Dáil Éireann debate -
Thursday, 18 Jun 1964

Vol. 211 No. 3

Ceisteanna—Questions. Oral Answers. - Price Control.

8.

Dr. Browne

asked the Minister for Industry and Commerce if, in view of the continued increase in prices and of the fact that the Prices Advisory Committee will not report on jams and marmalades, and canned and processed foods, until 31st July, 1964, and 31st October, 1964, respectively, he will consider using his powers to fix prices under the Prices Act, 1958, to freeze prices at their present ninth round wage award level, and so help preserve the advantage of that wage award to salary and wage-earners generally.

9.

Dr. Browne

asked the Minister for Industry and Commerce if he will state in view of the failure of the Government's price control policies as shown by the steep increase in the cost of living figure what further steps the Government intend to take to protect salary and wage-earners' living standards by enforcing some measure of price control and profit control.

Mr. J. Lynch

With your permission, a Cheann Comhairle, I propose to take Questions Nos. 8 and 9 together.

The increase in the price of many commodities that followed the ninth round of wage increases has tended to level off. The increase in the Consumer Price Index of 6.53 points between mid-February and mid-May, 1964 represented an overall increase of less than 4 per cent on the commodities taken into account.

I would refer the Deputy to my reply to a question by Deputy Corish on 2nd June, 1964 Vol. 210 No. 3 Columns 302 to 305 of the Dáil Debates when I stated that I believe that tree competition provides the most effective means of controlling prices.

Where I have considered it necessary and practicable, I have used the powers given to me by the Prices Act, 1958. This Act does not empower me to freeze prices as suggested by the Deputy and I do not think that such power is necessary or practicable except possibly in times of scarcity that would require rationing.

Dr. Browne

May I ask the Minister does he believe that prices at present represent a reasonable return to the producers as compensation for the wage increases? Can we now safely give an undertaking that prices will remain at their present level between now and the expiry date of the present wages agreement?

Mr. J. Lynch

I can say this, that the upward movement of some prices which took place after the 12 per cent increase in wages appears now to have levelled off and it appears reasonable to expect that as a result there should not be any significant further upward movement in prices.

Dr. Browne

Does the Minister have any figure in his mind above which, if further rises take place, he would take remedial action and, if he has such a figure, will he say what it is?

Mr. J. Lynch

Nobody could give such a figure because the cost of raw materials would have to be taken into account and some of these have to be imported. As I said, if there is any undue upward change in prices, I shall take action.

10.

Dr. Browne

asked the Minister for Industry and Commerce which of the three broad types referred to on pages 20 and 21 of Policies for Price Stability, the OECD working party report, represents the Government's specific policy for price control.

Mr. J. Lynch

"The three broad types" referred to by the Deputy are not integral alternative policies. They are elements of a pattern of complementary policies any one or all of which may, according to circumstances, be applied in selected proportions to any or all sectors of industry. No one of the three types represents entirely the Government's policy for price stability which must, of necessity, be flexible enough to accommodate a variety of conditions.

Dr. Browne

May I take it from the booklet to which I have referred that none of the proposals of the Government contained any decision to interfere with profits, dividends or prices at any time?

Mr. J. Lynch

The Government's policy in that connection was broadly stated in the first publication of the Second Programme for Economic Expansion. If the Deputy will read that again, he will see that the three elements to which he refers in the OECD publication are taken into account in our own publication. The second document on the Programme for Economic Expansion, the wider document, will be published very shortly and the Deputy will have an opportunity of studying for himself the fuller statement of Government policy.

Dr. Browne

Is it not a fact that the sum total of these proposals was connected practically exclusively with the control of salaries and wages and did not make any serious references to the restriction of profits, dividends or prices?

Mr. J. Lynch

It did refer to more than salaries and wages. It referred to incomes generally in relation to the supply of goods and that could refer to dividends, profits and prices as well as to wages.