Dáil Éireann díospóireacht -
Wednesday, 19 Feb 1975

Vol. 278 No. 5

Private Members' Business. - Price Control: Motion (Resumed).

Debate resumed on the following motion:

That Dáil Éireann condemns the failure of the Government to honour its promises in regard to control of prices; notes with concern the apparent intention to enforce even less strict price control; and calls for the implementation of the various available forms of assistance to industry which will help firms in difficulties without resorting to further price increases.

—(Deputy O'Malley.)

Mr. Crinion

Looking through the National Prices Commission reports for the past two years I see that when this Government took office there were 53 applications before it in that month, and within four months the applications had gone to 114. There was a slight fall back then and, again, there were further rises until it reached an all-time peak in the middle of last year of 128 applications. The rate of inflation and the rate at which prices were allowed to increase is a fair indication of how the Government were running the economy.

There are excessive price increases in the reports, for instance, increases granted to solicitors, particularly in relation to free legal aid, range from 43 per cent to 308 per cent. Even accepting that this was the first increase they got for four years, some of the increases are still excessive. If a solicitor is making a bail application and a case is stated, for one day's hearing there is a fee of £28 and for each additional day £14. For a visit to Mountjoy, St. Patrick's or other penal establishment, it is £9 plus travelling expenses as appropriate.

The commission also deal with the Dublin fruit and fish market. Restrictive practices in the market are referred to, but only a small paragraph is devoted to this. If they had really gone into what was happening, particularly in the fish market, they would have found that a price ring and restrictive practices are being operated. I have seen myself where only six people from particular firms were allowed even to bid. Suppliers and shopkeepers have come up from the country and the auctioneer would not take their bid because the auction was under the control of these people. I know a case where, because none of those six persisted in the auction, they called it off and waited until the outsider went off so that they could sell the goods privately among themselves. When the commission were carrying out their investigations they did not go deeply enough into it. I see from the report that they intend carrying out further investigations, and I hope this aspect of the fish market will be thoroughly examined.

There was a more thorough investigation of the fruit and vegetable market. There should have been more diligence in regard to the checking of prices, particularly the prices of imported fruit. Usually the importer is also the wholesaler so that although there is a transfer of the fruit from one firm to another there is only the one person involved. The traders who come from the country to buy fruit and vegetables in the markets here say that the margins of profits in some cases in so far as the wholesaler is concerned range from 50 to 100 per cent. Therefore, it is obvious that a closer watch should be kept on prices in this area.

The big increase in the number of applications for price increases during the two years that this Government have been in office gives a clear indication of the way the Coalition have mismanaged the affairs of the country. This, in turn, has led to our very high rate of inflation. There should have been more stringent control such as that exercised when we were in office when the applications each month were only half the number that have been coming before the NPC during the reign of this Government. The situation has now been reached where, because of the rate of inflation, price controls have to be removed in some areas in order to keep some firms afloat and so that they will have a cash flow. The situation has become so bad that the Minister is afraid to tackle it. These cold facts are an indictment of the Government's handling of prices during the past couple of years.

Mr. Staunton

I am pleased to speak for this side of the House to this motion relating to price issues. We might revert to the motion to realise the degree to which we are speaking at a tangent and to see how irreconcilable are sections of the motion which reads:

That Dáil Éireann condemns the failure of the Government to honour its promises in regard to control of prices; notes with concern the apparent intention to enforce even less strict price control; and calls for the implementation of the various available forms of assistance to industry which will help firms in difficulties without resorting to further price increases.

The motion begs the question as to what Deputy O'Malley and Fianna Fáil suggest should be done in regard to this issue. Last evening the Minister spoke of negativism at the weekend and sought a positive response. I think we got that positive response in Deputy O'Malley's speech last night. Reverting to our debate on industry and Commerce in December last, a number of speakers from this side referred to the Fianna Fáil attitudes in regard to prices. We recognise that prices are probably an area of fair game so far as the Opposition are concerned. During that debate the Minister for Foreign Affairs said that at no stage was there any suggestion either of what precisely should be done or of what we were not doing. We would seem to have the answer from last night's debate because Fianna Fáil, through their spokesman, are apparently articulating a new policy, a clear break from past traditions, in advocating the subsidisation of food. It is clear that this was the kernel of and, apparently, the solution to the problem. However, if we consider this issue of subsidisation we could develop a philosophical argument about the Opposition and their attitudes in the past to issues such as this. I should have thought that within this country they were the ultimate example of laissez faire. The Minister, being pragmatic, quoted an example— butter—in which he said that if the price of butter were to be reduced by only 15p per lb., the cost to the Exchequer would be £12 million. This would be only one small aspect of the issue we are dealing with. If the Opposition are being serious about subsidisation presumably they are talking of subsidisation at an infinitely higher level and this, in turn, begs a further question which the Opposition should have a responsibility to answer. It is that if we are talking about subsidising food as a means of reducing the cost of living and if we are talking in terms of from £50 million to £100 million, in what other area is this money to be found in a way which would not, in turn, affect the cost of living? There is a great deal of nonsense in this area.

Because Deputy O'Malley was placed in the position of having to talk about food subsidisation, the motion is foolish. Apparently, as the remedy for the prices situation, the latter part of the motion calls for the implementation of the various alternative forms of assistance to industry so as to help firms in difficulty without their having to resort to further price increases. This is a lot of nonsense. There is a wide range of assistance to industry. That range of assistance exists through State policies, through the auspices of the IDA, through the CCT, through the Institute for Industrial Research and Standards, through the Industrial Credit Corporation, through Fóir Teoranta if there is a rescue problem where a company is in a critical state. Any question of implementing these forms of assistance does not apply to Government implementation but to implementation by the firms who are being encouraged and exhorted every day of the week by the Minister to implement them. It is farcical to suggest that the implementation of this assistance is relevant to the Government if the Government are selling the idea to people that they should avail themselves of the assistance which is available in the morning if they apply for it.

It is ambiguous and quite far-fetched to suggest that such implementation, whether it be by private industry or by semi-State bodies, or by Government Departments, will help firms in difficulty without resorting to further price increases. That is the inference in the motion. There is no corollary that if greater effectiveness takes place, that if greater productivity takes place, this will result in further price increases. This also is a lot of nonsense.

In the National Prices Commission's Monthly Report for November, 1974, they refer to this issue. They state:

Given the size of the increases in money incomes that have occurred in recent years, and the increases that will occur during 1974, it is only very rarely that they can be met from profits or significantly offset by improvements in productivity and efficiency. If all applications based on increased wages and salaries were rejected, the result would again be redundancies and bankruptcies.

They also state:

If the Commission rejected all applications for price increases while the external and domestic causes of inflation continued to operate, the consequences could be predicted with confidence. If firms were not allowed to recoup the increased costs of imported materials from higher prices, redundancies and bankruptcies would follow within a relatively short period.

This is the reality of the price issue. In setting out so many irreconcilables, the motion is obviously mischievous and intent on gaining publicity rather than contributing to national debate in this area.

There is a reference in the motion noting with concern the apparent intention to enforce even less strict price control. This merely refers to a side remark made by the Minister in his speech in the Estimate when he spoke of the liquidity position, when he spoke of the difficulties many companies are getting into, when he spoke of the necessity for profits, and of the certain circumstances in which very strict price controls might be against the national interest. If Deputy O'Malley notes with concern an intention to enforce less strict price controls, this does not relate to the reality of business and commerce and the necessity for price increases based on increased costs which arise and for many other reasons.

Reference was made to the position in the textile and shoe industries. We are being treated a little unfairly in this regard. The Minister referred to it yesterday evening. There are other points which should be borne in mind. I know the Minister has had discussions with the Commission. The first result of his negotiations has been a visitor to this country to investigate the position. I know the Minister is extremely concerned about the position in the textile and shoe industries.

It is necessary to put certain matters into perspective. When we entered the EEC we were extremely fortunate in being able to retain certain incentives for industrial development which were not conceded to any other country in the EEC. Up to now we were not saying these things too loudly because it might have been damaging to the national interest if we tended to gloat about them. In the present climate, it is necessary to say these things. We have been allowed to retain the concession of complete relief from taxation on export sales in the manufacturing industry. We have been allowed to retain the option to give substantial cash grants in the area of capital investment in manufacturing industries coming in here. We have been allowed to arrange that this applies to sales within the Community, apart altogether from sales in North America, Japan, the Middle East, the Near East and Scandinavia. This was a tremendous concession and achievement.

Mr. O'Malley

Obtained by Dr. Hillery.

Mr. Staunton

Let me compliment the Government on their achievement in retaining them, It was a very good deal which I, for one, applaud. It must be put into perspective that, if we can retain these incentives, we have an enormous advantage in attracting industries. We are aware of the figures for last year in which industrial exports ran at about £600 million and in which the percentage increase was about 40, completely beyond the level of inflation. Along with agriculture, this is the most buoyant element in our economy.

The danger we are in as a country is that if we press too hard, we may gain in the short term in one or two narrow instances which are a small percentage in relation to industry and to the nation but, in the long term, there can be a catastrophe if the squeeze is put on us in a much broader area. This is a matter about which we should show some sensitivity and some real concern.

The question of internal or external factors in these increases has been raised. Deputy O'Malley suggested that one-third of these are beyond our control. I have not looked into the available statistics but, broadly speaking, a great deal of them are imported. There are factors which are national which, to a degree, are imported. One of the national factors, which is to a degree imported and which is inevitable, is the consequential farm price increases arising from EEC membership and consequential increases in the price of foodstuffs in Irish shops.

We know that through EEC membership we have managed to increase substantially the income for the farmers who, together with their farm incomes and greatly increased social welfare benefits are more than matching any pace of inflation. We know that as a consequence of that, farmers' goods in the shops or in the market place will increase in price. We are conscious of that. However, as a nation it makes for a very good deal, because we have proportionately the highest number of people in any EEC country still working in agriculture, in comparison with the situation in Britain and Germany where you are talking about a 5 per cent fringe and where the workers tend to pay for the party if there are enormous price increases.

We have attempted to protect other sectors through the substantial social welfare increases. While we have imported inflation to an extraordinary degree, in addition, many of the statistics related to what is termed internal are to a degree external in that they are beyond our control. If we are negotiating in Brussels for the benefit of our farmers, which the Minister for Agriculture and Fisheries has been doing extremely well over the past two years, every time he negotiates successfully it adds on an internal increase which is inevitable but which is for the greater benefit of the nation.

Additionally in the internal elements are the normal wage increases coming to people which again are inevitable to a degree. Suggesting that the internal element in this is completely within the hands of the Government to do what they like with it, is a great deal of nonsense.

The profits issue has been raised and the question of liquidity and the banks. In referring to this yesterday, Deputy O'Malley attempted to relate the liquidity issue and the banks issue to price increases. I accept that it is a factor. Without question there is an inter-relationship between the different elements in any business or any industry. It is far-fetched to bring this in as a broad reason for price increases because the relationship is minimal.

Again referring to what I quoted from the Report of the National Prices Commission, of course there is a liquidity problem, a banks problem, but the solving of the liquidity problem, or the expansion of credit by the banks, might well improve the liquidity of the companies. There is no inference in any way that it will lead to these companies having any capacity to reduce prices. Suggesting that greater liquidity or expansion of credit will create a situation in which prices will come down is a lot of nonsense. It does not hold water. It is the rebuttal of these suggestions which has now put the Opposition into the position of talking about the subsidisation of food.

I should like to refer briefly to the offshore oil question. In my judgment, it is irrelevant to this motion.

An Ceann Comhairle

Quite.

Mr. Staunton

It was dealt with by the mover of the motion and, for that reason, I would welcome your gracious indulgence in making a few comments.

An Ceann Comhairle

I ruled it out of order at that time.

Mr. Staunton

Might I point out that the Press this morning quoted Deputy O'Malley at length on the offshore oil issue. Might I make a few comments?

An Ceann Comhairle

I would not The Deputy's reference does not make it in order.

Mr. Staunton

I accept your ruling. With regard to the National Prices Commission and the job they are doing, they were set up by the previous Government and there has not been any change of policy to my knowledge. It seems illogical to me that people now in Opposition, who established this commission, which is working under the same terms of reference today, should at this stage start complaining about the commission and the work they are doing.

Their job is not to prevent price increases but to examine applications coming before them and see to what degree they can moderate demands. I am personally aware of many instances where companies have made applications and these applications were not granted, or possibly half the increases sought were granted, or possibly more. In the judgment of some of these companies the increases granted were not sufficient to allow them to expand or take up options in other areas of activity.

We are talking now about Irish industry and Irish people and, if we are to attempt to support Irish industry, Irish personnel and Irish key management in the battle of wits, and wits is the word, against the multi-nationalists and the large companies, and we do not apply the same raison d'etre which is applied to these companies in other countries, we are downgrading Irish management, Irish personnel and Irish business people and putting off for some time the possibility of Irish business taking up certain options. This is the reason the Minister referred to the fact that in many instances it is possibly true to say that profits at a higher level should be made in the interests of the State.

From June, 1973, to October, 1974, for example, the National Prices Commission examined 1,634 proposals; the recommendations they made were for £33 million under the figure sought. My own view about prices is that the market place decides, if there is a fair market place, and I have had some personal experience in the grocery trade. I am aware that for a decade or 20 years there has been the most intense competition in this trade, the type of competition which has sent many family businesses to the wall. There has been rationalisation. There has been the development of supermarkets, all based on keen prices. There have been recommendations made to successive Ministers about unfair competition and companies selling goods too cheaply. This is the reality in the market place and so it seems to me the market place does not hold any answer on pricing difficulties.

Might I summarise by describing this motion as a gimmick? It is not serious and the fact that the spokesman for Industry and Commerce should take it in such a way as to talk about the implementation of various forms of assistance to industry proves it is a gimmick. I would ask him when he comes to reply to say in what way the Government could implement their alleged obligation in relation to private companies in industry. If the response is positive it is possible there are things we should not be doing and things we should be doing that we are not doing. If there are aspects in that area we should like to hear them.

We are entitled to have an expansion of that point, on the question of calling for the implementation of various forms of assistance to industry and how this relates to helping firms in difficulty without resorting to further price increases. We are also entitled to an expansion in regard to the food subsidy issue because, if we are now reaching the stage where the spokesman of Fianna Fáil—the party of private enterprise, as they claim themselves to be, the party which in office in the past made notable achievements in the area of industry and commerce, which I gladly acknowledge—in a major debate on price control issues tables a motion which is a lot of nonsense and irreconcilable in itself and suggests in the latter part of his speech that the answer in regard to price control and price increases is the subsidisation of food, then we have reached a really extraordinary stage thinking back to the removal of VAT from food by the present Government, a step opposed totally and vigorously by the Opposition who said it would make no difference.

Mr. O'Malley

And it did not.

Mr. Staunton

It certainly did. It reduced the price of food.

Mr. O'Malley

For a month.

An Ceann Comhairle

Deputy Staunton, without interruption.

Mr. Staunton

It made this difference: it reduced the price of food by the proportion of VAT on the day on which it was removed. What happened to cloud the decrease was the fact that there had been inflation and farmers had got substantial increases in prices and the result was that it had had to go into the market place and into the shops and therefore the reduction was not as apparent as it might have been that VAT was effective. What the Opposition are saying to us is to extend the VAT situation. A year ago the Opposition opposed the removal of VAT by a minor percentage from food and Deputy O'Malley, the Fianna Fáil spokesman for Industry and Commerce, the largest party in the State, is telling us now that the answer to price increases is to give subsidies on food.

Mr. O'Malley

Because the Deputy and his Government put up the price of everything by more than 20 per cent in the last year.

An Ceann Comhairle

Order. Deputy Staunton, without interruption.

Mr. Staunton

Not only do they want an expansion in the areas of food which are going to be covered and the areas in which they think subsidy will work, but there is a complete change of philosophy. We would like to hear the reason for this change. We would also like to hear a further extension of this and the degree to which the Opposition would welcome the subsidisation of food. As the Minister pointed out, a reduction in the price of butter by 15p would cost the Exchequer £12 million and butter is only one item on the shelf. The Opposition would extend subsidisation to flour, bacon, meat and so on. We are talking then about £60 million, £70 million or £100 million—take your figure—and, when the Opposition have taken that figure, then come back to us and tell us from which area the Exchequer will get these funds and, when the Opposition have got these funds, will they tell us then whether or not the getting of these extra millions from other areas of activity in the economy will or will not have any effect on price increases or price control and the degree to which the Government may be affected.

In my view this motion is a sham. It is not serious. I would have welcomed areas of constructive help as to how development could be advanced and how we could attract more jobs in the nuances in which constructive opposition might be helpful. I agree with the remarks the Minister made last evening. In this debate the speeches we have heard are a carry-over of the negativism of the Opposition at their annual party conference over the weekend. This is a bankrupt policy. In a narrow political sense it may suit my Government to see Fianna Fáil in the role of Alice in Wonderland in this area of industry and commerce and prices, but I think it is sad for this nation.

Mr. Lalor

It was extremely interesting to listen to Deputy Staunton saying that the idea of the Fianna Fáil spokesman for Industry and Commerce putting down a motion condemning the failure of the Government in not living up to their promises was a sham motion.

Mr. Staunton

Might I explain? I did not complain about objections to price increases. I complained about the extensions which are contradictory and do not make sense.

Mr. Lalor

It would appear that there are a great many ideas in connection with prices now that do not seem to make sense but which, in February, 1973, seemed to make a heck of a lot of sense. We had the shameless admission in an article in a daily newspaper over the last few days from the Minister for Industry and Commerce that a number of promises were made before the last election and had not been kept. But one sees things differently when one gets into Government. He did not quite say what his colleague the Parliamentary Secretary to the Taoiseach said some time ago, that nobody should have taken them seriously, but he did say in effect: "Now that I am in the chair of the Minister for Industry and Commerce I find that the application of an idea is extremely different from the generation of the idea in the first instance."

I am very conscious of the difficulties that exist in relation to price increases and because of the knowledge I had of the inflation taking place abroad and affecting prices before 1973, it became extremely difficult for me at that stage to justify the very small increases that had taken place over the previous 12 months. It was extremely difficult for me then to find a logical answer to the claims that were being made by Opposition spokesmen that they would be able to stabilise prices and prevent further increases. Deputy O'Malley in moving this motion gave a number of ideas on how the situation could be improved and made suggestions which the Minister brushed aside. It appears to me, having listened to Deputy Staunton, that he considered this to be a rather ridiculous motion that need not be taken seriously. I think the Government have reached a stage when they accept that they have not been taking it seriously and that this is generally acceptable. Deputy O'Malley mentioned that the general public are punch-drunk with price increases. This is so. No matter how sizeable price increases are at present they do not seem to provoke the same reaction from the public as they did two years ago because they were, in general, rare at that time. The 1p on the loaf, the butter, or the stamp caused consternation but now, due to the efficiency or inefficiency of the Minister for Industry and Commerce increases are an everyday occurrence, led primarily by his colleagues in Government.

There is no need for me to go over again the ground covered yesterday by Deputy O'Malley—the unchecked, unmonitored increases conceded, the increases the Government gave to themselves and to the Government services in television, the ESB and various other public services and which have succeeded in bringing the public to a punch-drunk state so that if a person picked up the paper tomorrow and saw that bread had gone up by 3p on the 2 lb loaf he would say: "This is awful but what can we do about it?" People are wondering when this Government will collapse so that they can get the old duffers back, the fellows without brains who for 16 years kept the country going, improving the economic situation year after year without any of the glamour and without having the services of a specially detailed publicity agency—I do not want to go into that.

The Minister has been able to present himself as a most sincere and genuine person who looks objectively at everything and studies it from all angles. He has certainly satisfied the country as a whole that he gives sufficient time examining every topic from every possible angle, generally taking two years to make up his mind in regard to anything except prices—they seem to be sanctioned as they roll in. To Deputy Staunton, I would say that I am not aware that the National Prices Commission, as such, has been attacked. Up to two years ago the Commission was recognised as an agency which had been set up while I was Minister for Industry and Commerce to examine price increases and make recommendations to the Minister who carried the can for sanctioning them. The publicity and the announcements issuing from the Department of Industry and Commerce in my time—these can be checked— showed that the Minister had sanctioned the increases but now every official announcement comes in the form: "On the recommendation of the National Prices Commission, the Minister has sanctioned ...". The can is supposed to be carried by the Commission, dedicated people doing their job to the best of their ability. But the Minister must accept responsibility.

We had a number of increases that the Prices Commission did not sanction or recommend such as those I have been talking about. Whenever we come up with constructive, straightforward criticism the Minister for Industry and Commerce, having no genuine answer to it, says: "You are damaging the national economy; you should not be talking like that; this will interfere with our image in Europe. You are affecting the overall business I am trying to do very quietly in Europe." We had an example of this yesterday evening when the Minister attacked Deputy O'Malley for raising certain discussions in which the Minister, it would appear, is surreptitiously engaged in Europe to help our economy. Everything the present Minister is doing seems to be surreptitious; we cannot see any evidence that he is doing anything useful for the country.

One of the taunts thrown at the Opposition regarding their criticism of the Government's failure to implement that promise—and there is complete failure in that regard—is: "What would you do about it?" I remember offering advice to the Minister six or eight months ago—which was not accepted then—that he should do something about meat prices. Everybody, except the Minister, knew that cattle prices were at a very low ebb. I read in the same article that he likes moving around among his cattle. I am sure he did know cattle prices were very low but he did nothing effective to have the benefit—a disadvantage to the farmer —converted into an actual benefit to the housewife as it should have been, enabling her to procure cheaper meat. He did express a pious wish that butchers should charge 5p per lb less but there was nothing to back that up. On the other hand, yesterday, when Deputy O'Malley was attacking the Minister, the Minister asked if the Deputy was suggesting that the farmers should not get the higher prices as agreed by the EEC. Of course, the farmer should get the higher prices and we can assume that when the farmer gets the higher prices and the butcher has to pay more for the fat cattle there will be another price increase. That is justified but it is the responsibility of the Minister to see that when the price of cattle goes down there is a corresponding reduction in the price of meat.

I am not satisfied with the monitoring being done by the Minister's Department and by the National Prices Commission on the purchase price of imported articles. Let us take the example of boots and shoes. I accept that the Minister has a problem in this regard because if he monitored the prices and effectively controlled the mark-up on those articles they should be sold at much lower prices. In that way they would probably constitute greater competition for home-based industries. When I was Minister I asked the trade unions to take note of this matter. The boot and shoe industry is in serious trouble. Let us take a pair of Irish shoes selling at £7 or £8 and giving a profit of, say, 25 per cent or 33 per cent to the retailer. On the other hand, a pair of Italian or English shoes may give him 55 or even 100 per cent profit. For that reason the shop assistant or shop manager will run down the Irish shoe and recommend the foreign one. This situation arises because the Minister is not effectively controlling the mark-up on imported articles. I accept that he has a problem but he has a long enough experience of price increases to take effective action. There is the extra bonus for the shop assistant in selling the more expensive article and this is preventing the sale of the home-manufactured article.

A prominent trade union leader made a recommendation in the last few days that all imported articles should have a protective duty of 33 per cent imposed on them. This, as he sees it, is to give a boost to home-manufactured products. I believe it is the wrong way of doing it and it is also impracticable. Our spokesman on Industry and Commerce and our spokesman on Finance have talked about the question of reducing VAT in order to give an incentive in this regard.

Deputy Staunton suggested that we could not be serious and the Minister for Industry and Commerce talked about the about-turn of a party which had imposed VAT across the board and had rejected Opposition criticism at the time it was introduced. At that stage we told the Opposition and the public that if we were to take VAT off food and put it on other items, which is what the present Government did, it would have a greater inflationary effect. This fact is completely overlooked by Government spokesmen. The Government cannot justifiably claim that the Opposition have not been constructive in relation to price increases. Deputy Staunton, a short while ago, again claimed that more than 50 per cent of our inflation is imported despite the evidence presented to us by the Central Bank and also the statement of Deputy Staunton's own Taoiseach. There is no point in the Minister for Industry and Commerce continuing to blame the Arabs. We know all about that. It is remarkable that the main criticism of the only Government speakers we have had—the Minister and Deputy Staunton—was that we had no right to put down this motion.

Mr. Staunton

I did not say that. I spoke about further sections of the motion which in my view were irreconcilable and not acceptable.

Mr. Lalor

All right. The Deputy has a view in that regard.

Mr. Staunton

The Deputy misquoted me.

Mr. Lalor

We have stated in the motion that the Government have not honoured their promises. This has been admitted outside the House by the Minister though it is remarkable that he has not admitted it for the record.

Mr. Keating

Absolutely untrue and it is a disgraceful thing to misquote someone without an attribution.

Mr. Colley

Is the Minister serious? Is he saying the Government have honoured their promises on this?

Mr. Keating

The Deputy was obviously not listening to what the man on his side said.

Mr. Colley

I heard what Deputy Lalor said but I should like to know what the Minister is trying to convey.

An Leas-Cheann Comhairle

Deputy Lalor.

Mr. Keating

I am conveying that I was being misquoted without any reference or attribution. That is all.

Mr. Lalor

There is no doubt the Government have failed to honour their promises. The Minister for Industry and Commerce has the audacity to stand up here and say I am wrong when I say he has admitted that he has failed to fulfill his promises in this regard. I am not putting the actual words into his mouth but he certainly did say that being in Government and being in Opposition were two separate things and that it was far easier to see from the Opposition side how things should be done but that when you are in Government yourself it is a different proposition. That is grand once you have deceived the public and got to that side of the House. I got a degree of satisfaction listening to Deputy Crinion quoting from the monthly reports of the National Prices Commission and referring to the fact that when this Government took office the number of price applications before the National Prices Commission was 53. We all know that would only take up two or three pages in the bulky monthly reports at present.

I hope that the Minister for Finance will read that aspect of the report because I have a recollection of him saying that one of the biggest problems the present Minister for Industry and Commerce had when he took up office was to get the doors of the Department open because the place was packed to the door with applications for price increases that were awaiting the change of Government. It is now on the record that the smallest number of applications in any month were the 53 applications that were on the desk of the present Minister for Industry and Commerce shortly after he took up office. The Minister for Industry and Commerce and Deputy Staunton talked about what it would cost to subsidise food and the figures of £80 and £90 million were mentioned.

Mr. Staunton

We merely made suggestions and we were wondering at what level the Deputy wanted to pitch in at. We were not speaking definitively on it.

Mr. Lalor

It was stated that it would cost £12.4 million a year to subsidise butter to the extent of 15p per Ib. My information is that very few retail stores in Border areas on our side can succeed in selling any butter. The Minister for Industry and Commerce in the "Involvement" programme last week welcomed this idea and said it was a help to us that we were able to buy our own Irish butter back so cheaply from Britain. I do not think the Minister was conscious of how hard it is for the retailer in the Border areas to live when housewives from such areas, and further south, cross the Border weekly to purchase their supply. In welcoming this the Minister said that the British Exchequer was subsidising those people but I have not heard of any arrangements made by him to help the retail trader in those areas who have to live with that sort of recession around them.

I found it interesting that when the Minister mentioned that in order to subsidise the food items mentioned by Deputy O'Malley it would run to between £80 and £90 million and that if he had that sort of money to spare he would much prefer to give it out in social welfare benefits or to use it to stimulate the building industry. That statement was quite intriguing in view of the fact that his colleague, the Minister for Local Government, does not seem to be aware that that industry needs stimulating. The communication between the Government and the general public seems remarkable but what is twice as remarkable is the lack of communication between one Minister and another in the present Government.

Mr. O'Malley

They could communicate about some things and the Deputy should not forget what Tully said to Keating six weeks ago.

Mr. Lalor

It is those same two Ministers who are involved.

An Leas-Cheann Comhairle

Members of the House should be referred to by their titles.

Mr. Lalor

I suspect that there is not a sufficient monitoring of the prices of imported articles. Whether this is deliberate or otherwise I do not know but taking it across the board with the amount of general household articles we need and are imported if an effective job of monitoring was done we could reduce the cost of living considerably. I do not want the Minister to say to me that there are no fields where an effective policing job of this nature could not be done more efficiently. I throw that advice out to the Minister for free. The Minister has said that one of his worries in relation to the price control as operated by the National Prices Commission is that some of the Irish manufacturers are being watched too closely. In mentioning the relaxation in price control he said he might have to allow a greater degree of profit.

The Minister said he was afraid the policing by the National Prices Commission would have the effect, following the criteria they had been following in relation to applications for price increases, of squeezing some of the manufacturers too much. On the other hand there are importers who are not being watched as effectively as they should. I join with Deputy Crinion in his views about the importation of various fruits, and so on. It appears as if there is not a sufficient check in this regard and the housewife has to pay more. I was surprised that Deputy Staunton, who speaks so much on industry and commerce, said that the non-availability of cash or the liquidity problems of industries were being exaggerated by Deputy O'Malley.

Mr. Staunton

I did not say they were being exaggerated.

(Interruptions.)

Mr. Lalor

Liquidity is one of the problems as also is the availability of cash and the best way the Government can keep companies in business, rather than allowing greater price increases than are justified, is to improve the availability of credit from the banks in the manner suggested by Deputy O'Malley. That would enable many of the firms the Minister knows are in trouble to continue operating.

Mr. Staunton

I merely said that the effect was minimal in so far as price increases were concerned. Deputy Lalor has misquoted me.

An Leas-Cheann Comhairle

We cannot have interruptions on a limited time debate.

Mr. B. Desmond

I want to place clearly on the record of the House that it is possible to set maximum prices or regulations and to police them and this Government have most certainly done so under the general aegis of the National Prices Commission and the Department of Industry and Commerce. The only exceptional difficulty in policing in so far as specific commodities are concerned has been in relation to drink. It is no harm to remind the House of the efforts of the Government in this regard. We now have maximum price orders fixed for a number of commodities and if Fianna Fáil want to be constructive they should at least say that prices should be fixed in relation to a number of additional items. In doing so they would have to consider the consequences in respect of employment, profits and viability of an industry.

Mr. Colley

This is laissez-faire economics with a vengeance all right. Now we see the true colours of Deputy Desmond.

Mr. B. Desmond

I have never presumed to be conservative, laissez-faire or Marxist——

Mr. Colley

That is what the Government are. The management of the economy is beyond them and they are surrendering.

Mr. B. Desmond

We have fixed maximum prices in respect of the following commodities: bread, milk, sugar, butter, flour, wheatenmeal, flakemeal, cornflakes, turf briquettes, bottled gas, certain baby foods, margarine, cooking fat, tinned peas and beans, frozen beans, peas and brussels sprouts, pre-packed coal, cigarettes and drink in 17 centres. If Fianna Fáil wish to be constructive I suggest they should propose additions to this list——

Mr. O'Malley

Or the enforcement of the existing ones.

Mr. B. Desmond

Perhaps my rather abrasive colleague on the other side would allow me to continue? Fianna Fáil have been talking in utterly contradictory terms in relation to VAT. I will not read out Deputy Colley's record on this matter but I would refer the House to some of the speeches he made here——

Mr. Colley

In relation to VAT on food and at a time when the inflation rate was 10 per cent.

Mr. B. Desmond

The Deputy opposed the removal of VAT from food and he cannot now say we should have food subsidies on certain items.

Mr. Colley

Why does the Deputy not pay attention to what we said regarding food subsidies in the context of the green £ and its effect on our economy——

An Leas-Cheann Comhairle

Deputy Colley should not interrupt the Deputy in possession.

Mr. B. Desmond

We have rigorously policed maximum price orders in relation to a series of commodities and we will continue to do so. I will give the House some examples of the surveillance we have carried out. From 1st November, 1973, to 31st January, 1975, in relation to maximum prices for milk we had 44 prosecutions and 40 convictions; in relation to maximum prices for household goods orders we had 231 prosecutions and 229 convictions; with regard to maximum prices on cigarettes we had 14 prosecutions and 14 convictions; in relation to other maximum price orders we had 42 prosecutions and 42 convictions, a total of 333 prosecutions and 325 convictions in the period in question. Deputies O'Malley and Colley should examine carefully their record when they instituted the surveillance machinery and when they listed a smaller number of commodities for maximum price orders. They will have to agree our record is much stronger, more rigorous and effective.

Mr. Colley

There is 20 per cent inflation.

Mr. B. Desmond

At the moment there are approximately 365 prosecutions pending. In addition, there were 712 prosecutions for breaches of retail prices of the Food Display Orders, 1973 and with regard to the Beverages and Licensed Premises Display Order, 1972, approximately 270 prosecutions are pending. In relation to those elementary statistics I suggest to Deputies O'Malley and Colley that we are quite prepared to enforce the legislation and that we will do so with vigour and confidence.

Mr. O'Malley

In the Evening Press of today's date there is a cartoon on the front page that refers to a topical matter. It shows a man in a bookshop who wants to buy a book called “Learn About Inflation”; the assistant tells him although it is marked £1.25 it has gone up to £3.50. Unfortunately, that is not just a joke— it is the kind of reality consumers of every commodity have to face in the shops. I am supposed to apologise to their majesties, the Government and their supporters, for having dared to put down a motion that called attention to the fact that the Government got themselves elected on a promise to keep the price of everything as it was in March, 1973. Deputy Staunton gets up on his high horse because a motion is put down criticising the Government——

Mr. Staunton

I did not object to the motion. I objected to what was irreconcilable—

An Leas-Cheann Comhairle

Deputy O'Malley is entitled to speak without interruption.

Mr. B. Desmond

The Deputy has nobody in the House to vote for his motion.

Mr. O'Malley

The Government have and that is a problem for them. I was criticised in a patronising way by the Minister for Industry and Commerce for allegedly not suggesting how prices should be controlled. I spoke last night for 40 minutes and, apart from the Minister's interruptions, I devoted 30 minutes to a long list of things which could be done but were not done. However, I have been criticised by the Minister and Deputy Staunton for not doing that.

I do not know what is the point of speaking in the House. I set out my criticisms and suggestions but I was criticised immediately afterwards for not doing so. The Minister for Industry and Commerce spoke for 30 minutes last night and today Deputy Staunton spoke for 25 minutes but the entirety of each speech was to criticise what I had said. Neither of them made the slightest attempt to justify themselves or to defend their record because it was unjustifiable and indefensible and this they knew quite well. The people know the facts only too well.

It is almost implied in what they said last night and today that we should be very grateful we are living under a Government who have inflation running at a rate of 20 per cent to 25 per cent. Even though the Minister did not say so, Deputy Staunton made it quite clear that he approves of the less strict price control, which the Minister threw out as an aside in Deputy Staunton's words, on one occasion. Aterwards he was not quite sure whether he should have done this but, in practice, there is less strict price control. We are told it helps companies but last night I gave a long list of methods by which companies could be helped in their liquidity and other problems.

Mr. Staunton

Liquidity is a separate issue.

Mr. O'Malley

Liquidity has a great deal to do with it.

An Leas-Cheann Comhairle

Will Deputy Staunton allow the Deputy in possession to continue without interruption?

Mr. O'Malley

If Deputy Staunton is going to continue in this fashion, will the Chair please ask him to leave the House? I am unable to make my speech with the interruptions.

An Leas-Cheann Comhairle

Deputies should not interrupt in a limited debate.

Mr. O'Malley

As well as the very large number of increases in prices which have taken place, a small number were as a result of the deliberate action of this Government on matters under their own control, which they did not have to send to the National Prices Commission. Posts and Telegraph charges went up by 75 per cent. It costs ?d. in old money to post an ordinary letter. RTE licence fees increased by 40 per cent. Health contributions increased by 80 per cent. Petrol, which was already at a very high price as we all tragically know, increased by 15p, or 3s. overnight in five surreptitious minutes in this House at the end of November.

The increases in the budget added 2½ per cent to the cost of living index. The social welfare stamp has gone up by an amount that is as yet undisclosed by the Government but it could be increased by as much as 100 per cent. They have not denied the suggestions that that is a possibility. All these matters were totally within their own control and completely without justification. Not one word have we heard from the other side in an attempt to justify that. Everyone of those matters affects every person or business throughout the country directly or indirectly. By driving costs up they correspondingly drive prices up. This is the Government who allege they are doing their best. If their members believe they are doing their best with regard to prices, they are the only ones who do.

It was alleged today that we are complaining about the National Prices Commission. I was very careful in all I had to say last night to point out the difficulties under which the prices commission work, to point out the long, as I described it, apologia pro vita sua which they printed in their December, 1974 report to quote certain parts and to show the difficulties and the limitations under which they work. I pointed out last night that this commission were set up in the summer of 1971 at a time when inflation was running at about 7 per cent and was in no sense a fraction of the problem it is now. At that time they were given certain terms of reference. Now in 1975 when inflation is running at probably 23 per cent or more, that prices commission have somewhat narrower terms of reference if anything because the important commodities such as fertilisers and animal foodstuffs were removed from their control and overnight in many cases increased in price by 100 per cent.

Mr. Staunton

What was another condition?

Mr. O'Malley

Because price control was removed.

Mr. Staunton

No, that is not so.

Mr. Kelly

Where are the 67 Fianna Fáil Deputies who should be behind the Deputy to support this motion?

An Leas-Cheann Comhairle

Deputy O'Malley must be allowed to have his time.

Mr. Kelly

Where are the 67 Fianna Fáil Deputies who should be behind Deputy O'Malley supporting this motion?

An Leas-Cheann Comhairle

The Parliamentary Secretary must allow Deputy O'Malley have his time.

Mr. O'Malley

It is a funny thing that when two years ago prices were increasing at 7 or 8 per cent per annum we had a lot of steam in this House from people who sneer if someone dares——

Mr. Kelly

Do not mind two years ago——

An Leas-Cheann Comhairle

Deputy O'Malley without interruption.

Mr. O'Malley

——if someone dares to——

Mr. Kelly

Where are the people to back the Deputy?

An Leas-Cheann Comhairle

The Parliamentary Secretary must allow Deputy O'Malley to make his reply. He has only 15 minutes.

Mr. O'Malley

If Deputy Murphy is here to vote on this occasion I trust that the circumstances under which he votes will be more honourable than the ones under which he voted last——

(Interruptions.)

Mr. Kelly

Will the Deputy have Fianna Fáil Deputies behind him to support his motion?

Mr. Colley

On a point of order, Sir——

Mr. O'Malley

In view of the condition of the Parliamentary Secretary, would the Chair ask him to leave the House?

An Leas-Cheann Comhairle

The Parliamentary Secretary must not interrupt the Deputy. I call on Deputy O'Malley to resume his speech.

Mr. O'Malley

I trust, Sir, that by asking me to continue you are in a position to guarantee that the Parliamentary Secretary will have a little more control over himself, notwithstanding the difficulties he quite patently has in controlling himself at the present time.

To a great extent this debate from the other side has been founded on criticisms of what I did or did not say. Not the faintest effort was made by this Government to show they are doing anything constructive or positive towards price control.

Mr. Kelly

Or by the Deputy's colleagues.

An Leas-Cheann Comhairle

Will the Parliamentary Secretary refrain from interrupting the Deputy?

Mr. O'Malley

I wonder is there any point in continuing in the circumstances——

Mr. Staunton

Not unless the Deputy has something to say.

Mr. Kelly

The Deputy might as well sit down and not be making a farce out of the Dáil.

An Leas-Cheann Comhairle

Deputy O'Malley must be allowed to finish his reply. Deputies must appreciate that.

Mr. O'Malley

Some Deputies would be capable of appreciating it but unfortunately others are not. One of the numerous suggestions I made last night—although I am told by the Minister for Industry and Commerce and others that I did not make any at all—was that in the context of the present situation, with inflation running at over 20 per cent, and perhaps as much as 25 per cent, and particularly with large sums of money coming into the country as a result of our entry, happily, into the EEC, this is the time to begin to implement the putting of subsidies on certain vital commodities which are absolutely necessary to sustain life in our people and, particularly in the poorest people. What is alleged is that because we applied VAT in 1972 across the line at a time when inflation was 7 per cent, the things which were valid then should be equally valid now.

Mr. Keating

It was 16 per cent in the last quarter you were in Government.

Mr. O'Malley

Inflation is now running at 23 per cent. I pointed out that in Northern Ireland at the moment butter can be purchased by the housewife for 23p per lb. retail. Down here it is 42p or 42½p. As Deputy Lalor said, happily many hundreds of thousands of people are in a position to purchase butter at 23p per lb. That is not much good to retailers in six counties around the Border. As the Minister for Agriculture and Fisheries pointed out in the course of an Adjournment Debate on the increase in the price of butter shortly before Christmas when one of the subsidies was removed deliberately by the Government, causing an increase of 3p per lb., butter is supposed to be bad for your health. Even if it reduces consumption, what about it. It is a great pity that that remark of the Minister for Industry and Commerce did not get any publicity at all, let alone the publicity it deserves.

Mr. Keating

I never said any such thing.

Mr. O'Malley

I am not saying you were the Minister for Agriculture and Fisheries.

Mr. Keating

You wrongly attributed it to me.

Mr. O'Malley

I am sorry.

Mr. Colley

The first time the Deputy attributed it to the Minister for Agriculture and Fisheries, as the Minister well knows.

Mr. O'Malley

The Minister for Agriculture and Fisheries made the remark.

Mr. Colley

Supported by the Minister for Industry and Commerce in the withdrawal of the subsidy.

Mr. O'Malley

This debate is drawing to a close. In it there has been nothing but bitter, carping, personal criticism of the Opposition from the people who spoke from the Government side. Fault was found with our alleged lack of suggestions but not the faintest effort was made to defend the situation because prices of essential commodities increased last year at 20 per cent per annum and are running in the current year at 23 per cent at least and possibly 25 per cent. Let me remind this House that this is from a Government which, if any one single point got them elected, as they were narrowly elected at the end of February, 1973, it was the promise, which some people fervently believed, that prices would be controlled by that Government and that the outrageous increases of 7 per cent and 8 per cent per annum, which had been taking place up to then would be stopped——

Mr. Keating

Why not tell the truth?

Mr. Colley

Let the Minister stop juggling.

Mr. Keating

It was 16 per cent in the last quarter.

Mr. O'Malley

——and no further increases in prices of any description would take place after the great day dawned and this present collection got themselves into Government.

An Leas-Cheann Comhairle

I must now put the motion, Deputy.

Mr. O'Malley

The people have tragically learned their lesson. I can only trust that the lesson they have learned in such a very hard way will not be forgotten on the next polling day and that they will avail of their opportunity to give their verdict on this sort of thing.

Mr. Kelly

Where is the applause behind the Deputy?

Question put and declared lost.

The Dáil adjourned at 7.30 p.m. until 10.30 a.m. on Thursday, 20th February, 1975.