When the debate was adjourned I had been dealing with the question of professional services but before I proceed with that I want to advert to the question of the powers that are to be vested in certain people to see that the charges for these services are fair and equitable.
This Bill provides, as I have mentioned, in passing, when discussing another aspect of it, for the transfer of these powers to the various Ministers, to the Minister for Health, in the case of doctors and dentists, to the Minister for Local Government in respect of houses and so forth. At the same time, we have had the establishment of the National Prices Commission. I do not want to criticise in any way the National Prices Commission or the personnel on it, because I have the greatest respect for every member of that commission, of whom I know all except one. However, there seems to be an extraordinary divergence of activity on the part of the Government. Each Minister of State will have responsibility for the fixing of prices for services and goods in the particular sector within his administration. For instance, the Minister for Industry and Commerce will, I presume, have responsibility under this Bill, without delegating to any other Minister, for the prices of ordinary consumer goods. Why then should we have the National Prices Commission, and the abolition of the Prices Advisory Committees with provision made for other prices advisory committees?
It really means that this National Prices Commission is not a commission within the meaning of the word "commission" as I learned it at school. My understanding of the word was that a commission were inviolable, that if we established a commission the country at large would accept the fact that this commission could not be influenced by the Minister, could not be influenced by anybody, even as to the extent of the time they might take to produce their findings. It would appear to me that the National Prices Commission are in the same position as the Prices Advisory Committees were in before the introduction of this Bill.
As I understand the situation, and I have practical experience of it, the Prices Advisory Committees produced findings which were sent to the Minister. They were not of necessity accepted by the Minister. He ruled on whether or not they were to be accepted. In the last case which was dealt with, the findings were altered by the Minister—not in great depth, but they were altered. There were many cases in the past where findings of Prices Advisory Committees were altered quite radically by Ministers. I am not saying that the alterations were wrong. I am merely stating that the Prices Advisory Committees, which are still to continue as I understand it, were not all-powerful.
The National Prices Commission now seem to be factually—and I use the word deliberately—relegated to the position of an advisory body, perhaps a very important advisory body, and perhaps one that can help the Minister in dealing with problems relating to the cost of services and the cost of goods. It is an anomaly to see a National Prices Commission established and a Bill introduced into the Dáil which gives to each Minister in respect of the part of our lives for which he has responsibility the final say and the arbitrary right to decide what we will pay for our services or our goods.
I have not dealt with the question of the law. As I understand it, in costs for legal work there are scaled fees. The scaled fees here are rather like the scaled fees in England except, so far as I know, for the transfer of property, in which case they are somewhat higher here. I am told that the reason is that there is less property and less business to be transferred here. Perhaps that was so in the past but, with the development of our nation, and because we have such a backlog in housing and must of necessity during the next 15 or 20 years try to catch up with this backlog, it is no longer the case and it appears to me that we must look at the scaled fees.
It has been said to me—and I agree with it completely—that one of the cheapest forms of law is that provided by barristers who give opinions. A solicitor who wishes to have something clarified for a client sends his brief, having prepared it carefully, to a junior or senior counsel who has, perhaps, specialised in that section of the law. The normal sort of fee charged for a most exhaustive opinion is about 15 guineas or less by a junior and about 50 guineas by an eminent senior. There is a lot of work in the investigation of legal problems by these gentlemen. They put their reputation at stake when they give an opinion. It is possible that an experienced junior or senior counsel would have investigated the same type of problem before and he might be in a position to do the job much faster than a colleague. This service has been cheap and efficient.
The service that seems to me to be quite expensive at times is the service charged for on scaled fees on the transfer of property. I do not wish to say that there have been overcharges. I know perfectly well that in many cases the transfer of property is an easy matter where administration is taken out by the people who own it, and where it had been owned by their forefathers, and where there was only one move to be made. Solicitors have bashed their brains out trying to clear title in cases where perhaps for two, three or four generations administration had not been taken out and, for borrowing purposes or any other purposes, it was necessary that there should be clear title to the deeds of property.
There is a great variation in the amount of work that has to be done. For this reason I am certain that solicitors have worked extremely hard for very little. In other cases solicitors have worked very little for quite a large fee. I am not saying this in criticism but perhaps the matter should be investigated. I am glad that services are included in this Bill. There is no objection to it. I do not want to criticise the legal side in any way except to say that that problem may exist.
One must not accept that all the complaints one hears are properly based, but one of the complaints one commonly hears is that in the building of 100 or 200 private houses there are scaled fees on every one of them when, in the first instance, the architect who drew up the plans decided on the different sections of ground. Young people going into these houses should not have to pay the full scale fee in respect of what would seem to be a repetitive action on the part of the solicitor. The production of legal documents by solicitors for building societies is also repetitive. The contracts were printed in hundreds and were, perhaps, changed ten years ago. The scaled fee could be looked at. That is the only criticism I have to offer on that aspect of the service.
I am very glad that hire purchase transactions are included and that they can be investigated. There have been many first-class hire purchase companies. The commercial banks have set up what could be described as subsidiary companies that engage in hire purchase and provide short-term finance in different ways from the commercial banks. This is a good thing since it provides competitions from a reputable source. The people who were grinding the faces of the poor in hire purchase transactions have now got competition from this reputable source which will not overcharge them.
I started my contribution with the statement that price control could never be effective. I do not believe for a moment that it could be effective either in the case of services or goods except in the case of a loaf of bread, a bottle of beer or something which is clearly definable. In the Monthly Report No. 2 of the National Prices Commission Report for December, 1971, at page 7 paragraph 8 it is stated:
Any attempt to control rigidly the prices of all or most food and household products would have little or no prospect of success. In the grocery trade alone there were nearly 11,000 outlets at the last Census of Distribution. A typical small to medium independent grocer or member of a voluntary chain might stock 500-700 different lines, and a large supermarket might stock upwards of 1,500 to 2,000 different food and household items. Given the sheer scale of the problem, effective enforcement of the controlled prices would be virtually impossible. Moreover, price controls would slow down improvements in organisation and efficiency in retailing and in that way could make for still higher prices in the future.
This is something that, as I say, corroborates that fully effective price control is an impossibility. It is easier in regard to grocery items than clothes items or other items like that. The fact that you can now make the person, if you want to, put the price and the weight on the article at the point of sale is a good step in that direction. Nevertheless, the grocery items are probably the easiest ones and yet we have the National Prices Commission saying that there is no hope of rigidly enforcing such a price control.
I now want to pass on to what has happened in the past and deal with whether or not this legislation will have any effect on the Government's failures in the past in regard to price control. This party are in favour of price control but there is a necessity to ensure that jobs shall not be put in jeopardy by dilatory action on the part of anybody. In a case where a price increase is necessary the Minister has a good prices section in his Department who are capable of giving him in time the necessary advice, I think there is evidence that in the past when an item came up, which was of political potency, the Minister and the Cabinet dithered and related the increase in price, which would have been a small one, to the next election or the next-by-election. In that way they created the situation that in the end not only had a huge increase to be given but also back money had to be given in respect of what was stated to be a loss of £26,000 per week, for as long as nine months.
I am referring to the flour and bread inquiry. I want to point to what happened in relation to that inquiry and how it was dealt with by the Government. I have no doubt the Government were receiving letters from the flour milling people, who are a most active body in that regard, and have a permanent staff working on their cost increases. I believe that because bread was a political factor the flour millers over the years were forced into that position. The bread producers had to wait for an increase in the price of bread until after the next election and only then was the increase given. That has been the Government's attitude over the years.
The inter-Party Government had a different line on this: they produced food subsidies. It appears as if that particular line, with the Common Market on the threshold, has now gone. At the time it was a most advantageous method of helping the less well off section of the community and giving them an advantage in respect of the essential items of their diet. I will not comment further on why the flour millers have a permanent staff working on their cost increases. I will only say that information was presented to the Government that the industry was losing £26,000 per week and nothing was done. By-elections were pending in Longford-Westmeath and in Kildare. Eventually the flour millers announced they intended to break the law, that on a certain day they would increase the price of a sack of flour. There was a period of tension and not long after the present Minister was put in charge of the Department of Industry and Commerce and the flour and bread inquiry was established. The result of that inquiry was not only had there to be this large increase but that back money had to be paid. In fact, the woman in Gardiner Street who buys two loaves of bread tomorrow is paying not only for the bread she buys but also for the much smaller increase she should have been paying at a time when it was not propitious for the Government to allow the increase to be given, as far back as 12 or 15 months ago.
My point in making this case is that if there are industries in this country who validly need any increase in the price of their products to continue in operation that price increase must come quickly. There is no point in creating a situation whereby an industry can perhaps produce a loss over a period of 12 or 18 months before they get their price increase. The Minister might say that there never was such a delay. I say to him there was such a delay and there were such situations forced on industries. That put jobs in jeopardy and meant that profits which could have been used to improve industries for the challenge of the Common Market were not so applied.
This new system cannot work unless not only is justice done as far as the consumer is concerned but that justice is done as far as the industrial worker and his boss are concerned. I want to know whether or not this new system proposed by the Government will speed up things. There is no point in postponing the evil day as happened in the case of bread. If there is a relatively small increase required it should be given immediately. This has been the fault of successive Fianna Fáil Ministers for Industry and Commerce who were prepared to place party first and consideration of these particular problems afterwards.
It is not possible in the case of most industries to do what was done in the case of the flour and bread inquiry. This particular industry is a closely-knit one in which it was possible to give back money, to arrange a price that would be a general price for a sack of flour and for a loaf of bread. It was perhaps only a little more complex than arranging a price for Guinness's stout which is only manufactured by one firm. How can an industry which has 12 or 13 factories within its ambit, which has not got a price increase and which makes varying products within the same line of business, be compensated for a period in which the increase that was necessary to keep their industry viable and prepare them for the future was not given? It is not possible because they are not a closely-knit unit. They are all producing different things, each within the same line of business.
It is therefore necessary that justice be done on both sides without any thought of general elections, by-elections or whether the Government are popular or unpopular. I have not access to the files and archives of the Department but it would not require any great intelligence to instance the cases in which price increases have been allowed. The message I would give to the consumer first, to industrial workers second and to employers is that there is necessity for more than this legislation which is nearly a difference in mechanics. There will be price increases if inflation creates the need for them. They should be allowed only in small measure at the right time and as soon as possible after they become necessary. That is the only way in which fair play can be given to everyone. If fair play is not given the result is unemployment and we are not doing so well in that respect at the moment.
I do not understand the logic of the second paragraph of the Minister's opening speech in which he said:
The system of price control operated up to now has been directed primarily towards manufacturers, importers and wholesalers. It was expected that competition would be instrumental in keeping retailers' prices generally at reasonable levels. This form of control was particularly appropriate when the majority of home manufacturers were protected by high tariff walls, but it has been gradually losing a great deal of its relevance in recent years with the dismantling of tariffs between ourselves and Britain under the terms of the Anglo-Irish Free Trade Agreement and the resulting gradual exposure of home manufacturers to competition from external manufacturers. With our entry into the EEC competition from external firms will be further accentuated and if in these circumstances a home manufacturer succeeds in making good profits, it will generally be the result of the efficiency of the firm concerned and not through charging excessive prices.
That is true but what does it convey? To me it is a bit of waffle. It merely states that any trader here who makes profits in competition with goods from abroad is efficient. This legislation has no bearing on that. If I were the Minister and that statement was handed to me—I do not know whether the speech was written for the Minister—I would draw my pen straight through that paragraph because I do not think it does any good as far as putting across this legislation is concerned.
The second paragraph on page 3 of the Minister's speech states that a feature of trading at the importing, wholesale and retail levels is the adding on of a percentage mark-up on buying prices. A percentage make-up naturally gives a higher real profit, but it is also true that a percentage mark-up on an article is related to the cost of bringing the article on to the counter, paying rents, rates and taxes, paying for heating the shop, paying the other expenses, taking all risks of bad debts. That statement in the speech more or less indicates that if an article cost 10p a year ago and if the mark-up were 20 per cent, and if the price today is 15p, the mark-up should not be regarded as 20 per cent. That is a fallacious argument. After all, is the unfortunate shop-assistant not entitled to an increase, does heating not cost more, have rents and rates not gone up? A trader who was able to exist on a 20 per cent mark-up last year could not exist on less than 20 per cent this year because the article had increased in price and so had costs.
I fear that to some extent there is written into the Minister's speech a suggestion that small shopkeepers in particular and generally persons in trade have been getting too high profits. I do not accept that. This is a country with a small population. In Britain, with high populations in towns, the turnover even at small shops can be spectacularly higher than here and they can therefore make higher profits on smaller percentage mark-ups. I do not hold that profits in shops here have been excessive.
The solution is to have price investigation and control. In that way justice would be done and would be seen to be done. I do not think this Bill will reduce prices for the consumer. There may be individual instances of some trader hitting the jackpot. An instance I could give is of somebody importing Italian fashion hats. I understand a profit of 150 per cent can be made on them. I am sure that if one were to bottle French perfume in a back room one could make 300 per cent if you could sell the thing. But how many people want Italian fashion hats or French perfume bottled in back rooms? The number is strictly limited.
For that reason the housewife who goes to the supermarket to buy ordinary grocery goods or ordinary clothes for everyday use for her children, or the ordinary man who goes to buy a suit, are not paying to the shopkeeper a very high percentage mark-up. At the same time, as I have said, it is necessary there should be investigation.
I do not wish to delay the House further except to express the hope in relation to this legislation that when action comes to be taken on a projected price increase it be taken swiftly and that the application should be refused, partly granted or given fully. I speak from experience of the disastrous flour and bread inquiry. I was on oath in the box for an hour in private session and I was present for more than half a day at that inquiry. My impression of that disastrous inquiry was that it was entirely the fault of the Government that a situation was created in which the unfortunate women of this city are now paying back-money on bread. They are not only paying the increase, the justice of which one can argue about, but also back-money and will pay it, if I remember rightly, for the rest of this year.
What is needed is fair play for the professional people and for their clients, swiftly applied, fair play for the shopkeepers and their customers, swiftly applied, and, perhaps most important of all, fair play for the industrialists and their workers, swiftly applied. In this way pace can be kept with creeping inflation which will always be with us; wage increases can be granted perhaps more often but can be smaller and have less of an impact on our exports and on our employment. Price increases may occur more often but again these will be smaller and will be fairer and will keep our industry and our distributive trades, our professional services and the people who have to avail of them in line with the increases in costs. The Government have, in my time in this House, constantly postponed the unpleasant thing until the propitious political moment, with disastrous results afterwards, and have even gone to the stage of disregarding it if they felt so inclined. Anything like that will do harm to our economy. Our economy must progress by stages and month by month adjustments must be made. If there are more numerous adjustments they will be less radical and less punitive as far as employment is concerned, as far as industry is concerned and as far as the ordinary consumer is concerned.
