asked the Minister for Finance the increase in food prices for the year ended mid-November 1978 and the estimated increase between mid-November 1978 and mid-February 1979 inclusive of the effect of the first phase of withdrawal of food subsidies.
Ceisteanna—Questions. Oral Answers. - Food Prices.
11.
The consumer price index number for the food commodity group rose by 11.6 per cent between mid-November 1977 and mid-November 1978. It is not possible to say at this stage what the overall increase in food prices will be between mid-November 1978 and mid-February 1979. It is estimated that the partial removal of food subsidies will add about 2¼ per cent to the food commodity group price index in that period, or less than threequarters of 1 per cent to the consumer price index for all items.
Would the Minister not agree that whichever 12 months period one took—say, February 1978 to February 1979—the food price index itself will have increased by at least 13 per cent? In that context, which is at least 50 per cent higher than the average national rate of inflation, would he agree that the decision of the Government to remove food subsidies becomes even more perplexing?
I am sure the Deputy is well aware of the fact that food subsidies operate indiscriminately to benefit the rich as well as the poor. I imagine the Deputy would welcome an arrangement whereby the benefits intended to be conferred would be confined on the less well-off.
In view of the abolition of food subsidies, its effect on the consumer price index and the food sector, and of an increase of at least 13 per cent on food items in the past 12 months, might I ask the Minister, through the Chair, if he will have an increase in social welfare benefits of at least 13 per cent in the forthcoming budget?
I would suggest the Deputy should wait until next Wednesday.
Would the Minister agree that the removal of food subsidies does not affect equally the poor and the well-off and that it is very much harder on the less well-off than on the well-off?
There is some substance for what the Deputy says, but equally there is substance in the opposite argument: that food subsidies, as such, benefit many people who do not need the benefit.
That is a point which should have been raised three years ago.
Does not the November report of the National Prices Commission, which contains extensive data relating to household budget surveys, clearly dispel the doubt which seems to exist in the Minister's mind relative to the impact of food subsidies on the lower income group, on the poor, elderly and those generally on lower incomes?
I would suggest that Deputy Desmond ought to address himself to the question of whether or not he is in favour of food subsidies benefiting the rich.
To use the Taoiseach's argument, that is puerile.
That was not my argument; it was my suggestion.
Might I ask the Minister if he is not aware that the removal of food subsidies affects low income workers generally, not merely those in the social welfare categories, and that therefore the removal, even if there were an increase in social welfare benefits in partial compensation, would leave important groups of the community significantly worse off? Does he propose to take any action to deal with that problem?
Might I say—before I reply to Question No. 12—that the suggestion in regard to social welfare came from Deputy B. Desmond and not from me?
Has the Minister given any consideration to the fact that food is much cheaper in Northern Ireland than it is in the Republic, that the removal of food subsidies in the Republic will mean that more people will be going into Northern Ireland to buy goods, which they are entitled to do under EEC regulations, and that this will have an adverse effect on the commercial life of Border counties and perhaps even counties far removed from the Border? Would the Minister care to comment on that?
There are, as the Deputy knows, many areas apart from food, where this kind of problem arises both ways, depending on the prices of different commodities. It simply illustrates another of the problems inflicted on this country as a result of the separation of the North from the South.
Might I ask the Minister, when he refers to the economic hardships of this country, to what is he referring?
We cannot have a debate.
It is very important, a Cheann Comhairle.
It may be important but it is not relevant.
The Minister referred to the economic effect on this country. Could the Minister tell me what he is talking about?
I am calling Question No. 12.
Am I entitled to ask a question?
I have called Question No. 12 twice. Let us maintain some order.
I wish to raise this subject matter on the adjournment.
I will communicate with the Deputy.