Michael D'Arcy
Question:25 Mr. D'Arcy asked the Tánaiste and Minister for Enterprise, Trade and Employment the reason prices for certain goods are higher here than elsewhere in the EU; and if she will make a statement on the matter. [9352/02]
Written Answers. - Consumer Prices.
Paul Connaughton
Question:56 Mr. Connaughton asked the Tánaiste and Minister for Enterprise, Trade and Employment the terms of reference in the investigation currently under way by Forfás into price disparities; and if she will make a statement on the matter. [9353/02]
I propose to take Questions Nos. 25 and 56 together.
I have asked Forfás to commission a study to analyse relative price levels and changes in Ireland and other euro zone countries. PricewaterhouseCoopers has been selected to undertake this study. The objective of the study is to compare the absolute prices of a balanced subset of the products covered in the consumer price index and to explore the factors that determine and influence price differentials. These include incomes, wage and other input costs, taxation, regulation, logistics and the level of competition. The study will also analyse the consumer price inflation figures for 2001 and early 2002. It will seek to ascertain whether the rate of increases in prices coinciding with the introduction of the euro was of a higher order than might have been anticipated and compare the rates of increase that occurred in Ireland with other euro zone countries.
I have asked that a report on the preliminary findings be submitted to me by mid-April. As the terms of reference are comprehensive and lengthy, I propose to circulate them directly to the Deputies and in the form of a tabular state ment with the Official Report of these proceedings.
Terms of Reference
Part A:1. Analyse relative price levels and changes in Ireland and other euro zone countries using all available existing data, including data on computer price indices, purchasing power parities, and underlying exchange rates, where relevant. Address issues of convergence and divergence over time.
2. Where data is available from national statistics institutions and/or other sources, make direct comparisons of the price levels of individual goods and services and baskets of goods and services, harmonised and weighted to maximise international comparability.
3. Ideally the objective would be to compare the absolute prices of a balanced subset of the products covered in the consumer price index across a selection of euro zone countries. However, at this stage, no primary research is required. The consultant should indicate the availability and scientific robustness of data available to this end.
4. Discuss fully the factors that determine and influence price differentials, in particular differences in income, wage costs, input costs, taxation, regulation, logistics, levels of competition, etc.
5. Produce a report, presenting the findings of the exercise, drawing out implications for competitiveness and standards of living, and making policy recommendations where appropriate.
Part B:6. Within the context of 1 and 2 analyse the consumer price inflation figures for 2001 and 2002 to ascertain whether price rises coinciding with the introduction of the euro were of a greater extent than would have been anticipated from the current trends and particular circumstances. In doing this, focus on particular categories and types of goods and services where appropriate. Compare consumer price inflation in the changeover period in Ireland with inflation in other euro zone countries over the same period, again with reference to current trends and particular circumstances. Incorporate findings in report as above.