12 Mr. S. Barrett asked the Minister for Industry and Commerce, in his capacity as President of the EC Council of Industry and Commerce Ministers, if he will outline the steps he has taken to ensure that the net new car price differences between member states are reduced to comply with the 1985 EC regulation to limit the difference to 12 per cent; and if he will make a statement on the matter.
I assume that the Deputy is referring to Commission Regulation (EEC) No. 123/85 of 12 December, 1984 on the application of Article 85 (3) of the treaty to certain categories of motor vehicle distribution and servicing agreements. This entered into force on 1 July 1985 and expires on 30 June 1995. This regulation provides for a block exemption of motor vehicle distribution agreements from the scope of Article 85 of the Treaty of Rome.
Neither the Minister for Industry and Commerce nor the Council of Ministers have any function in the administration of the regulation, which is solely a matter for the EC Commission.
The regulation itself does not refer to any percentage figure. However, at the request of some of the commercial sectors involved, the Commission published a notice which set out some of the conditions by which agreements would be assessed. The notice also lays down certain administrative principles for the procedures which the Commission might initiate.
In the notice the Commission indicated that, for the time being, certain circumstances would not of themselves justify an investigation of whether an agreement exempted by Regulation (EEC) No. 123/85 is incompatible with the conditions of Article 85 (3) of the Treaty. One of those circumstances would be where list prices of a motor vehicle in one member state and of the same or a corresponding motor vehicle in another member state differed by not more than 12 per cent.
Of course that circumstance and any other in the notice does not affect the right of any person to make a complaint to the Commission. The Commission, whose responsibility it is, will examine all such complaints with due diligence.
Is the Minister aware that a recent survey showed that the net price, that is the price before tax, of motor vehicles in Ireland were 45 per cent higher than in Denmark; that there was a 48 per cent difference between Denmark and Italy, and a 49 per cent difference between Spain and Denmark? There is a huge rip off in the sale of motor vehicles and there is a huge difference in the basic price of the vehicle from the point of manufacture to the point of sale. Now that we are talking about a single market, surely the net price of a vehicle should be the same in any of the Twelve member states of the Community? Would the Minister of State not agree that it is the responsibility of the Minister for Industry and Commerce, particularly in his role as President of the Council of Ministers, to see to it that this arises?
There is no standard ex factory price for motor vehicles anywhere in the Community. There are very considerable variations and the question of the final price to the consumer is more a matter for the Minister for Finance, in the context of excise duties and VAT. In all of these areas, the Community has not taken a position for the post 1992 period. Having examined the matter and on the basis of the reports, which the Deputy has referred to, it seems to me there are no standard ex factory prices on which to base a judgment.
I accept that prices in this country, comparatively speaking are quite high. However, there are some instances where tax regimes are quite high but factory prices to those countries are lower than the factory price in Ireland.
Would the Minister of State agree that unless you have a situation where the net price of motor vehicles is the same in all Twelve member states, the removal of barriers will be detrimental to the Irish motor industry and a consumer will be able to travel to Denmark, purchase a car, bring it back into the country and pay the taxes and it will still cost less than purchasing the car here and paying all the taxes? Surely it is time that the manufacturers are forced into a situation where they would sell into the single market and that the tax is a matter for the Minister for Finance of each of the member states. The basic prices should be the same in all the member states because of the single market and there should not be a differential of 45 per cent between the basic price of a vehicle of a car in Ireland and in Denmark?
I would like to remind the House that we are dealing with priority questions, to which a rigid time limit applies. If we are to dispose of these four questions, brevity is of the essence.
I again want to make the point that so far as I can ascertain, the ex-factory prices are not standardised. In the case of the sale of German cars to Denmark, because the Deputy referred specifically to Denmark, the ex-factory price to Denmark, which has a very high level of taxation, is lower.
The point I am making is that they should be the same.
There is no way other than this regulation, which is a broad set of guidelines, where the Commission will act in a certain set of circumstances but it is not compelled to do so even when the differential is more than 12 per cent.
The Minister should see to it that the basic price is the same in each member state.
Let us take another question please——
That is not clear.
The Chair has called the next question and must be obeyed by both sides of the House.
I am sorry.
