Dáil Éireann debate -
Tuesday, 2 Dec 1980

Vol. 325 No. 1

Private Members' Business. - Control of Prices:Motion.

Mr. Bermingham

I move:

That Dáil Éireann notes the continuing failure of the Government to take decisive action in the area of the control of prices, notes the continuing attempts by the Government to evade its responsibilities in this area and further notes that the rate of inflation is still almost 19 per cent, and calls on the Government to implement its undertaking in page 10 in the Fianna Fáil Manifesto to discourage increased costs and prices in all areas where it has control or influence so that the impact of inflation on the community, and in particular, on the less protected sections of the community, will be abated.

Most of this motion is a quote from the Fianna Fáil manifesto. One of the important commitments entered into by the Government prior to the last election was to take effective action to reduce price increases. In this as in all other areas of public policy they have failed lamentably. According to the manifesto, price rises this year would be of the order of 5 per cent. The White Paper, National Development 1970-1980, published in January 1978, restated this commitment when it stated that the Government's target was a reduction to 5 per cent in the rate of inflation in 1980. That target was restated in a Green Paper, Development for Full Employment, published in June 1979 two years after the Government took office.

What is the reality this year? Prices in 1980 will increase by around 19 per cent, almost four times the Government's target. The pound in the consumer's pocket at the end of this year will be worth one-fifth less than it was at the beginning of the year. Not only therefore have the Government failed to meet their pre-election commitment on prices, but they have landed the country with a rate of inflation which is one of the highest in Europe and is effectively destabilising the whole economy.

It is worth recalling the position when the Government took office. Inflation in 1977 had been brought under control. In the years to mid-November 1978 it had dropped to 7.9 per cent as a result of the policies of the previous Government. From then on, however, prices once again began to rise rapidly. By mid-November 1979 the annual rate of inflation had more than doubled to 16 per cent and this year it will increase further to 19 per cent.

The question arises why the position has deteriorated so rapidly since the Government took office. What has caused prices to rise by 50 per cent since the last general election? Oil price increases have certainly contributed. Nobody denies that, but it would be wrong and dishonest to pretend that oil prices are largely to blame, as the Government say they are. The greater part of the blame rests on their mis-management of the economy. This is the case for a number of reasons. In the first instance the financial handouts which followed the election and which were supposed to increase demand for domestic products had two completely different effects. One was to boost inflation and the other to increase imports. In other words the financial handouts the Government promised in order to win the last election were responsible for directing inflation from a downward to an upward trend. The Government decision to reduce food subsidies in the 1979 Budget contributed directly to inflation. That decision added over 3 per cent to our food prices and contributed directly to the upward trend in inflation which began in the previous year.

The Government's decision to increase indirect taxation in the 1978, 1979 and 1980 Budgets pushed prices up in each of those three years. These were specific causes of the high inflation rate. Above and beyond all these, however, the Government must face the fact that as a result of their policy, particularly on taxation, the country has entered into an incomes and prices spiral which is dangerously high. Incomes are now chasing prices in a vicious circle which appears to be out of control. The result is not only falling living standards for most of our people but rising unemployment and loss of production.

High inflation is not just an economic problem, it is also a social issue. Price increases this year are cutting savagely into the living standards of the poor. Pensioners and low income families are worse off this year than when the Government took office. There is no doubt about that. Escalating house prices have put a home of their own outside the reach of an increasing number of young couples. At the same time the local authority housing bill has been savagely cut back. High interest rates combined with high inflation are leading to company closures and redundancies. This year alone almost 30,000 workers will lose their jobs because of the crisis in our economy.

Most of the trouble in our economy has been caused directly by Government action and inaction and by the rising rate of inflation. It is no harm to give the background to the debate. In regard to the promises and vicious election campaign that Fianna Fáil began in 1977, when they claimed the country was destroyed by the prices that existed at that time, they gave an undertaking that they would do something about it and reduce the rate of inflation in no uncertain terms. The former Taoiseach, Deputy Lynch, went on a grand tour of the country and came to my constituency. He went into a supermarket in Newbridge. A woman held up a pound of butter to him and asked: "What do you think of the price of that"? He said: "Put us in and we will do something about it". They were put in and he did something about it. He took the subsidies off food and increased the price of a pound of butter by 20p. That is the kind of thing Fianna Fáil talked about at the last election. They said they would do something about the terrible prices that were in existence at the time. Now at the end of three years we know what they did about prices. We know that the rate of inflation is 19 per cent. We know that one of their first actions was to remove the subsidies on food.

There is collective responsibility in any Cabinet. A Minister of this Government is quoted today in the newspaper as saying that food prices are too low. That has not been denied. The role seems to be changing, but there used to be collective responsibility in a Cabinet. The Minister for Agriculture is reported as saying that food prices are too low. There is not much recognition there for the unfortunate poor or old-age pensioner living on £21 a week. That is what they are living on and nobody should think otherwise. People are living alone on £21 or £22 per week who are hungry, and there is no use in saying anything else. They are hungry because of the direct action of this Government in doing away with the subsidies on our food. The whole of those people's income is spent on food, and action of that kind hits these unfortunate poor far more heavily than it does anybody else. When I speak of the poor I am carried away because I know what it is to be poor. I know what it is for an unfortunate widow to rear three or four children on the kind of pittance supplied by this State. To gain paltry sums the Government did away with the food subsidies and these people suffered. Fianna Fáil claimed during the period of the last Government that they advocated the introduction of food subsidies. In their long history they have never been known to introduce food subsidies but they have been known on several occasions to take them away. They might have advocated them when in Opposition. If ever there was a time for a Government to do something about inflation it is now and they should introduce food subsidies as the former Government did.

I will give a few examples of the increases. These are not my figures, they are figures given in answer to a question in this House. For example, bread is part of the basic diet of the poorer sections of our community. The increase in the price of bread since this Government took office is 71 per cent. These are the Minister's own figures. Milk, another basic in the diet of our poorer sections, has increased in price by 63 per cent, butter by 67 per cent and clothing by an average of 50 per cent over various items. I will go on to the fuel which our unfortunate poor have to use in order to keep themselves warm. Turf briquettes have increased in price by 65 per cent and bottled gas, which unfortunately all the poor in the rural areas have to use, has increased since this Government took office by 80.7 per cent. I do not represent a Dublin constituency but I know that the increase in the price of piped gas in this city is the wonderful figure of 137 per cent.

In my opening statement I mentioned people who have been struggling for years to buy a home of their own and who have been lucky enough to get a mortgage from a building society or some such body. The increase in the interest rate on these people's mortgages is 66 per cent over the past three years.

Every member of this Government promised in 1977 that not alone would they reduce the rate of inflation but they would reduce the prices of the commodities that were necessities of life, and this is the return that they have given us. I could go on and on. I could talk about petrol, the price of which this Government increased deliberately——

Mr. Enright

Hear, hear.

Mr. Bermingham

—— by 20p a gallon in the last budget. That was the most irresponsible action ever taken by any Government in the history of this State. The increase in that tax on petrol went right through the economy and it set inflation roaring mad. This Government ought at this stage to say honestly and truly that they can do nothing about this inflation.

I turn to the area for which I am spokesman for my party, that of agriculture. It is well known and admitted by Government Ministers that the farmers are in a desperate state. Only this morning I was talking to the manager of a bank who asked me if I thought the Government would do anything about it. I told him honestly that I did not think they would and he said, "These people are coming in here to me and they owe money which they borrowed at the rate of 10 per cent when the last Government were in office but now they are paying 18 and 19 per cent". That is impossible for them and it is due directly to the reckless policies of this Government who raised the rate of inflation in their period in office.

Apparently a survey has indicated that Fianna Fáil were handling the economy well, but that must have been taken by a Fianna Fáil cumann who interviewed only Fianna Fáil people. I think that about 1,000 people were supposed to be interviewed in it. How anyone could think or say that our economy has been handled in any kind of manner that would bring honour to a Government is beyond me.

I come to another item in which I have a special interest and on which my party put down a motion here a couple of years ago, and that is the rate of increase in motor insurance. The Minister for Industry, Commerce and Tourism and some others were talking about the Minister for Prices in 1977. We hear very little talk about that now and a number of organisations now suspect that they must support Fianna Fáil although they claimed to be independent at that time. Another promise by Fianna Fáil in their manifesto was that they would have announcements on the media about any increase and how it was justified in the CPI. They did start off by making announcements in the early days when inflation was dropping as a result of the previous Government's policy. That has stopped and there is not a word now in the media about price increases. Fianna Fáil promised in 1977 that they would monitor prices in a serious way and that they would publish on radio and television and in the media generally the reasons, if any, for price increases.

We now see that the insurance company who control more than half the motor insurance business have been granted a 35 per cent increase and no attempt has been made to justify it in the media. The matter was discussed here one evening on the adjournment. Prior to becoming a Member of this House I worked for a while as an insurance agent and I have some knowledge of this area. the company to which I am referring started off as a co-operative, owned and fully maintained by its members. Then they formed themselves into an insurance company, separating from the co-operative for which they continue to collect a membership fee. They have made huge profits from the members of their own co-operative and yet they have been granted an increase of 35 per cent. Does the Minister for Industry, Commerce and Tourism—or, as I would prefer to call him, the Minister for Prices—own this company? In the light of the huge profits made by them, it is hard to believe that anyone could allow them to mulct their members in the provision of insurance. It must be obvious to any ordinary person that these people are using money collected for motor insurance for the purchase of property and newspapers. There is no doubt that the money for these enterprises has come from motor insurance premiums and membership fees paid by working people who must travel in some cases up to 40 miles to their jobs in order to earn enough money to pay these outlandish sums. Young people are being asked to pay as much as £350 for third party cover. The Government are not making any attempt to control this company. They gave an undertaking to their membership that they would plough back profits to the relief of insurance premiums but instead they are expending huge sums on the purchase of property. Their promises to their membership were probably made before they realised that they would be dealing with such a soft Minister who would allow them to mulct policyholders and young people looking for first insurance. That is the policy of Fianna Fáil and responsibility to deal with this matter rests on their shoulders.

It was bad enough that Fianna Fáil made so many foolish promises during the last election campaign, but it was entirely stupid to try to carry them out. A typical example was the removal of tax on motor cars without any provision for the replacement of that tax. This created the illusion that money was there for anything and that the Government could take any action without ruining the economy. If they did not appreciate the consequences of such action they are not fit to be Ministers in any Government. They fuelled inflation while promising full employment, and the two are incompatible. The rate of inflation is higher on food than the average 19 per cent and this also applies to materials and inputs for industry. It was one of the factors in the closing down of so many industries and the redundancy of 30,000 people last year. Through their lack of initiative the Government failed to control the rate of inflation and allowed this to happen. The rate of inflation in Germany is about 5 or 6 per cent while here it is 19 per cent. Yet the Government expect our industries to compete on the European market and they expect workers faced with huge price increases to accept pay increases lower than the rate of inflation. This is the worst type of Government any country could have.

I wish to speak about the effect of inflation on local authorities who are, in rural areas, very important employers. The Minister for the Environment allowed local authorities to increase their own rates by 10 per cent. They refused to allow them to increase the rates any further even though the rate of inflation was 19 per cent and the increase in the price of materials purchased by local authorities is far higher than 19 per cent.

The price of road-making materials and sand has increased by about 40 per cent and tarmacadam and tar by 36 per cent. The result of the difference between the 10 per cent increase in rates and the increases in the price of these commodities can be seen in our roads. I do not have to tell anybody who travels in this country what has happened to our roads. Not alone are they the worst in Europe but they must be the worst in the world, except perhaps in some undeveloped African country. A Fianna Fáil member of this House told me he would prefer to pay £500 tax and be able to travel to other constituencies than travel on our roads as they are at present. That is the truth. There are people in my constituency who travel 30 and 40 miles to and from work every day. There cars are being wrecked because the local authorities are unable to maintain the roads due to the limits being put on them by this Government.

The Kildare county manager is boasting that he did not have to lay off any men this year. There are 100 fewer people working in the Kildare County Council now, because of retirement and so on, than there were two years ago. The council cannot recruit——

An Leas-Cheann Comhairle

We are getting completely away from prices.

Mr. Bermingham

——because of inflation and because of the increases in the cost of road making materials and machinery allowed by this Government. That is a point worth noting.

An Leas-Cheann Comhairle

That is in order but the Deputy cannot discuss roads and unemployment.

Mr. Bermingham

I am telling the House that as a result of the Government's inactivity in this area this is happening at local authority level.

I have dealt with food but there are other areas where employment is affected. The price of meat has increased by 35 per cent, although the rate of inflation is only 19 per cent. There must be something wrong there. It goes without saying that this affects beef production because beef cannot be sold. This affects 1,000 workers in my constituency and I am sure there are people involved in the meat processing industry in other areas who are also affected. What answer have the Government? I do not think they have any; they have not given any evidence that they have an answer.

Anybody who applies for permission to increase his charges is granted that permission. This is the type of complaint we heard in 1977 from the then Deputy O'Malley. Telephone charges have increased beyond recognition but the quality of the service has not improved. That, too, was one of the complaints heard in 1977. We all know that despite the brutal increases in charges there has been no evidence that the service has improved. The Minister said there will be a phone in every house soon but the phones are not there now. Where they do exist they are no good to anybody because a person cannot get in touch with anyone else by telephone.

Let us get down to brass tacks. This Government have not done anything to help the people. They have carried out a deliberate policy which increased the cost of living and the rate of inflation. The price spiral has gone mad. I want to mention a few very important items.

The price of sugar has increased substantially with the result that our sweets and confectionery are being priced out of the shops. I challenge the Minister to go into the smallest huckster's shop or largest supermarket where he will find our confectionery, sweets and chocolates — some of the most famous commodities are manufactured in Ireland — being replaced on the shelves by cheaper British commodities. This will lead to unemployment. It means we have a sugar surplus. The EEC say we are producing too much sugar but we could use our own sugar if inflation was not so high. This will also lead to unemployment in this industry.

The price of dried vegetables has increased by 44 per cent. This is an area over which the Government have control because these commodities are produced by State bodies. The Government say they cannot interfere with these companies but I say they can. The Government have been too free to grant price increases for which there was little or no justification. I have instanced several areas. The Government have not taken any action in this area, except that they met in Barrettstown Castle last year for four or five days to see what cutbacks could be made, what subsidies could be reduced or done away with and in which areas they could save money.

An Leas-Cheann Comhairle

The Deputy should conclude now. His time is almost up.

Mr. Bermingham

I thought I was entitled to 45 minutes.

An Leas-Cheann Comhairle

No, 40 minutes.

Mr. Bermingham

I need one minute to conclude. I have proved beyond all reasonable doubt that the Government have not made one move to keep prices down as promised in the manifesto. They cannot point to one issue on which they have done anything to control prices. The Minister should be called the Minister for bankruptcy of ideas.

Minister of State at the Department of Industry, Commerce and Tourism (Mr. Meaney)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and add:

"notes and approves of the measures being taken by the Government to control prices in the present difficult economic circumstances."

I have listened to all the gobbledgook, with no positive proposals on how to handle the problems of today or how to run the country, and to the tirade of criticism, which does not measure up to facts. I would like to compare the record of the past three years — I will not discuss election year, 1977—and the three years of Coalition Government. I will not discuss election year 1973. With regard to prices and inflation, I will go over the years 1974, 1975 and 1976. That is fair to the Coalition Government. I will go over the years 1978, 1979 and 1980. The combined inflation of 1974, 1975 and 1976 was 55.9 per cent. I would like the Opposition parties to realise that. The combined inflation of 1978, 1979 and 1980 was 39.1 per cent.

Mr. Bermingham

That was all denied.

Mr. Meaney

I did not interrupt when the Deputy was speaking. The boot is getting tight.

An Leas-Cheann Comhairle

No interruptions, please.

Mr. Meaney

Fifty five point nine per cent as compared to 39.1 per cent. That is the record.

Mr. Lipper

You promised to reduce prices.

(Interruptions.)

An Leas-Cheann Comhairle

Deputy Lipper, please. If Deputy Lipper is not prepared to listen he should leave the House.

Mr. Meaney

The cost of living is down 16 per cent.

Mr. Lipper

That is a fraud.

An Leas-Cheann Comhairle

The Chair must be obeyed. There were no interruptions for the last 40 minutes.

Mr. Lipper

I am sickened. I will leave the House.

An Leas-Cheann Comhairle

There is no one keeping you here.

Mr. Meaney

Good luck to you. You cannot take it, that is why you did not appear in Donegal.

On 20 February last, Minister O'Malley spoke in this House on a motion on prices from the Labour Party, most of which read word for word the same as the motion now before us. On that occasion the Minister thanked the Labour Party for providing him with the "opportunity of a regular six monthly appearance to speak in this ritual debate on this ritual motion". He predicted that we would be back again in six months' time for the next instalment. I am glad to see that his prediction has come true, although slightly later than expected.

The Labour Party motion before the House refers, once again, to the undertakings on prices given in the Government's 1977 Manifesto and asks the House "to note the continuing failure of the Government to take decisive action in the area of the control of prices and its continuing attempts to evade its responsibilities in this area". I will outline for the House the actions which have been taken by the Government in accordance with its undertakings in 1977. I will show that the results of these actions are that we now have in operation in this country a system of price control which is more effective and more meaningful than when we took office. The changes which we have introduced have resulted in a far more rigorous examination of price proposals than heretofore. The Government's influence and control in the prices area has increased. Procedures have been tightened up and every avenue has been explored to maximise the effect of our price control arrangements.

We undertook in 1977 to review the structure and operations of the National Prices Commission. This examination was embarked on by the Minister immediately he took office. As a result of the examination and a number of meetings between the Minister and the National Prices Commission, changes were introduced in a number of areas. These included such items as price contracts, notification of price increases, export exemption, transfer pricing, the whole question of currency fluctuations and new rules and guidelines for the processing of price increase applications. The Minister also expanded the membership of the commission to include an economist.

I must say at this stage that in my own short period as Minister of State at the Department of Industry, Commerce and Tourism I have been amazed at the volume and complexity of the work continually undertaken by the National Prices Commission. I regret very much that there is a sustained campaign by the opposition to lower the standing of the National Prices Commission. It is unfair and unfounded. They are, indeed, to be congratulated for the service which they have provided and continue to provide for this state. I believe also that the way in which the Minister has undertaken his responsibilities in regard to price control has served as an encouragement to the commission in their difficult tasks. Minister O'Malley has taken an active interest in price control matters. Under the previous administration the then Minister simply acted as a rubber stamp in so far as National Prices Commission's recommendations were concerned. Unlike his predecessor, Minister O'Malley subjects National Prices Commission recommendations to close scrutiny. In cases where he felt that applicant firms could absorb certain cost increases without increasing their prices and without damaging their ability to remain in business he has refused or reduced the recommended price increases.

In the pre-election manifesto Fianna Fáil undertook to investigate middlemen's margins in areas where there was an inordinate difference in the prices obtained by the producer and the price paid by the housewife for the same products. The Minister asked the National Prices Commission to undertake these investigations and directed their attention to such areas as the profit margins on meat, poultry, fruit, vegetables, fish, and so on. In the case of poultry the commission discovered what they regarded to be an unjustifiably large increase in the gross margins on chickens. Acting on the recommendation of the commission the Minister made a maximum prices order on chickens which had the effect of reducing significantly the price of chickens at the time.

As far as meat was concerned, th commission concluded in their December 1977 report that, despite increases in gross cash margins on beef and lamb in Dublin, there was no evidence of excess profits in the trade. The commission have continued to monitor gross cash margins on meat throughout the country to ensure that margins do not increase unreasonably.

A study of middlemen's margins on fish revealed that there was no evidence of excessive profits on the part of wholesalers, processors or retailers.

The study of middlemen's margins in relation to fruit and vegetables concluded that margins were not excessive except, possibly, in supermarkets. Formal control of fruit and vegetable margins by maximum prices order would create serious administrative difficulties; it would be virtually impossible to relate a controlled price to a clearly defined quality of produce and this would render an order ineffective.

The Commission continue to monitor prices being charged in these areas. It has been found that, in a good many of them, the best way to reduce excessive margins is through improved efficiency and increased competition. One of the best ways of increasing competition is by ensuring that the general public have as much information as is possible with regard to prices. The fullest possible dissemination of information on prices was another one of the important undertakings given by the Government in the 1977 manifesto. As a result of the implementation of this undertaking, my Department now provides an almost continuous flow of information to the national newspapers. In addition, a member of the National Prices Commission presents a weekly prices programme on RTE 2 Television. The Commission recently had a survey undertaken to ascertain the effectiveness of the prices information being published in the media. I am glad to say that the survey concluded that a great many people find the information provided extremely useful. The survey also revealed that the Tam ratings of the prices programme on television compare very favourably with other similar type programmes.

The manifesto also committed the Government to control by legislation of monopolies and mergers. This legislation was enacted and is being enforced rigorously. We committed ourselves also to abolishing the seven-day rule arising out of the UK outer zone in respect of petroleum product prices. We abolished it and now applications for price increases on these products are examined strictly in relation to cost increases already incurred.

We undertook also to investigate fully differences in prices for similar products as between Northern Ireland and the Republic. This undertaking has been met fully and the matter continues to be an on-going part of the commission's work. Deputies will be aware that the most recent National Prices Commission Report published — the report for August/September last — contains the results of a survey of prices of spare parts of passenger motor vehicles. The survey concluded that, in some instances the price of spare parts in Ireland is very much out of line when compared with Northern Ireland/UK prices and the commission are pursuing the matter further.

The final item in the manifesto with regard to prices related to the accounting procedures of the ESB. These have been examined by a high-level inter-Departmental working party whose report is now under examination in the Department of Energy.

Electricity prices have risen sharply over the past 2 years. They are a clear example of the effects on prices of external pressures which are outside the control of any Irish Government. The ESB are dependent for 80 per cent of electricity generation in this country on imported oil. Deputies do not need me to tell them what has happened to the price of oil in recent years. The figures are well known. I will just remind the House that, in the last decade, the price of a barrel of light Arabian crude has increased by nearly 2,000 per cent. The effect of cost increases of this magnitude on the price of electricity is easy to understand. Opposition spokesmen may indulge themselves protesting to the newspapers about each and every price increase but when they are faced with the harsh realities of economic facts their protestations are seen for what they are, that is, simplistic.

There are no easy solutions to rising prices in times when costs are rising. There is no magic wand which will make rising costs go away. Given the open nature of the Irish economy, we cannot insulate ourselves completely from the adverse forces or influences operating in markets abroad. We cannot simply award ourselves large wage increases in order to compensate for price increase caused by the increase in the cost of the imported raw materials which we need to keep industry going. Increased wages and salaries not matched by real increased productivity must simply be passed on in increased prices on the home market and, therefore, in the final analysis are of no real benefit to the people who obtain them.

In 1977, the Government committed themselves to improving the price control systems to ensure that the operation of price control is effective and is geared to meet changing economic circumstances. I believe we have achieved this. As the manifesto put it "Government policy must be directed towards discouraging increased costs and prices in all areas where it has control or influence". This is the policy which the Government have actively pursued since taking office. It is safe to say that the system we have now in Ireland is one of the strictest systems operating in any country of the EEC. Our system ensures that in most cases only vouched increased costs which have been incurred and which cannot be absorbed by firms can be passed on to the consumer in higher prices.

A strict price control system cannot, however, of itself, provide all the answers. It must be clearly understood that the cost pressures which nurture our inflation have both external and domestic origins. The big rise in import prices, including oil-based products, reflects the international and political nature of the current inflation and is indicative of the widespread character of the problem. The urgent need is to win acceptance of the fact that people cannot be compensated for high oil prices. These make the country as a whole poorer and if we want oil we must be willing to pay the higher prices to the OPEC countries. Trying to resist this by claiming higher pay packets for all only makes matters worse, because more paper money cannot raise living standards, it can only raise prices and as prices go up, it means more Irish jobs are lost to competition from other countries. If we overcome the problems in the areas of cost increases which are within our control and, indeed, industrial relations, we can confidently expect that our performance can at least match that of many other European countries. There is still a strong momentum of new industrial investment, as a result of the efforts of the IDA to attract more firms into Ireland. And since this is modern industry with the most up-to-date technology, it is well placed to come through the present recession in relatively good shape and to benefit from whatever opportunities become available in the international market place.

The Labour Party motion before the House refers to the impact of rising prices particularly on the less-protected sections of the Community. I can assure the House, and the country, that there is no lack of awareness on the Government's part of the effects that price increases have on ordinary people. Opposition spokesmen in their statements try to give the impression that the Government are in some way oblivious to the feelings of the people. I am glad to say that the people themselves are not fooled by these statements. I say that specially to Members of the Labour Party who were not involved in the recent by-election, who surely must have heard of its result and the way the people reacted to Government policies. The Government's degree of awareness and concern for the plight of the less-advantaged sections of the Community has been amply demonstrated in successive budgets since the Government took office. Major improvements in the income of the less well-off have always been the central element of the Budgets since 1977. I would like to quote some figures to emphasise this point. In quoting these figures I should say that the last speaker maintained that prices had risen 50 per cent since 1977. Actually that is not correct; it is somewhat above that figure. Be that as it may I should say that since 1977 unemployment benefits — even with the admission by the last speaker of an inflation rate of 50 per cent — have been increased by 64 per cent — surely demonstrating a plus-14 per cent situation. Since 1977 also widows pensions have been increased by 78 per cent, contributory old pensions by 76 per cent, non-contributory old age pensions by 79 per cent and children's allowances by 90 per cent. Surely that is a firm answer especially to the last speaker who wanted to give the impression that increases granted the less-welloff members of society had not kept pace with the rate of inflation. Certainly they have done. Indeed he quoted specific cases, one being of old people living alone. We are all aware of this situation and the fact that probably these people will never have sufficient income because it is very difficult to live alone. But the last speaker forgot to mention — and it is only correct to put this on the record — that it was this Government who initiated all those little additions those people got, which they cherish. For example many of these people qualify for the free electricity allowance, the living alone allowance, the free fuel scheme and — something berated by the last speaker — the fact that there are now no rates payable on their private dwelling places. Indeed the Deputy referred to that matter a number of times almost giving the impression that he wanted rates re-introduced on private dwellings. It was difficult to know what the Deputy was advocating. The fact that these people do not now have to pay rates on their dwellings is of great benefit to them. Before that change was brought about a person living alone often paid £100 per annum in rates. Thanks to Government policy initiated in 1977 they no longer have to do so.

Mr. Enright

There are a great number of people living in caravans at present who cannot get houses.

Mr. Meaney

I was surprised the last speaker referred to rates in a manner appearing to advocate their reintroduction. There were many people living in caravans in 1977, when the former Government had not even the money to hold a census. Deputy Enright is talking about housing but, when he remembers that the Coalition Government could not even hold a census, then he must ask himself how in the name of goodness they were going to undertake other things.

It is clear from these figures that the Government have always had, and continue to have, a firm commitment to improve, in so far as is possible, the position of those most vulnerable in our society.

In 1977, the Government committed itself to developing an effective price control system. In the operation of an effective price control system, it is necessary to hold a balance between the competing needs and demands and pressures of the consumer and those of industry. An effective price control system must cater for these needs in a consistent and practical way. The powers which the Government possess in regard to price control have been used and can be seen to have been used, over the past three years, in this way. The system is strict, fair and equitable and is applied strictly, fairly and equitably. The present economic recession which is being experienced throughout the world creates many problems for us. There continues to be however, in my opinion, considerable opportunities for our economy which can be obtained through our own initiative and if we exercise prudent management of our affairs. I believe that the way in which prices are controlled on the home market is of paramount importance in this recessionary period in that it can help to set a sound economic base from which to grasp the opportunities for progress which will arise in the future. By implementing the commitments on prices made in the 1977 manifesto, the Government have ensured that this will be possible.

I should like to refer also to some other points raised by the last speaker in regard to which, by the end of his contribution, he was contradictory. He dwelt at length on the increased cost of the necessities of life, for example, stating firmly that the cost of meat had increased by 35 per cent. He also said there was a substantial increase in the price of sugar, vegetables and milk. Earlier he had said that farmers were never worse off. He says on the one hand they are not making enough and on the other hand that they are making too much. He cannot have it both ways. He cannot run with the hare and hunt with the hounds. He must face the position as it is. It is hard to understand his argument. He says that meat is up 35 per cent and that this is affecting jobs in his constituency. Earlier he said it was because the farming community were not making enough that there would not be enough produce from the land. One of these statements contradicts the other and that is the way the Labour Party works at present.

Mr. Bermingham

The rate of inflation is destroying——

Mr. Meaney

The motion which is down here is attacking——

Mr. Bermingham

The rate of inflation——

An Leas-Cheann Comhairle

The Deputy has already spoken.

Mr. Bermingham

I am only explaining——

An Leas-Cheann Comhairle

The Deputy is not even entitled to do that at this stage.

Mr. Meaney

I think the previous speaker referred to the public ownership of land in Cork. I do not know what he meant by it but it is something his party are since trying to get out of.

Mr. Bermingham

If the Minister read the speech he would know that is denied.

Mr. Meaney

The Deputy is very worried about it.

An Leas-Cheann Comhairle

The ownership of land does not come into this debate.

Mr. Bermingham

The Minister is misquoting——

Mr. Meaney

The Deputy is trying to worm out of it.

Mr. Bermingham

Not worm out of it at all; the Minister can have my speech.

Mr. Meaney

The Deputy said agriculture was in a bad situation. When the Coalition Government were in power in 1974, it would take the price of two suck calves to buy a chicken and the Deputy knows that.

Mr. Bermingham

It was never in such a state as it is now.

Mr. Meaney

It was.

An Leas-Cheann Comhairle

Suck calves and chickens have nothing to do with this debate.

(Interruptions.)

An Leas-Cheann Comhairle

Both the Deputy and the Minister should keep to the motion before the House.

Mr. Meaney

Local authorities are complaining about a 10 per cent increase and say they should have got 12, 14 or 15 per cent. That is right, but are the Opposition parties suggesting that income tax should go up? They have not spelled that out. In the past 30 years or more how many local authorities really went higher than 10 per cent or pro rata in relation to inflation? Very few of them did.

Mr. Bermingham

I challenge that.

Mr. Meaney

There was mention of the cost of living and how young people would manage. The rate of loans was never higher, the amount of loans for which young people can qualify. The amount of income that can qualify for a loan was never as high as it is at present.

Mr. Bermingham

And a house is three times the price it was in 1977.

An Leas-Cheann Comhairle

Deputy Bermingham finished about 25 minutes ago.

Mr. Meaney

There was mention of the car tax and I am not sure if it was being suggested that it should be brought back. People have been trying to associate this with the bad roads.

Mr. Enright

Is the Minister recommending that it should be brought back?

Mr. Meaney

No, but the previous speaker did.

(Interruptions.)

Mr. Meaney

We heard about the great advantage it was to those who had to drive to work. At that time it was costing in car tax alone almost £100 per cent, from £50 up. That was a big imposition on top of insurance.

The Deputy knows that the Government have laid down guidelines as regards car insurance. It will have to pay for itself. Reports over the past few years that have been examined by the prices commission show that what the companies take in respect of car insurance is not equal to what they are paying out. They must be solvent, otherwise victims could not get damages. The Deputy opposite spoke about profits and money being moved in one company from one section to another, if he has anything to say in that regard, he can write to my office giving the facts. The challenge is up to him. Let him come outside the Dáil and give me the facts I can guarantee to examine them fairly. The Deputy should not stand up and talk ad lib through his hat.

Mr. Bermingham

The facts are there.

Mr. Meaney

I am making a fair offer to the Deputy. It is unfair to make statements without backing them up. The prices commission examined that particular claim which was for approximately 30 per cent. They finally allowed 24 per cent across the board. That was allowed to other companies also and there was not a word about that. Nobody likes to see insurance go up but the level of damages awarded here is very high by European standards, as Deputies know. If Deputies opposite can prove that there is anything wrong or underhand taking place in the case of any company, I would like them to come to me and they will be welcome if I can help them out.

Mr. Bermingham

What about the huge profits returned by this company?

Mr. Meaney

Car insurance in this country, quoting from memory, was carried on at a loss last year of approximately £5 million. If the Deputy can prove otherwise he is welcome to produce his facts.

Mr. Bermingham

This company was set up to deal with cars.

An Leas-Cheann Comhairle

The Deputy has already spoken.

Mr. Meaney

Both Deputy Bermingham and Deputy Lipper were very sore when I outlined to them this Government's policy over three years. We do not take the election year into consideration because that is a divided year, so to speak. Taking 1974, 1975 and 1976, the rate of inflation over those three years was 55.9 per cent. In 1978, 1979 and 1980 it was 39.1 per cent. That is sufficient answer to the Opposition speakers. When the House considers the facts that I have put before it I am sure it will readily accept the amendment to the motion.

Mr. Enright

In dealing with car insurance the Minister challenged Deputy Bermingham to come outside the Dáil——

Mr. Meaney

I did not say "challenge"; I asked him to tell me.

Mr. Enright

I shall not argue on that but I should like to draw the Minister's attention to an important development over the weekend which I belive should be investigated by his Department. I should like his Department to examine the position in regard to oil and diesel fuel that have been freezing over the weekend. The cost of oil and diesel is excessive, but, as the Minister of State is aware, last year because of the intense cold some of it turned to jelly.

Mr. Meaney

Deputy Leyden was ahead of the Deputy today on the radio.

An Leas-Cheann Comhairle

All remarks should be addressed through the Chair. It is in order to talk about the price of oil but not to debate something that does not arise on the motion. The House will have ample opportunity of raising the question of the quality of the oil being distributed.

Mr. Enright

The oil companies gave an assurance that the oil would be treated in such a way so as to prevent it being affected by the cold. I have received complaints recently that that assurance has not been honoured. The result is that many families, farmers and those who use oil in trucks are inconvenienced and have a heavy price to pay. The cost of installing central heating is very great and it is wrong that those who have oil burning central heating must face this hazard annually. The Minister should give urgent consideration to this matter and seek an assurance from the oil companies that this will not occur again. This matter is of urgent public importance.

The Taoiseach has said that the issues raised last week would be left to the historians but he cannot say the same in relation to the subject matter of this motion. The Irish people, and the Irish economy, are subjected to a Government the incompetence of which has never been experienced before. I challenge the Government and the Taoiseach to refute that. We have witnessed a frightening record of failure by the Government. It is just one year since Deputy Haughey was made Taoiseach and in that short space of time we have been subjected to one of the worst Governments that has ever controlled the country.

I should like to quote some sorry facts for the Minister of State. The terrible situation that exists here has been caused by rampant inflation and the failure of the Government in last February's budget to tackle that problem. The result is that unemployment is rising by about 4,000 per month. We have never seen such massive unemployment. It is part of the Government's record of dismal failure. Irrespective of the result of the Donegal by-election or of the opinion poll carried out by the RTE programme "Today, Tonight" it is my view that when the Taoiseach decides to call a general election he will be rejected by the people for his failures. since December 1979 to the end of October 1980 29,700 people have been added to the list of unemployed. In December 1979 there were 85,200 people out of work.

An Leas-Cheann Comhairle

This motion does not deal with unemployment.

Mr. Enright

The increase in unemployment is as a result of inflation and other Government policies.

An Leas-Cheann Comhairle

The question of unemployment is a matter for a different motion. We are dealing with prices and inflation. It is in order to mention the results of those but not to debate them.

Mr. Enright

Up to the end of October of this year there was 115,000 people out of work, the highest increase experienced here in such a short space of time. It is a frightening figure. What is more alarming is the fact that apparently there is no positive action being taken or effort being made to try to solve this frightening problem. The Government should direct their attention immediately in this direction.

The report of the National Prices Commission issued in October states that a total of £38 million in price rises was allowed. A total of 85 applications were made to the commission, 32 were allowed in full, 42 allowed in part, nine noted and two refused. Sizeable increases were allowed.

The Minister has asked us to suggest positive efforts that could be made to reduce inflation and which, as well as reducing inflation, would help employment prospects. I will recommend a few. It is my view that food subsidies should be restored totally and even increased beyond what they were under the National Coalition.

The Government should have the courage to admit that they made a mistake when they withdrew a large protion of the food subsidies. However, having made that mistake they have decided to stand over it. At the end of December 1978 we saw the commencement of the inflation spiral. At the end of 1978 it stood at 7.9 per cent. By the end of 1979 it had reached 16 per cent and at the moment it is 18.8 per cent and rising. Now inflation is out of control and the Government have not got a remedy.

I do not know who advised Deputy Colley, when he was Minister for Finance, and the then Minister for Economic Planning and Development, Deputy O'Donoghue, and the then Taoiseach, or was it those three wise men themselves who made decisions without advice from anybody at the end of 1978? At any rate, inflation stood at the 7.9 per cent and now it is running at nearly 19 per cent. The removal of the food subsidies, as can be seen from those figures, was the greatest of the many blunders made by Fianna Fáil.

I will suggest to the Minister some further positive efforts the Government could be making. The Government must have considerable influence in the area of the State-Sponsored bodies and the various Departments and they should have used that influence to stop price increases. In the last budget the Minister for Finance announced increases in postal and telephone charges and I warned him of the consequences of going ahead with such increases. I told him that many small firms throughout the country would be devastated. I issued a public statement on it and I am sure some members of the Government saw it. Nevertheless they decided to go ahead with those increases, despite my warning that they would lead to job losses.

They allowed massive increases in ESB charges. The last such increase, in October, brought the aggregate increase in the price of electricity to a massive 89.6 per cent in 12 months, a savage increase. Somebody has got to try to shake the Government out of their slumberland, because those electricity price increases have sounded the death knell for a number of small industries throughout Ireland, many of which had been built up by the sweat, the hard work, the investment and even the lives of many people, 30,000 of whom have lost employment in the last ten months. Small indigenous industries throughout the country, like textiles, depend heavily on electricity. If they failed to meet their electricity bills they were cut off. They paid up and looked happy although they were far from happy. The position is that high electricity charges have devastated these small industries.

Two other blunders that seriously affected the entire country were increased CIE charges and the increased petrol taxes in the last budget. The accumulation of all these increases has devastated industries throughout the country. That is why I ask Fianna Fáil backbenchers to look at the situation realistically and to act accordingly. I do not expect them to cross the floor of the House and vote with us tomorrow night, but at least let them stay away.

Mr. Meaney

Will the Deputy put up a policy?

Mr. Enright

The Minister must have been slumbering because that is what I have been doing. I have suggested a number of measures which would help to relieve some of the hardship Fianna Fáil have imposed on the country.

Debate adjourned.