Vol. 395 No. 8
18 Mr. Quinn asked the Minister for Industry and Commerce if he will give an up-to-date report on his continuing monitoring of prices to ensure that the benefits of a strong punt are continuing to be passed to Irish consumers; and if he will make a statement on the matter.
As the Deputy will be aware, I acted to ensure that Irish consumers would benefit from favourable movements in the Irish pound-sterling exchange rate. Subsequently on the basis of information made available to me on a range of price reductions which had ensued, I issued a statement indicating that I was satisfied that I saw no need to introduce statutory price controls. However, at my request, the Director of Consumer Affairs and Fair Trade carried out an investigation into the prices of a limited range of grocery products in order to assess whether price reductions taking place fairly reflected favourable exchange rate movements. In a recently received interim report the director concludes that, on balance, there was a downward movement in the retail price of imported groceries during 1989 which should be seen against an overall increase in the CPI of some 4 per cent.
Following the recent Government decisions announced by the Minister for Finance in the 1990 Budget Statement, to reduce the standard rate of VAT from 25 per cent to 23 per cent and to lower the rates of excise duty charged on a range of goods, my Department have arranged that a monitoring exercise is carried out now, and again after 1 March when the reduced rate of VAT takes effect, in order to establish that the consumer benefits from these reductions by way of lower retail prices. Inspectors under the control of the Director of Consumer Affairs and Fair Trade have just completed the first phase of the exercise, inspecting the retail prices of a wide selection of products in a range of outlets countrywide.
The Deputy will be particularly conscious that the Government in 1986 decided to disband the National Prices Commission and to allow detailed price control measures to lapse to produce, inter alia, cost savings for the taxpayer and for the business sector. A direct consequence of this decision was the dispersal of staff dealing with price control and price monitoring to other work. Accordingly, I do not have official information readily available to me on prices. However, the Government action in 1986 was not taken in isolation. It was associated with measures designed to strengthen the regulation of competition in the market. An extensive press release was issued on 17 January 1986 on behalf of Deputy John Bruton, then Minister for Industry, Trade, Commerce and Tourism, detailing these measures. Competition legislation was subsequently strengthened with the enactment of the Restrictive Practices (Amendment) Act, 1987 which came into effect in January 1988. The policy emphasis of the present Government is to further strengthen Irish competition legislation. A commitment to this effect features in the agreed programme for Government. I intend to bring a new competition Bill before this House as a matter of priority.
