Seanad Éireann debate -
Wednesday, 27 Nov 1957

Vol. 48 No. 10

Destructive Insects and Pests (Consolidation) Bill, 1957. - Prices Bill, 1957—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. Bartley)

The Supplies and Services (Temporary Provisions) Act, 1946, will expire on 31st December, 1957. Accordingly, from 1st January, 1958, general powers to make Orders fixing maximum prices and charges will derive solely from the authority conveyed by this Bill which provides for the repeal of the Control of Prices Act, 1937, and the Prices Commission (Extension of Functions) Act, 1938.

The Control of Prices Act, 1937, provided for the establishment of the Prices Commission and authorised the Minister for Industry and Commerce to fix maximum prices for commodities when he had received a recommendation to that effect from the commission. The Act provided also for the establishment of the office of Controller of Prices and the assignment to him of certain executive functions including action on complaints in respect of overcharging for commodities not the subject of price Orders. The Prices Commission (Extension of Functions) Act, 1938, authorised the commission to review the operation of tariffs and quotas, in particular cases, and to make recommendations to the Minister. Powers of a similar character with respect to tariffs and quotas are now vested in the Industrial Development Authority.

The Control of Prices Act, 1937, was only a relatively short time in operation when the crisis atmosphere of 1938 gave way to the emergency of 1939. With the onset of the emergency, the nature of the prices problem underwent a radical change. The main difficulty became a shortage of supplies extending over a wide field. The root causes of the price increases were not hard to find nor was there any great difficulty in establishing in what direction the balance of national advantage lay as regards interference in price matters in individual cases. Furthermore, the rapidity with which action was required and the number of commodities involved precluded procedures involving any form of lengthy investigations. Accordingly, under Emergency Powers (No. 173) Order, 1942, a Minister was authorised at his absolute discretion to make an Order or to give, either in writing or orally, a direction for controlling the prices at which articles of any description might be sold or purchased or the charges which might be made by any undertaking in respect of the doing of any work. It is this Order as supplemented by the Order made in 1951 establishing the Prices Advisory Body which has provided authority for price control.

When the Minister addressed the Dublin Chamber of Commerce on 28th May, 1957, he dealt with the question of the continuation of the emergency arrangements for price control. He said then that the survival of these war-time price controlling measures long after all scarcities have ended has operated as a major deterrent to investment in Irish industrial possibilities and that they have been interpreted by people outside Ireland interested in the promotion of new undertakings here as implying a hostile attitude to industrial profits. Every foreign expert, who advised on Irish industrial development, put his finger on these price control arrangements as an impediment of outstanding significance. It is true that profits earned in export business have never been subject to control but that fact has not been appreciated. It is proposed now to dismantle that war-time price control structure.

Some system of price control there must be, undoubtedly, but it is intended to legislate for a system which will be invoked, only where either (a) there are monopoly conditions arising from unavoidable circumstances or from combinations among suppliers which can be shown after examination to be operating to the public detriment; or (b) in the case of protected industries, there is evidence of inefficiency, by which is meant excessive costs due to factors within the power of those engaged in the industry to rectify, whether manufacturers or employees, or (c) there is need to deal with temporary shortages arising from temporary causes. The Government believes that in normal circumstances competition is the best regulator of prices and where competition operates there will be no control. There is no desire to prevent the most efficient firm from getting the reward of increased business in higher profits, lower prices and better conditions for its employees. The Bill is intended to give legislative effect to the foregoing general statement of policy.

Under the provisions of the Bill, the Minister for Industry and Commerce will no longer have unfettered discretion to fix maximum prices and charges even in respect of prices and charges to which the Bill applies. With certain exceptions, his power will be exercisable only on——

(i) the receipt of a report under the Restrictive Trade Practices Act, 1953, from the Fair Trade Commission;

(ii) the receipt of a report from a Prices Advisory Committee as envisaged in the Bill, or

(iii) the making by the Government in accordance with the provisions of the Bill of an Order that a state of emergency exists with respect to a specified commodity or commodities.

In ordinary circumstances, therefore, the position will be that general powers of price control cannot be exercised on an arbitrary basis and can be exercised only on the basis of the report of an independent investigational body. Earlier price enactments provided for the appointment of a prices commission and a controller of prices and entrusted to them functions with regard to the surveillance of prices, the carrying out of price inquiries, the investigation of the effects of protective measures and other responsibilities of a similar nature.

I think that the establishment of a permanent commission or of a controller is unnecessary and is undesirable from the point of view of the wrong implications which might be drawn from their existence. Since the enactment of previous price legislation the necessity for a commission or controller has been eliminated to a very great extent by the establishment of the Fair Trade Commission and the Industrial Development Authority. I think it is unwise to have any overlapping of responsibility or of functions in matters of this kind and therefore, in so far as price problems derive from restrictive practices, the Bill provides that the Minister's powers should be exercisable only on a report from the Fair Trade Commission. The position is more complicated in the case of the Industrial Development Authority because of the variety of functions and responsibilities attaching to the authority.

I am satisfied that as regards price investigations other than those relating to restrictive practices as defined in the Restrictive Trade Practices Act, 1953, the best course is to set up an ad hoc advisory committee to conduct each particular investigation. Once, however, such a committee is appointed it will have all the powers and status necessary to carry out its responsibilities and will have full power to summon witness and examine them on oath. I think it is essential that the latter power should be exercisable only by the chairman and the Bill provides accordingly.

It will be observed that advisory committees in addition to their other powers will have authority to report as to whether in their opinion prices or charges are unduly high by reason of undue labour costs. These undue costs might arise from a variety of circumstances including restrictive practices.

The power to fix maximum prices in a state of emergency is one which is considered appropriate to a situation such as developed in the course of the Suez crisis. If an emergency of the proportions of war or near-war arose it is likely that resort would have to be had to legislation of a more general character. It is desired to limit to the maximum extent possible the use of direct powers of control and the procedure proposed seems to provide the best practical approach to the problem. It might be unwise, however, to have any lesser powers of control in an emergency even of limited extent.

In a period which is not an emergency, the only commodities in respect of which direct powers of control may be exercised are bread, sugar, milk and butter. Provision was made in the Bill as introduced in Dáil Éireann for continuing in force the Intoxicating Liquor (Maximum Prices) Order, 1957. The Order fixes maximum prices for stout and porter in County Dublin, the County Boroughs of Dublin, Cork, Limerick and Waterford and the Borough of Galway. Following discussions with the trade, it has been decided not to continue the Order in force after 31st December, 1957, and it will now expire on that date, unless previously revoked.

There are specific enactments relating to milk and bread which give authority to control prices and it will be possible to proceed either under these enactments or under the Bill. The power to control milk and butter is restricted to retail prices and is exercisable only after consultation with the Minister for Agriculture. In the case of milk, the power to fix prices is subject to the further limitation that it is exercisable only in areas declared to be sale districts for the purposes of Part II of the Milk (Regulation of Supply and Price) Act, 1936.

No provision is made in the Bill for the continuance in force of the Orders at present in operation fixing maximum prices for kerosene, motor spirit and sugar. These Orders, as well as the Order fixing the maximum prices for intoxicating liquor, already mentioned, will lapse on the 31st December, 1957, with the expiration of the Supplies and Services (Temporary Provisions) Act, 1946. The Orders providing for the display of price lists and requiring a seller to give on demand to a buyer certain prescribed particulars of a sale will also expire on 31st December, 1957. In the case of sugar, it will, of course, be possible to make a price Order without reference to either the Fair Trade Commission or a prices advisory committee. While no final decision is possible at this stage, present indications are that it will be necessary to maintain control.

Power is taken in the Bill to make Orders requiring the display of prices of any or all of specified commodities. Certain commodities do not lend themselves to the display of exhaustive price lists and the articles specified have been selected by reference to their importance and to the reasonableness of requiring shopkeepers to display prices of these articles. No provision is made in the Bill requiring a seller to furnish to a buyer particulars of a sale or for the making of an Order to that effect and such a rerequirement could be included in an Order only, if at all, to the extent to which it shall appear necessary or expedient for giving full effect to any provision inserted in the Order or to secure compliance with the Order. A number of other detailed provisions contained in previous legislation or legislative proposals have also been omitted.

As I have said, the commodities in addition to sugar which are subject to direct control under the Bill are bread, butter and milk. Retail prices of milk in certain areas are at present controlled under the provisions of the Milk (Regulation of Supply and Price) Act, 1936, and it is not anticipated that any changes will be made with the coming into operation of the new Act. No Orders are currently in force with respect to either bread or butter nor has any immediate reason for such Orders come to notice.

The remaining matter of principle to which it is necessary to refer in relation to the Bill is the provision for exclusion from its scope. The important exclusions are prices paid to producers of agricultural and horticultural products and to fishermen, charges for professional services and prices and charges already subject to control under specific enactments or coming within the administrative competence of members of the Government or local authorities. As already mentioned, however, the Bill expressly applies to bread and milk although control of prices is provided for in specific enactments.

Dr. O'Donovan

Any fairminded person must admit that, since the end of the war and even during a part of the war period, price control has not been very successful in this country. Quite obviously, this Bill is intended to dismantle the bulk of the price control machinery. A few items are left in, in a rather diffident way.

In a period of long-term inflation, the Executive has great difficulty in keeping the prices of the necessaries of life at the level which appears to the ordinary person to be reasonable. I should like to direct attention to one factor in the situation. Although they have turned downwards now, import prices have been rising continuously in recent years. That resulted, in the past 12 or 18 months, in a considerable rise in retail and wholesale prices here, and in import prices, although our export prices remained approximately stable. These figures are shown in the current Quarterly Bulletin of the Central Bank of Ireland.

The result of a deflation in the economy here, combined with an inflation in Britain last year of about 7 per cent., has been to give rise to a considerable spread in the standard of living between this country and Britain. It is an extremely difficult problem to deal with and the Minister for Industry and Commerce, whoever he may be and to whatever Party he may belong, deserves considerable sympathy in trying to cope with it. It would be fair to infer from this Bill that to a certain extent the present Minister for Industry and Commerce has thrown his hat at the job.

Speaking for myself, I do not agree with the action which was taken by the Government in abolishing the subsidies on bread and butter—and I will give my reasons. Before the subsidy on bread was abolished, the price of the 2 lb. loaf delivered was 9¼d. and the subsidy can be worked out very accurately at about 3¼d. or 3?d. If you add the two together, you get 1/0½d. In fact, when the decontrol took place immediately following the Budget, the bakers fixed the price at 1/2. That was too much for the Minister and he reimposed the control immediately; but it would appear from subsequent events that the bakers were assessing the position correctly, because the price is now again 1/2 for a 2lb. loaf delivered.

My point this evening is an economic one. There is a subsidy of 3¼d. and when it is removed, you get an increase of 4¾d. Of course, any person who knows the way these things work out would expect that to happen. There are the consequential costs; the subsidy is paid at the base, probably through Grain Importers Limited; you cut it off at the base and you effect all the consequential spiral of costs. That is the case of the bread subsidy. There is a much greater increase in prices than the benefit the Exchequer gets through the abolition of the subsidy.

There was a subsidy of 5d. a lb. on butter and the price officially was 3/9. Owing to price cutting, it was cheaper here in Dublin, at times. It is cheaper at the moment than the official price. The recognised price, the general price, went up from 3/9 to 4/4. Although the subsidy was 5d., the price went up by 7d. Anyone who wishes to defend that change, on the ground that people who could afford it were getting butter at a subsidised price, is welcome to that argument.

One must not get away from the fact that undoubtedly all this led to the current round of wage increases of 10/- a week which is being paid generally. That is, of course, going to put our export industries into a very grave position. If it be true, as the Minister for Education said in Cork a few days ago, that the "fifth round, the 1955 round, of wage increases created the conditions which led to the difficulties for our export trade" we are going to be back in those difficulties. But the 1955 round was due entirely to the importation of inflation and I want to go back to that subject in a moment because people are inclined to chaff about it occassionally. The Minister suggested that the 1955 round of wage increases created serious difficulties for the economy. That round of wage increases came about without any action of any sort by the Government of the day. The Government kept out of the business; the negotiations were allowed to take place between the unions and the different organisations of employers. On the current occasion, the Government has held the ring again, so to speak, but more than on the 1955 occasion. The result, at any rate, is that there is an increase of 10/- a week in many categories of wages.

If in fact it be true, as the Minister for Education seems to suggest, that difficulties were created for the export industry by that increase in wages, there is not the slightest doubt that similar difficulties will be created again. People in other countries are inclined to chaff about the subject of importing inflation and that is particularly true of some of the English writers. It is an easy excuse to say it is imported from somebody else. In this country, half the imports are raw materials and the other half agricultural raw materials. The effect of continuously rising import prices will be to produce inflation. I am glad to say there has been a definite downturn in the prices of raw materials during the last four or five months. Copper has come down from over £400 a ton to £180 a ton and the whole fall of import prices should be of benefit to our economy.

I take it that the Government, in abolishing the food subsidies, calculated the risk and what the increase in wages would be. It was quite obvious that when it happened immediately, without any furore, they were in agreement with the increases in wages but that will not affect the internal economy to the same degree as it will affect the export industries. As it is necessary for our economy to increase exports, it is obvious that the expansion of exports will be made more difficult. If the increases in wages in 1955 was too great the economy has not had time to absorb that increase in a period of two years, particularly with import prices rising continuously. The present Executive are taking the risk on that front, with the external part of our economy, which from one point of view has been running exceptionally well for nine or ten months, but is now getting into difficulties.

Many people have objected to this Bill dismantling these controls and have thought it extremely undesirable. The Fine Gael Party does not feel that price control has been so successful that the Executive are not entitled to take a decision to dismantle a large part of it, though it is quite obvious that, in a small country like this, where you have individual monopolies in a good many of the ordinary commodities that are produced, the Executive are running a risk. I cannot say that I honestly welcome the Bill, but I think the Minister is entitled to take his view and that we will not be inclined to oppose it as he has introduced it in this way.

Miss Davidson

The Bill now before us repeals the Prices Act of 1937 which, as we know, has been in abeyance, and it replaces by permanent legislation on price control, the Supplies and Services Act of the emergency. We can all agree on the desirability of replacing the temporary legislation. In fact, the previous Minister had intended to do this. We feel, too, that it is essential that there should be some machinery available for the investigation of prices and for control by the Minister and Government, where necessary, but we have a feeling that the legislation now proposed is definitely a dismantling of price control machinery and that, we submit, is dangerous as well as highly undesirable.

In legislation of this kind, the protection of the consumer should be a primary consideration and we do not agree that price control is inimical to industrial development, as the Minister implied in his speech in the Dáil. On the other hand, we are of opinion that investigation could redound to the advantage of manufacturers and traders in that it would give them an opportunity to justify their prices to the public and to prove that their profits are low—if that is in fact the case.

We recognise that the major factors concerning price levels are not susceptible to control by Governments. The price of imported raw materials is the primary factor in our situation and we feel that public investigation of prices can do a great deal to bring this fact home to the community, and to create a more balanced public opinion on prices. I do not think anyone suggests that price control can prevent prices going up in all circumstances, but it certainly can prevent unjustifiable increases. The Minister continually asserts that profits are too low and that any suggestion of price control creates an anti-profit atmosphere. It may, of course, be true that profits in some cases are too low, but what evidence is there that they are too low in industry, distribution and trade generally? The I.B.E.C. Report is usually cited as proof that profits are too low, but the conclusions in that report are based largely on a comparison between American and Irish results, which is hardly realistic. Then, too, the data on which the report was compiled relate to almost ten years ago. If its conclusions were correct at that time, they are not necessarily applicable to present-day conditions.

The real fact is that there is not sufficient evidence to show whether profits are too low or not. The Committee of Inquiry into Taxation on Industry which was set up in 1953 by the then Minister for Finance, concluded its report which was published last year with these words:—

"In the absence of comprehensive data... it is difficult to arrive at any worthwhile objective conclusions in regard to Irish profit levels."

This apparently is all that can be said on the matter and it is unwise for the Minister, or anybody else, to assert dogmatically that profits are too low, when in fact the evidence is not there.

In the Bill before us, an important defect is that there is no provision for investigation of distribution margins. The Prices Advisory Committees will be restricted to manufacturing, whereas it is excessive distribution costs that are most subject to public criticism on prices. The Minister has based the Bill on his assumption that competition is the most effective price regulator, but when there is a small market, with relatively few industrial units, competition is unlikely to operate effectively.

In any case, apart from agreements to maintain prices or other such restrictive practices—which, in theory, can be blocked by the Fair Trade Commission —it is not difficult in Irish conditions to restrict competition—close personal, social and business contacts in a small community can be exceedingly effective. Price control is difficult to operate in many cases, but this should not be an excuse for abandoning it altogether. The Bill abolishes the Prices Advisory Body and its functions will be taken over by ad hoc Prices Advisory Committees. A strong case can be made for a Prices Advisory Body, or Board, with a permanent personnel, as against ad hoc committees such as are proposed. Such a body need not be expensive and its members would become expert in the difficult task of price investigation and would be extremely useful to the Minister in their advisory capacity. Such body could win the public confidence in a way a committee never would.

The Prices Advisory Body did a very good job and the previous Minister referred a considerable number of investigations to it. Since the change of Government, however, there has not been a single public investigation. The public investigations of the body were welcomed by the consumers and the consumers' organisations, and in the Irish Times of 13th of this month, there is a statement regarding a protest sent to the Minister on the Prices Bill by the Irish Housewives' Association in the course of which they say:—

"We regard the abolition of the Prices Advisory Body as a retrogressive step...."

and they continue:—

"We are of the opinion that the fact that sittings of the Prices Advisory Body were held in public has to some extent acted as a check on rising prices. We deplore the proposal to hold sittings of the Advisory Committees in private. This would deprive the consumer of this safeguard and also of the right to know what is being done by his representatives."

There is no doubt that the public investigations of the Prices Advisory Body were of great value and the reports in the press of its investigations were also of value in educating public opinion on the factors affecting prices. There is bound to be general concern that the body is being abolished.

Professor Fearon

I should like to emphasise a point raised by Senator Miss Davidson which has been running through my head since I have been considering this Bill and statements made about it and the functions and workings of these proposed Advisory Committees. It seems to me that, in losing the old committee of the 1937 Act, we have lost a very important channel of communication which that committee could exercise by independent inquiries. So far as I see, there are no facilities made for public sittings for this proposed advisory panel. I think it is very desirable, where prices are concerned, that there should be some way in which an approach can be made to a sitting body and that a sitting body can go in search of information. It looks to me from the construction of this Bill that the advisory body will be very much of an appendage to the Minister.

During the course of his remarks on the Bill in the other House, the Minister said that the element of profit is only a small part of prices. I suppose that is right, but I do think that, in prices investigations, we should remember that profit and quality are very often closely related. Very often, we have to pay the same price for articles made here as for articles made elsewhere, but very often the quality is not as good. When the Minister refers, in Part II Section 10, to the prices charged for commodities, I would like the quality to be included as well as the price. Many of us are prepared to pay higher prices, provided we get what we are expecting to get, but when we are charged practically the same price for doubtful confectionery, or other strange things, then we feel doubly hurt. I think the quality should be stressed as well as the price.

I observe in this Bill that the Minister has reserved power in regard to the important food materials. I still believe, and sometimes imagine that I will live to see the day when food finds its own natural price level. There is one thing we cannot change, that is, the amount of food required every 24 hours to keep a man going. For that reason, I feel that when a Government is reserving the power of control over food prices, that Government must be very well informed as well, lest quite unwittingly it interferes with the nutrition necessary to mankind.

I think it is very desirable for the Minister, in the Schedule, to make provision for the display of retail prices. Where prices are displayed, the element of competition comes in. I have only got to look at the price lists in my own town to find that citrus fruits vary from 1/6 to 10d. Of course, they might not be of the same quality and one vintage might be different from the other. All I regret is that the Schedule is not a little more extensive. For instance, vegetables and tomatoes are left out. Oranges are the only citrus fruits included and I suppose fish is too risky to be included —it certainly becomes rarer and rarer in a community so well provided for by the sea. Apart from that, I welcome the intentions of the Bill, but not all these operations I have indicated.

Mr. Lenihan

Briefly, this Bill provides for the repeal, by the Minister, of the wartime controls in use year by year under the annual Supplies and Services Bill, and in particular the Prices Advisory Body sitting continually as a public body is now to go. The Minister proposes to deal with four essential commodities as heretofore by direct ministerial Order. By such Order, he can control the price of bread, butter, milk and sugar. In regard to other services, the Minister proposes to reserve to himself what he called reserved functions or enabling functions. In other words, from a permanent panel, he can call into being an advisory committee under certain circumstances on a declared state of emergency, or when costs in a protected industry lead to unduly high prices. I think it should be made clear that there is no question in this Bill of dismantling price control as was said by Senator Miss Davidson. What is gone is what I would regard as the ineffectual Prices Advisory Body which, over the past few years, has been having expensive sittings and which, to my view, and I think in the opinion of the Minister, has been largely making work for itself over the past few years. It is inevitable, with a permanent body of that nature, that it will try to make work for itself where work is not necessary. In its stead, the Minister will have this committee which he may bring into being in certain circumstances. I think that is a good thing.

The Minister's real problem is that the degree of price control which we can have in this State cannot be such as will act as a deterrent to private industrial enterprise. If we are to get anywhere in our efforts to cope with unemployment and emigration, we must have a greater degree of private industrial enterprise. I think it is with that end in view that the Minister has brought in these reserved functions in regard to non-essential commodities.

The Bill is a good one for two very good reasons. The first is that it marks, as I hope, the end of the era of political friction over prices in Irish public life. We have had that friction every year for the past 10 years when the annual Supplies and Services Bill came before the Oireachtas. That has happened every year since 1948 and the attitude has been bred in the public mind that the Government can control prices and that the Government of the day should be held responsible for the prices of commodities. That was largely introduced by the type of anti-Fianna Fail electioneering which has been carried on since 1948—the type of electioneering that sought to create in the public mind the view that the Fianna Fail Party alone were responsible for high prices. That reached its zenith in the 1954 General Election—

Professor Hayes

I wonder how long the House will sit if we all wish to go back to the 1954 General Election?

Mr. Lenihan

I bring in the 1954 General Election only in this context, with regard to that type of electioneering. I am thankful that the attitude of mind reflected in that electioneering is going under this Bill and I hope the Bill marks the end of it.

An Leas-Chathaoirleach

I suggest that the Senator should not try to re-introduce it.

Mr. Lenihan

I introduce it only in so far as Senator O'Donovan made his point. I think that the abolition of the subsidies and this Bill have brought that type of thing to an end. From now on, there will be no arguments about subsidies and prices and the Government of the day can carry on with the practical business of running the country.

The second important reason for supporting this Bill is that it nails on the head the statement that excessive profits are being made in Irish industry. Senator Miss Davidson has attached herself to the outworn notion that excessive profits are being made in Irish industries, but the Minister, when introducing the Bill, dealt with that matter in column 120, volume 164 when he said:—

"I have far less desire to revive the campaign against profits when all our experience is that the profit margins in industry are in many instances too low to permit a rate of expansion in industry such as we would desire to see. The advice which we have got from outside experts who were from time to time brought here to advise upon Irish economic development is that profits in industry are inadequate to en-encourage investment in industry."

What the Minister has said there about profits in industry is the main factor militating against the expansion we require in Irish industrial development to-day. The fact is that profit margins are not high enough. Senator Miss Davidson said that it was unrealistic to draw comparisons between Ireland and the United States, but if a high margin of profit operates there, we should aim at a similar margin here so as to bring in outside and home investors.

I hope the idea that great profits exist in Irish industry is now gone for ever, and if it has not, that this Bill will put the final nail in its coffin. Prices should be taken out of the political arena and the question of margins of profit should be regarded as an incentive to industrialists and investors in this country so that they will invest more in the effort to combat unemployment and emigration. The truth is that the rise in the cost of living in this country has been brought about by world-wide inflation which no Government in this little island could offset to any degree. That alone has been responsible and the sooner we face up to that fact, the better.

In conclusion, I should like to say that this Bill represents part of the general pattern of Government policy which has been evident since March of this year. First, we had the Finance Act and the various tax concessions which were given by the Government under that Act, such as the increased depreciation allowance and the 100 per cent. remission of tax on profits from exports. These fiscal concessions should operate as an incentive towards greater investment. The existing system of war-time price controls was a disincentive which prevented people from putting money into Irish industrial enterprise. These two measures I have mentioned, taken in conjunction with the proposed amendment of the Control of Manufactures Act which will shortly be before the Oireachtas, represent a real effort on the part of the Government for the past six months to get to grips with our essential economic problems. There should be no difficulty in getting this Bill through the House as I have no doubt that it will commend itself to the Seanad.

Mr. McGuire

I am rather disappointed that the previous speaker should have introduced a political note into the debate on this Bill, especially as he is, like myself, a business man. Apart from a few asides, I agree with practically everything he said. I should like to treat this Bill from a businessman's angle and not from a political angle. I agree with the previous speaker that the major industries, and agriculture is one of them, the industrialisation of our country, the employment of our people and the reduction of emigration are all problems that should not be used purely as political shuttlecocks; but that is how these problems have been used in the past.

Unlike the previous speaker, however, I do not propose to cast a political slant on my remarks on this measure. Despite the Minister saying in the Dáil, when introducing this Bill, that it was of minor importance, I regard it as of major importance. It shows a major change in the views of the present Government and of the Opposition Party, to which I myself belong, on this whole question of price control. Both the Minister and Deputy Cosgrave expressed recognition of the futility of the price controlling efforts of the past 20 years, efforts against which I have taken every opportunity to protest since I came into the Seanad.

When the Minister was introducing this Bill the Dáil, he said at column 119, Vol. 164 of the Dáil Debates:—

"When the Control of Prices Act of 1937 was being debated here before the war it was in an atmosphere in which it was generally contended that all price increases which occurred were due to one cause and one cause only, namely, excess profit taking."

He went on to say:—

"The experience of those 20 years, the record of continuously rising prices due to inflationary forces which no system of Government regulation, investigation or control was able to check has, I hope, helped to educate public opinion in regard to the forces that affect prices."

In the same debate, Deputy Cosgrave, speaking for the Fine Gael Party, said at column 126:—

"I suppose experience has taught Deputies on both sides of the House but it is possible that both sides have contributed to the illusion that prices can be controlled by Government action or by some statutory authority. Experience in recent years, however, has demonstrated that, with occasional exceptions, that is not so."

There we have both sides admitting that something was attempted which should never have been attempted because of the damage perpetrated upon the industrial and commercial life of the country by the unwise and unfair imposition of these controls on prices and profits. I believe that much of our unemployment and emigration to-day can be traced back to this 20 years attack on profits through prices, because, as Senator Lenihan has pointed out, there was a public opinion created and a public mental climate antagonistic, through prices, to business itself, business on which we depend to employ our people and to stop emigration.

I must say I am always astonished at the attitude of the Labour Party and the trade unions on this question of prices and profits. The fact is that wages in any particular costs bill are the single biggest factor. In fact, at the present moment, when the prices of raw materials have fallen, it is fair to say that from now on, the only factor which will put up prices—and prices will go up—is wages. How the Labour people can attack profits all the time is something I cannot understand. As I have said before, the Labour Party are boring holes in the ship they are travelling in; business must make a profit in order to carry on and to maintain itself in a strong and healthy condition.

Reference was made to America. I think we should copy America because, in America, they have the highest standard of employment, the highest standard of living and the highest wages. Surely, that is something to be copied and not something to be denigrated. In this context, I should like to refer to a remark of Senator Miss Davidson about distribution. We are always hearing about distribution costs being too heavy. Does that mean that we should employ fewer people in distribution? If we are to have a less wieldy form of distribution, we shall have to disemploy people and get rid of people who are at present employed in distribution. From a social point of view, it is vitally important that all who are at present employed in distribution should be retained. Does the Labour Party and Senator Miss Davidson suggest we should get rid of these people in what she describes as this over-wieldy distribution system? That seems to me to be the suggestion. I do not think it is a logical one, coming from people who are always asking for higher wages and more employment.

An atmosphere has been created here to-day to which we are not wholly unaccustomed. I know we shall have more attacks on prices and profits as the debate proceeds. The I.B.E.C. Report is supposed to be out of date. It was published in 1951, only five or six years ago. It is not out of date. The only drawback is that notice was never taken of it. What is the good of getting reports? We are now to get a report from the World Bank advising us on our economy. Supposing that report states that our profits are too low to reward our own native capital, to build up wealth and strength in our industrial economy or to attract outside capital with the know-how, will we ignore that report because it is not in accord with the Housewives' Association views in relation to prices, profit controls and so forth? I would ask the housewives: do they want to have lower prices for goods which they are not able to buy? Would they prefer to have reasonable prices given to industry which employs their husbands, their sons and their daughters? I think housewives generally would be much happier having their husbands and children employed than having lower prices for goods at uneconomic prices which they themselves would not have the money to purchase.

This Bill marks a welcome and essential change in Government policy and Government thinking on the question of profits. The fact is we need and we should encourage enterprises, private or State, that are profit-making. I wish our C.I.E., our Aer Lingus and all the others were making big profits. If they were, we would be in a very strong position. Are we going to try to make private enterprise as unrewarding as C.I.E. and all these other undertakings? If we do, I do not know who will pay the subsidies and the taxes necessary to keep these uneconomic enterprises going.

I welcome this change of policy and the admission by the Government in relation to prices and profits. I welcome the Bill, but there is still inherent in it a certain degree of suspicion and a desire to hold on. We have got to the stage here—it is a general one the world over—best illustrated by the story of the little girl who was being brought down Grafton Street by her mother. She was holding her mother's hand, but, as she walked, she looked about her. Suddenly she hit her head against a lamp post. In tears, she said to her mother: "Mummy, why don't you look where I am going?" That appears to be our philosophy. We want the Government to look where everybody is going.

As I have said, for many years past, public opinion has been suspicious of business and antagonistic to it. Up to now, it has been considered anti-social for business men to make profit. The truth is that it is anti-social not to make profit. If we get that sort of mentality in this country, that it is anti-social not to make profit and that we must make good profits, then we will be at least on the road to developing an economy that will be able to employ our people.

Here we are, after 30 odd years of self-government, and everybody wonders what is wrong with the country. It is quite simple. As somebody said to me when I was abroad recently: "The Irish people are not business people; they have no idea of the reward necessary in order to build up capital." For instance, I believe that before we can have our people properly employed, we will have to change completely our attitude towards business. At present, there is penal taxation designed against business. We should have little or no taxation on undistributed profits in order to build up capital. Our death duties are an absolutely killing factor so far as private businesses are concerned. On top of that, businesses operate in an atmosphere in which it is supposed to be anti-social to make a profit; in other words, to run a successful business.

I welcome this Bill for the reason that it shows that price control has been a failure in this country. The reason it failed is that it was bound to fail. The only thing it succeeded in doing was to damp down industrial and commercial progress and expansion. I welcome it as a first step in the direction of creating the right atmosphere in which we can have a successful industrial, and even agricultural, economy.

I have already said what we all know to be a fact: that wages are the biggest factor in costs, and, therefore, in prices. Reference was made by Senator O'Donovan to the fifth round of wages. I will not go into all the ill effects that that had on our economy; but I think it is relevant to mention that we are now dealing with the sixth round of wage increases and that will have a lot to do with prices and profits. An agreement was made by the Federated Union of Employers and P.U.T.U.O. on a future policy for wages, under which it was agreed that general rises in wages should not cause unemployment or rises in prices. Wage claims could be negotiated up to a ceiling of 10/-, but it was also mentioned in that agreement that where wage increases were given, something should be done between the employer and the workers to arrange that there would be an offset against wages paid. Otherwise any such payment would be purely inflationary. In the words of the agreement:—

"The two bodies are anxious that increases in wages would not be followed by increases in prices and recognise that, in so far as they are able to exercise any influence on restraining price rises, employers and trade unions have a duty to do so. Both organisations accept the responsibilities for ensuring that every practical effort be made to offset increases in costs where they may occur by improved efforts and efficiency and greater productivity."

What has, in fact, happened up to now? In many cases, I am sorry to say, employers have not asked for improved efforts, efficiency and greater productivity. They are merely handing out this 10/- as a formula and thereby floating into the spending power of the community inflationary money that has no counterpart in production, in work and in services. I need not tell you that such purely inflationary money will create trouble such as we had last year.

Where employers have asked for greater efforts and for the breaking down of restrictive trade practices, I am sorry to say that, in a great many cases that have come to my notice, the unions are refusing. They just say: "We want the 10/-; that is all there is to it." They are turning down—I do not like to use the word "contemptuously"—almost contemptuously any suggestion that they should do anything to offset the 10/-. They say it is their right under the agreement. Of course, it is not.

What I am pleading for is that the trade unions and the employers should read the whole of that agreement. If we are to keep down our costs, and therefore our prices, they should read it. It not only mentions 10/-, but does so in accordance with the terms relating to that ceiling. That is a most important point. I wish it could be got over to the country generally.

In conclusion, I should like to say once more that I welcome this Bill as a movement in the right direction, towards the freeing into rational channels of the operations of industries in this country. I can only say that I hope the movement that has been started in this Bill will be pursued and that, later on, we will see an enlightened Bill to give relief from the penal taxation at present imposed on business here. If we get a reasonable taxation code, plus a reasonable atmosphere in which business can operate, I think we can look forward to a much more pleasant future in relation to the employment of our people and dealing with emigration.

Dr. Sheehy Skeffington

I listened to this debate with great interest. It has been a varied and fruitful debate and—if I may say so without discourtesy—a wider debate than it was found possible to give this measure in the Dáil where only three Deputies were aroused to make speeches on the Second Stage.

I think it was Senator O'Donovan who first used the phrase that this Bill was effectively "dismantling the present prices machinery." Some Senators have differed from him in that view. I think it is a sound analysis of what is taking place. I had a feeling when I first read this Bill that it represented a large measure of window-dressing, of pretence that something will be done in some wonderful new way, with "panels" of people who can be put on "advisory committees" and so on. As I read the Bill, I realised it was not even going to be window-dressing. It was not even going to be kept in a shop window; it was going to be put on the shelf. That may seem a little hard, but I can quote the Minister as saying that very thing. In volume 164, column 135 of the Dáil Debates, he says:—

"When the Bill becomes an Act, it will be put upon a shelf, and taken down from the shelf only when some set of circumstances arises which, in the view of the Minister for Industry and Commerce or the Government, requires its utilisation."

This whole Bill is entirely empty of content, unless circumstances arise to make the Government or the Minister think that they might set up one of these advisory committees. I do not think that this is a Bill with teeth in it; I do not think it is a measure which intends action at all. Therefore, we find the business interests so far as they are represented here in the House, praising the Bill and saying it is a wonderful Bill, because they know it is a completely ineffective Bill in so far as it claims to deal with prices. After all, the title of the Bill is "Prices Bill." It might as well be called the "No Interference with Prices Bill."

Senator Lenihan made a point that, in fact, all our Irish Governments have always been completely incapable of controlling prices. I hope I am not misinterpreting him when I say that. It is quite unfair of one Party to criticise another Party because they have failed to control prices, says Senator Lenihan, because the other Party knows perfectly well that they cannot do it, that they are powerless. It is not a question of being incompetent; but of being impotent in their efforts to control prices. At all events, says Senator Lenihan—and Senator McGuire agrees with him—it is recognised that no Government can do it, that we never had and never shall have in this country effective price-control by Governments representing either of the big parties. I think that is an absolutely fair statement of the facts, and I agree with it. I do not believe that either of the big parties here have ever controlled prices effectively, or that they ever intend to control them, or are capable of doing so in the future.

The abolition of the Prices Advisory Body is a return to something like the old days when there was a Prices Commission sitting in the Department of Industry and Commerce behind closed doors, making decisions based upon mysterious evidence which never came before the public at all. I do not suggest there was anything improper in the way in which such a body acted; I believe it behaved in a most conscientious way; but I suggest that such a closed-door method of determining a just price is bad in a democracy. It leads to lobbying, and trying to find people who "have the ear of the Minister," and so on. That lobbying may be ineffective, but the tendency is very great to encourage it by all decisions on prices and price control being made behind closed doors. I would prefer that such decisions should be taken right out in the open. For that reason, I believe that the Prices Advisory Body, which was set up by the first inter-Party Government, represented a very big step forward.

It may, of course, have been a step forward deplored by certain prominent members of the Fine Gael Party. Senator McGuire does not agree with that kind of thing and would like to retain the old method. Yet, in spite of the harsh things said about it by Senator Lenihan, I believe that, by and large, it has done excellent work, and I believe that if we had not had these public inquiries, defective as some of them may have been, prices would be far higher to-day. I believe the abolition of this body—and its present cessation of work, more or less—is having an effect on price levels at this moment. I think then that it was good, but that it suffered from two main defects.

The first defect it had was that upon it there was no consumer representation. That is a point I want to make in relation to the present Bill and to the advisory committee panels which are to be set up. It is absolutely essential that the consumer should be directly represented. I am familiar with the thesis that says: "After all, there were trade union representatives on the Prices Advisory Body and everybody is a consumer; a High Court Judge is a consumer and a trade union official is a consumer." I am not satisfied with that. I have seen cases come before the Prices Advisory Body where prices could be shown to be high and where the defence was made that the trade unions insisted on certain wages which necessitated a high price; and the trade union representatives on the Prices Advisory Body were very reluctant to criticise or interfere with a price factor for which trade unions appeared to be responsible. For that reason, I do not believe that a trade union representative makes a sufficiently good representative of the consumer. That was one defect: that the Prices Advisory Body had not got direct consumer representation.

The other big defect it had, in my opinion, was that although some of the proceedings were held in public, not half enough was brought before the public. Much of the evidence which was asked for in public by consumers' organisations was not given in public. The business men, who are so cager to defend the profit motive and the sacredness of their "social duty" to make as big profits as they can, are terribly reluctant to tell us just precisely what those profits are, in public. If it is a social honour, as Senator McGuire has told us, and a social duty —assumed perhaps even reluctantly, for the sake of the country—to make such profits, why are business men so ashamed to let it be known what those profits are, and tell how they make them, before the public? Again, businessmen pleaded before the Prices Advisory Body that such and such information was confidential and its disclosure would embarrass them, and they could only whisper it in private into the ears of the members of that body. They did so; they had to do so under the law; but such evidence was never made public.

Now, I am satisfied that the Prices Advisory Body was a body of complete integrity, which took into account all the evidence placed before it. What I am pointing out is that one of its two major defects was that much of the evidence, even for public enquiries, was given privately, and, of course, several of the inquiries were entirely in private. So, that body suffered from those two defects; but it was, on the whole, a good body. Now it is being abolished by this Prices Bill.

On the question of consumer representation, there is no guarantee enshrined in this Bill that the new committees, if ever set up, will have consumer representation. And there is a reference specifically to the holding of inquiries before such committees in public; and that specific reference is that they shall "not be held in public," unless the Minister gives his special permission. I cannot think that that is an improvement on the present situation. Before the Prices Advisory Body to-day anyone can appear, anyone can ask them to make an inquiry, and anyone can give evidence before them in public. Any manufacturer who wants to justify a rise in prices—and it is obvious that sometimes a rise may be justified—has to make that justification in public. I do not think that that is a bad thing. I do not see why business interests should be afraid of it, and I deplore the fact that that apparently will not be necessary any longer.

I would remind people like Senator Lenihan furthermore—I am sorry he is not here—that the right of our State to inquire into Irish price levels is a function of the State protection which is gladly accepted by our industries. Industries, whose representatives talk about their "rugged independence" and so on, are protected by 50 per cent. and 75 per cent. tariff walls. They accept this State interference with "the prices mechanism" and all the rest of it. They accept this shelter provided by the State and I suggest to them that that protection ought to be linked with a parallel right of the State, which gives that protection, to inquire into the factors which constitute their price levels. I believe protection of that kind ought to carry with it the right, if not directly to control prices, at any rate, to insist that they be publicly justified.

I should like to give one example. There was only one case in the history of the Prices Advisory Body where a group of consumers brought before the body an application to have the price of something reduced. This one case was in connection with children's perambulators. The case was pleaded before the Prices Advisory Body, and it was shown that there were only three Irish manufacturers of prams, and that there was a very strong retail traders' organisation. It was shown that these Irish prams benefited by a 50 per cent. protective duty. It was shown also that the traders' association was putting a squeeze on the manufacturers to prevent them from supplying any trader who committed the ghastly crime of taking a profit of less than 50 per cent. gross. That is a business crime. You must not do it. You must not cut the amount of profit which you are prepared to take. In this case, the compulsory profit margin was 50 per cent., and the protective duty was 50 per cent.

It emerged, in the course of evidence, that one of the manufacturers was also a retailer, and was very closely linked with a finance company to arrange hire purchase terms for people who could not afford to buy prams at the extraordinarily high prices insisted upon by these traders in their ring. And this was a ring. The Prices Advisory Body went into this question and it emerged that one retailer who was prepared to take a 33? per cent. profit had applied time and again for permission to allow him to import British prams free of duty in order to break this ring. The Minister said that he was helpless in that regard. This is the kind of thing the ordinary consumer thinks about, when he hears business representatives talking about the sacred duty of the business man to get as much profit as he can. The Prices Advisory Body found and specifically ruled in this case that it was in the public interest to decree that the price of prams should be reduced by 1/4 in the £.

I cite that example as a representative example of the sort of arrangements, negotiations, collective action and rigging of prices, and rings, rings which the community would like to see a Bill like this framed to combat, and which, in my opinion, this Bill does nothing whatever to defeat or circumvent. I never cease to be astonished— perhaps I have a big capacity for astonishment—when I hear speaker after speaker in politics, in the Dáil or in the Seanad, speaking in favour of "competition." Deputy Cosgrave said competition was the only effective form of price control. The Minister for Industry and Commerce hardly opens his mouth without praising competition, but he does not really want competition; he only wants to talk about it. These speakers do not want competition. They want this type of price fixing arrangement. They want no competition at all in prices, and, if competition in prices breaks out, there is a loud squealing about "cut throat competition," suicidal competition and all the rest of it.

The Fair Trade Commission brought in three or four reports which were implemented, in contrast with their last report which was not implemented. These reports dealt with the grocery trade, wireless trade and the building trade. Nobody can claim that the prices of groceries did not drop immediately after the introduction and implementation of the Order by the Minister in accordance with the recommendation of the Fair Trade Commission, which was aimed at breaking the price-controlling ring in groceries. You have only to walk down the streets of Dublin, and even Grafton Street, which was referred to by Senator McGuire, to see that the prices of wireless sets have dropped, since this Order was brought in, breaking the price-fixing ring.

It has been said that there have been too many "controls," and that the object is to "abolish controls." I am in favour of abolishing controls over prices by private interests. Let us have only public control in the public interest. I should like to ask the Parliamentary Secretary what steps does he or the Minister intend to take to ensure that there will be price competition? Has he any legislation in mind to break price-fixing rings? Is he concerned to break price-fixing rings, because if, on the one hand he loves competition and, on the other hand, the organised bodies have the purpose of preventing price competition from taking place, I think he ought to tell us what he is going to do to ensure that the competition he loves so much is going to be real and not fictitious or part of his dream world.

I am supported in my view that the Minister is not really concerned at all to break this kind of ring by the fact that the Fair Trade Commission brought in a report to recommend an Order to stop this kind of "collective action" in relation to pharmaceutical products and infant foods, an Order which was not made by the Minister. The commission considered that "collective action to maintain fixed retail prices, whether through an association or otherwise, by manufacturers or traders, for the enforcement of such prices constituted an unreasonable restriction on the supply of goods" and they "recommended that it be prohibited," but the Minister decided he would not prohibit it.

The commission also recommended that "collective arrangements between wholesalers relating to prices to be charged was contrary to the public interest in that it constituted an unreasonable limitation on free and fair competition," but has the Minister prohibited it? No. He has looked into the recommendation, and has decided he would not like to prohibit it. The reality is that the Minister has not the slightest interest in there being really effective price competition. Rather he is interested in talking about price competition, and, at the same time, allowing the pricearranging associations, to continue to prevent effective competition. The commission also recommended:—

"The coding of prescriptions to show the price charged by one chemist as a guide to other chemists is unnecessary in view of the detailed information on prices available to chemists and is undesirable in that, by promoting uniformity of prices, it may induce a chemist to charge a higher price than he might otherwise charge. Accordingly, the commission recommends that this practice should be prohibited."

Does the Minister prohibit it? No. He has not the faintest notion of prohibiting it. When the Fair Trade Commission makes such a specific recommendation and clearly states that it is a danger and against the public interest, why has the Minister done nothing about it, if he is genuinely interested in real competition, which I am afraid he is not?

I should like to turn to some of the provisions of this Bill and to ask the Parliamentary Secretary, in relation to Section 5, why it is that there are so many bodies exempted from the applications of this Bill: "a vocational education committee, a railway, road, air or water transport undertaking or a harbour authority?" These are all out, and quite unaffected by the Bill. "Ex-boat prices of fish and all transactions of An Bord Iascaigh Mhara' are also not affected. Does that apply to the prices of imported fish?

Again, in the same section, in paragraph (g): "charges for services wholly of a professional character"— I should like to ask the Parliamentary Secretary does that cover chemists' prescriptions? Are they to be completely out? Again I would call the attention of the Seanad to Part II, Section 9, the "Constitution of Prices Advisory Committees," which states—"The Minister may from time to time by warrant under his hand constitute such and so many bodies of persons as he thinks fit..." That is the worst section, I think, in the whole Bill. It means, as the Minister has frankly admitted, that he is going to take this Bill and put it on the shelf, and probably not use it at all. He "may from time to time," but there is no obligation on him to do so.

In Section 10, the prices to be gone into would appear to be solely manufacturers' prices. Senator Miss David-son has mentioned that apparently the middlemen are not covered, and it is not quite clear, but perhaps paragraph (c) covers that. I should like to hear the Parliamentary Secretary on that matter. I should also like to ask if the section covers the price of coal and meat? Would they be regarded as "manufactured" commodities? I am not clear about that.

In sub-section (3) of Section 10, "an Advisory Committee shall report to the Minister..." and so on, "and if it reports that the prices or charges specified in its report are unduly high owing to causes within the control of manufacturers or of persons rendering services or to undue labour costs, shall state whether in its opinion circumstances are such as to require the Minister to make an Order..." I would resent that reference to "undue labour costs." The only price factor references are either to "causes within their control" or to "undue labour costs."

I think that, if undue labour costs are to be mentioned, exorbitant profits ought to be mentioned in that section. Nobody wants exorbitant profits, I take it, although apparently the roof is to be taken off profits, if we are to listen to some Senators. I thought it quite touching to hear Senator McGuire agreeing wholeheartedly with Senator Lenihan on the question of the necessity for having no limit on profits. Yet, almost in the same breath, Senator McGuire indicated that no working-class man should get more wages. If it is wrong to limit profits, it is surely wrong to limit wages. Senator McGuire is horrified that the workers should get more than their 10/-, but any suggestion that there should be any limitation on profits is regarded by him as "antisocial."

I should like to see—and I shall propose an amendment to that effect— either the omission of the words "undue labour costs" or the insertion of the words "exorbitant profits". I am not one of those who join with Senator McGuire in feeling that the more profit the business man gets, the more public thanks should be given. I think it is very nice of him to go into business, but I find it a little bit mealy-mouthed when I hear it said: "We are getting profits which it is our public duty to take; we are doing it all for the sake of the community." If that is so, I should like to see many of these business men in an atmosphere of real competition, with the removal of some of the protective tariff barriers—which may in fact have to be removed in the not so distant future. I should make the same observation about Section 14.

On paragraph 2 (1) of the Second Schedule, I have made a point already in regard to consumer representatives. I think it is quite essential on these panels.

There are two final points I should like to make before I conclude. One is in regard to paragraph 11, subparagraph (5), on page 14, and is about this question of the Advisory Committee not holding its meetings in public. I think that that is wholly bad, and I would much prefer—"it shall, unless by consent of the Minister". In paragraph 12, subparagraph (3), I notice that a witness before an Advisory Committee shall be "entitled to the same immunities and privileges as if he were a witness before the High Court". What does that mean? What kind of protection in fact is the witness going to get? In sub-paragraph (4) of the same section, if any witness refuses to give evidence or gives faulty evidence, or "does anything which if that Advisory Committee were a court of justice having power to commit for contempt of court, would be contempt of such court", that Advisory Committee may certify the offence of that person, and so on. If a witness does anything wrong, the penalty is stated, but if the witness is subsequently victimised by reason of his having given evidence, he is afforded "the same immunities and privileges" as if he were a witness before the High Court. What does that mean? Supposing somebody who is a trader or a wholesaler gives evidence, and has all his supplies stopped subsequently. Will these committees or the Minister have any power to do anything under this Act? There is no reference to that being the equivalent of contempt of court and no penalty is mentioned.

A case has been brought to me of a witness who gave evidence before the Fair Trade Commission, and whose supplies were stopped immediately afterwards. The Fair Trade Commission, with whom I have been in touch, have, in effect, confessed themselves to be powerless to protect him. Therefore, I would ask the Parliamentary Secretary whether this clause is quite empty, and whether in fact, unless some real protection can be offered to witnesses, such committees, if they are ever set up, will find it difficult to get witnesses to come forward. That is all I have to say. I am afraid I shall vote against this toothless Bill on general principle, because it is so weak.

Mr. Carter

The Minister, when he spoke on the Second State of this Bill in the Dáil, stated that it gave reserved powers to the Government to deal with the prices of commodities, the prices of which might give rise to concern in certain circumstances. He instanced the circumstances and set out the conditions. I might describe that as a wise decision. We know, all of us, that unless and except the country is subjected to a state of emergency and going through an emergency, the best method of controlling prices is free competition. With the lapsing of the Supplies and Services Act towards the end of this year, it is desirable that some sort of price control should be held by the Government. The fact that those powers cannot be used arbitrarily except in respect of some commodities should be sufficient to show to those engaged in the business of manufacturing, producing, distributing or retailing the real desire of the Government to let trade flow freely.

In post-war years, experience has shown the futility of trying to control the prices of certain goods simply because standards vary. There no longer exists any lingering doubt in that regard. All Parties subscribe to the view that whatever need there was for a system of price control in former years, it has practically vanished under present trading conditions. In fact, in some trades, the position would seem to be reversed by the advent of the cut-price trader. Lawful traders and certain trade unions are concerned regarding the activities of these merchants.

Dr. Sheehy Skeffington

Is the Senator in order in implying that cut-price traders are not lawful traders?

Mr. Carter

I said lawful traders. I did not imply that it is unlawful to indulge in cut-price trading. One can only hope that the law of diminishing returns may, in due course, catch up with those merchants. Generally speaking, the Bill would seem to be well thought out and framed to deal with a heatedly-contested subject. In recent years, several elections have been won and lost on the question of prices and the idea that profits are wholly illegal should have long since died a natural death. In later times, the statement that people are not entitled to profit is no more than a mouthful of wool shavings. That is why we, on our part, welcome the powers that are in the Bill. Let us hope that the Minister will have no need of them.

Mr. Cole

There are a few points in connection with this Bill which I should like the Parliamentary Secretary to amplify now or later. One is in connection with Section 15, which deals with the Government's declaration of a state of emergency. It sets out: "Whenever and so often as the Government are of opinion that abnormal circumstances prevail...." It just says "abnormal circumstances" and nothing else. I feel that that power could be used by an unscrupulous Minister in days to come to declare that abnormal circumstances exist with regard to any class of goods. Would the Parliamentary Secretary not consider that there should be an appeal to the Advisory Body from an Order made under Section 15?

Another section which might cause hardship is Section 14 which deals with the fixing of maximum price rates. Suppose this Prices Advisory Committee comes to inquire into the goods of a certain manufacturer and that manufacturer himself knows that his prices are not what they should be and that the prices of the commodity he produces will be reduced by Order of the Minister. Under Section 14, that manufacturer could unload his commodity straight away on to a shopkeeper, without the shopkeeper knowing that there was any inquiry into the price of the commodity. Could we not safeguard the shopkeepers in that respect by putting an additional clause into the section? In the case of raspberry jam, for instance, a manufacturer could unload large quantities by allowing his travellers to take orders for larger amounts than they would normally take, if he knew that there was to be an inquiry into his prices.

I am in favour of the general principle of the Bill. If we are to invite outsiders in here to start up industries, to produce and to employ, we do not want to have them saying that the people in this country have Acts and regulations about profits and that we would not allow them to make profits above a certain percentage. If we give them a chance to say that, they will not come in here.

We can see from reports of English companies the amount of their profits that they plough back into the business. Senator Sheehy Skeffington rather thinks that all the profits from these businesses go into the pockets of the owners and are spent in riotous living. If he would only look at the balance sheet of any competitive company, he would see that the profits are ploughed back into the business to give employment in the country. That is the reason that we do not wish to limit profits too much in this country. Business cannot expand where profits are limited. The former Prices Advisory Body was open to the consumers and only once was it used by the consumers.

Dr. Sheehy Skeffington

It was used only once for the purpose of obtaining a reduction. It was used many other times by consumers.

Business suspended at 6 p.m. and resumed at 7 p.m.

Mr. Burke

Senator McGuire and Senator O'Donovan have given at length the views of this side of the House, but some things have been said during the debate upon which I should like to comment. Senator Sheehy Skeffington referred at some length to price control in peace time. I believe that such control savours very much of a planned economy, the sort of economy they have in Russia, and I believe that such an economy will benefit neither the worker nor anybody else. America is free of all forms of price control and profit margins and profits are higher there than they are anywhere else in the world. In America, there is an enormously expanding economy.

Senator McGuire referred to the I.B.E.C. Report. The fact that it is now six years since that technical service was made available does not render out of date any single principle laid down in that report. One of the finding was that we are not earning enough to allow us to have an expanding and a buoyant economy, such as they have in the United States of America. If we have price control, we will not get the money which will give us the savings necessary to plough back into industry and we will not have money for socially desirable schemes.

It is not within the wit of man to say what the effects of price control are in this or any other State which has a free economy; it is not within the wit of man to say what the results of price control may be. We are an agricultural community and many of our products are exported to Britain and elsewhere. Cattle, sheep, pigs, bacon and so on vary in price on the British market and one of the things which helps our economy is the fact that we are in a position to export certain products to Britain when those products demand a good price, and the home market goes scarce. Such trading is an advantage to this country and the so-called planners and the people who suggest price control might easily upset our balance of payments and upset the incentives given from time to time, because of the existence of good prices for our products, if they interfere with the market through the medium of price control.

The Irish Housewives' Association and the consumer organisations could do a great deal of good if they would educate the people as to what to buy and as to what is beneficial to our economy at a particular time. If shiploads of fish came into Dublin tomorrow and the best fish was sold at 6d. per lb., the people would not buy it. The people are not sufficiently conscious of the market and, instead of the Housewives' Association and consumer organisations complaining about prices, they would do a tremendous amount of good if they would indicate to their members and the public generally what should be bought and where the best value is to be found. That type of education would be very beneficial and the more expensive products could then be exported to Britain and other countries.

I will deal with fish briefly. If people got the best fish for next to nothing, they would not eat it. These organisations could encourage people in the use of foods which are in good supply at a particular time and are reasonable in price.

I have already dealt with the question of profits. Senator Cole referred to it also. If we look at the balance sheets of any of our good public companies—and the same thing applies to the private companies that have remained in business—we find that three-quarters of the money is held for reinvestment and for expansion in these industries. Is not private enterprise, when it is expanding its business and giving good employment, an enormous benefit to the State? It removes from the central Government the problem of providing employment and expanding industry.

I say to the people who wish to restrict profits and to be allowed to have a sort of continuous witch-hunt of industry, that they ought to bear in mind that it is only by allowing profits and reinvesting them that we can have sound, competitive industry. Such industry will require to look outside Ireland if it is to develop itself fully. Therefore, not alone will we have a healthy industry supplying the home market, but it will also supply the export market. The final result will be that we will have cheaper priced goods in greater variety and abundance. The Minister deserves to be congratulated on bringing in a Bill that looks at the situation we have here in Ireland to-day in a realistic manner.

Mr. Murphy

I did not intend to speak on this Bill at all, but as it seems to me that much nonsense has been spoken during the debate, I feel that I should make a contribution. Whether or not I speak nonsense might be a matter of opinion, but I suppose I am entitled to my opinion that a lot of what has been said is nonsense.

This is not a free economy. There is no competition in the sense of what is known as free competition in the United States of America. Having listened to all that has been said, I wondered why we are worried about the Free Trade Area and how it will affect Irish industry. Because there is not free competition in industry here, it is my opinion and the opinion of some of my colleagues that there is need for price control.

We have heard a lot about the rights of people to make profit, and I am not attempting to challenge the rights of people to make a reasonable profit; but it seems to me that the supporters of this Bill from both sides of the House are attempting to imply that if anybody raises his voice against profiteering, he is something near a communist—a terrible thing altogether. I make no apology whatever for saying that in this economy as we know it— where there are protected industries, where there cannot be, because of our small economy or the protection necessary, free competition as generally understood—the State has the obligation to protect the consumer.

If we look at this Bill from that angle, I am afraid we will have to say that it is quite inadequate. It means that the Prices Advisory Body, which has done some good work, will disappear and there will be ad hoc bodies which may or may not be set up by the Minister, as he so wishes. We know the attitude of this Government in regard to price control. It has been made very plain to us and apparently it is supported by people on the other side of the House. We saw, in answer to a question in the Dáil last week or thereabouts, a staggering list of the commodities which have been released from price control since last March. We know that this Government is not in favour of price control and of giving what I would say is adequate protection to the consumer in this economy, which is not a free economy and in which there is not a free competition, such as was referred to by previous speakers.

Unfortunately, some of my colleagues and myself find ourselves in this predicament. We think the Bill is quite inadequate. We regret that the Prices Advisory Body is disappearing. The Prices Advisory Body has its existence because of the Supplies and Services Act, and that Act will lapse at the end of the year. If this Bill is not passed, there will be no provision whatever for any measure of price control, so I suppose we have to say it is better this Bill should pass and provide even inadequate safeguards, rather than that the provisions of the Supplies and Services Act should disappear at the end of the year, leaving no right or authority to the State to intervene at all in price control. Whilst not enthusiastic in any sense about this Bill and whilst criticising its inadequacy, I am afraid we could not oppose its passage through the Seanad.

Tomás Ó Maoláin

I should like to refresh Senator Murphy's memory. We had machinery here for price control for years and everything continued to go up and up in spite of it.

Mr. Bartley

This is the stage at which the principle of a Bill is debated and rejected or accepted. I think only one speaker, Senator Sheehy Skeffington, opposed the Bill on principle. I think he specifically used the word "principle". He has interpreted the Bill as being a departure from control. I should like to remind him, as Senator Murphy has said just now, that the end of the year, the existing régime will have passed and there will be no power in the hands of the Government to exercise any form of price control. Therefore, when Senator Sheehy Skeffington tells me he opposes the Bill "on principle", I do not know exactly what he means.

I prefer to interpret the Minister's words in the Dáil somewhat differently from the interpretation given them by Senator Sheehy Skeffington. He said that this Bill, when passed, will be shelved—and we all know what the word "shelving" means. The criticism has been offered that we had control continuously applied under the existing conditions of affairs. That is true to some extent and it is also true that we are, so to speak, withdrawing the control from that advance position and putting it into a position of reserve. However, it certainly will be there and will be available for use in the circumstances set out in this measure. This Bill, of course, is one further step in the attempt to get away from the emergency conditions produced by the war.

The arguments advanced here are so obvious that I need hardly repeat them. One is the very cogent argument that competition is the best regulator of prices. This Bill is an attempt to get back to conditions of competition and, at the same time, preserve some protection for the consumer, if that protection should be required. I could not agree more with what Senator Ó Maoláin has said just now. I have heard it said by people who were in very close contact with the machinery of control during the war years that in an atmosphere of control, prices tend to rise and in an atmosphere of competition, they tend to fall. This Bill is an effort to get the downward tendency operating under its own momenturm, to get away from the artificial system of control which, in fact, never worked satisfactorily.

I think it is true to say that those who most desire, or seem to desire, control appear to be its keenest critics when they have it. It does not seem possible to devise a scheme of control of prices which will satisfy those who are constantly clamouring for it. Nearly all of us remember that when the subsidies were imposed, there was considerable objection to them. The arguments were somewhat like those we have been hearing now in opposition to this measure; but the very same people who opposed them also opposed the removal of them. Consequently, one is not impressed by the consistency of many of the arguments advanced in matters of this kind. Where maximum prices are fixed under control, we know from our experience the tendency is for them to become the standard prices. That bears out the argument that, in circumstances of control, the tendency is upward.

Senator Fearon objected to the removal of the provision for the display of a list of prices. There is provision in the Bill for such a display in respect of commodities set out— the most important ones. It seems to me that there is an inducement to business people who are charging reasonable prices to display those prices as a good piece of business advertising, leaving the buying public in their locality to make a comparison with those who are charging exorbitant prices. That is a far more effective method of making reasonable prices known than any official arrangements such as a statutorily required display.

In the statement of the Minister for Industry and Commerce that our controls generally had an adverse effect here on industrial promoters, the Minister was not relying on the I.B.E.C. Report alone for evidence of the truth of that statement. The Minister has had numerous interviews with people from outside who, since the end of the war, have been showing an interest in the industrial possibilities here. I think it has been the experience in almost all cases that they made an unfavourable comparison between the régime of control here and with the conditions of affairs in other countries.

It is true to say that the inducements have not up to date been sufficiently powerful to bring that amount of useful capital for industrial promotion here which our present condition demands. If this Bill makes any small contribution towards relieving the apprehension of these people, many of them very good friends and some of them having hereditary connections with the country, who are anxious to come here, that, in itself, would justify the passage of this measure.

A number of seeming anomalies have been mentioned by some Senators, but, I think, principally by Senator Sheehy Skeffington. I should like to remind him, and any others who have misgivings, that there are no serious gaps being left, that there is the protection which is available under the Fair Trade Commission, and some of the matters referred to can be dealt with only under the provisions of that body. There have been a number of matters mentioned, again picking out details in the Bill, which I think might be more thoroughly dealt with on Committee Stage. I feel confident that if we cannot satisfy the objections, we will be able to explain the reasons.

One point was made that we are applying this Act to the possible machinations of manufacturers and we are not providing against the ultimate result of these machinations by also controlling the distributors. If we can ensure that manufacturing costs will not be allowed to be unduly inflated because of the reasons mentioned in the Bill, we will have controlled the distribution at the proper point. That is the explanation of why the section is worded as it is.

Some Senators seem to think that there was discrimination against labour because the expression "undue labour costs" was used and that profits should also be specifically mentioned. Profits are, in any event, very effectively dealt with in the way I have just indicated, by dealing with the manufacturers' costs, and any machinations, rings or otherwise operated by manufacturers, will naturally be dealt with automatically.

I do not think that there is really anything to reply to in the debate. There has been only one speaker who indicated that the principle of this Bill was not being accepted by him. I am at a loss to meet the objection of this Senator, because he seems to demand control much more than any other Senator who has spoken. This Bill provides that control and, if it is not passed before the end of this year, there will not be any control.

Much as that state of affairs is to be desired, if it could be achieved with safety to the consuming public, we feel that the time has not yet arrived when control can be entirely abolished. By removing control a little to the background, in view of the many objections expressed to it by the people who can contribute very considerably to the economic progress of the country, we are making a gesture, showing that we appreciate their viewpoint and that we are determined to co-operate with them as much as possible. However, in view of our experience during the emergency, we feel the time has not arrived at which control can entirely be abolished.

I think it was Senator O'Donovan who referred to the effects of the removal of subsidies on the price of bread. When control was removed in respect of bread, action was taken almost immediately to increase the price of that vital commodity. The Minister was forced to step right back again with an emergency Order to restore the position. That experience indicates that it is not yet safe to remove control entirely and we feel this is the best compromise, and the best arrangement, in the present circumstances of the conflict that exists between the business community and those who speak for the consumer. In the last analysis, when all is said and done, the Government is the best protector of the consumer.

Question put and agreed to.

Committee Stage ordered for Wednesday, 4th December.