Vol. 550 No. 5
8 Mr. Coveney asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans she proposes to take to stem the increase in prices consequent on the euro changeover; and if she will make a statement on the matter. [9363/02]
30 Mr. Yates asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps she proposes to take in response to the level of concern from the public at a price increase consequent on the euro changeover. [9351/02]
49 Mr. Coveney asked the Tánaiste and Minister for Enterprise, Trade and Employment the areas where she understands prices have increased following the euro changeover; and if she will make a statement on the matter. [9364/02]
57 Mr. Bell asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the survey from the Consumers Association of Ireland showing evidence suggesting that price increases have been slipped through in conjunction with the euro; her views on the findings of the survey; and if she will make a statement on the matter. [9462/02]
I propose to take Questions Nos. 8, 30, 49 and 57 together.
In the absence of State enforced price control, movements relating to prices of goods and services are an ongoing aspect of the market economy. I am aware of reports of increases in the price of some goods and services in the recent past. I am also aware that some prices have fallen, for example, public transport costs.
The official consumer price index and relative inflation figures published by the Central Statistics Office do not support suggestions that there were widespread, or excessive, increases in prices during the period of the changeover to the euro.
The latest figures published by the Central Statistics Office for the month of February this year record that annual inflation has fallen to 4.7%, down from 4.9% in January last. The rate of increase in consumer prices recorded this February was 0.7%, compared to 0.9% in February 2001.
There is no evidence to suggest that the rates of increase in prices during the period of the changeover are any greater than would otherwise have been anticipated. However, I have asked Forfás, as part of the study I have commissioned on price differentials among euro zone countries, to analyse consumer price inflation figures for 2001 and 2002 and to assess whether or not it is possible to attribute price changes in that period to the introduction of the euro.
I have contended for some time that the introduction of the euro should not, of itself, have required any trader to increase prices. However, it can be legitimate and justifiable for suppliers of goods and services to increase prices as a consequence of increased costs. In this sensitive time of transition it is in their trading interests to invest some time and effort in explaining the rationale for any such increases. Equally, I urge consumers to be assertive in seeking explanations for price increases they feel are unjustified and they should exercise the power to take their business elsewhere if they are not satisfied with the explanations provided.
While I have seen reports of the survey undertaken by the Consumers' Association of Ireland, I am not aware of the methodology employed or the survey techniques used to conduct it. The findings of this survey have been given high visibility, but it is not possible to scientifically sustain some of its conclusions on upward price movements. Such conclusions cannot exclusively be attributed to the introduction of the euro as the study maintains. In addition, the consumer price index for this year records some comparative prices decreasing while the study suggests the opposite. I am disposed to rely on the official findings of the Central Statistics Office.
The Minister said he has commissioned Forfás to analyse consumer price inflation. Has he received a report yet and is Forfás commissioned to conduct this analysis on an ongoing basis? When does the Minister expect to hear from Forfás? Why did the Minister ask Forfás to do the job and was there any other organisation he could have asked?
I have asked Forfás to carry out this work because it has a very good reputation for carrying out research, which most Members of the House will appreciate. PricewaterhouseCoopers has been selected to undertake this study on behalf of Forfás. There are two dimensions to the study. One is comparative pricing among countries in the euro zone and the other is an examination of any price rises which took place in the changeover period. I expect a report before the end of April. It will be good, solid work which will be of use to the next Government and in that sense it will be ongoing.
The study will be scientifically produced and all Members of the House will I hope, appreciate that it is necessary to do this work. Many surveys have been carried out by newspapers and other media as well as by the Consumers' Association of Ireland, to which the Government has provided some funding, but we need scientifically conducted research and that is what this study aims to provide. I hope it will be of help to whomever is involved in the next Government.
Does the Minister of State agree that it is not fair to make price comparisons across Europe as there are different start-up costs and price surveys may be carried out by unscientific means? Such surveys do not accurately reflect the differential in prices across the euro zone. In light of the fact that restaurant owners and publicans in Dublin have been highly criticised for price increases, has the Minister of State met the Vintners Federation of Ireland and the Restaurants Association of Ireland to discuss this matter with them and to get their reactions? Such criticism can be unfair as, by and large, retailers have operated according to the code of conduct established by the Minister prior to the euro changeover. I speak as a retailer. Based on the inquiries of his Department, in what areas has the Minister of State found the greatest price increases?
The evidence produced by the Consumers' Association of Ireland has given it cause for concern in relation to medical fees and prices charged by restaurants and public houses. Some of the prices referred to in the CAI's report are not recorded in the consumer price index.
I accept the Deputy's point regarding the detailed work being done. If Deputies are anxious to obtain further information, I refer them to the answers to Questions Nos. 25 and 26, which we may not get to in the Chamber. They refer to the Forfás study. I described the detailed terms of reference, one of which is to discuss fully the factors that determine and influence price differentials, in particular differences in incomes, wage costs, input costs, taxation regulations, logistics and levels of competition. The Deputy is right about this being a very complex area and it is necessary to make the terms of reference quite extensive. There are actually five are six terms of reference.
The Deputy mentioned public houses and restaurants and, for some time, I have been expressing concerns about those areas. While I have introduced a price freeze in the past, I have ruled out such an approach in this instance. The Deputy's suggestion of contact with the Vintners Federation of Ireland and the Restaurants Association of Ireland is one that I am considering.
