asked the Minister for Industry and Commerce if he is satisfied that an increase of 16s 8d per ton on the price of cement following the recent wages settlement in Cement Ltd. is justifiable.
22.
Ceisteanna—Questions. Oral Answers. - Cement Prices.
21.
asked the Minister for Industry and Commerce whether the recent decision to increase the price of cement was referred to his Department for approval.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 21 and 22 together.
The prices charged by Cement Ltd. for cement are governed by a condition in the licence which was issued to the company under the Cement Act, 1933, which permits the company to increase its prices to offset increased costs that are outside its control.
The evidence submitted to me by the company shows that the recent increase in cement prices was necessary to offset in part increases in wage costs and in various other costs.
Is it not a fact that this company made a gross profit of well over £2 million in the year 1967-68 and very nearly £2 million in the year 1968-69 and got an increase of 15s a ton early this year and has now added a further increase? Are these not facts?
Yes.
OK.
Would the Minister care to comment on what he expects the effect of this will be on the Taoiseach's suggestion that wage demands should be confined to 7 per cent by way of compensation for price increases?
Perhaps it was not clear from my reply, though it is stated in it, that the increase recently was to offset, in part, increases——
The Minister did not say "in part" until now.
Yes, I did. I said the recent increase was necessary to offset, in part, increases in wage costs and in various other costs. The fact is, if we were to recover all the costs arising from increased wages and other factors, the increase would be substantially higher.
That was not the question I asked. What effect does the Minister expect this will have on the Taoiseach's proposed 7 per cent? Does he not appreciate the fact that this will prove to many other companies that the 7 per cent was all cod at the start and could not be maintained?
No. The point I was making was that it is not correct to assume that the recent increase was due solely to the wage adjustment made as a result of the strike, which is, I think, what is implied in the Deputy's question.
I am not suggesting that at all.
I thought that was what the Deputy was implying.
The company got 15s earlier and is now getting 16s 6d. Does this not prove, no matter what way the Minister puts it, that the 7 per cent increase suggested by the Taoiseach just could not work in this year 1970?
Is the Deputy talking about a 7 per cent increase in wages or in costs?
The 7 per cent increase to allow them to offset the increase in wages.
The fact of the matter is that the Minister has been confining increases so far as they relate to wages to 7 per cent in 1970.
But not in Cement Limited.
I cannot give the Deputy the exact percentage in the case of Cement Limited. It does not come under the normal trades control arrangements because there is a special arrangement under the licence granted under the Act which provides a statutory control, and that does not come under the ordinary control on price increases.
Does the Minister think that would be accepted by other manufacturers?
I am telling the Deputy what is happening in regard to the various wage applications.
The Minister is not being fair to himself.
Will the Minister say the wages factor was no more than 7 per cent?
I am afraid I have not got that percentage.
Will the Minister say it was no more than 7 per cent?
I could only guess at it. It looks as if it would be about 7 per cent, but I could not be sure of that.
Will the Minister guarantee to us that there is no truth in the rumour that this increase was granted to Cement Limited because they endured a strike for 21 weeks?
There are so many things implied in the Deputy's question I have no intention of following it up. All I can say is that the increase was allowed because it was shown to be justified. It did not, in fact, cover all the increases.
In view of the concern of many prospective house-owners at the impact of this increase in house construction costs, would the Minister confirm that, in respect of local authority housing, the increase should not be in the region of say more than £20 to £25? Will he comment on that matter in view of the fact that we all expect the price of houses to rocket?
Everybody is concerned about the effect of this increase on the cost of houses. One of the realities we have to live with—some people have not yet got round to recognising it—is that if the cost of one item goes up it almost inevitably leads to an increase in the cost of another item. Increases of that nature and increases in wages cannot be carried on thin air. In the situation in which we exist, where there are price and wage increases, there is a spiral. It keeps affecting the cost of materials.
There would be no justification for a surcharge on any newly-constructed house of £100 or £75 when the target should be no more than £20.
If the Deputy means that at the present time people are trying to profiteer on it——
Some builders are trying to cash-in on it.
This should not happen and it should be exposed.
The black market cement during the cement strike put up the price of houses. The Minister is aware of that.