asked the Minister for Industry and Commerce whether he proposes to take any particular action to relieve inflationary pressures and reduce prices as considered advisable at the Ministerial Conference of OECD last month and at the Economic Policy Committee of that organisation on 15th June last; and, if so, what action will be taken and when.
Ceisteanna—Questions. Oral Answers. - Price Control.
50.
As indicated on earlier occasions, I exercise price control over manufacturers, wholesalers and importers in respect of a wide range of commodities which affect the cost of living. Where increases in prices of these commodities have taken place they were necessary to compensate for unavoidable increases in costs.
We must be prepared to face up to the fact that price stability cannot be achieved so long as costs, particularly costs of wages and of raw materials, continue to escalate. Manufacturers can only go a certain distance in absorbing costs; after that they must increase prices or close down.
Increases in labour costs attributable to wage increases during 1970 in excess of 30s a week per worker, or 7 per cent, whichever is the greater, are still being disallowed when assessing the amount of compensatory price increases allowable. This alone represents a substantial contribution by manufacturing industry to the maintenance of price stability.
Has the Minister for Industry and Commerce taken cognisance of the fact that the Ministerial conference of OECD and the Secretary General of that organisation have now advised that to permit a prie increase in excess of 2½ per cent per annum is to run the economy at a dangerous level with almost inevitable serious consequences of ultimate recession? having regard to the fact that the cost of living in this country in the last 12 months has increased by almost four times the danger limit fixed by the OECD, would the Minister not agree that the steps taken so far by him are clearly quite inadequate and, if he is not prepared to accept that, would he indicate what steps he proposes to take to get our economy, particularly our price structure, on to a sound basis?
The Deputy's supplementary question is based on some decision at a ministerial conference of the OECD or a statement by the Secretary General, of which I am not aware, and I have no knowledge indicating there was any decision or statement in relation to a 2½ per cent increase——
Look it up.
——and in view of that, the supplementary question is one I cannot answer.
It did not happen.
It did happen. I have already indicated to the Minister what the authority is.
It is not correct.
It is quite correct. What the report said was that 2½ per cent was the safe limit and, beyond that, there was serious risk. We are four times worse than the danger point.
The remaining questions will appear on tomorrow's Order Paper.