Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Wednesday, 23 Oct 1957

Vol. 164 No. 1

Committee on Finance. - Prices Bill, 1957—Second Stage.

I move that the Bill be now read a Second Time. Deputies are aware that the Supplies and Services Act will expire on December 31st. That Act had its origin in the emergency legislation which was enacted on the outbreak of the war and which gave the Government wide powers of control over the supply, distribution and prices of goods, to be exercised over the whole period of the war and its aftermath. Some time after the war ended, however, the scope of that emergency legislation was very considerably reduced, but through the Supplies and Services Act, the powers which were given to the Government on the outbreak of war, regarding control of prices, were continued. It was in accordance with these powers that various price control Orders were made from time to time since then. That temporary Act which was initially passed by the Dáil for one year only has been continued by annual continuation Acts every year since. It is now finally coming to an end and, with its passage, we have to consider the extent and the form of the legislation relating to prices and control of prices which should have a permanent place on the Statute Book.

There is a pre-war Act, the Control of Prices Act, 1937, still on the Statute Book. That Act which was to be permanent was, of course, passed by the Dáil in conditions entirely different from those which operated during the war and post-war years. To some extent, it could be described as a product of the political conditions prevailing at that time. It is, however, still on the Statute Book, and, as an alternative to enacting new legislation, it could be brought back into operation again. That course was considered by the Government, but we decided against it.

The 1937 Act provided for a permanent Prices Commission with independent powers of investigating prices, and provided also for the making by the Minister for Industry and Commerce of maximum price Orders, relating to either goods or services, on receiving from the commission a report which justified the making of them. It provided also for a controller of prices who was empowered to make investigations of individual complaints. His powers related not to the general survey of prices charged everywhere for particular goods which the commission might investigate, but to prices charged for particular products in a particular locality, or even to prices charged in an individual transaction to a single customer. He was empowered to issue certificates relating to such transactions, even certificates relating to individual transactions, requiring in some instances a refund of any overcharge which he thought had taken place.

It is our view that the machinery of the 1937 Act is too cumbersome. It proved to be so in operation in the pre-war years. The principle of that Act was to maintain machinery capable of carrying out the continuous investigation of prices charged for all commodities, even as I said in the case of individual transactions and irrespective of the general trading conditions applying to any class of goods or in any area. In our view, that type of price control legislation would be unsuited to our present circumstances. To some extent, when it was in operation, it did operate to discourage the development of industry. It did so not to any great extent — certainly not to the extent that the continuation of the war-time powers, long after the war had passed, had operated to discourage industrial development.

When one comes to consider the desirability of relying upon the 1937 Act, one cannot leave out of account what has happened since. We think it would be undesirable to provide for continuous investigation of prices through organisations or individuals empowered by Statute to act independently in that regard. We think that legislation, if relied upon now, would have the effect which we think the emergency legislation has had in recent years, of discouraging people from engaging in industrial and other forms of production in the hope of making a reasonable profit on their investment. It is proposed, therefore, in this Bill, which contains our proposals for permanent price control legislation, to repeal finally that 1937 Act. Deputies will, of course, have gathered from my remarks that that Act has been out of operation since the beginning of the war and there is now in existence none of the machinery for which it provided.

The Government considered whether it was desirable to have price control legislation at all. We could have allowed the Supplies and Services Act to lapse at the end of this year without taking action to bring the 1937 Act back into force and have left the situation such that no powers of price control would be available to the Government, although we might have to have in mind the need to deal with an emergency situation. In the absence of a permanent Act we would have to deal with an emergency situation if it occurred by ad hoc legislation brought to the Dáil in the light of that emergency and justified because of its requirements.

We decided against that course although it has certain attractions. We think that, taking the conditions prevailing in this country at present and likely to prevail for many years to come, it is desirable that the Government should have available to it powers which it can use when it thinks it necessary to use them to carry out an investigation of prices in particular instances and to take action regarding those prices when investigation shows it to be desirable or necessary.

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. Deputies who were active in politics in those days will recollect that the contention that price rises were all attributable to that one cause was common, and the belief was spread amongst the people, a belief which has not been completely demolished yet, that preventing prices from rising was merely a matter of controlling the profit margins taken by producers or distributors.

We have had 20 years' experience of continuous inflation since then, 20 years during which the various, Governments that held office have not merely had available to them the powers regarded as necessary in 1937 but the far wider and far more drastic powers conferred by the legislation passed when the war began. 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.

It is now certainly more generally realised if not universally realised, that profits, whether the profits taken by manufacturers, importers or wholesale and retail distributors, are a very small part of prices and that systems of controlling profits have very little effect against powerful inflationary forces. Deputies will be aware that I have been trying to get my view regarding the ineffectiveness of price controls in inflationary conditions understood generally and have been trying to destroy any lingering illusion that may be left that any system of control can prevent prices going up when costs are going up. As I have now to come to the Dáil to recommend the enactment of this Prices Bill I want to make it clear that I have no desire, by advocating it to the House, to help in keeping alive any illusion that it is possible to devise a system of control which will prevent prices rising when costs are rising.

I have for 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 of 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 encourage investment in industry. In the light of that advice it would be clearly unwise to enact legislation or take any other measure which would help to spread the mistaken notion that there is a desire to limit profits further or to prevent those who may be induced to invest in Irish industrial expansion getting a reasonable and adequate return for their enterprise. Neither have we any desire to suggest that profits in distribution where competition is effective require any special supervision. Where there is genuine competition for trade between suppliers, profits are limited by a far more effective method than anything that can be given by legislation.

It is the view of the Government, which I have had to reiterate upon many occasions in public speeches recently, that the most effective price regulator is competition and, therefore, I want to make it clear beyond all possible doubt or misunderstanding that the Government does not contemplate utilising the powers which will be conferred on it under this Bill where competition is active. If competition is active, there will be no need for either investigation or regulation. There are, however — and this is the justification for the Bill—circumstances which may limit competition and in certain instances these circumstances are more likely to arise in this country than in other countries. Because of that, we think we need legislation here which other countries have not seen the need for or have long since discarded.

The circumstances which may operate to limit competition are of three kinds. First of all, there is the possibility of agreements, covenants, between suppliers of any class of goods to restrict competition amongst themselves. We have, of course, passed the Restrictive Trade Practices Act and set up the Fair Trade Commission to deal with restrictive agreements of that kind, and where recourse to that Act can restore competition in any trade, then there will be no need to use the powers to be conferred under this Bill; but where the Fair Trade Commission has to report that it is unable completely to eradicate restrictive arrangements of that kind in any trade, where, notwithstanding any Orders we may make here or any fair trading rules they may publish, competition is being limited by these agreements amongst suppliers, then we can have recourse to the powers of this Bill to fix prices on consideration of a report from the Fair Trade Commission to that effect.

Because of the smallness of the Irish market it is, of course, to be expected that something akin to monopoly conditions may apply to some commodities, not because of any undesirable restrictions or agreements, but because the limited size of the home market makes it economic for only one supplier to operate. In all cases of that kind which exist at the moment, I think we can have confidence in the desire of those who are responsible for the direction of those industries not to exploit their position to the public detriment, but in some such cases, existing now or in the future, the need for regulation by price Orders may arise, and in such cases the power to make them will exist under this Bill.

The second case which may require action under the Bill is where there are unnecessarily high costs prevailing in any industry from causes which are within the control of those in the industry, causes which could be eradicated, if action was taken by those engaged in the industry. If there is an undue exploitation of a tariff by the retention of obsolete techniques or by reason of restrictive practices of any kind which push up costs, then, following an inquiry by the committee acting under this Bill, action to control prices may also be taken.

The third circumstance under which that action might arise is where the Government decides that there are emergency conditions in existence, or likely to arise, which may have the effect of restricting supplies. The most recent example of the type of emergency we have in mind in that regard arose last year with the Suez Canal development. In these cases, and in these cases only, subject to certain qualifications which I will mention later, the Government can control prices, but it can do so only after an investigation by the Fair Trade Commission has brought out the fact that there is an artificial restriction of competition or monopoly conditions arising from any cause, or investigation by a committee under the Bill has shown that these unduly high costs, capable of being remedied and not remedied, still exist, or where the Government decides that there is an emergency situation which requires special action.

It will, however, be understood by Deputies that the remedy for unduly high prices arising because of a restriction of competition or inefficient production or obsolete production methods may not be price control. There are many commodities in respect of which price control is not practicable at all, commodities which are sold in such a wide number of varieties that no common price could be fixed and in many cases with such little difference between one variety or quality and another that only the expert could judge between them.

Tea is, perhaps, the outstanding example in that regard. When we did exercise control over the price of tea, we had to have a standard tea, only one quality, on sale and when it was decided to restore the pre-war freedom in relation to varieties of tea, then, of course, price control had to go as well.

If, therefore, a situation should arise where, either because of the prevalence of monopoly conditions, or restrictive practices, or because of unduly high cost, action has to be taken, that action need not necessarily be the making of price control Orders. Where price control Orders are not suitable, a remedy will have to be sought by other means. It may be thought necessary to reduce protection in some cases, but the intention would be that where a problem exists, where price control is not the answer to the problem, ad hoc measures will be taken to deal with the situation.

It is, of course, considered that because of the limited size of the Irish market and the limited number of producing units in industry, the policy of protection obliges the Government to take powers of investigating what is happening and to check on undesirable developments. That was the main justification for the pre-war Prices Act. It was argued in justification of that Act that when the Government had, in the interests of national economic development, limited or prevented competition from imports, there was an obligation on them to keep under constant examination what was happening in the protected industries so that any undesirable development resulting from protection could be checked in the interests of the consumers of the products.

The Bill, therefore, gives power to control prices generally only on three conditions: first, where investigation has revealed that a monopoly situation, arising either out of the circumstances of a particular trade or contrived by agreements among those engaged in the trade, is leading to unduly high prices and where no other method can be found to rectify the position; secondly, where investigation has shown the prevalence of unduly high costs in a protected industry from causes which are capable of being remedied and where no other suitable method is available: and thirdly, in temporary conditions, such as the Suez crisis, on decisions by the Government.

We think that a permanent and costly investigating body is not necessary. What is proposed in the Bill is that a committee should be set up, whenever it is thought necessary to undertake an investigation, drawn from a panel of persons who have already agreed to be available to act for that purpose when required. That committee, of course, will have all the powers which are usually regarded as necessary to carry out a thorough investigation. I have mentioned, however, only the general powers of control which the Bill will confer. It is considered desirable to retain power to control the prices of a limited number of essential commodities even without a prior investigation. These commodities are bread, butter, sugar and milk. These are commodities which are capable of being subject to price control Orders and in regard to them the danger of developments requiring action taking place must always be deemed to be there and a protracted investigation might be undesirable and, indeed, in some cases unnecessary.

We have, therefore, decided to keep in this Bill power to make price control Orders without prior investigation in regard to bread, sugar, milk and butter. In the case of milk and butter the Minister for Industry and Commerce is required to act in consultation with the Minister for Agriculture. There are, it is true, other Acts upon the Statute Book under which the price of bread and milk could be controlled, and we did consider whether it was desirable to rely on these earlier Acts or to make provision in this Act on the lines I have indicated. We think it is just as well to have one Prices Act to which people can refer when they want to ascertain the Government's power, and a uniform procedure for all price-regulation activities.

It is, of course, appreciated by Deputies that the prices of bread and butter are not at present controlled. The retail price of sugar is at present controlled although there may be some question as to the necessity for retaining control and the price of milk is controlled only in certain limited areas.

I have now mentioned the general provisions of the Bill giving power to exercise control in the case of any goods or services after investigation, and where investigation has shown the need for it arising out of some factors operating to limit competition, and these more specific powers of control in relation to a very limited number of commodities. It is, of course, intended to exclude from the scope of the Bill certain commodities in regard to which Ministers other than the Minister for Industry and Commerce have primary responsibility, or for which there is already statutory machinery for maintaining any controls that are considered necessary. Therefore, the power exercisable under this Bill will not apply to prices paid to producers for agricultural produce. That is, of course, a central aspect of agricultural policy and is the concern of the Minister for Agriculture.

The Bill does not apply to prices paid to producers of fish who are the concern of the Minister for Fisheries. It does not apply to professional services which it would be impossible to control by price regulation, anyway. Nor does it apply to prices controlled under any existing legislation administered by any other Department than the Department of Industry and Commerce or by any local authority.

I do not want to present this Bill to the Dáil as a measure of major importance. I do not regard it as such. I think we have now got a situation where we can hope that the free play of competition will be effective in dealing with the prices of most commodities and it will certainly be the general aim of Government policy to promote competition so that the need for any other type of regulation or control will disappear. Nevertheless, we think it would be undesirable to let the Supplies and Services Act lapse at the end of the year without putting something in its stead in the shape of a Prices Act, and it was because of the feeling that circumstances could arise which would justify investigation and perhaps action that this Bill was framed, and it is solely in circumstances in which competition is not fully effective that it is intended to use it.

The Minister has said so much against the Bill or against the idea of making price control effective that I wonder why he has introduced it at all. I agree, to a considerable extent, with the view that competition is the most effective method of price control. In fact, I doubt if in present circumstances, there is any faith in the effectiveness of price control in this country. We have had a succession of debates and discussions here over the years. We have had occasional alterations in legislation. In the main, the discussions have centred round the annual renewal of the Supplies and Services Act. Our experience of operating price control here has not been such that there is much public confidence engendered in it.

For that reason, I was interested in the Minister's concluding remark that he did not regard this as a measure of major importance. 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. In fact, experience of wartime and emergency conditions has shown that, with the exception of the special circumstances pertaining to wartime or emergency conditions and then only in relation to goods which are either rationed or within the control of the Government, it is not possible to make price control effective.

I am surprised that the Minister has dwelt on the control which it is proposed to retain in respect of some essential commodities. He dwelt at some length on the control of the price of bread. Early this year, when the Budget was introduced, bread was decontrolled as a result of the reduction in the subsidy and there was immediately a very steep increase in the price. After a few days, the Minister intervened and made a price control Order. The effect of that was to reduce the price slightly in relation to bread manufactured by bakers for a short period. After a lapse of time, the Minister withdrew the control that had been imposed. There may have been good reasons for that action, but I believe that when action of that sort is taken, the public lose faith in the effectiveness of price control. Either the original price charged as a result of the reduction in the subsidy was a fair and reasonable one or the price fixing Order should have been retained. Either one or the other is true and, if one is correct, then in either case action taken has the effect of misleading the public into believing that price control can be effective.

As the Minister remarked, it is possible to make price control effective in a uniform commodity where there is a central buying authority and where the commodity is centrally controlled and issued. He instanced the case of tea in relation to which there was a uniform variety during the war or emergency years. The real problem here is not so much the belief which was current because of our experience of wartime and its aftermath, that profits were a considerable factor in prices; the Minister remarked that the inflation of the war and post-war period has shattered that illusion. What we have got to face, and so far nobody seems particularly attracted to the desirability of dealing with the problem, is that we have here a high-cost economy. That has come about as a result of deliberate national policy and it is not easy to change now. Certainly it would not be easy to change without causing difficulty and possible hardship.

The advent of a free trade area may force a change. In fact, if the free trade area evolves as it is expected to evolve, it will inevitably cause changes. But, unless and until that aspect of the problem is considered, price control by Government action or by a statutory authority can have only a limited effect and very likely for only a limited period. The wisdom of retaining a permanent system in circumstances as normal as we are likely to get is, I think, open to question.

I notice that, in the main, the Minister has in this Bill followed what was in the Supplies and Services Act, as amended by the subsequent establishment of the Prices Advisory Body. That amendment was inserted to deal with circumstances which arose as a result of the outbreak of the Korean war. Whether or not it is a desirable form of permanent legislation is another question. This Bill follows more or less the pattern in which a body — in this case, a number of ad hoc committees appointed by the Minister — will investigate and report. The Minister has apparently decided, after consultation with the Government, that this system of price control is better than the permanent and rather cumbersome machinery introduced in the 1937 Act. It has the merit that it enables action to be taken quickly and it gives the initiative to the Minister. I believe that one of the reasons why there is a lack of public confidence in this matter is that the public feel that Governments act only on the prodding or the initiative taken by a section of the community, or the amount of public interest focussed on a particular question here in the Dáil or in some other public discussion.

We have, therefore, to tackle two distinct problems. One is whether greater public confidence would be shown in an independent statutory body which could itself initiate action, but which might consequently take decisions which would, of course, impinge either on public policy or on policy which would have a bearing on the Government's political fortunes, if no others. On the other hand, the difficulties in the machinery envisaged in this Bill are, I think, that the initiative rests with the Minister, and while there is a rather interesting preamble in the Bill setting out the circumstances in which it is considered desirable to operate a system of price control, it is left to the Minister's decision to initiate a particular inquiry as to whether the price charged for a commodity or commodities is fair and reasonable, and, after investigation, he can take action.

I am not entirely satisfied that in normal circumstances — in so far as they are normal having regard to present circumstances—it is worth while trying to operate a system of price control. As the Minister remarked, competition is the most effective means of control, and in that regard I am to some extent surprised that some commodities have been included here. At least, if oranges are included, I submit there is an equally good case for including such commodities as tomatoes and apples. Again, this comes within the remarks which the Minister made concerning the variety of a particular commodity. At the present time, any one can go into a fruit shop, or even go to a barrow in Moore Street or elsewhere, and get a wide variety of the one commodity. I recently had experience of asking about the different prices. One can buy an article at 5d. or at 3d., but one can readily see that there is a difference in size and quality.

Surely, in those circumstances, caveat emptor ought to be a condition under which a person makes a purchase. If people can see the article they intend buying, if it is not an essential article in the public interest, normally speaking, if it is not an essential foodstuff, then the public should have some choice. Those offering articles of that sort should be allowed to do so on the basis that if they sell a range of commodities differing in size and quality, the purchaser is an equally good judge as to what he wants.

The Third Schedule relates to price display Orders and does not involve fixed maximum prices. It lays down that the shopkeeper must put the price on the package.

That is reasonable, but a number of the commodities here are, or have been up to recently, subject to control—butter, for instance.

There is a separate provision relating to display.

I think that is reasonable. In some shops, at the moment, they display different grades of oranges at different prices. However, I feel that in those circumstances it is better to leave it at the discretion and the wisdom of the prospective purchaser, rather than to try to operate a system which cannot work to the extent that would engender public confidence. Undoubtedly, the view which was expressed at a number of inquiries or by experts who came here, particularly from America, is that our profits are too low. Compared with conditions in America and in other countries where economies are expanding, our rates of profit are unfavourable. In this matter again, a number of things must be considered. The size of the markets here is infinitesimal as compared with those of some of the people who come here. We have, by deliberate policy, embarked on what is called a high cost economy.

If a decision altering tariffs and quotas is taken, we must arrive at it with our eyes open and on the basis that it is in the national interest that changes of this sort are to be carried out. Up to the present, in the main, any decision to alter the rate of profit not alone evoked a protest from those interested but had an immediate effect on the whole economy of the district or the town where an industry is located.

With the introduction of the free trade area, that situation may change. If it does, it will certainly involve a radical alteration in the whole question of price control; it would mean radical alterations in more than price control because it would involve the whole question of protection and assistance for industries. This Bill has two main purposes. In fact, I think, it is really a continuation, with slightly different effect, of the provisions already enshrined in the Supplies and Services Acts, extended and continued. Whether it is worth enacting a measure of this sort in present circumstances is open to question, but if the Minister and the Government feel there is some advantage to be gained from it, I do not think there will be any opposition to it.

There are just a few points I should like to raise on this measure. First of all, I should like to know from the Minister how he would arrive at the decision to have an inquiry put in hand. We know that when inquiries of the nature envisaged are held, they involve the particular industries or trades concerned in very heavy expenses. I have a feeling that some inquiries held in the past were initiated on the protests of a number of people who were, in my opinion, not very responsible and whose complaints were, in many cases, frivolous.

It is my own opinion that, before the Minister arrives at a decision to hold an inquiry, he should have the complaints which are made to him on the application for an inquiry examined very closely in order that the trade concerned will not be put to tremendous expense in order to justify its existence.

Another aspect in relation to prices which should be discussed on a measure like this is the question of the cut-price shop. On my way into Dublin this morning, I saw in a shop window an advertisement saying "Cut-Price Shop". I understand that in practically every department of trade, prices are cut. The purpose would seem to be to attract customers of other shops throughout the city to that particular place because they will get things a couple of pence cheaper. I do not think that is a very good business. The Minister told us already that profits are not a big factor in prices. If this system of cut-price shops were to spring up throughout the country, it would involve all trades in immense difficulties. People seeing prices cut in these shops will begin to get the impression that other honest and responsible traders are mulcting them unnecessarily. We all know that shops in the retail business find it difficult enough to pay the wages of their staffs and to keep their premises in a proper condition with the small profits which the Minister has already admitted and which have very little bearing on prices.

I think some form of investigation into the cut-price shop should be taken side by side with any inquiry into the legitimate trade of legitimate traders. It is quite wrong that legitimate traders should have all their business inquired into while this type of trader to whom I have referred should be allowed carry on simply because he is going to cut prices below the normal level. That aspect should be very closely inquired into. I, of course, never like to see a Government interfering in any business, but I realise it is necessary in certain circumstances, that the price which people have to pay for normal goods should be inquired into from time to time.

The only reason I stood up was to ask the Minister for an assurance that no inquiry will be held until he has something in the nature of proof that an abuse is taking place in regard to a particular commodity and that he will not hold an inquiry simply because there is a suggestion that prices in a particular commodity are being abused. I made these few remarks, firstly, to get information and secondly, in the hope that the Minister may at some time do something to prevent the type of trading I have mentioned and which I believe is not justifiable.

I believe that this Bill represents a very much more realistic approach to the whole question of prices than we have had heretofore. There is only one point on which I would disagree with the Minister and that is when he described the Bill as not being of major importance. That is a matter of a point of view, but from the point of view of the business community, I would regard it certainly as of major importance. I would also regard as being of major importance the comments which the Minister has made on the question of profits. The unfortunate thing is that up to recently the very idea of somebody making a profit was regarded as, if not illegal, at least highly improper. How people were expected to continue in business without making a profit was always a mystery to me.

I welcome very much the very strong statement which the Minister has made and which was confirmed by Deputy Cosgrave, that the rate of profits in Irish industry is far too low. The dismal fact still exists that public opinion is far from convinced on this point. One other reason why public opinion has been influenced in this way is that in the public inquiries by the Fair Trade Commission, the most irresponsible criticisms have been made, as Deputy Loughman has pointed out also. It is those criticisms of Irish industry which have hit the headlines.

The only way in which those criticisms could fairly be met by Irish industry would be a complete and public disclosure of the details of a company's accounts. It is grossly unfair to expect any business to disclose its accounts in public, except in a case where some gross impropriety is being alleged. But the atmosphere in the Fair Trade Commission has always been that the industrialist is guilty, unless and until he can prove himself innocent. That has been largely due to the fact that irresponsible people have been allowed to make criticisms which they are not bound to substantiate. For that reason, I greatly welcome the provisions in this Bill for prices advisory bodies and I note there is no specific reference to public sittings.

I do not want anybody to believe for a moment that I—or any other person engaged in industry — am frightened to let people know how the business is run and how much money is being made, but at the same time it is unfair that these inquiries should take place in public. I hope that these prices advisory bodies, appointed by the Minister, will act not in public but in private. There would be considerably less cost involved for all parties. I feel that if those bodies are properly selected — as I anticipate they will be —and have the influence of men who have experience of industry and business generally they will be able very rapidly to advise the Minister as to whether monopoly conditions exist. I think the Minister can make up his own mind whether there is a temporary emergency, without asking anybody's advice.

I welcome the fact that responsibility for initiating any action lies with the Minister. I think that is the place where the responsibility should rest. That brings me back to Deputy Loughman's point that irresponsibility may creep in if you have a body which is not directly responsible to anybody else but is just sitting there looking for trouble, as it were. No Minister for Industry and Commerce will be sitting in his office looking for trouble but he will adopt a responsible attitude in this way.

I hope this Bill represents mainly a reservation of power to be used only when necessary and that it will not mean a regular routine of price inquiries which can only be upsetting both to producer and consumer. There is a lot to be said for the reservation of that power in the hands of the Government and that threat alone should prevent any tendency towards unduly high prices.

I am very glad, too, that Deputy Loughman raised the question of the cutting of prices. This is a matter which has been raised with me on a number of occasions and not so much by those engaged in trade or industry as by consumers who have come to me and said: "We are frightened of the cut-price shop because the shop where we have always dealt is being put out of business, and we prefer to deal with those with whom we have always dealt —people whom we know and can trust."

The only way to deal with the cutting of prices is by allowing some system of retail price maintenance. I do not want anybody to think that that means collective price fixing, which is an entirely different thing. Retail price maintenance still retains the element of competition between suppliers. Each supplier can state the retail price at which his product shall be retailed and he should be allowed to withhold his product from those who will not maintain that price. The only danger that could arise would be where a number of suppliers all agreed on one price and then you would get a price ring. However, individual price maintenance is entirely different.

Only when the Fair Trade Commission allows an individual to maintain his prices will the cut-price shop go. Once price maintenance is allowed, as it must be allowed, the cutting of prices will stop — and that does not mean that excessive profits will be made. It simply means that there will be stability in industry and in commerce and that there will be a fair chance to make a reasonable profit. With reasonable profits, there is a chance for industry to put something in reserve, which is in the interest of the workers, because, without reserves, there can be no guarantee of continuity of employment.

I welcome, therefore, the Bill which is before us today. I hope it will receive detailed consideration at a later stage, but, in general principle, I regard it as showing a very much more realistic approach to the whole matter. I would ask all Deputies and the Press to give the maximum publicity to what the Minister has said on the question of profit. Do please appreciate that profit is not improper and that there is no evidence of excessive profit-taking in Irish industry to-day.

It is quite true that this Bill is intended to give reserve powers. 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. These circumstances would obviously arise if there were another Suez crisis, leading to the drying-up of supplies of essential goods, producing scarcity conditions in the shops which could be exploited to the detriment of consumers. If that should happen, the power to deal with it will be there. Power will also be there, which can be used at the discretion of the Minister, in the other two circumstances I mentioned— monopoly conditions which cannot be broken up by the Fair Trade Commission, and the evidence that high prices in protected industries are traceable to excessively high costs which those engaged in the industry could remedy, if they were forced to do so.

I have characterised the Act, therefore, as giving reserve powers. The next point to make clear is that the Minister for Industry and Commerce, to whom the powers are given, cannot himself use them arbitrarily at his own discretion, except, perhaps, in relation to the four commodities I have mentioned, namely, bread, butter, milk and sugar. In every other case, before he can use the powers, he has to have an inquiry carried out — an inquiry by the Fair Trade Commission, if monopoly conditions are to be dealt with; an inquiry by a committee set up under the Act if excessive costs have to be dealt with.

We therefore have a picture of reserve powers usable only after an inquiry. By whom is the inquiry to be held? The Fair Trade Commission is there to handle a monopoly situation, but, in any other case, a committee drawn from the panel to be set up under the Bill is intended. There is a Prices Advisory Body in existence, consisting of a number of people, some of whom are remunerated on a more or less whole-time basis, who have not at present a great deal of work to do and have not had for some time past. We do not think it desirable to have an organisation of that kind. One reason is that it involves a much higher cost than we think is justifiable, but it is mainly because we think that an organisation of people who are remunerated for the purpose of being in existence to do a job of that kind, if they are given any independent powers, will inevitably seek to use them, even if it is only to justify their existence.

That is one of the main arguments against bringing back the 1937 Act. There, you had a Prices Commission permanently functioning, the members of which were paid on a whole-time basis and who naturally poked around looking for things to inquire into. We do not think that desirable or necessary in our circumstances. We think there should be no inquiry at all unless there is an obvious need for it — and the decision upon the need for it will rest with the Minister for Industry and Commerce. It will have to be left to his discretion to decide where an inquiry is needed. I am sure he will be helped in that matter by questions, motions and proposals in the Dáil, if Deputies are aware of circumstances which require investigation.

The idea is that there will be chosen now a panel of persons who will serve on these committees. The idea of a panel is to avoid the Minister's having to go around looking for people to conduct an inquiry, when he thinks it necessary. It is contemplated that a certain number of people will be asked to agree now to be available for such inquiries, when necessary. That obviates the need for delay when an inquiry will have to be held. It will also help to remove any possible suspicion that the members of the inquiry are being hand-picked, as it were, for the purpose of a particular investigation. Such a committee can hold an inquiry in public but the decision whether the inquiry will be held in public or not is taken not by the committee but by the Minister.

What the Bill provides is that no part of the inquiry will be held in public, unless the Minister so directs. That is to enable a flexible procedure to be followed. If it is more likely that a full and informative inquiry will be made by the committee hearing the evidence in private, then no authority to hold public sittings will be given. I think there will be cases where the Minister's decision will be that a public inquiry is the most effective instrument because of course a very large part of the purpose of legislation of this kind is to help to educate public opinion about matters on which it is agitated and, secondly, one of the methods of using legislation of this kind is not to bring it into actual use but to have it available to bring into use and probably the prospect of a public inquiry might in many cases be more effective in getting a situation remedied than the actual publication of a report.

Generally speaking, I am in agreement with the views expressed by Deputy Cosgrave. I think we are now all coming to the same point of view that whatever case there was for the elaborate machinery of price control during the war and post-war years, it no longer exists, that, in a free enterprise society, competition can be relied upon to take care of prices and the main purpose of policy must be to make sure that competition is functioning, and that we need the powers of price control only to deal with rather exceptional conditions. We have a special requirement arising out of our own experience — to prevent any public misunderstanding of what can be done by official control of that kind. We have learned what it is causes prices to go up. Price rises are rarely due to circumstances that can be dealt with by Government regulations. When costs are increasing, when inflationary forces are at work, there is no hope that rising prices can be stopped by the simple process of making Government Orders prohibiting them. We have learned that by our experience and I think public opinion has come to accept now the lessons of that experience.

I do not want to deal with this general question of price cutting. It is a term which is used to apply to the selling of goods on a margin of profit so small that it could not sustain the costs involved and the wages which would have to be paid in running a normal trading establishment. We hope that competition will force prices down and force people to work upon the minimum reasonable margins; but there is rather a special problem which Deputies have in mind when they use that term "cut-price shops". It may have been noticed that a request has been made to the Fair Trade Commission by certain industries which are particularly affected by that practice, to be allowed to operate retail price maintenance methods. On previous occasions and from both sides of the House, I have expressed my strong personal view that retail price maintenance — in the sense of not cutting the price which the manufacturer thinks should be charged upon the article and a right to the manufacturer to refuse to supply the article to anyone who sells it under the price fixed by him— is not necessarily objectionable, when there are several manufacturers of the same kind of article in open competition with one another.

I do not know what the procedures are by which the prices of cigarettes are fixed. As far as I know, there is no getting together by manufacturers and, as far as I know, the same applies to certain alcoholic drinks. There is one predominant manufacturer in each case who has to be followed by all the others. They, apparently, cannot charge more than that predominant manufacturer chooses to charge and are usually in such a weak position that they cannot afford to charge less. Therefore, we get what is known as the "price leader" who is, in fact, the determinating authority when prices are arranged. The actions of the Fair Trade Commission have been primarily directed — and should, in my view, continue to be mainly directed — towards breaking up any attempt at collective action to fix prices. It is the collective action that can be prejudicial to the public and lead to undue exploitation of the consumers.

Where there is sufficient competition between the suppliers of any class of goods, then it seems to me there can rarely be any danger to the public arising from normal retail price maintenance procedures. However, that is a major issue of policy which hardly arises on this Bill. We discussed it here fairly extensively when the Restrictive Trade Practices Act was going through the House and it may arise again on certain measures which I will have to bring forward soon either to confirm or to amend Orders based upon reports of the Fair Trade Commission, and perhaps we can discuss the theory and practice of retail price maintenance more fully then.

Question put and agreed to.

When is it proposed to take the Committee Stage?

This day week.

This day fortnight.

Certainly; but perhaps the Deputy would not mind fixing it provisionally. I do not think it is a very elaborate Bill. I am not quite sure what business might be available for next week and Deputies may prefer to take the Committee Stage of this Bill rather than the Second Reading of Bills which were circulated only to-day.

It could be ordered provisionally for this day week.

Yes and if there is any desire to do so, we can postpone it then.

Committee Stage ordered for Wednesday, 30th October.