Committee on Finance. - Prices Bill, 1957—Committee Stage.
Sections 1 to 4, inclusive, agreed to.
Question proposed: "That Section 5 stand part of the Bill."
I would like to make a brief statement on this section. I think representations have been made by an organisation called the Private Motorists' Protection Association concerning paragraph (h) of this section which excludes from the Bill charges for services rendered in connection with banking or insurance. I presume the Private Motorists' Protection Association is solely concerned with the insurance arrangements for motor vehicles. On that assumption I want to point out the position is that, under the Insurance Act, there is power to control the cost of motor insurance and workmen's compensation insurance. These two classes of insurance are singled out from all others in that respect that the Minister for Industry and Commerce is given power to control charges for those types of insurance. Consequently, there is no necessity to make any provision in this Bill for the control of charges of that type. That power under the 1936 Insurance Act has, in fact, never been used, but it is there to be used if circumstances should justify it.
With regard to other classes of insurance, not merely would price control be impracticable because of the very technical considerations that would enter into calculations of proper premiums, but it would be particularly difficult for the Minister for Industry and Commerce to take power in that regard because the main purpose of that Insurance Act was to put upon the Minister for Industry and Commerce a specific obligation to ensure the solvency of Irish insurance and assurance companies. There are, as Deputies may be aware, provisions for the periodic examination of the accounts of these companies in the Department for the specific purpose of ensuring the solvency of insurance companies.
I feel certain, however, that the Private Motorists' Protection Association was mainly concerned with motor insurance, and power to control charges in that respect already exists. I might mention that I have received some representations from the Banks' Standing Committee regarding the wording of the paragraph. I do not think any amendment of the paragraph would be necessary but I should mention that these representations are under consideration so that I shall have the authority to produce an amendment if an amendment is considered necessary on the Report Stage.
Do I understand the Minister's answer to the Private Motorists' Protection Association is that he has power to deal with matters——
——affecting motor insurance.
Question put and agreed to.
Sections 6 to 9, inclusive, agreed to.
I move amendment No. 1:—
In sub-section (1), to add to the sub-section a new paragraph as follows:—
(e) the prices charged for the commodity specified in the warrant by wholesalers or retailers thereof.
I think Deputy Cosgrave may have put down this amendment under some misapprehension regarding the provisions of the Bill. Sections 10 and 14 of the Bill stand together. Sub-section (1) of Section 10 provides for an inquiry by an advisory committee into the prices charged by manufacturers and it would be solely in relation to manufacturers' prices that an Order might be made under Section 14 following upon an inquiry under Section 10. So far as wholesale and retail prices are concerned, as I explained on Second Reading, reliance is placed entirely on competition, and Price Orders in regard to wholesale and retail prices would be made only on a report from the Fair Trade Commission that competition was not effective. It would therefore be inappropriate to make reference to wholesale or retail prices in this section in so far as only manufacturers' prices will be reviewed under it. If a question concerning wholesale or retail prices should arise it will be in circumstances where some development restrictive of competition has emerged in which case the matter will be referred to the Fair Trade Commission under Section 13 and it is following upon the report from the Fair Trade Commission that appropriate Orders will be made.
From what the Minister says the word "service" does not cover any aspect of distribution?
No; it would be a service like shipping, for example, or transport.
And as far as price advisory bodies are concerned retail prices and wholesale prices are completely cut out?
And, unless otherwise specified, there is nothing affecting retail prices or wholesale prices——
——arising under this section.
No. There are three sets of circumstances under which price control can be exercised. The first is where it has been established that manufacturing costs are too high due to causes within the control of the manufacturers. In that case, power is taken, where it is possible to use it, to control by Order the prices charged by these manufacturers. The second is a case where there is a situation which tends to restrict competition and where there is such a situation, it is the Fair Trade Commission which carries out an inquiry and the inquiry could relate to retail and wholesale prices. It is where it is reported that there are limitations on competition that the Minister will make Orders to deal with wholesale and retail prices. The third case is where there is a temporary scarcity of a commodity resulting in possible inflation in prices. It is only in these three sets of circumstances that it could be appropriate to have this amendment of the Bill. So far as wholesale and retail prices are concerned reliance is placed on competition, and power to act is given where it is reported that competition is not effective.
Amendment, by leave, withdrawn.
Section 10 agreed to.
I move amendment No. 2:—
To add to the section a new subsection as follows:
(3) An advisory committee shall inform the Minister if it is unable to furnish a report concerning the matters into which it is to inquire.
The suggestion is that the Minister's intelligence service may not be equal to the task.
This amendment is not necessary in so far as it is already covered by the provisions of the Bill. If circumstances should arise where the committee is unable to make a recommendation, either because it had not sufficient time to complete an examination or because it was unable to get sufficient facts or for any other reason, it would be open to the Minister to take cognisance of that situation. It is not necessary to prescribe in the Bill that the committee has the right to say: "We cannot furnish a report on this issue." The committee will undoubtedly furnish a report even though it is unable to make a recommendation. It would be open to the Minister either to decide to take no further action or to amend the terms of reference of the committee or to appoint another committee. It is not necessary to prescribe it as a provision in the Bill. The committee will submit a report. If it is unable to make a recommendation, it will be open to the Minister to deal with the situation. There is no necessity to prescribe that the committee shall furnish a negative report as is suggested here.
In the case of a report being held up or delayed by reason of the advisory committee being unable to get certain information, there appears to be an implication that the Minister might have power to enable him to get that information, a power which would be greater than the powers held by the advisory committee. It does not appear to me that that is so.
The committee has power to report in negative terms.
But has the advisory committee less power than the Minister for inquiry?
No, the Minister has no power for inquiry at all. The only thing he can do is set up a committee to conduct an inquiry. The committee has full power to carry out an inquiry. I cannot quite see the circumstances under which it would be unable to make a recommendation but if those circumstances did arise it could so report.
Amendment, by leave, withdrawn.
Section 11 agreed to.
Sections 12 to 16, inclusive, agreed to.
Question proposed: "That Section 17 stand part of the Bill."
Can the Minister indicate what particular type of inquiry he intends to make preparatory to making any maximum prices Order in regard to bread and sugar?
As far as these commodities are concerned, there is no obligation on the Minister to make an inquiry before taking action. The procedure under the Bill is this: in respect of all other commodities the Minister cannot act except on a report, either from the advisory committee or from the Fair Trade Commission. In relation to these four commodities, the Minister is given power to act first and inquire afterwards. I justified that on the Second Reading by pointing out that in relation to these essential commodities it might not be desirable to delay taking action while an inquiry was in progress. Circumstances could arise which, in the Minister's view, would justify his acting first and inquiring afterwards. It is therefore proposed to give him power to do that in relation to these commodities.
The only commodities which the Minister considers essential are bread and sugar?
No; bread, milk, butter and sugar. These are the four commodities which are essential and which can be made the subject of price control Orders. That is the point. The Deputy will appreciate that not every commodity can be dealt with by maximum price Orders, but these commodities can. It is, therefore, in relation to these commodities that power is being taken.
If the Minister considers that milk and butter are to be associated, has flour to be associated with bread?
No, it is in regard to the ultimate product that it is proposed to take this exceptional power. Flour can be dealt with but it will have to be by the ordinary procedure in the Bill.
Question put and agreed to.
Sections 18 and 19 agreed to.
I move amendment No. 3:—
Before Section 20, to insert a new section as follows:
20.—Where the Minister makes a retail price display order in respect of any commodity it shall be an offence to sell such a commodity at a price exceeding that fixed in the order.
That is in the Bill. If the Minister makes an order requiring traders to display the graded prices which they are charging for the scheduled goods, then the traders must charge these prices and will commit an offence by charging higher prices. I think that is what the Deputy was aiming at.
Amendment, by leave, withdrawn.
Section 20 agreed to.
Section 21 agreed to.
Question proposed: "That Section 22 stand part of the Bill".
I oppose the retention of this section chiefly on the grounds of equity. Price control has been in operation since 1939 and it is about time that this section was removed. It should be removed at least before the 31st December, 1957. The five areas which are controlled are areas where there is a great labour content. The licensing trade gives considerable employment. It is not afraid of price control in general — in fact it rather recommends it — but it wants such control to be general. The example has been set in Waterford, Cork and Limerick where the controlled prices in regard to particular commodities in the beer and spirit line are not being charged. The price of stout, for instance, is a halfpenny, a penny, or a penny halfpenny, less than the permitted controlled State price.
The Minister should abolish this section completely because it is unjust and inadequate. Also it has a very detrimental effect upon the enterprising trader in cities like Dublin, Cork, Waterford and Limerick. If he wishes to improve his premises and spend a considerable sum of money he will, in most cases, have to go to the bank. The fact that the banker knows that control exists places the trader at a slight disadvantage. As a result his enterprise is considerably dampened.
I trust that the Minister will revise, delete or amend the section. I should like to see it go completely. I am speaking as an interested trader in Dublin and outside. While it is there it has the stigma of a watch directly on a particular section of the trade here. It remains as a sort of threat over people that they are not to be trusted. I can assure the Minister the trade will accept any control or fixed prices imposed on them but let them be equal and cover all sections of the country. Sin a bhfuil le rá agam.
I confess I am conscious of the fact that this section is in a degree inconsistent with the rest of the Bill. So far as the main proposals of the Bill are concerned, the general aim is to provide for price control in future only where the need for it existed in accordance with the procedure laid down in the Bill. It is, therefore, slightly inconsistent to carry over into the new situation a special section of the Emergency Orders under the Supplies and Services Act. I know Deputies have been receiving representations regarding this section of the Bill from the Vintners' Association. I do not think they can be very seriously perturbed about it, except in so far as they have received the impression from the section that it is intended to deal with that trade in the future on a different basis from other trades.
This Order in one form or another has been in operation for 15 years and, certainly, in so far as it concerns the Orders now in force, I never received any representations from any licensed trade organisation or any licensed trader concerned. There is, on the other hand, a proposal that it should be amended or abolished. It seems to me that a great many affected by it never knew it existed until their attention was directed to this section of the Bill. The present Order controls the maximum prices that may be charged for beer and stout only, and applies to the county boroughs of Dublin, Cork, Limerick, Waterford and Galway. It controls the maximum prices on the basis of a permitted increase over the previous prices and all these Orders relating to beer, stout and alcoholic drinks are in that form. The first Order fixed the prices at what could be then charged and the Orders made throughout the years since permitted so much addition on these original prices and that is an unsatisfactory system of price control.
Let us be clear what the effect of taking out the section is. So far as this control is concerned if the section remains in, that particular Order made under the Supplies and Services Act remains in force until it is amended or until I, as Minister for Industry and Commerce, make an Order repealing it. If it goes out, that particular Order will cease to have force on the 31st December and these commodities will be in the same position as any other commodity in the sense that, following an inquiry, an Order fixing maximum prices can be made for the future.
That is one of the questions I want to deal with.
That inquiry would be conducted only on the evidence that there were restrictive trade practices limiting competition. We are all aware, I think, that the licensed vintners' organisations——
Both of them do decide what is the price to be charged when they are free to determine the prices. They communicate that price as a sort of indicated price to their members. I have no reason to believe and, in fact, I think it is incorrect, that they enforce these indicated prices by any penalties upon traders who do not obey them. To that extent their procedure would not be the same as that in some of the other trades in respect of which inquiries have been carried out by the Fair Trade Commission and Orders submitted to the Dáil. In so far as there is evidence the price is a sort of regulated price. There might be occasion for an inquiry and, indeed, I should think it is not unlikely, if this section were deleted, that the need for an inquiry some time in the future would be accepted and the matter referred to the Fair Trade Commission. That would depend entirely upon the practices that were maintained or developed within the trade.
I think it is only fair I should say that if the Licensed Vintners' Association had come to me prior to the introduction of this Bill and had urged that the Orders should be repealed, I think I would have done it because, so far as I can see, it is not of very great importance whether it is maintained at all in the present condition of the trade. I think it is unlikely that there may be any attempt by any organisations of the traders to push up prices in an unjustifiable way because the falling off of sales would carry its own penalty for them. Looking at the position, so far as one can judge with the limited information available, the need to retain the Order is not very strong. It is not the kind of trade in respect of which competition on prices is likely to be very effective. The margins available in such competiton are very narrow. My feeling, therefore, is that I do not mind very much whether this section remains in the Bill or not. I do not think it makes a lot of difference whether it remains in the Bill or not.
I understand the objection of the licensed trade to be singled out in this particular way, and their apprehension that this is by way of giving notice that they are always going to be treated on a different basis from traders in different other commodities. I felt here was a control which was fixed and applied to a trade in which there was some superficial evidence of restrictive practices in operation and it should not be allowed to lapse without some examination of the position. I am fully conscious of the fact that I might have decided either way when the Bill was being framed.
Might I ask the Minister is it the intention of the Government to introduce legislation in the near future in connection with the licensing laws, and if so, would not this problem be considered in the light of that Bill?
I presume that some legislation relating to licensing laws is under consideration following the report of the recent commission but I hardly think price control would come within the ambit of that legislation. Personally, I am anxious to get back as quickly as possible to the pre-war situation when these controls did not operate at all. It would be all the better. If we dropped the section, control would become operative again only after the Fair Trade Commission reported that the circumstances prevailing were restricting competition to an extent that was prejudicial to the public interest. I have not been able to investigate, myself, whether these conditions do, in fact, exist. There is an admission by the organisation of traders that they do determine the prices which it would be regarded as reasonable to charge and communicate these prices to their members and that, in practice, the members adhere to these prices. The organisation also tells me that there are no sanctions and that if a member does not adhere to the prices, there is nothing they could or would do about it. I would be prepared to accept their explanation because I feel that, in the present state of the trade, there is no danger of excessive prices being taken which are not justified by costs.
On the whole, I feel it would be better to leave the section out of the Bill, but I have no very strong feelings. We will leave it out.
Question put and negatived.
Section 22 deleted.
Sections 23 to 29, inclusive, and First Schedule agreed to.
I move amendment No. 4:—
In paragraph 3, to delete subparagraphs (2) and (3).
I am advised that, in fact, the Civil Service Commission Act does not apply to these appointments. In other words, the provision is unnecessary.
Amendment agreed to.
I move amendment No. 5:—
In paragraph 10, to delete subparagraphs (3) and (4).
That is the same.
Amendment agreed to.
Second Schedule, as amended, agreed to.
Third Schedule, Preamble and Title agreed to.
Bill reported with amendments.
I may have an amendment or two on Report Stage.
I was not present for the earlier stage. Did the Minister receive representations in connection with the insurance rates?
I mentioned that on Committee Stage. So far as motor insurance is concerned, there is power of control under the Insurance Act itself. I take it that it was the Private Motorists' Protection Association——
Report Stage ordered for Wednesday, 6th November, 1957.