here, which increased prices considerably more than was necessary to correspond with the turnover tax and which, as a result of complaints from customers, withdrawal of custom and competition, all of which are concomitant, have reduced their prices. I personally know of a number of such instances. I know of one large chain of supermarkets which increased the price of a certain type of cigarette by twopence for 20; within a week, that twopence was reduced to one penny per 20. It must be perfectly obvious to anybody who thinks that what I say is true: where competition operates, it is by far the most effective method of dealing with profiteering.

Dr. Browne

Is it the Deputy's case that the cost of living has not gone up?

Mr. Colley

I am not aware of having said that.

Dr. Browne

If prices had not gone up, the cost of living would not have gone up.

Mr. Colley

That interruption is typical of the type of statement we have heard in this debate. At one stage we had Deputy Dunne maintaining that the Minister had said that there was no increase in the price of drink in Dublin. The Minister, of course, never said any such thing. Now we have Deputy Dr. Browne suggesting I have said there has been no increase in the cost of living. I never said that. Perhaps Deputy Dr. Browne would do me the courtesy of at least paying some attention to what I am saying, if he wishes to interrupt me.

I was saying that by far the most effective way of dealing with profiteering is competition. It follows logically from that that our efforts should be directed towards ensuring that there is competition. Some Deputies have contended that one cannot depend on competition to prevent profiteering and that the only effective method is price control. The whole history of price control, not only here but in other countries, shows that one of the principal results of introducing price control is the elimination of competition and what is fixed as a maximum permitted price becomes in fact the minimum price. That is a phenomenon well known in every country. To resort to price control of the type advocated would be a most retrograde step. It would ensure that, where competition is operating, it will be eliminated.

Deputies who are seriously concerned about this problem—I am speaking now of Dublin and the large cities and towns—could not do more for their constituents than to emphasise that day in and day out all over their constituencies and encourage people not alone to take away their custom from shops that are profiteering but also make it clear why they are removing their custom. I know a number of cases where that has happened. I ask the House to consider a business, large or small, into which ten people come on the one day and object to the prices charged, refusing to buy, and saying they will not deal in the shop again. Imagine the effect of that in a shop. I know what has happened in a number of shops. Prices have come down. The most effective action Deputies concerned with this problem can take is to encourage constituents to take the most effective action open to them where profiteering is concerned, namely, withdraw their custom and give it to the man who is not profiteering. This has operated, and it will operate to a larger extent as time goes on. We can hasten the operation of that most effective method of price control.

The second category to which I referred is the category of the small villages and towns of rural Ireland. Here you have a different problem, because in some cases competition cannot operate. In those cases, clearly we cannot rely on competition. Listening to this debate, one would think the Minister was hearing about this for the first time. In fact, it is clear from the Minister's statement that he was on to this problem as soon as it occurred, that he has succeeded in gathering evidence of concerted efforts by traders in small towns and villages to force prices up to a profiteering level and that he has issued instructions for prosecutions against such people. I do not think that fact has been sufficiently emphasised in this debate. The Minister has taken action, and prosecutions are pending. I feel confident that, if we have just a few prosecutions, a number of people who have been endeavouring to profiteer will learn very quickly what is in store for them and will mend their ways.

Again I suggest that Deputies concerned with this problem can do a considerable amount of spreading this information, not concealing it, that prosecutions are pending, that the Minister said he intends to continue with these investigations and to take all the necessary steps to deal with these concerted efforts where competition is being eliminated. If we make that information known and make it clear it is our determination to support that action by the Minister, we will be doing something really effective to secure the elimination of the profiteering which has been complained of.

Lest anybody be under any misapprehension, it should be clear from what I have said that I believe profiteering has taken place in certain parts of the country and I believe it is the Government's duty to deal with that. But I also believe that the Government are dealing with this in the most effective way open to them. To my knowledge, nobody has put forward any argument in this debate which would show that steps other than those taken by the Government will be more effective.

The third situation to which I referred concerned manufacturers getting together and unduly increasing the prices of their commodities. This presents a more difficult problem, but the Minister has made it clear he has been dealing with this, although the machinery, necessarily, is a bit slow. Investigations are taking place into the increases which have been forced by some manufacturers. If the inquiries disclose grounds for prosecution, I do not think anyone need doubt that the Minister will not hesitate to institute prosecutions. Apart from the slowness of the machinery, which, I suppose, is unavoidable, in regard to the methods by which the investigations take place, I have some doubts that it is rather too easy for manufacturers to make statements in reply to these inquiries which they are not asked to prove up to the hilt. They are asked to prove them all right. I know it is extremely difficult for the Minister and his officials to get to the root of this. Even highly-qualified chartered accountants would probably find it difficult to find the flaw, if there is a flaw, in some of these arguments. I would urge the Minister to take every action possible to ensure that the investigations will be as searching and as accurate as possible.

I do not wish to stray from the terms of the motion, but since reference has been made to the turnover tax as a tax, to its political effects, and since allegations have been made that this Party have been running away from by-elections, I should like to say there are two ways of looking at this problem. One of them is the way we have heard, but the other way is this: why is it that the Opposition Parties are making such desperate— and "desperate" is the word—attempts to have a by-election held before the people get an opportunity of judging this turnover tax in action? Why were they so keen to rush the by-election in Dublin North-East? They held it up until they were quite sure what was happening about the turnover tax, then they moved the writ. Since it is my constituency, I feel I had better say something about it.

General MacEoin

It was not fair?

Mr. Colley

Despite what Deputy MacEoin says, I suppose it was fair political tactics, but it is also fair comment for me to say what happened. In Dublin North-East, we were subjected to the greatest barrage of misleading election propaganda I ever heard—and I have a fair share of experience of elections, though not so much experience in the House. We in Fianna Fáil realise—we have admitted it—that we lost out badly on the propaganda battle.

Mr. Byrne

Though you had the most efficient machine.

An Ceann Comhairle

Will all this not come up again later on outside this House? Would it not be better to leave it over until then?

Mr. McQuillan

The sooner the better.

Mr. Colley

All I should like to do is to point out that the Opposition know very well the tide is turning as far as that propaganda battle is concerned and the truth is coming out. They do not want that. However, we are determined to see it does come out and that the people will get an opportunity of passing judgment on what has really happened, not what the Opposition said happened in Dublin North-East or what they are saying is happening now, which, in many cases, is quite untrue.

A fair test of the genuine concern of the Opposition for increases in prices is how they approach the problem. Are they, in fact, going out urging people to do what they can in the way of taking custom away from shops so that the shops which profiteer suffer? I have not heard of any of them doing it. They may have done it in private, but none of them has been reported as doing it and none of them has done it here. None of them got up and said he was glad to hear the Minister has made arrangements for prosecutions to be instituted against people who have made concerted efforts to put up prices unduly. In fact, listening to the speeches made, one would get the impression that they had not heard the Minister say this.

I think it is fair comment on my part to note this omission on the part of Opposition speakers to this motion. I would be lacking in my duty if I did not comment on this. I grant Deputy MacEoin the statement he made—that to take advantage of the situation in Dublin North-East was fair. All is fair in this game. But they should not complain if we make an effort to fight back and show what the truth is.

Mr. Corish

Not at all—delighted.

Mr. Colley

Good. We will have that opportunity. We are anxious that the people should know what is going on, not what the Opposition say is happening or might happen, which is what we had to put up with before. We would like the people to get a fair chance to judge this, and they will, and we have no doubt what will happen.

I am afraid I have strayed somewhat from the motion but I plead relevance to what was said before. The real issue here is the question of undue increases in prices and I have suggested that no method has been put forward by the Opposition which would be, on the face of it, more effective in dealing with increases in prices than those detailed by the Minister. The only suggestion has been the actual fixing of price levels, maximum retail prices, and, as I have said, that procedure has not turned out to be effective in the past in this country or in other countries. It completely eliminated competition.

There is one assurance which I should like to give the House, that is, that this Party is at least as concerned as any other Party in this House to see that the people are not exploited, that we in this Party are determined to see that whatever steps are necessary to deal with exploitation will be taken. We are satisfied that the Minister has taken the most effective steps that can be taken at this stage to deal with it.

Mr. McQuillan

Soft soap.

Mr. Colley

But, if these steps are found not to be effective, the Minister, I know, will have no hesitation whatsoever in looking for further machinery to deal with it and there will be no hesitation whatever in this Party in supporting his demands. But, until we hear of a more effective way of dealing with it, I suggest that we ought to do what we can to further the efforts that are being made by the Minister, and a great deal can be done on both sides of the House effectively to deal with exploitation.

I would say, in conclusion, that Deputy Liam Cosgrave, as I understood him, said that apart from a few very limited commodities, a sum of much more than 2½ per cent had been added on to all commodities and he blamed the Government for this. I recall that not so very long ago Deputy Cosgrave's Party were shedding crocodile tears in this House for the very people who have put on these large increases he has talked about and it strikes me as the height of hypocrisy for him to come in now and blame the Government for this. It would have been much more effective if he had dealt with the actual problem of price increases and had lent his support to the efforts being made by the Minister to deal with them.

Mr. Corish

We note the Minister's acceptance of the motion but I think we should repeat the terms of the motion, not only for the benefit of the Minister but for the benefit of Deputy Colley and those other Deputies who sit in the Fianna Fáil benches.

Mr. Booth

Deputy Cosgrave, too. Please remind him.

Mr. Corish

The Minister has accepted a motion which says in the first part:

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——

——et cetera. The Minister accepts that motion. Deputy Colley admits that there have been increases but he qualifies it by saying that prices are now coming down and that there is no need to worry.

Mr. Colley

No.

Mr. Corish

The Minister goes further than Deputy Colley. He says he recognises that there have been many increases in the prices of foodstuffs and essential services and he accepts that the Labour Party wants him to do something about it. We are not so much concerned about the acceptance by the Minister of this motion because, with all due respect to him, it is easy to say: "I accept the motion" but what we want him to do is to implement the terms of the motion as vigorously as needs to be done.

Deputy Colley in a sort of apologetic speech said that the Fianna Fáil Party did not fight back vigorously enough when they were being attacked about the turnover tax. Why the reticence, why the shyness, since last April? That is about seven months ago. Nobody prevented Fianna Fáil from talking about the turnover tax but there seems to be a reluctance, more than a reluctance, even on the part of members on the front bench, to say anything about it, which leads people to believe that they were ashamed of the turnover tax and are now still more ashamed of the turnover tax.

Mr. Colley

Not a bit.

Mr. Corish

The turnover tax has had a test. The people have had time to reflect on it from April to November and to see how it works in practice in November and the first two weeks of December. We know what the reaction is.

I would say with respect to the Minister that what he has done with regard to the investigation and control of prices he must have done reluctantly because all the time, even since this turnover tax was debated, there has been a reluctance on the part of the Minister for Industry and Commerce, the Taoiseach and all the members of the Government even to mention the term "price control". When we assembled here on 23rd October it had been obvious to us for weeks that there were increases in prices and that there would be increases in prices in the name of the turnover tax and in anticipation of wage increases and even on 23rd October, when the Minister was questioned, he did not seem to be too anxious to introduce the machinery that was available to him under the Prices Act, 1958. A week after that, when he was asked, he gave a sort of half threat that if prices went up unduly he would be forced to take action and we saw an example of his action that weekend: there was a pathetic statement through the Government Information Bureau to the effect that manufacturers and traders should explain their prices to the public—"Please, Mr. Trader, please, Mr. Manufacturer, explain to the public why these increases have been necessary and then they will be satisfied". They did not even attempt to explain the increases in prices that had undoubtedly taken place in the latter end of September, all through October, and in November. Prices at that time were already rising.

The Minister told us last week that he has power, without having to avail of certain administrative machinery, to control the price of bread, sugar, milk and butter. These are essential commodities and the prices of these commodities have increased.

When we spoke of the turnover tax and related the turnover tax to social welfare payments, we spoke about essential foodstuffs, including the four I have just mentioned. In the case of milk and butter the Minister said he must consult with the Minister for Agriculture. The price of milk has increased and, as was described by Deputy Kyne last week, it seems to have gone up quite a bit in many parts of the country. The price of butter increased by 2d. per lb.

Mr. Carter

No such thing.

Mr. Corish

I am talking about the price of milk and butter. That might not appeal to the Deputy. The price of butter has been increased by 2d. per lb.

Mr. Carter

No such thing.

Mr. Corish

I do not shop in Longford. I am talking of the experience in Wexford. The price of milk has gone up. What I want to know from the Minister is——

Mr. J. Lynch

I will not be allowed to answer the Deputy now.

Mr. Corish

Take it as a rhetorical question. There will be some opportunity. Has he, in fact, consulted with the Minister for Agriculture in regard to the price of milk and butter and, if he has, with what results? He says he has to consult with him before he can take any action but, as I said before, butter has gone up by 2d. a lb., which is four per cent, and milk, in one instance I know of, has gone up by ?d. per gallon. The Minister for Industry and Commerce has not indicated to us that he has even investigated these with his colleague, the Minister for Agriculture. Sugar has gone up by six per cent. Bread has gone up by varying amounts all over the country. If it were to go up by the 2½ per cent which Fianna Fáil Deputies talked about on the debate on the turnover tax we would have to deal in farthings, of which we are assured by the Minister for Finance there are plenty in the country but when one wants to get them in order to pay a price that would entail the payment of farthings, these coins cannot be found at all.

At column 562, volume 206, of the Official Report of 4th December, 1963, the Minister said he had investigated some manufacturers' prices and was satisfied that the increases were warranted. To satisfy the public and to satisfy the Dáil he should have told us what manufactured articles he had investigated. I do not disbelieve him. I believe he has investigated these but the public want to know. They want to see evidence that the Minister for Industry and Commerce has been concerned to the extent of investigating particular commodities and particular articles. I would say his assurance last week on that matter was much too vague and certainly does not satisfy the public.

The Minister also quoted what Deputy Cosgrave said in relation to the Prices Act, 1958. He said, in effect, that price control could not be operated successfully unless in wartime or emergency conditions. I want seriously to submit to the House that, in view of the introduction of the turnover tax, the turnover tax which has been responsible for these increases, as far as prices are concerned we could be deemed to be in an emergency and for that reason price control is necessary.

I do not know how effective the Fair Trade Commission can be. The machinery of the Fair Trade Commission has been invoked by the Minister in order to ascertain whether there has been a price agreement in areas and in certain businesses or industries. I submit again it would be very difficult to prove that there was a price agreement by a body of people and while I hope the Minister, who only today announced that he intended to prosecute and while I agree that is an excellent thing——

Mr. J. Lynch

I did not announce that only today.

Mr. Corish

Yes. The first time the Minister said "prosecution" was to-day. The Minister last week, as far as I could read from his speech, said he proposed to take certain action.

Mr. J. Lynch

I specifically referred to prosecution, several times.

Mr. Corish

I apologise if that is so but, as far as I remember, the only indication I got that he intended to prosecute was when he replied to a Parliamentary Question today. I accept what the Minister says but what I am trying to tell him is that the machinery of the Fair Trade Commission is not adequate to investigate prices if the Minister intends to control them at all. The Prices Act of 1958 is the only piece of legislation containing machinery which could meet the present situation because, as I say, we want vigorous action.

There is not much point in the Minister merely saying he intends to accept this motion, if he intends to do merely what he has been doing over the last few weeks. It has been said by speakers from the Labour Party and by Deputy Cosgrave that wage and salary earners will look after themselves. There is no doubt about that but there are other people who are not in a position to look after themselves. There is the social welfare group but I do not want to dwell too much on that. The Minister will recollect that when he spoke on the Budget here in April of last year he took examples of certain people and described how the turnover tax would affect them and how they would be compensated by increased social welfare benefits. However, like every other member of the Fianna Fáil Party who spoke about the turnover tax, he spoke merely in terms of the cost of living increasing by 2½ per cent and no more. Even with this example of 2½ per cent many of those in the social welfare class, especially assistance groups like the non-contributory old age pensioners and noncontributory widows, just about broke even on the assumption that the cost of living went up by 2½ per cent.

Mr. Sherwin

I thought it was 7½ per cent they got.

Mr. Corish

I am talking about the increase the Fianna Fáil Party said would occur as soon as the turnover tax was introduced. It was described as an increase of 2½ per cent for the purpose of their argument to demonstrate that these people would be compensated by social welfare benefits. Even now it is recognised that the cost of living has gone up much more than 2½ per cent and the net result of that is that tens of thousands of people who are supposed to benefit under the last Budget now find themselves worse off than they were prior to the 1st November.

In any case I do not think the Minister has said much that will allay public disquiet. Despite what Deputy Colley says he is doing and we should do with regard to certain shops, I do not believe the public are convinced that the Government are serious about controlling prices. The women in the city of Dublin seem to be concerned about prices and I do not think Deputy Colley could allege that the march of women has been prompted by any political Party. In any case I do not think he can allege that the Labour Party has prompted this protest march. As a matter of fact, a description of the protest march is contained in the Irish Press of 15th November, 1963, one edition of which had a heading: “Women in tax protest” and then went on to say:

Several hundred Dublin housewives yesterday marched from Cathal Brugha Street through the city to lodge a protest at Government Buildings against the turnover tax.

I have another copy of the Irish Press of the 15th November, 1963, which says in this regard:

Between 90 and 100 Dublin housewives marched from Cathal Brugha Street through the city to lodge a protest at Government Buildings against the turnover tax.

Mr. Sweetman

That is truth in the news for you.

Mr. Corish

That is the Irish Press of 15th November, 1963.

Mr. Sweetman

The political blue pencil.

Mr. Corish

I accept the comments of Deputy Colley as being sincere and I accept what the Minister for Industry and Commerce said, but when one sees this sort of thing, this effort to tell the people down the country that there are no such things as protests against the turnover tax in the capital, I do not know what one would call that; I would hate to put a name on it. In any case the Minister has accepted this motion but in the beginning I said, and I repeat, that we expect him to implement the terms of the motion as vigorously as needs to be done and we shall have no hesitation in putting down the same sort of resolution, with the permission of the Chair, or in questioning him periodically as to the action he is taking in regard to the control of prices, where it is necessary to control prices.

Question put and agreed to.