asked the Minister for Industry, Trade, Commerce and Tourism if he is fully satisfied that the decreases in the rates of VAT in the recent budget are being fully passed on to the consumers; and if he will make a statement on the matter.
Written Answers. - VAT Reductions.
471.
The reduction in VAT rates applied to a wide variety of products and services including newspapers, electrical and other household goods and hotel charges. The full reductions due in the cover prices of newspapers were not passed on to the consumer as the newspaper publishers and distributors implemented price increases from 1 March 1985 which offset in some cases the full VAT reduction. While I expressed to the Irish publishers my disappointment at the timing of these increases, I had, in deciding not to apply my powers under the Prices Acts, to take into account the financial position of the industry which has for some time past been exempted from detailed price control.
In regard to hotel and other tourism related charges I am advised that the relevant sectors of the tourism industry have agreed to reduce their prices by 6.8 per cent which is the equivalent of the appropriate VAT reduction applied. In so far as the many other products are concerned the indications are that traders have generally passed on the VAT reductions. As the Deputy may appreciate, however, there is a wide variety of items involved here, with many brands and models sold in many thousands of distribution outlets. Because of the highly competitive nature of the market most of the items concerned have not been subject to detailed price control. Few complaints about failures to pass on the VAT reductions have been received and, with the notable exception of newspaper cover prices, very few of these were, on investigation, found to be substantiated. In some cases it was found that the reductions due had in fact been implemented prior to 1 March. The National Prices Commission will continue to monitor the situation and have, through surveys undertaken some time prior to 1 March 1985, established generally prevailing prices for a range of these products against which current prices following the VAT reductions can be compared. The Priceline offices will continue to investigate any complaints received.