If no Deputy offers I shall call on the Minister to conclude.
Prices (Amendment) Bill, 1971: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
I have been offering for the past ten minutes.
If I had seen the Deputy I would have called him.
I think the Prices (Amendment) Bill is couched in such terms that it could itself readily permit of a debate on unemployment. Before the debate was adjourned I had been dealing with the Bill in so far as it brings the price of new houses within the scope of price control. I regretted that it is confined to new houses. I believe it should be extended to include old houses also in price control. In my opinion one of the most important factors of inflation in our economy is the price of houses. If prices for new or old houses are excessively high and inflationary in themselves they will produce a vast number of other pressures within the economy. By and large, the person buying a house has to borrow money to make the purchase and the borrowing has to be repaid in annual instalments. If these instalments are high because the purchase price is high, there will be inflationary pressure in that the borrower will see if he can improve his income to relieve the burden of his house repayments. This is so common that it must be a very potent factor in the inflationary spiral we have been experiencing.
This is equally relevant to the cost of old houses. There is a remarkable lack of logic in a Bill which seeks to control the price of new houses and leaves old houses alone. Whether it is hoped that if new houses are controlled the price of old houses will be kept in check in consequence, I do not know and the Minister does not say so, but it would not necessarily follow.
I agree that to control the price of houses presents much practical difficulty. The matter would be probably passed to the Department of Local Government to deal with rather than be dealt with by Industry and Commerce. There is power in the Bill for the Government, by order, to transfer to any Minister of State any particular subject and I presume the cost of new houses is a matter that would be transferred to the Department of Local Government. It is disappointing that the Minister gave no indication in his speech and we have had no indication from the Minister or from the Minister for Local Government or from the Government as to how this very important price factor will be tackled. It seems to me that the only way in which it can be tackled is by controlling the supply of money available for house purchase.
At present building societies, banks and insurance companies are making very large sums available to house purchasers. These sums are related to the wage or salary of the potential borrower. It may be argued that because they are so related they cannot be excessive and that no building society or insurance company will allow a man to borrow more than his salary will appear to enable him to repay. This is the theory but in practice we have houses in the £10,000 to £25,000 price bracket being purchased frequently in this city and county and to a lesser extent in other parts of the country. It amazes me that there is a sufficient number of persons in the country with incomes of the size that would justify the borrowing that has to be made. I also wonder if the houses themselves are good value for that sort of money.
Some drastic changes will have to come about in regard to the availability of money for house purchase if it is desired to control the price of new houses. If the source of supply of money is controlled and a limit is set to the amount a bank or building society or insurance company may lend that will limit the market potential without decreasing the demand. If, in conjunction with that, there is a strict examination of building costs the two factors should combine to bring down building costs. At present, as far as I know, there is no control whatever over building costs. The only move in that direction is the commission which is at present investigating the price of building land and, as far as I know, the builders themselves have not been subjected to any scrutiny.
I think there should be a system whereby either this Department or the Department of Local Government take power to investigate and scrutinise builders' costs at random so that the building industry may at any time and without notice expect a detailed examination of its costings. I mean a really detailed examination so that it will not suffice for an inspecting authority to be told that wages and materials cost £X and the land costs so much. These things themselves must be sifted in detail and if a wages figure is given it should not be taken at face value but should be investigated and it must be ascertained who is actually receiving the wages. That can be cross-checked through the PAYE office of the Revenue Commissioners. In the case of building materials the check will have to go back as far as the suppliers. If the examination is not as strict as that, a tricked-up balance sheet or account could pass scrutiny.
This matter is too serious to permit of any superficial examination. If we are ever to control the cost of houses we must get at the builder's operation. If rumour is true the profits available to those in the building industry are fantastic. One may assume that there is some truth in the rumours because one sees signs of quick and very evident prosperity on the part of those engaged in that industry and it behoves the Government, as custodians of the common good, to ensure that no one section of the industry is so acting as to acquire for itself profits which are out of proportion, especially when that sector has such far-reaching effects on the general health of the economy.
If these rigorous controls of building societies are introduced and at the same time the supply of money to potential borrowers or house purchasers is also controlled, so that a person will not just get the amount he asks and will have to satisfy the lending authority that the house is value for that money and if, in turn, the transaction will have to come under scrutiny by the Department, these things together might manage to bring some reason into the price of houses. If that were done it might be sufficient to have the control applied to new houses and the cost of old houses might begin to come into line. If that did not happen, some form of control would have to be introduced with regard to old houses. The amount of money available for their purchase would have to be controlled and if the price being asked was out of proportion to the original cost of the house, the borrower would have to be refused a loan. The matter has become so serious and so detrimental in terms of contributing to our inflation that something drastic will have to be done.
On the last day I mentioned the question of prices being paid for property and for land and how certain wealthy organisations appear to be willing and able to pay prices higher than the market price at the time. A report in last Saturday's Irish Independent was a perfect example of what I had in mind. This was that a firm, Irish Distillers Limited, had bought 65 acres of land beside a small town, Midleton, County Cork, for which they had paid £120,000. Apparently land for building purposes in that area was already expensive at £1,200 per acre. Yet, this wealthy company paid almost twice the current market rate in the area. What effect can this have on the economy of that area except to increase prices and increase again the inflationary spiral? The real irony of the matter is that this particular company were, I am sure, in the vanguard of the demands for the reduction of corporation profits tax before Christmas last. Corporation profits tax was reduced and it could well be taxpayers' money that is enabling people such as those to pay outrageous prices for land. The reduction in corporation profits tax, while it was good in principle, should not have been available in a global way to every company. The reduction should have been available only to companies that put to the Revenue Commissioners a definite scheme for spending whatever tax rebate they would receive. It is counterproductive to give this reduction and see it being availed of, either in the distribution of increased profits or in inflationary purchasing of land. The example I have quoted highlights the problem. It is a problem that has not been given any attention by the Government. If this Bill is to mean anything and if the philosophy behind it is firmly to be put into practice, the sort of practice that I have quoted can no longer be tolerated.
On the last day, too, I referred to the effect on the cost of living of the change-over to decimalisation. Again, by coincidence, in last Sunday's Independent, there appeared an article by a journalist who has researched into the effects of decimalisation. His conclusion, as reported in that article, is that the change-over has led to a startling increase in prices. One particular organisation which that journalist quotes is the Irish Housewives' Association. This is an association who are in high standing with the Department, because so far as I know, they will nominate to the advisory committees that are proposed to be set up under this Bill. This is a responsible organisation and they estimate that the increase in the cost of living since decimalisation has been 29 per cent. That is a huge increase to accrue merely from the change-over to decimalisation. It could have come about only because of lack of control. Lack of control is unforgiveable in something that was anticipated for a long time. It should have been anticipated also that there would be rounding up and rounding down and if there had been proper foresight, the rounding up to the extent of 29 per cent should not have been allowed happen.
Enough money was spent on decimalisation—£300,000 in one year.
That is so but it was not spent on setting up control to make sure there would not be an adverse effect on the cost of living.
It certainly was not spent in the right way.
Another example given in the article I have mentioned was that a survey showed there had been an increase of 6p in the price of coffee during one week and that a brand of tea increased from 36p to 38p. We have been so used to talking of pennies that we are inclined to forget that the pence referred to here are more than twice as valuable as the old penny and we have been blinded to some extent by the adverse effects of decimalisation. The Department of Industry and Commerce, as the Department charged with operating price control and as the Department, together with the Department of Finance, who are in the front row in the fight against inflation, should have been very conscious of the difference between the decimal penny and the old penny. They should have been in a position to have effective controls introduced so as to ensure that traders, when they were changing their prices, took into account the difference in the value of the penny.
Another novel development in this Bill is the intention to control the costs of services, including professional services. As Deputy Fitzpatrick has pointed out already this will impinge on the legal profession. I wish to make it clear that the legal profession have no objection whatever to their costs being controlled and supervised but what they ask is that control be exercised ultimately by the Oireachtas. They do not wish their remuneration to be in the hands of the Executive. Having regard to the weak Government we have experienced here during the past number of years, when we say "in the hands of the executive", we mean, in effect, in the hands of the bureaucracy behind the Executive. Our reason for requesting that ultimate control of legal costs be vested in the Oireachtas and not in the Executive is based on the nature of our Constitution. In this country we have the classic type of democratic constitution which has within itself the separation of powers. These are the three powers of State which are the legislature, the Executive and the judiciary.
These powers, while they are separate, are interlocking. Our Constitution follows general constitutional practice in this regard. The reason for the separation of the powers is to ensure that no one power will ever become too strong in such a way as would diminish the freedom of the citizen. The judicial power ensures that the legislature does not enact harsh or oppressive laws. The legislature, in turn, is a check on the Executive in the sense that it should reject any movement by the Executive to introduce such laws. It is well recognised that the most effective and most potent check on both the Executive and the legislature is the judicial power of the State. The independence of the judicial power is enshrined in the Constitution in the sense that judges' salaries cannot be reduced by any Act of this House once the salary of a judge is fixed. Consequently, the other powers of the State, the Executive and the Legislature, cannot exert financial pressure on a judge and a judge cannot be removed from office except by very drastic means—by the entire House voting by a vast majority for his removal. The judicial arm of the State comprises more than the judges on the bench. It comprises also those who operate the courts—the lawyers who practise in them and to that extent the legal profession must be considered as part of the judicial power of the State. If the Government have a proper appreciation and concept of the doctrine of the separation of powers they will be careful not to introduce any legislation which might in any way impinge on the judicial power or might in any way lessen its independence. There is no more potent way of getting at the judicial arm than to control the costs of part of the judicial arm, namely, to control the costs by action of the Executive.
I wish to emphasise again that the legal profession do not reject and are not against their costs being controlled, supervised or decided on by whatever type of structure is set up. However, the legal profession want the ultimate decision on costs to rest with the Oireachtas, the Dáil and Seanad. The legal profession want this to be done in order to give practical effect to the constitutional doctrine of the separation of powers.
I know that commentators and other people are cynical when it comes to matters relating to legal costs. The costs are attacked as being excessive, as being hidden and it is claimed that they have built-in inflationary tendencies. The legal profession are quite prepared to recognise that their costs may require review. They would welcome such a review and would welcome a situation whereby their costs are determined by an independent body with fair representation of all interests. However, if such a body should be so constituted as to come up with an unfair decision in regard to the legal profession, if it should come up with a decision that would allow the State from time to time or over a given period to determine what the costs of the legal profession should be, then the State would, in effect, be transgressing the doctrine of the separation of powers.
All that we ask is that the ultimate control would rest with the Oireachtas so that if the legal profession, being part of the judicial arm of the State, considered they were being prejudiced in a way that could affect their independence vis-à-vis the State they come to this House and to the Seanad and make their case and rely on the constitutional feeling of these Houses to support them and ensure that they are not treated by the Executive in a way that could take from their independence. I want to emphasise that the legal profession do not ask for or require extra privileges in relation to rates of remuneration. All that the legal profession ask is that the ultimate control of their remuneration should rest with the Oireachtas, not with the Executive.
Because they do not come into contact with the law, people generally are not fully cognisant of the buffer position of the legal profession between the State and the citizen. As a practising lawyer, I can assure the House that this situation arises quite regularly. The lawyer's task is to protect the citizen from excessive administration and it is a duty he has to discharge regularly. One can visualise a situation where that duty might be difficult to discharge, or could be rendered impossible to discharge, if the remuneration of lawyers was controlled by the Executive. If the Executive thought that this profession was a nuisance or was getting in the way of the administration by keeping the administration from infringing on the rights of the individuals one can imagine the situation where the Executive would tend to try to denigrate or diminish this interfering body. This House, being one arm of a democratic constitution, should not allow this situation to arise. Having regard to its function in the operation of the judicial arm of the State, the legal profession should be left in an independent position and should be left in a position where the ultimate control— which is financial—should be in the hands of the Oireachtas.
In his speech the Minister makes the point that where charges are a percentage of the price obtained for property or of the value of the contract they have grown out of proportion having regard to the inflationary increases in the price of property. I concede there is validity in that point. The solicitors' profession also concede this and are willing to have the system of charges revised in order to obviate this apparent abnormality. However, this must not be considered in isolation. Like any other sector of the community, the solicitors' profession also suffers from the other side of the coin. When I point out that the wages of general law clerks in the period 1964-71 have increased from 62½ per cent to as much as 130 per cent, the other side of the coin can be seen. In that period the cost of living index showed an increase of 46.7 per cent but the wages of male law clerks increased from 62½ per cent to 130 per cent and for female clerks the increases have ranged from 52.3 per cent to 125 per cent. I doubt if any other sector of the community has had to bear such vast wage increases.
When it is pointed out that costs have increased because they are tied to increasing property values, equally it should be pointed out that wages have increased to an even higher proportion. Similarly, rents have increased tremendously and there is no need to remind the House of the enormous increase in postage charges. This is a high element in the overheads of any solicitor's office. Likewise, the many increases in the cost of court stamps have contributed to the overheads. It can be argued that the cost of court stamps, court fees, Land Registry and Land Commission fees are recoverable ultimately but a significant proportion get lost in the general administration of a solicitor's office. Therefore, in fairness to the legal profession it is necessary to point out all the extra costs they have had to bear.
Moreover, it is only proper to point out that it is in only one aspect of operations that there has been this built-in increase as a result of increasing property values. Similar increases have not taken place in the vast area of litigation, and if an examination were to be made it would be seen that, having regard to the length of time since costs were fixed, there is a lessening of the charges available to solicitors. But, as I say, it is not the wish of the solicitors' profession to be in a position where their costs are not subject to control or revision. All that they ask is that the ultimate control be exercised here in this House and in the Seanad.
How the Minister proposes generally to deal with professional or other services or to control them I do not know. It puzzles me as to how charges can be regulated so as to take into account differing levels of expertise. Again to take a legal example: you go to an eminent senior counsel for an opinion; you choose him because of his education, training, intelligence and expertise in a particular field. Because men are not born equal some professional persons will be able to offer a better service. How to exercise control over the cost of such services while taking that factor into account is to me an insuperable problem. The same must be true of other spheres, veterinary, medical, engineering; within these professions there are varying degrees of expertise and they will be rewarded according to the standard of the expertise offered. No matter what check or control it is sought to apply, I do not see how it will take into account the different value a client is getting or is looking for.
By and large, however, the Bill is welcome to me as an effort to introduce control and to get to grips with inflation. Wages and prices are the two main factors contributing to inflation. If this Bill is an indication of an intention to get to grips with prices it is welcome, but I have my doubts as to whether it will be really effective or not.
Another part of the Bill I do not greatly like is the power whereby the Government, by order, can put different matters to different Government Departments. There is far too much legislation by order at the moment. The growth of administrative law is not a very happy development, because administrative law, by its nature, is not subject to the same checks as legislation passed by this House. There is something hidden about it; it is foreign to our tradition of common law whereby the courts are the ultimate arbiters as to the rights of the citizen. Legislation by Government order gets over that difficulty—if "difficulty" is the right word —but removes the executive from being answerable to the courts to quite a large extent. Therefore, I never like to see Bills before this House which give potentially wide powers of legislation by order. It means that laws can, in effect, be made, even though they may be called regulations, which are nevertheless binding on the citizen, without coming before this House and can be made in such a way that it might not be possible to bring them before the courts.
The question of price control, if it is to be really effective, must bring into the arena of public discussion the general philosophy of State interference in the private sector. This is where the Bill falls down, in that it indicates a necessity for control but it is not prepared to grasp the nettle that control means State interference in the life of the country. There cannot be effective control until such time as the State is prepared to interfere in all aspects of the economy. To make recommendations, to have advisory committees, to appeal to manufacturers or retailers or persons offering services to exercise restraint, is all very commendable, but our experience so far has shown that, unless the Government take teeth actually to interfere in the operations of private enterprise in cases where private enterprise has shown itself unwilling or unable to act responsibly, then there can be no real price control; and until there is real price control there cannot be a successful battle against inflation. Until that nettle is grasped there will be mavericks whose only motive is private profit, going their own way without caring what damage they may do to the economy. The Government and this House have a duty to the people generally to ensure that no private operator so conducts his affairs as to do harm to the economy.
I hope that when price control comes into operation it will be operated vigorously, on a wide scale, but at the same time individually so as to ensure that individual pressure points that I mentioned earlier, such as undue prices for land or houses, will not be allowed to continue. It is distasteful in a democracy to have the State interfering to the point that it may be necessary to interfere, but it may be a measure of our immaturity as a democracy or our lack of responsibility as citizens that such a Bill is necessary. One has always to weigh up the common good against the private good. In such a situation, so long as the liberties of the individual are not infringed, the common good must take precedence.
If this Bill adopts that philosophy I welcome it. If it is only going to a form of well-meaning appeal or supervision without teeth it is still welcome but I must say it is useless. It will be interesting to see it in operation in the areas I mentioned, of housing, the price of land and of professional services and personal services of one kind or another. As I say, its implementation in those areas will cause considerable difficulty. It is a pity the Minister in his speech has not given some indication of how he proposes to operate in those areas, or is the position, as I suspect, that the power to operate in these areas is taken in the hope that the public recognition of this power might ensure some control? If that is the thinking behind the lack of fact in the Minister's speech, then I believe it is mistaken thinking. It behoves the Minister to indicate to us quite clearly how he proposes to exercise control over these new areas now being brought into the ambit of price control.
It may be that various parts of the Bill will be hived off to other Departments and that it will be for individual Departments to make up their minds on how they will operate it. That would be a bad development. We should be told in the debate on the Second Stage of the substantive Bill how the controls will be applied. If the powers under the Bill are, by order, passed around to the various Government Departments, the actual exercise of them will be formulated and put into practice without the Minister in question having to come back to this House for a debate.
I could see constitutional difficulties arising. As I say, there is the delicate area where the public good and private rights meet. This area will be invaded to a fairly serious degree in exercising price control as envisaged in this Bill. This House should have an opportunity of debating any radical changes in that area. I do not like to see in a Bill such as this, power to do so much by Government order. This can lead to an unconstitutional situation—a situation where the actual operation legislation, being a bureaucratic exercise, might not be such as to end up before the courts to test its validity, thereby causing considerable injustice.
Under the Bill, too, an advisory committee is to be set up with power to call for information and power to punish by way of fine and finding of contempt. I have no doubt that this has been looked at with a view to considering its constitutionality having regard to the fate of the Bill which set up the present sittings of the Committee of Public Accounts. It would be a pity if price control legislation were introduced and the teeth were found to be unconstitutional. It is important that when this Bill becomes law it should become effective law immediately and that the public should be aware that it is effective, and that there should be no question of its operation being held up for the length of time a constitutional action in the High Court, and an inevitable appeal to the Supreme Court, would take. It would be worse than useless to go through the exercise of introducing a Bill if it were to suffer that fate. I commend to the Minister that a very careful look should be taken at the powers of the various tribunals which can be set up under this Bill. He must ensure that they are constitutional.
I want to emphasise what I said in regard to the legal profession. I have grave fears that our apprehensions might be misrepresented. Our apprehensions are not directed towards any desire to be in a privileged or protected position. The legal profession are anxious and willing that their costs and cost structure should be determined by whatever body the Government or this House should set up. All they ask is that the control of their costs should ultimately rest with the Oireachtas. They ask for that in full recognition of their position as part of the judicial arm of the State and in recognition of the doctrine of the separation of powers as enshrined in our Constitution.
Last year certainly saw prices spiral to such an extent that it has been a cause of serious concern and serious worry and anxiety to a great percentage of our people. If you are in the upper income bracket it does not bother you. You can take it in your stride. If you are a person on a fixed income or an ordinary worker you feel the pinch. You become impoverished. We have over 200,000 people living at or below the poverty level. These are the very people who are affected by price rises. These are the people who are finding it more and more difficult to live. These are the people who are unable to afford the basic necessaries of life. These are the people who are suffering from malnutrition.
Since I came into the House in 1965 feeble attempts have been made by the Government to impose price controls. They knew in their hearts and souls that the Bills they were introducing would be ineffective. They were ineffective and they were left aside. The proof is that we have galloping inflation, spiralling prices, and no real attempt to bring down the cost of living by the Minister for Industry and Commerce or his predecessor, Deputy Colley. Time and time again we in the Labour Party pointed to these rising prices, and we were told that they did not exist, that we were imagining them, and that there was full and effective surveillance by the Department of Industry and Commerce. Now the Government are admitting failure and they are now bringing in another Bill to try to deal with rising prices.
I believe that this attempt to impose some kind of control over services is just a whitewash job. I cannot see it working. An attempt is being made to delude the working man into believing that the professional man will be watched. The Minister and the Government know that they cannot impose any controls on the services given by professional men, and I am speaking as a professional man. There is no way in which they can do that. If the Minister can spell out how they can I will certainly stand up and apologise. I cannot see it happening. If a doctor says: "The service I am offering you at the moment is a little different because I have changed my diagnostic methods and I have changed my therapy methods", how can the Minister impose controls over that? The Minister knows he cannot. This is terribly important, so let us not delude ourselves into thinking that this Bill will be effective. Unless the working-class people are aware of this fact they will be deluded into thinking that control on services will be operated by the Minister under new legislation.
How can we control the price of new houses? We have seen an increase of over 20 per cent in the price of new houses year by year. I have said to people: "If you could save £400 you would be able to put a deposit on a house." They found when they had saved £400 that the deposit had jumped to £700. These are facts and the Minister knows them. Other Members of the House know that when people thought they had enough for a deposit the deposit had jumped. All I could say to them was to keep on saving and hope that things might improve. It was a lost cause because they could never get the deposit. They were beaten time and time again by spiralling prices and by the big profits that were made on those houses.
The handing over of new houses to auctioneers was another gimmick to shove up the price of houses. Why should those houses be handed over to the auctioneers? They add on their fee and this increases the price still further. We have all seen the plush offices of auctioneers. Dawson Street can be called the auctioneers' street. Those are the people who are the parasites in our community, who are not playing their part. We talk about patriotism but these people do not know what it means. They have no regard for their country. All they want is to take what they can out of it, bleed us to death. Those people are not interested in the poorer sections of the community. They consider that this is the law of the jungle and they will survive no matter what happens to the poorer sections of the community.
Many people come to us with tears in their eyes over an increase of 3p in their rent. Their social welfare payments have been increased by a moderate sum and they, therefore, have to pay increased rents. This causes those people great anxiety. The 5 per cent of the population who own 71 per cent of our wealth have no regard at all for these poor people. We have a very inequitable distribution of wealth in the country. I deplore this farcical attempt to remedy the situation because I know it will not be effective.
There was an interesting editorial in today's Irish Press on the first anniversary of decimalisation. Decimalisation was a psychological confidence trick perpetrated on the people. The lowest currency was ½p, which is the highest currency in any country in Europe. Even the United States have a cent which is 100th part of 8s. Attempts are even now being made to eliminate this ½p. When increases take place they do not take place by the old penny but by the old 1½d. which is the equivalent of ½p. The article in today's Irish Press stated:
It was widely held at the time of their introduction that they would push up prices, although it was equally strenuously argued that there was no reason why they should. The fact of the matter is that the past year has seen a very big rise in the cost of goods to the public, and it cannot be pure coincidence that this took place at the same time as the changeover in currency. If not responsible for all the rise in prices, it must have played an important part. That, at any rate, is the popular view and the economists have not so far proved it wrong.
Further on it states:
Between mid-November, 1969, and mid-November, 1970, there was a rise of 18 points in the Consumer Price Index. A year later there was a further rise of 21 points. The latter should not have taken place against the background of the National Wage Agreement and the strict government control of prices. Indeed, one would have expected a relative stability which would have been reflected in a much smaller increase. This is a matter for very serious inquiry if, in fact, the changeover to decimals was partly the cause.
It was envisaged that an increase of 7½ per cent would take place having regard to the national wage agreement. This was stated in March, 1971. In fact, an increase of almost 9 per cent in prices took place in that time as against any increase in wages, so workers are now much worse off than they were a year ago, despite the national wage agreement. Would you blame workers for being wary about any new wage agreement in the light of that spiralling cost of living which took place between the time this national wage agreement was negotiated and now? Workers were fooled into the national wage agreement. There was no honour observed by the industries or by the Government.
All sorts of devices have been used to increase prices. There is no protection for the consumer against the manufacturer who introduces a smaller package. He can introduce a smaller package and charge the same price. That is what happens time and time again. It has been shown in the so-called "special bargain" offers that the contents of the package have been smaller. We have no proper legislation to prevent this.
I get many letters about price increases even from shopkeepers who do not get adequate notice about price increases. The manufacturer just tells them on the invoice after they have purchased goods that the price has been increased. When a manufacturer applies for a price increase why can his application not be made by way of a public notice in the papers? Does the Minister think that one month is adequate for an investigation into an application for an increase in prices? I was interested to read the National Prices Commission Monthly Report No. 1 of November, 1971, which stated:
If price increases are prevented, the increased costs would have to be met from profits or improvements in efficiency.
Why should our industrialists and our manufacturers not meet the increased costs from profits or improvements in efficiency? I see the Minister grinning as if he has come up with some inspiration on this matter. I hope he will answer this in a rational way. Paragraph 6 of this report states:
If we must take increases in the price of materials, indirect taxes and wages and salaries as data (as must individual firms), then our job of price surveillance requires us to take a view about profits.
I have been asking time and time again for an investigation into profit margins. The report further states:
But there is no universal norm for profits that we can use.
The National Prices Commission admit their failure to investigate that because there is no universal norm for profits that they can use.
Price increases are too readily granted. They take place before the investigation can take place. Even in restaurants they can shove up prices without ministerial approval. If you look at any menu in a restaurant you will see a 5 per cent turnover tax added, which did not exist before, but the 2½ per cent which existed was embodied in the price. We know the turnover tax imposed only another 2½ per cent. That 5 per cent was added to prices when only 2½ per cent should have been added. This was done openly and no measures were taken by the Department. Did those people reduce prices first? I have no indication that they did and I certainly will not buy that story. I will quote again from this report. It is in paragraph 4 where it is stated that the level of profit should sustain a firm in industry. I agree with this. The report says that the commission would have to have before them expert advice when making any judgment on what rate or level of profit is appropriate in any case where the issue is in question.
I was wondering what measures the Minister will take to provide this expert advice. They are the answers I need. The report I have been quoting from is the monthly report of the National Prices Commission, No. 1, November, 1971. I do not think that a monthly investigation is adequate to give detailed examination to profits. The report states at paragraph 4:
When an application for a price increase reaches us, increases in these have already occurred.
I should like to know what detailed examinations have taken place. The report states in paragraph 11:
Each notice of intention to increase prices is passed to us and we must indicate whether the increases proposed should be accepted in whole or in part, or subjected to detailed examination.
We need answers to these questions because the report goes on:
Unless the increase proposed is to be subjected to detailed examination, it may be put into effect one month after the date on which all the particulars required in the notice of intent are received by the Prices Division of the Department.
In what proportion of cases did detailed examination take place? If it does not take place the prices are automatically increased within one month of notice being given to the Department. Why cannot investigations be held in public in the same way as planning appeals are held in public? This would provide public surveillance on behalf of the inarticulate public who cannot properly defend themselves against spiralling price increases.
There is another interesting article in today's Irish Press dealing with decimalisation. It states:
It was significant there was no blatant price increase on February 15th or reasonably near that date. The increases crept in gradually after about three months and it may be assumed that consumers' vigilance was relaxed.
There had been an inquiry to Mr. Michael Curry of the Department of Finance and he gave a few figures from the consumer price index about the general cost of living increase on Decimalisation Day. He said that from a survey he had done in four shops on that day and again five months later, 30 per cent to 50 per cent of items sold showed an increase in prices. It seemed to him that the price increases were due to decimalisation. The fact remains, however, that in a period of three to five months there was a considerable increase in prices.
The people were fooled through decimalisation and it became clear to the public that the Government were indifferent. It seems to me that the Government allowed prices to increase so that there would not be any great difference between prices here and in the EEC countries when we enter, if we do so. The trouble is that prices are very much higher in the EEC countries, but in reply to a question last week in the House the Minister said that wages were far ahead in the EEC. There is no intention to bring wages up here.
I was speaking to an American last week. He lives in a flat in Dublin and he told me he found that prices here are higher than in Washington, that he found it cheaper to live in Washington. He does not eat in hotels or restaurants: he cooks for himself and buys his own food. On the other hand, he said that wages here are much too low, that they are inadequate to cope with the cost of living. This is the opinion of somebody from outside who has had no experience, who is looking at the position here for the first time.
Now we are to be subjected to the value-added tax. Of course the Minister will say the same thing, that there will be no change in prices. Earlier the Minister corrected himself and said there will be no appreciable change. We all know that VAT will have the same effect as decimalisation, that it is a further excuse for a prices spiral. From discussion with a number of people in my constituency I have support for the idea of a national prices freeze. There are 15,300 signatures for the proposal that prices be frozen for a mandatory period of at least three months. If we could get the Confederation of Irish Industries and the employers' bodies and professional people to agree to this, to show a new patriotism, this galloping inflation would be stopped. They could agree to adjust profits for a period and this would have the effect of bringing about orderly price rises. We should have an assurance from the Government on this issue. Maybe the Minister can laugh. Maybe he is not concerned.
Talk about wages and prices at the same time.
Dr. Kiernan said last year that there would be a price rise of 7½ per cent with the National Wage Agreement. Prices went up by almost 9 per cent. Does the Minister not think, in the light of that, that the worker was badly treated, suffered as a result of the National Wage Agreement? I am asking for a national price freeze for a mandatory period of three months. We could then see how things would go.
Would the Deputy freeze wages as well?
The workers have suffered as a result of the National Wage Agreement. They were assured that prices would rise by 7½ per cent. They have gone up by 9 per cent.
Would the Deputy freeze wages?
I am asking that we should make some attempt to compensate the workers by a national price freeze for a period of at least three months. There is public concern over the rise in prices. People are genuinely worried about it. I know the Minister is not out of touch with the lower income group—the people on pensions, on fixed incomes and low wages. The Minister is not that far removed from these people. He knows the problems. Would the Minister consider this freeze? It would be a sincere gesture on his part.
If people who are making very big profits, professional people and others, were to sit back and say: "We have an obligation to the country" it would be what I would call patriotism— people willing to make sacrifices for their country and their fellow human beings. We should talk to these people and ask them whether they can seriously call themselves Irishmen if they are not prepared to do something for their country and not to bleed it. I would appeal to these people to consider the people who are living in poverty, and there are almost a quarter of a million people in the country at or below poverty level.
There is something radically wrong when one can see, as I did the other day, in a shop in Dame Street, a pair of men's shoes for £9. The profit must be colossal. Even the Minister is surprised. I do not think these people have a right to these high profits. They are indulging in the law of the jungle—survival of the fittest. They have not got the interests of the country at heart and we need to have the interests of the country at heart at present because we are going through a very difficult period. These people may be the losers in the long run, but unfortunately people such as these readily leave the country and bring their money with them. There are too many people making money like that while the people who make the sacrifices, the people who never get a look in, are the productive workers.
I should like to know how the Minister will control the price of new houses. Will he set a figure on them? I appreciate that it is a difficult task but it would give some hope to young couples buying houses to know that we might curb prices. It is annoying to find that the price of a new house includes the price of the site and that the builder now becomes the new ground landlord. We heard this the other day about one builder and we worked out that the house price included £1,000 for the site. Then he charges an annual ground rent. This is very unfair. I thought we were getting rid of ground landlords but instead we are perpetuating this system. The owner is now expected to pay the builder £20 a year even though he has paid for the site in the price of the house. The Minister should have an inquiry to see whether the builder is entitled to this or what kind of control could be introduced.
I should like the Minister to consider a public inquiry into prices. I should like the Minister to say that an application for a price increase should be announced in the newspapers by the firm concerned to alert the shopkeepers and the public. I would support my colleague, Deputy O'Leary, in his demand for a weekly television feature giving price trends in essential goods especially. The housewife is the least protected member of the community. She must cope with illness, clothes, rent and rates and everything else. It would be a good thing to give her some idea of price changes. This might make for a more orderly state of affairs and perhaps a greater public awareness of price increases. At present we only hear of them when it is too late. I have a question on the Order Paper as to why an increase took place in the price of sausages without any notice to the shopkeepers. The small shopkeepers have to explain about price increases to the people. The system of turnover tax was never explained to the public. When a person sees a packet of tea marked 13p she forgets that turnover tax has to be added to that. The small shopkeeper is then told he is overcharging when the problem is at manufacturers' level and Government level.
I should like the Minister to consider seriously the questions I have raised. I should like him to consider a national price freeze as a gesture on the part of the Government to show that they are making a determined effort to control rising costs.
Labhróidh mé ar chúrsaí tithíochta, go mór mhór i gcathair Átha Cliath. Fáiltím roimh an mBille seo, mar go ndéanfar iarracht ann praghasanna tithe ar a laghad a choimeád faoi shúil na Roinne. D'éirigh conraitheoirí, dlídóirí agus daoine eile saibhir toisc gur chomhlíon na lánúin nua-phósta aitheanta Dé maidir le tógáil a gclann.
I propose to speak briefly and exclusively on the aspiration in the Bill that an effort will be made to control the price of houses. I am concerned specially with the situation in Dublin. A number of developers, builders, legal men and others have been rocketing into unbelievable and vulgar affluence over the past ten years. They have done so on the backs of young people who are answering the natural and, indeed, supernatural call to increase and multiply. I am sure that this has set even the Lord wondering on the wisdom of His instruction to humanity.
Over the past ten years people anxious to get married and industrious enough to save money have been robbed by the people who control the building industry. I mentioned the developer and the legal men but I would not exclude the worker. We cannot hope to solve the problem by indicating that the cause of the high house prices is the price of land. This is not the only cause. Neither the builder nor the developer nor the legal man is responsible. These four agents whom I have mentioned are collectively responsible. It is not outside the Minister's competence to examine the situation bearing in mind that land must be paid for and that builders are entitled to reasonable profit and workers to a fair return for their labour. I question the value of the service of the legal men but if they provide a useful service they are entitled to a fair reward but they are not entitled to profits which put a burden on young people getting married.
Deputies are aware of the profits that have been made to date. A new situation has arisen in Dublin where a young couple, having saved £600 to £800, approach a builder or his agent who indicates to them that he will book a house for them. The young couple feel pleased. The builder then takes their £800 and indicates broadly the rest of their obligations in this matter and tells them that they will have to approach the local authority or a building society in order to get the balance of the money which they will be expected to pay to him. The builder does not tell them that a State grant is payable. He gets them to sign a form which automatically hands it over to him. The grant does not seem to figure at all in the price of the house.
There should not be any ambiguity at all about a builder selling a house. Other manufacturers are required to indicate their prices, as are shopkeepers. They often indicate prices of consumer commodities in the 5p bracket. I cannot understand why a builder is not required to state exactly what the price of a house is; not just give net and gross prices. The builder should indicate clearly what the grant is. Abuse occurs when a builder takes about £800 from a young couple and quotes a price of £5,500 for a house, indicating vaguely that there may be a price variation clause. A builder may have other callers looking at the house and if he finds someone with a little more money than the couple to whom he is already committed, morally if not legally, he may change his mind. When the original couple return to him, perhaps three months later, inquiring about their house and indicating what they have done to raise the money they may be told that, unless they have got the balance of the money from the local authority or the building society within a month, the deal is off. This is happening all the time on the perimeter of Dublin.
A builder or developer, not happy with normal profit from the sale of the house, may have had the use of the £800 interest free over four or five months. If that money had been in the Post Office or in the bank it would have earned money for the young couple. When the young couple realise that the deal is off their immediate concern is about their £800. The builder, pretending to be magnanimous, will tell them they will get their money back after deduction of a slight fee of, perhaps, £5 for some solicitor who will look after the matter for them, but he does not tell them about the fraud in which he has been engaged and the wrong way in which he had the use of their money for some five months.
Deputy Cooney is a Deputy to whom I listen with great pleasure. He is always enlightening. However, that will not deter me from telling him that members of his profession are getting a profit which is not justified by the services they render where housing is concerned. A solicitor acts on behalf of a developer buying a 20-acre field and he makes sure that his client is in the clear; he does everything to safeguard his client's interests. On that 20-acre field 200 houses are erected, identical for all practical purposes. All the solicitor has to do is to draw up an agreement and run off 200 copies of that agreement and each house purchaser will pay him a fee of anything up to £100. Now I think that practice utterly indefensible. The house purchaser has to borrow hundreds of pounds and pay 9 per cent or 10 per cent interest on every hundred. For the life of me, I cannot see how any solicitor could justify charging the fee that is charged for the services he renders.
We have at least half a dozen big developers operating in and around the city of Dublin. A prospective purchaser is invariably told that he will get better value if he employs the solicitor who is acting for the developer. I believe this is something the legal profession does not condone. I believe they are not happy about this practice. They do not think it right that the same solicitor should act for the vendor and the purchaser. But this is happening. The result is that a solicitor who should be bending his efforts to defend his client's interests —that is, the interests of the purchaser—is more concerned to defend the developer's interests. The unfortunate purchaser has to pay the solicitor a fee of £70, £80 or £90. I suppose it is only natural that the solicitor should lean more heavily on the side of the man who will give him more business as against the client who will pass his way but once. I hope the Minister will look into these aspects. He is aware of the situation. I can confirm his fears. As I said earlier, robbery is taking place in Dublin.
Deputy O'Connell appealed to the Minister to be rational. With all due respect to the Deputy, it is he who should be rational. I wish he would give us his formula, the formula under which we can keep down prices and, at the same time, increase wages. If we had his formula many of our problems would be solved. But, so far, none of us has either seen or heard the formula. Problems will not be solved by talking. They will be solved only by firm decisions.
I detest the expression the "ordinary worker". We are all of us workers and the man who refers to the "ordinary worker" must regard himself as "extraordinary". In relation to the group in the £5,000 to £5,500 house category, I would hope that the trade unions would make a certain contribution. I have asked that the builder should do with less profit, particularly where anything up to £400 or £500 can be saved. Young people who have not got all the financial resources others have will wait for the local authority to house them. A housing emergency exists and desperate ills need desperate remedies: would the trade unions not consider a policy designed towards reducing the cost of houses to their own members? Perhaps they could make their contribution in the matter of certain skills, the matter of demarcation. Perhaps they could do so by not insisting that only a qualified carpenter with five years apprenticeship and four years subsequent operations can nail down floorboards, or by not insisting that only he can perform certain other construction work that could be performed by a semi-skilled man. I am not advocating that this situation should continue indefinitely but if the Labour Party and the trade unions wish to make me believe there is an emergency housing situation in Dublin I ask them to make their contribution along with the contribution which I hope will be made by the Government in the form of increased grants and by restricting the profits of the developer and the builder and, if possible, eliminating legal charges.
Perhaps trade unions would also consider whether they would—again they would have the expertise and the knowledge of how to handle labour— on an experimental basis in a situation such as in my constituency where there are thousands of trade unionists, invest some of their money or—and they would have good collateral— borrow money and build houses and show us how houses can be built at a price trade unionists can pay. This would be well worthwhile and would not be beyond the ingenuity of the unions who are forever telling us how all problems should be solved. In this case they have the capital, the labour and the knowledge. They ask us to believe that they know how every worker's problem can be solved; they know what is a just wage for every man in every activity. I should like to see them doing this—as the old adage says, actions speak louder than words —and indicating how the housing problem in Dublin can be solved by the trade unions. At the least it would indicate that they are prepared to make their contribution towards a solution.
I said at the outset that I intended to confine myself exclusively to the matter of housing and especially housing in Dublin because I understand from other Deputies that the situation is not as serious elsewhere. You will always have a housing problem in a growing metropolis but that is no reason why people should exploit the situation as it is being exploited. Deputy Cooney referred to it and mentioned the number of new millionaires who have appeared within a very short time within the housing industry.
I commend the Minister for what he is attempting to do in this matter and in other matters but more especially in regard to housing because to me there is nothing more vital and important. No other purchase that anybody makes affects his life and that of his family as much as the purchase of a house. I hope there will be a climate created in which it will be possible for all the people of Dublin to purchase their own houses and that we can eliminate the position where people after marriage are required to wait ten years, during which they suffer depression and frustration, before ultimately qualifying for a local authority house. I hope it will be possible for the type of people about whom I have spoken, the young industrious people wishing to buy a house and prepared to make sacrifices, to have the co-operation of all the agencies concerned so that they can look forward to owning their own house and having their interests protected. I hope we can look forward to the time when some of the sins now being committed under the mantle of housing will be eliminated.
There are a number of factors responsible for the large increase in the cost of living in the past few years. Some speakers have mentioned decimalisation as a contributing factor, if not one of the prime factors, for the cost of living increase and the fall in the value of money. I agree that decimalisation contributed and very few will argue otherwise. I wish to make a suggestion to the House. Because of the scope of the Bill I believe it is relevant although perhaps it might be more appropriate to make it to the Minister for Finance than to the Minister for Industry and Commerce. I believe the Minister for Industry and Commerce should consider this suggestion which I think is relevant to this Bill because of the power it contains to transfer functions. Decimalisation reduced the number of coins.
Debate adjourned.