Deputy Enright is in possession and has three minutes left.
Private Members' Business. - Control of Prices: Motion (Resumed).
The following motion was moved by Deputy Bermingham on Tuesday, 2 December 1980:
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.
Debate resumed on 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."
—(Minister of State at the Department of Industry, Commerce and Tourism
(Mr. Meaney.)
I approve of the motion put down last night. I am seriously concerned about the continuing rapid rise in the rate of inflation in this country. It is true to say that one section of the community which has been hit perhaps even more seriously than any other by this rapid rise in inflation is the farming community. There is no doubt in anybody's mind that farmer's incomes have dropped by something in the region of 40 to 50 per cent in the past two years. The increased inflation rate has meant that all the materials used by farmers, such as manures, seeds, machinery, petrol and diesel, have risen rapidly in price, while incomes in some instances have fallen drastically and in others are only maintaining their previous level.
The situation in regard to our farmers is the most serious ever faced and is due absolutely to the rise in the rate of inflation. Last night I asked the Minister, and appeal again to him here this evening, that he and his Department — I might add, in conjunction with the Department of Finance — put uppermost in their minds the problem of tackling and solving the ever-increasing inflation rate bedevilling our economy. If this situation continues, I can foresee the already serious situation slowly but surely getting out of hand. The Minister has a great responsibility to tackle and solve this matter. The graph showing the rate of inflation can only be described as rising inexorably ever higher. Unless firm action is taken to grasp this nettle, people will suffer and suffer severely because of the lack of Government initiative, Government enterprise and total ineptitude in tackling this problem.
The excuse trotted out will be that the inflation with which we are faced is caused by factors outside the Minister's control. That is not good enough. If one looks at the rate of inflation in other countries, such as Germany, France and others within the EMS system, one has an example to follow of how these countries have tackled inflation. I wholeheartedly urge the Minister to follow this example at the earliest possible opportunity.
I have some National Prices Commission reports, one being report No. 92 for February 1980. In this report price increases are dealt with from February 1979 to January 1980. According to that report, £360.5 million in price increases were allowed. The Prices Commission are very fair and very thorough and are to be commended for the excellent work they are doing. However, their hands are tied in regard to these matters. It is admitted in this report that they must proceed along certain fixed lines in issuing their report and must follow stringent guidelines. A sum of £360.5 million in price increases in a twelve-month period is frightening and devastating. It is something which must be tackled seriously. In the Irish Independent of 8 October 1980 an article was published by John Foley, a consumer affairs editor, in which it is stated that Irish consumers face a £38 million a year bill following the spate of price rise applications approved of during July. Manufactures, service firms and employers have sought increases which will cost nearly £60 million in a year.
Increases were allowed of £38 million and during a period of twelve months there were £306.5 million in increases. Unless this problem is tackled immediately I regret to forecast that our whole economy will be seriously threatened. Last night, the Minister asked if we had any ideas. I shall try to devote some of the short time left to outlining some efforts which could be made by the Minister's Department. The first is one which has been repeated so often that it falls on deaf ears, but it was one of the efforts which succeeded during the period of the Coalition Government in regard to food subsidies. This helped to break the upper spiralling of price increases. I might add that when this measure was brought in the present Government members were in Opposition and they called for food subsidies. This essential measure could help to break the rise in the rate of inflation. If that could be achieved prices would level off and, in fact, initially would actually drop once food subsidies are brought in.
Secondly, I ask the Government to look at the present rate of taxation on petrol and other associated items. The tax on petrol is having a very damaging effect on many of our industries. The payment of this tax percolates through, causing price rises. Can a reduction be made in this respect?
In regard to increases granted on the postal and telephone services, I warned at the time that those increases would lead to job losses and similarly, when the vast — I think 89 per cent — increases in price to the ESB were granted in twelve months, I warned that this would lead to job losses. Unfortunately, I have been proved all too correct.
Our cost of transport is excessive by comparison with that in other countries. With a rate of unemployment at approximately 4,000 a month, action must be taken. Inflation is leading to job losses and closing Irish firms which have withstood difficult economic periods before. But they are unable to cope with the rate of inflation which the Government have allowed them to be faced with.
The Deputy's time is up.
I would ask the Minister to have a serious look at these matters.
The Deputy has gone beyond his time.
In his contribution to the debate last night the Minister of State referred to the fact that since taking office the Government have been particularly concerned to ensure that the effects of price increases on the less well-off sections of the community are softened in so far as that is possible, taking into account all other considerations. That concern has been expressed practically in two ways. Price control procedures have been tightened up to ensure that only the minimum, unavoidable price increases are allowed to occur. Improvements in social welfare benefits have been regarded as the central element in successive budgets.
It is undeniable that the operating costs of companies providing goods and services have increased enormously recently. These are difficult economic times. We are all aware of the reasons, both external and internal, for the huge cost increases which have occurred. In a situation of rising costs the Government are faced with a number of options in the matter of price control. First, applications for price increases could be refused point blank. The consequences would be predictable. If all applications for price increases were to be rejected while cost increases continued to incur, company bankruptcies and redundancies would follow within a short period.
In many cases supplies of goods to the Irish market would cease, given the increased cost of imported materials and the size of the increases in money incomes which have occurred in recent years. Nowadays increased costs can very rarely be met from profits or fully offset by improvements in productivity and efficiency. Every effort should be made by all concerned at every level of industry to see where efficiency can be improved and the price of commodities can be kept to a minimum. With price control operating in this way, cutting down profitability would be irrelevant. No products would be available at the controlled prices and the effects would soon become intolerable. The consequences of exercising this option would be catastrophic.
The second option open to the Government would be to refuse to allow certain price increases which were justified and grant subsidies to make good the difference. Deputy Enright made that point last night and again tonight. A number of commodities are in receipt of a Government subsidy at present. The cost of these subsidies runs at about £50 million annually. Any increase in these subsidies or the introduction of subsidies on other commodities could be met presumably only by increased taxation. It is the Government's belief — and I agree totally with them — that subsidies, applying as they do irrespective of individual needs, do not discriminate sufficiently in favour of the less well-off sections of the community. Moreover, subsidisation can lead to distortion in consumption patterns and hide the real cost of products and services.
The Government have not exercised either of these two options. Instead, they have rigidly controlled prices, having regard to the economic facts of life. They have made significant improvements in the level of social welfare benefits and payments to the less protected sections of the community. In his speech last night the Minister of State gave some details of the increases which have been granted. They are impressive and they underline the Government's commitment. In the most recent budget, weekly rates for contributory and non-contributory old age pensions, widows' pensions, invalidity pensions, deserted wives' benefits were increased by 25 per cent. These increases were an addition to the temporary increases given in October 1979 which represented some 6 per cent of weekly rates on average. As a result the weekly rates of benefit, which came into operation in April 1980, were on average 31 per cent higher in the case of long term rates and 26 per cent higher in the case of short term rates than the rates of benefit in operation in April 1979.
Children's allowances were increased in July last by £1 per month for the first child and £1.80 for the second and each subsequent child. There were many other benefits, including one which will come into operation next week — the double week's benefit for those in the long term recipient category. There are the free travel, the free fuel voucher, the free television licence, the ESB allowance, the abolition of rates on homes, living alone allowance and other small allowances as well.
Taking the comparative figures, since 1979 the unemployment benefit increased by 64 per cent, the contributory old age pension by 78 per cent, the non-contributory old age pension by 79 per cent and children's allowance by 90 per cent. The tightening up of price control regulations which took place during the term of office of the Minister, Deputy O'Malley, puts into perspective the simplistic nature of the attacks which the Opposition attempt to mount.
Given the detailed and extensive reports published each month by the National Prices Commission, both this House and the public are kept well informed of price control matters. Notwithstanding this, many Opposition Deputies continue to make contributions to debates on prices which display an obvious lack of appreciation of the controls which exist and how they are exercised. Every month the commission report details of the applications received. In the period from January to September of this year the commission considered price increase proposals from 425 applicants totalling £395.11 million on an annual basis. Of this total £310.64 million was actually allowed.
As a result of the proper application of price control procedures during that period the prices of the products and services covered in those applications rose by 21 per cent less than they would have risen if the applicants had not been subject to the detailed price control, and the consumers had to pay nearly £85 million less than they would otherwise have had to pay. This figure underestimates the savings to the consumers. Nearly all the commission's recommendations relate to the ex-factory prices and retail prices are generally fixed by adding a percentage margin to the prices at which the retailers buy. If the average retail margin on costs were 25 per cent the savings to the consumer would reach nearly £100 million. The £310.64 million which was actually allowed as increased costs, when broken into its constituent parts reveals some interesting facts. Of the total figure £193.38 million was in respect of raw material costs, £52.35 million was in respect of pay costs and £64.91 million was in respect of overhead costs. It is abundantly clear from these figures that increases in material costs were of paramount importance, in causing price increases.
Deputy Enright mentioned last night ESB costs. About 80 per cent of ESB generating costs is for imported oil. The total energy costs in this year alone was £250 million bringing our energy costs up to £800 million. Over 62 per cent of the total increased costs allowed was in respect of raw material cost increases. The vast majority of raw material inputs have to be purchased on world markets and the prices are influenced by external factors outside the control of the Government. For primary energy goods we have had to pay the going price on world markets to ensure continuity of supply, thus maintaining essential goods and services.
It is relevant to refer to the serious effects of the huge oil increase on our economy and on our balance of payments situation. The increases in the price of fuel oil have an overspill effect on the prices of numerous commodities. It is widely appreciated that it is essential for us to reduce our dependence on imported fuel. The way in which we use oil is more appropriate to an era when financial consequences were of little concern. The Government's action in their budget, in their efforts to promote energy conservation and to develop our own fuel resources, are designed to meet our needs.
The National Prices Commission also referred to the need for improved efficiency in energy usage in firms. In their report of April of this year they stressed that energy inputs are significant cost factors for nearly all firms. A more efficient use of energy inputs would result in substantial savings, in increased competitiveness and it would also have a beneficial influence on our balance of payments. The commission say that there is considerable scope in the industrial sector for energy saving and for switching to cheaper forms of alternative fuel. They also say in their report that they are considering the question of incorporating a section of energy utilisation to be included in efficiency for price contract firms.
The emphasis the Minister has placed on the investigation of complaints of overcharging is worthwhile and has been welcomed. The Minister has increased the strength of the price inspectorate during his term of office to ensure that all complaints are effectively and speedily dealt with. The work of the inspectorate continues to increase steadily and that is evidence of the support which the Government give to this service. It is also evidence that the Government are fulfilling their commitment to operate strict and effective price control.
I note from the July 1980 monthly report of the NPC that the trend of increasing the workload of the inspectorate was maintained during the second quarter of 1980. The volume of complaints received during the quarter increased by 52 per cent over the second quarter of 1979. During that period the inspectorate investigated some 1,797 complaints, 63 of which were substantiated. In addition, the inspectorate dealt with 3,277 enquiries. The commission report regularly on the operations of the prices inspectorate. Evidently, the impact of the inspectorate is being increasingly felt in areas where retail prices are controllable and consumers are now more than ever aware of the development in the area of prices.
The quality of the contributions made by the Opposition Deputies to this debate was poor in the extreme.
They have not got script writers.
The contributions were so full of vague innuendos and mis-statement of facts that they were almost meaningless. I was shocked at the little knowledge of the work of the prices commission that was displayed by these contributions. Deputy Bermingham, for example, at one stage last night had the audacity to say that price increases were being granted with little or no justification.
That is true.
That sort of statement from a senior Deputy really tends to make a mockery of this House. Does the Deputy not realise that a price increase is granted only following a minute and detailed examination of the increase involved, initially by the price division of the Department of Industry, Commerce and Tourism, secondly by the National Prices Commission and finally by the Minister, Deputy O'Malley? Does he not realise that every price increase granted is published in the monthly report of the National Prices Commission, together with detailed reasons for the increase? Does the Deputy not realise that in every case where a product whose retail price is controlled by a maximum prices order is increased——
Everything is being increased.
——the increase is advertised in each of the national daily newspapers? If the Deputy is not aware of all these facts, which have been spelled out on numerous occasions, he should not seek to criticise the Government's price control record. The Deputy has laid great emphasis on the fact that the price increases which he quoted in his speech have been taken from a reply to a Parliamentary Question, but he could not even get these facts right. He said that meat had been increased by 35 per cent while the rate of inflation was only 19 per cent, but he neglected to state that this price increase took place over the period from 1977 to 1980.
The Deputy also made many references to recent increases in motor insurance premiums and made numerous insinuations without laying any facts before the House. He tried to give the impression that the increases were introduced surreptitiously. These increases have already been the subject of an Adjournment Debate in this House on 20 November last. On that occasion the Minister of State outlined clearly the facts behind the increases and he emphasised the concern at increases in motor insurance rates which contribute to the rate of inflation. The fact remains that it is essential for premiums to be adequate to provide for the cost of the service. Insurance companies must be allowed to charge premium rates which will enable them to meet the cost of claims and——
Purchase Sunday newspapers.
——allow a contribution to cover the reserves which are statutorily necessary. The Minister of State said that the justification for the increases rested on the ever-increasing costs of claims. For most companies claims continue to rise at rates which are higher than the Consumer Price Index. The purpose of any price increase granted is to allow a company to break even in its underwriting account so that insurance costs are covered.
What about the monopoly company?
Deputy Enright asked the Minister of State to have his Department examine allegations that oil and diesel fuel was freezing up last weekend. I believe that the Minister for Energy would be responsible and I am assured by the Minister of State that the matter is being examined.
The Chair told Deputy Enright that this was not a relevant matter for discussion.
Deputy Enright referred to the analysis of price increases outlined in the monthly report of the NPC published in October. This relates to price applications considered by the commission during July. He highlighted a figure of £38.2 million as the annualised cost of price increases recommended by the commission during that month. He said that these represented sizeable increases but he neglected to mention that the price increases sought by the applicant firms totalled £56.9 million on an annualised basis. In other words, the increases allowed were £18.7 million less than the increases proposed, a reduction of more than 30 per cent. It is quite evident that not all increases are sanctioned and not all of the recommendations made by the National Prices Commission are sanctioned in full. On more than 30 occasions since he took office the Minister has refused to sanction increases recommended. The National Prices Commission are a very responsible body and play an important part in price control. The commission are composed of a representative section of the community.
That is not the Minister's view.
Mr. Liam Connellan is the representative of the Confederation of Irish Industry and Mr. Peter O'Brien represents the Federation of Trade Associations. Mr. Harold O'Sullivan and Mr. John F. Carroll are the nominees of the ICTU and Mrs. Mairead Allen is the nominee of the Irish Housewives' Association. The Minister's nominee is Mr. Patrick Lyons and the Chairman is Mr. D. Culligan. These are all responsible people.
We have given practical evidence of the effective price control system which is in operation, evidence that by living up to their commitments on price control the Government have strengthened the ability of the National Prices Commission effectively to consider price increase proposals. I wish to support the motion as amended.
The motion has not been amended.
It will be shortly.
The first thing I should like to say in relation to this motion — and it is something which will be clear to anybody who follows the proceedings of this House — is that it is the second in a series of motions which have been and will be put down by this party in the months ahead to concentrate the attention of the House and the public on what we regard as the key economic areas. As a party we have always made the economy our first priority. A fortnight ago we debated unemployment and this week we are debating prices. There can be no more critical area after unemployment than the area of prices. I am not surprised by it but I feel I should draw the attention of the House to the fact that there are more people who are prepared to make token gestures towards issues like this than they are to do anything about it. In this House last week we had Deputy Blaney from these backbenches bleating about the economy and how the House was wasting its time. Deputy Blaney has shown by his absence from this debate the real premium he puts on a key economic issue.
It is very difficult to talk in isolation about prices, but I will keep as closely as I can to the motion. The movement of prices in an economy is related to a whole range of variables. Our industrialists and businessmen will say that one man's price increase is another man's job. The Taoiseach is prone to saying that from time to time as well. We would argue that one man's job might mean another man's profit margin. That is a somewhat sterile argument at this particular point of the game but the point might at least be made.
The one thing we can agree on is that the level of price increases over the past couple of years in general, and over the last year in particular, has been so savage that it is promoting among wage earners generally two very sharp reactions. The first is the traditional one: workers are looking for higher wages to cover the costs with which they are faced at home and in the shops. The second reaction, which can be seen in some of the other aspects of the national understanding, is that workers in general and organised labour in particular are beginning to ask themselves what use is money if it cannot buy anything and they are beginning to talk — rightly, in my opinion — about the standard of living a person can buy with his wages. This is a key development which parties on all sides of the House would do well to comprehend. There is not much use having money in your pocket if prices have gone up to the degree where you cannot supply yourself and your family with the same standard of living you had last year. The facts and figures of wage increases must be set against the reality of prices.
I want to talk about the Government's price policy in two of the most fundamental areas we could touch on, shelter and food. The price of housing and food is, I would argue, one of the most political elements in any discussion on prices. Not enough attention has been given either inside or outside this House in the past — until tonight — to identify the causes of the price increases in these areas and to criticise the Government for what they are or are not doing about it.
In the area of housing, the first main area I want to talk about, the situation is difficult to understand at first sight because houses are being built, bought and occupied. On the face of it one would think that the housing market was in a splendidly healthy condition, but we argue that private housing, especially in Dublin, has become a paradise for speculators under Fianna Fáil. The casual visitor might be excused for thinking that the evidence of house building, especially in the outer suburbs, was evidence that an increasing number of young couples were owning their own homes. The truth is more complex.
More and more new houses being built in Dublin are being bought by speculators and rented to young couples who simply cannot afford to buy them. Then when the market price is right, they will be sold again, in all probability to other speculators. Ask any member of any political party who has gone around looking for money or political support in some of these housing estates in Dublin and he will tell you the same thing. You knock on door after door and find out that the house is owned by a speculator, that the couple with the young family have been in the house for only six months and are moving out again next month either because they cannot afford the rent or because they are emigrating.
Houses are scarce because the price is high. Speculators trade in scarcity and they can afford the price. One of the ironies of this development is that many of these houses are occupied by couples who cannot afford to buy them; but because they can just afford to rent them at an exorbitant cost in terms of their incomes they are deemed to be adequately housed by the local authority and may not go on the local authority priority housing list. At least, they may go on the list but they will not be considered in need of housing and effectively their chances are nil.
The Government's failure can be clearly identified. We all know what one of the major elements in the price of housing is — the price of building land in general and of developed land in particular. The Government's failure to control the price of building land is now little short of scandalous. The average cost of a developed site in the Dublin area is now £6,000, twice what it was no more than two years ago. The Government have not only failed to do something about this but they callously voted down in this House the Labour Land Bill introduced by Deputy Quinn, a modest enough proposal in all conscience but one which would have had the effect of controlling in the public interest the price of development land for house building. This was done by Fianna Fáil in this House and the moral is obvious.
To give another statistic in relation to the price of houses; when the famous £1,000 grant was introduced it was equal to about one-quarter of the deposit required for the average new house. We all know what happened. Within the two quarters immediately following the introduction of that £1,000 grant for a new house the average price of a new house jumped by £1,000. Economic arguments can sometimes fall prey to over-simplification and one could not prove in a court of law that one led to the other. But the people who were waiting to buy houses are the people who were "sculled" of that extra £1,000 as soon as it was put into their pockets, allegedly by the Government, and taken from them immediately by the builder. They know what you cannot statistically prove. They know this scheme was a direct transfer from the taxpayer to the builder through the conduit of the unfortunate young couple who were trying to buy a house. As I said, it was orignially equal to one-quarter of the deposit required for the average new house. Today it is worth less than one-fifth of the deposit needed.
When Fianna Fáil came into office the average wage earner had to work for a third of the week to earn enough to cover his mortgage payments on an average house. Today he has to work for over half a week to meet his mortgage payments, if he is lucky enough to get a mortgage in the first place.
For the benefit of the House I should like to give some irrefutable figures in relation to the average cost of new houses in the kind of period we have been talking about. The figures come from the housing statistics published by the Department of the Environment. Where building societies are concerned the average price of houses on which they gave loans in 1977 was £14,390. The average price of the houses for which they gave loans this year was £25,000, nearly double. The local authority picture is just as bad, if not slightly worse, in proportionate terms. In 1977 the average price of a house for which a local authority gave a loan was £7,181; in 1980 it was £13,792.
Of course, of late we have also had the associated banks coming into the housing market making mortgage funds available and, incidentally, criticising the building societies for their housing policy. We have our own views on these benches about the banks. In fact, the housing statistics published by the Department of the Environment would lead one to suppose that the only people to whom the banks are lending money for housing are people who are very wealthy indeed. This would appear to be borne out by the figures for the average price of houses bought with bank mortgages during the period concerned. In 1977 the average price of a house for which a bank made a loan was £18,978. In 1980 the average price — I stress, the average price because one has to stretch one's mind to accommodate it — of a house for which a bank gave a mortgage was £41,174. I do not know about other Members of this House but that is not the bracket I am in and I doubt if it is the bracket that many young people looking for houses today are in. And the proportion of increase in price in this category was greater than that in any of the other categories I have mentioned.
These general observations have been confirmed dramatically in the past few days with the publication of the report of the National Economic and Social Council —Economic and Social Policy 1980-83: Aims and Recommendations. They have identified and quantified the growing uselessness of the £1,000 grant, the growing cost of housing and the growing difficulty in meeting that cost. Paragraph 5.23 suggests that the average deposit in 1979 — that is only a year ago — net of the £1,000 grant for a first-time owner occupier was about £3,600. The report continues to say:
This amount, equal to about 15 per cent of the total cost of the house, was nearly three-quarters of the gross average annual industrial earnings. By the first quarter of 1980 the net cash requirement was near £4,200.
I stress that it says "by the first quarter of 1980"— we are now in the last quarter of 1980 —"the net cash requirement was near £4,200". In other words, assuming prices were to remain constant — and that is some assumption — a young married couple starting out with nothing who were in a position to save £20 a week would be saving for five years before they would accumulate the deposit on a house. Of course, we know what happens: prices do not remain constant. Anybody who would suggest that the average deposit on a house would be £4,200 in five years' time would need to go to St. Brendan's.
The plain fact of the matter is that when it comes to housing costs and prices many young people today are in the dispiriting position of the person on a bicycle who wearily breasts the brow of the hill only to discover that there is always another and bigger hill before him. If it were not so tragic one might almost call to mind the famous clown's trick in the circus. He drops his hat on the ground, bends down to pick it up and, as he does so, kicks it so that it rolls ahead of him. By the time he bends down again to pick it up, he kicks it again with his foot, so that he never catches up with the hat. The treadmill young couples are on in relation to housing and the price of housing will not end under Fianna Fáil. I would argue most strongly that only radical action of the kind the Labour Party have proposed in this House — and that was voted down by Fianna Fáil — coupled with an integrated, overall approach to the price of housing will make housing a reality for many young people today and remove it from the luxury class and category into which it is rapidly moving.
Table 34 of the NESC report from which I have already quoted has some daunting information about the repayments to building societies on mortgages on average-priced new houses between 1976 and 1980. I will give the figures only for 1979. I shudder to think what the 1980 figures will be when they are available because, unfortunately, they are not. In 1979 the average loan was £18,746. The monthly repayment was £238 which represented, in 1979, 58 per cent of the average industrial earnings in transportable goods industries. What kind of society have we got in which we expect — quite apart from the question of the deposit, part of which may also have to be borrowed and repaid — an average family to pay nearly two-thirds of their income to put a roof over their heads? Unless we tackle the question of the public control of the price of building land we will be whistling in the dark as far as this issue is concerned. It is the purpose of this party to make unmistakably clear to everybody in Ireland looking for a house, everybody in Ireland who is labouring under an increasingly expensive loan at present, exactly where the responsibility for this lies.
I should like to turn now to the question of food. There are many elements in the food package in relation to the consumer price index and I do not propose to go into them in any great detail. Of course, one of the reasons for this is that food prices fluctuate seasonally depending on which quarter one takes. For example, there could be an increase in the price of tomatoes from 60 per cent to 160 per cent. We simply cannot make realistic comparisons on that kind of basis. At the same time one has to be beware of the kind of approach which was evidenced by Deputy Cogan this evening, which was to attempt to blind us with facts and figures in relation to prices in general and not least to the price of food. I am reminded of what the late and unlamented Marie Antoinette said when she was told that the mob outside were shouting for bread. When she was told there was no bread she said: "Let then eat cake." The approach of the Government on this issue is to say: let them eat statistics. Statistics have a high fibre content but very little nutritional value. I would suggest that the people most affected by the rise in the price of food, and in particular of basic foods, know more and better than to believe that the barrage of statistics emanating from the Government benches on occasions like this will do anything to meet their real needs and problems.
Deputy Cogan made the classic case against subsidies, that they do not discriminate on the ground of income and that therefore they benefit the rich as well as the poor. That argument is not entirely confined to the party on that side of the House, apparently, but it is an argument from expediency. If the Government in office could find it in their heart to provide the amount of money which is needed — I stress "is needed"— for subsidies on basic foodstuffs they would not be advancing this argument. If one were to follow up Deputy Cogan's argument you would have a means test for education because you could not suggest that bread, butter and milk are less necessary to the people than schools, books, education generally.
One of the major problems here is that poverty in this country — it is the poor above all who are affected by high prices of basic commodities — has become increasingly "ghettocised". You will not see poverty in the average suburb built 20 or 30 years ago, you will not see it in many of our moderately prosperous provincial towns. You will see it in some of the small homesteads dotted around rural areas, you will see it in the ghettoes built, often with the best will in the world by concerned local authorities, on the outskirts of our larger cities and towns, and in the rotting centre of Dublin and in the centres of some of the other urban areas. It is not so long since the Taoiseach made a highly publicised visit to Seán MacDermott Street in the heart of Dublin.
He visited Castlebar, too.
He made a highly publicised commitment to rejuvenate and develop the inner city. He went from there quickly but if he had taken another ten minutes and had called around to some of the little huckster shops still to be seen at street corners in the inner city and had asked the shopkeepers what proportion of their turnover comes from milk, bread and butter and whether people were complaining about the prices of these commodities, and if he had gone back to Government Buildings and had done something about it he would have done more to rejuvenate the inner city than all the rhetoric that had gone before.
The two reports of the Prices Commission for April and May 1980 might as well be the Book of Job for all the bad news they contained, indicating clearly that the incomes of the poorer sections of our population increasingly are concentrated on the purchase of basic food items. More than half the weekly expenditure of households whose head is out of work is spent on milk, bread, potatoes, a little meat and butter. Thus, an alteration in the prices of these few items is particularly significant for that type of family group. It is also significant for the elderly living alone who form the other major sector of the poor in Ireland today. Between mid-May 1977 and mid-August 1980 the price of butter was increased by 24 per cent, milk by 63.2 per cent and bread by 71.6 per cent. It may be argued that these items are subsidised, but let us look at the subsidy then and now. In mid-August 1975 when the subsidy on milk was first introduced, the subsidy was 2p or 33.3 per cent of the cost of a pint of milk. The cost of milk is now 15½p, the subsidy is 1½p, or 9.7 per cent of the price, so the subsidy as a proportion of the price of a pint of milk has gone down from one-third to less than 10 per cent in a period slightly longer than I have been talking about. In the case of bread, the subsidy was introduced in July 1975 when it represented 32.4 per cent of the price of the average loaf. It is now 14.1 per cent of the price.
The poor of Dublin and the other cities and towns in Ireland do not need to be lectured by me about these facts. They know them in their pockets and in their bellies. We do not know about them yet and if we did we might do something about it.
Recently the Minister for Health said that he would carry out the first nutritional survey in Ireland since 1940. I should like to get a total commitment by that Minister and the Government to a full and adequate survey in this area. It is not less than scandalous that all Governments since 1940 must bear the shame for the lack of such a survey, particularly because it is these matters that affect the health and strength of the poor.
I said at the beginning that I would concentrate on prices policy in two key areas, shelter and food. If the case I have made does not stand up I have yet to hear it answered adequately by anybody.
It does not give me any great pleasure to support the motion, simply because there should not be any need for it if we had a commitment to solving the problems of the poorer sections of the community. Here tonight I listened to Deputy Cogan reading out a prepared script given to him by the Minister.
I did not give him a script.
There are so many Ministers and Ministers of State at the moment, 29 of them——
The Deputy would love to be one.
Absolutely, and I will be before long. Deputy Cogan tried to tell us the whole problem is the result of oil prices, energy costs. There is no reference to that in the manifesto of 1977 which has now become a dirty word, the supposed programme for national restructure. We can look at the CPI record in the past 3½ years. Fianna Fáil got in here on the benches on the far side on the basis of being able to provide the way to control and reduce prices. They provided a manifesto and in that document they devoted a full chapter to the way in which they would control prices. I was amazed to hear Deputy Cogan praising the NPC when that commission were castigated by Deputy O'Malley for not doing their job from 1973 to 1977. He said he would restructure the commission in such a way that they would do their job. He has done nothing since 1977 to restructure the NPC. All the members of that commission are honest, hard-working people. The Minister in his subtle, slick way has in the past three years given the impression that the NPC are responsible for price increases. I note in the media, radio, television and the newspapers, that in many cases the information on price increases is given as recommended by the National Prices Commission, when we all know that it is the Minister who has to sign on the dotted line and approve those price increases.
The Fianna Fáil Party not so long ago boasted that it was they who pressurised the National Coalition into introducing subsidies on food when they said that inflation was rampant. I sat here and listened to different members of that party giving me a lecture on when subsidies should be introduced and when they should be withdrawn. According to them subsidies should be introduced when inflation is in excess of 15 per cent. We have had inflation in excess of that figure for the past two years but there is not a word about subsidies. In fact, as Deputy Horgan pointed out, the proportion of subsidisation on the basic foods is such that it is no longer relevant because it is a subsidy of under 10 per cent against what it was during our term in office. When the chips were down and we saw the need of the less well off, the old age pensioners and the low paid workers, we introduced subsidies of over 30 per cent. Fianna Fáil said that they pressurised us into doing that but now they are in power and the money is needed for other things which in their opinion will get them more votes. There is great dissatisfaction in the country and the housewives are grumbling because everything they purchase every day in the week is rising in price all the time.
Last night Deputy Bermingham, on behalf of the Labour Party, introduced this motion to the House. We went into a great deal of detail and he had his facts correct. I assume, after listening to at least one speaker tonight, that he did not hear the motion or did not read it. The motion reads:
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.
Fianna Fáil introduced an amendment to that which says:
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."
If the Government are attempting to control prices you can fool me. In case people have any doubt about another matter, what the Government said they would do in the 1977 General Election, I want to read from pages 10 and 11 of their manifesto:
Restructure the National Prices Commission.
Did they?
Discourage increased costs and prices in all areas where it has control and influence.
Did they?
Investigate middle men's margins.
Did they?
Fully disseminate, at least once a week, to radio, television and newspapers, comparative prices of supermarket consumer goods.
Did they?
Investigate why Northern Ireland prices are less, apart from tax reasons, than prices in the Republic for the identical product from the same supplier and the same factory, for example, motor cars, parts, tyres, detergents, processed foods, biscuits, clothing and so forth.
Examine the accounting procedures of the ESB with a view to reducing the price of electricity.
This is what Fianna Fáil said they would do. What did they do? After taking over control of the country the Taoiseach, Deputy Jack Lynch, announced he was handing over prices to a woman member of the Cabinet. There was dancing in the streets and some of the women's organisations went haywire. One lady, who went on television, told everybody that it was a great day for Ireland, at last a woman had taken control and we would have what Fianna Fáil promised, a reduction in prices, price control. She then quietly disappeared from the scene and she has not been heard of since then with regard to prices. The male chauvinist pigs in the Fianna Fáil Cabinet — I assume that is what those ladies would call them — took over and they let prices run riot.
I do not know if the Fianna Fáil Party buy their goods in the same shops as the supporters of the other parties. It appears they do not. We have the list, which has not been supplied either by Fine Gael or Labour propaganda machines, but by the Taoiseach's office. It shows that such items as firelighters are up 61.6 per cent and coal 65.8 per cent, which does not include the most recent increase. An effort should be made by those who buy coal in small lots to get a scale and weigh the coal as they buy it because I had an example recently of a person selling an eight stone bag of coal with seven stone six pounds in it. The unfortunate person who bought the coal cannot afford to pay for something like that. Turf and briquettes are up by 52.4 per cent, paraffin oil 63.2 per cent, bottled gas 80.7 per cent and piped gas 137.9 per cent. If one wonders why that was an exceptional increase it was subsidised by the National Coalition Government. Town gas was subsidised and the subsidy was completely removed by the Fianna Fáil Government.
Last night we had an example of somebody here engaging in a practice that I dislike very much. I am referring to the Minister of State, Deputy Meaney, who, as he is entitled to do, read a prepared script and gave us his side of the story.
I delivered my own speech.
Having been a Minister for more than four years I know that Ministers read what is prepared for them by the officials. But what I object to is a Fianna Fáil backbencher reading the prepared script that had been handed to him by somebody who knew better than he how to colour the subject in question.
The Chair objects to any Member, other than a Minister, reading a prepared script because that is against the rules of order of the House. The practice should not be engaged in by Members from any side.
I was surprised that the Chair did not prevent the Fianna Fáil Deputy concerned from reading his speech last evening.
It is difficult for the Chair to know whether a Deputy is reading from a prepared script or is reading from notes.
He was reading for twenty nine-and-a-half minutes.
That practice has been engaged in by people on all sides of the House in recent years.
My reason for referring to the Deputy is that he attacked Deputy Bermingham who had made a very good speech, his own speech. The point is that people in glasshouses should be the last to throw stones.
To get back to the question of increases, the percentage increase in respect of electricity was 62.7, in respect of fuel oil it was 94 and according to the newspapers there will be an announcement of a further increase in this regard of 6p per gallon within the next couple of weeks. This is what Fianna Fáil have produced despite their promise to control prices. They told us they would deal with the problem differently from the way in which it had been dealt with by anybody else. That part of the manifesto was a lie. Consequently, Fianna Fáil have been living a lie ever since. Everything they do is contrary to what they promised. One would not mind if they were a crowd of greenhorns who had never been in government before but they have been in government longer than any other group in this country. They made promises which they knew they could not keep but having got away with that attitude and having been returned to office they proceeded to break every one of these promises.
They may say that they kept their promise in respect of car tax but this is not so. In a reply to a parliamentary question on October 21 we were told that car tax has been reduced by 78 per cent whereas we know that there is still a form of tax for every car. I am referring to the registration fee which was increased from £5 to £10. We can only wait and see what the increase will be in this regard in the forthcoming budget. We were told also that there has been a reduction in rates and water charges to the extent of 100 per cent. In other words we are not supposed to be paying rates or water charges at all. The situation is that water rates have been increased in the period in question by from 300 to 400 per cent. The official in the Taoiseach's Department who compiled the information given to us must not have been aware of this situation. Are the local authorities wrong? Should the water rates have been abolished? If this is so I hope that those responsible will ensure that water rates are not charged to people again and that those who have paid them will be refunded.
I must cut short much of what I have to say because of the time factor. We are governed by a group of people who promised specifically to do certain things but who have failed to do so. They have allowed increases under practically every heading. In these circumstances they have a hard neck to put down an amendment of the kind that has been tabled to this motion. While all this is happening those same gentlemen are going around the country lecturing the working people, telling them that they should not seek increases in wages because such increases would have the effect of putting other working people out of employment. I was a trade union official for 30 years. During that time I reared a family and I know from that and from going into the homes of working class people now how difficult it is for those people to live. A working man whose wages are not sufficient to meet the household bills will not be prepared to accept lower wages. Neither will he be prepared to resist seeking an adequate wage increase in order to allow him to purchase the necessities of life.
Deputy Horgan was very polite in referring to what the working people are living on. During my young days when times were very bad, it was said that the old people lived on bread and butter. When margarine was introduced it became a substitute for butter for these old people but now because both margarine and butter are about the same price, they are lucky if they have the bread. They must pay for coal at £4.40 for an eight-stone bag in country districts. Milk is 15p per pint. Is it any wonder, then, that they are not able to afford either margarine or butter? Recently I was surprised to find people talking about the cost of meat and posing the question why there cannot be more meat for the people when there is so much being put aside in the EEC. I know that many people have not eaten meat for a very long time. Day after day I meet people who tell me that they cannot afford this commodity. I receive many letters also to this effect, often with a little footnote to the effect that sometimes they can afford meat on Sundays. This, then, is the glorious country which Fianna Fáil have been promising — a land flowing with milk and honey. That is the case for some, but it is not flowing with milk and honey for those who, as Deputy Horgan says, are paying up to £30 per week in rent for a house that they cannot afford to buy. There is no question of a land flowing with milk and honey for those people who find it so difficult to buy clothes for their families or for those who are being asked now to pay examination fees for their children despite the fact that these examinations are not due to take place until next June. I have met at least four people who have told me that the amount of money being sought from them in respect of those fees represents more than the breadwinner is taking home after his week's work. Yet, Fianna Fáil tell us that only they can run the country. Only Fianna Fáil would dare do what is being done now.
They have done the country.
When we handed over the reins of Government in 1977, the consumer price index, according to a reply to a question here yesterday, was 10.8 per cent. The following year, because of the planning involved, this figure was reduced to 7.9 per cent. In the following year it was 16 per cent while it is 19 per cent now and increasing. In these circumstance anybody who votes against our motion this evening must be voting against his conscience.
Amendment put.
The Dáil divided: Tá 65; Níl 48.
Tá
- Ahern, Bertie.
- Ahern, Kit.
- Allen, Lorcan.
- Andrews, David.
- Andrews, Niall.
- Aylward, Liam.
- Barrett, Sylvester.
- Brady, Gerard.
- Brady, Vincent.
- Briscoe, Ben.
- Browne, Seán.
- Callanan, John.
- Calleary, Seán.
- Cogan, Barry.
- Colley, George.
- Herbert, Michael.
- Hussey, Thomas.
- Keegan, Seán.
- Kenneally, William.
- Killeen, Tim.
- Killilea, Mark.
- Lawlor, Liam.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- Leyden, Terry.
- Lynch, Jack.
- McCreevy, Charlie.
- McEllistrim, Thomas.
- McSharry, Ray.
- Meaney, Tom.
- Moore, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Gerard.
- Cowen, Bernard.
- Crinion, Brendan.
- Daly, Brendan.
- Doherty, Seán.
- Fahey, Jackie.
- Farrell, Joe.
- Filgate, Eddie.
- Fox, Christopher J.
- Gallagher, Denis.
- Gallagher, James.
- Geoghegan-Quinn, Máire.
- Haughey, Charles J.
- Morley, P. J.
- Murphy, Ciarán P.
- Nolan, Tom.
- Noonan, Michael.
- O'Connor, Timothy C.
- O'Donoghue, Martin.
- O'Hanlon, Rory.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Paddy.
- Smith, Michael.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael J.
- Wyse, Pearse.
Níl
- Barry, Myra.
- Barry, Peter.
- Barry, Richard.
- Begley, Michael.
- Belton, Luke.
- Bermingham, Joseph.
- Boland, John.
- Bruton, John.
- Burke, Joan.
- Burke, Liam.
- Byrne, Hugh.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Cosgrave, Liam.
- Cosgrave, Michael J.
- Creed, Donal.
- Crotty, Kieran.
- Deasy, Martin A.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John F.
- Enright, Thomas W.
- Fitzpatrick, Tom (Cavan-Monaghan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Horgan, John.
- Keating, Michael.
- L'Estrange, Gerry.
- Lipper, Mick.
- McMahon, Larry.
- Mitchell, Jim.
- O'Brien, William.
- O'Connell, John.
- O'Keeffe, Jim.
- O'Toole, Paddy.
- Pattison, Séamus.
- Quinn, Ruairi.
- Ryan, John J.
- Spring, Dan.
- Taylor, Frank.
- Timmins, Godfrey.
- Treacy, Seán.
- Tully, James.
- White, James.
Tellers: Tá, Deputies Moore and Briscoe; Níl, Deputies L'Estrange and B. Desmond.
Amendment declared carried.
Motion, as amended, agreed to.