asked the Minister for Finance the estimated increase in the consumer price index because of the introduction of decimal currency.
Ceisteanna—Questions. Oral Answers. - Consumer Price Index.
16.
For the conversion of retail prices to decimal currency terms a standard shopping conversion table has been recommended by the Irish Decimal Currency Board. The table is devised so that, over a range of retail prices, increases and decreases cancel out. The use of this table, the good sense of traders, the force of competition and the public alertness which will result from the publicity of the Decimal Currency Board, will all help to ensure that decimalisation, as such, will not result in an overall increase in the level of prices.
The Minister for Industry and Commerce will investigate any case reported where there has been an apparently unjustifiable price conversion.
Is it not a fact that, as a result of decimalisation, prices will be rounded upwards rather than downwards and that will mean in actual fact an increase in the consumer price index?
No. As I have said, the conversion on the basis of the shopping conversion table taken over the whole range of pence will, in fact, work out at exactly the same—no variation up or down. Of course, in a particular shop there could be a preponderance of items at 5d rather than 9d and this would result in a preponderance one way or the other but, taken over the whole range, it evens out. There is no alteration at all in the case of anything costing £1 or 6d or any multiple of 6d—1s, 1s 6d, 2s and so on. There is, therefore, no reason to believe that decimalisation should lead to an increase in the cost of living. The experience of other countries which have converted to decimal currency with 1.2p as the minimum unit, shows that decimalisation conversion has not led to an increase in the cost of living.
While that is theoretically possibly a satisfactory answer, does the Central Statistics Office anticipate any increase in the consumer price index?
The available information does not enable them to form any estimate, but I would point out that the last part of my reply was not theoretical; it was the practical experience of what has happened in other countries converting to decimalisation with a similar value to the lowest coins we will have.
It has been said that life is larger than logic. Have the Department taken any precautions against what many people have forecast, an increase in the cost of living? Do the Department take the position that, if all purchases are in pounds, there will be no problem? The biggest problem will arise, of course, for those on social welfare benefits who purchase in small amounts. Their cost-of-living increase will be most severe. I would be interested to know when the Minister will come down from his Mandarin heights and say what he will do if there is this cost-of-living increase that is forecast?
I wish Deputy O'Leary would come down out of the clouds and talk about what is really in issue here. The fact that I have pointed out there will be no change at all in the case of pounds does not entitle the Deputy to ignore the rest of what I said which is, of course, really what he normally does.
Is the Minister——
I have not finished. I would point out again that, when I refer to the experience of other countries, I am not talking about theory; I am talking about the practical experience of what has happened. I cannot guarantee that our experience will be precisely the same——
Of course, the Minister cannot.
——but certainly the practical experience of what has happened is a better and more reliable guide than the most alarmist theories Deputy O'Leary has heard advanced somewhere or other.
Is the Minister aware that retailers in some towns claim to have received advice that they should multiply the new pence by two and put the stroke between the two figures left and add on a penny, with the result that they are in fact increasing the cost of everything by one penny?
From whom is the Deputy saying they got this advice?
Not from the Department, but some of the retail organisations have given this advice.
This is the reality we are talking about.
I have no doubt groups of trading organisations have suggested to their members that they should increase prices to a certain level which may be unjustifiable. This has happened before and it has been dealt with before. If it happens again it will be dealt with again.
(Interruptions.)
I am calling Question No. 17.