My powers to control prices for commodities and charges for services are derived from the Prices Acts, 1958 and 1965. Price Control, as operated since October, 1965, has taken the form of requiring manufacturers to give me advance notice of their intention to increase the price of their products and of requiring importers or wholesalers to give similar advance notice about any intention to increase the margin which they take on the goods in which they deal. Where I felt that the proposed increases were not justified, I took steps to prevent them from being imposed or to have them reduced.
This form of control was particularly appropriate when the majority of home manufacturers were protected by high tariffs, but it has been gradually losing a great deal of its relevance in recent years with the dismantling of tariffs between ourselves and Britain under the terms of the Anglo-Irish Free Trade Area Agreement, and the resulting gradual exposure of home manufacturers to competition from external manufacturers. In recognition of this fact, I have in recent months, on the recommendation of the National Prices Commission, begun exempting from detailed price control firms which satisfy either of the following criteria:
(a) Where not less than 75 per cent of the firm's output is protected against competing imports from Britain by a tariff of 10 per cent or less and
(b) where the firm are exporting 25 per cent or more of their output of a product range and selling the balance on the home market at a price which is not greater than the average delivered export price in the British market, excluding all British taxes.
I should add that all applications for exemption are referred by me to the National Prices Commission who consider them on their merits. Even where a firm satisfy one of the foregoing conditions, it may not be possible to exempt them from detailed price control if special circumstances prevail, for example, if the firm occupy a monopoly or near monopoly position.
While the need for control at the manufacturers' level is declining, there are other sectors and circumstances where there is a need to extend price control. The fact that the existing prices legislation does not apply to prices for commodities or charges for services which may be controlled under other legislation has meant that some large firms and organisations were subjected to price control on a less rigorous scale than under the Prices Acts. This has led to complaints from time to time that certain sectors were in a more favoured position than firms whose prices and charges were controlled by the Prices Acts. To remove any basis for this complaint the present Bill proposes in section 2 (1) (b) and (c) to extend the Prices Acts to prices for commodities and charges for services which may be controlled under other legislation.
The Bill proposes at section 2 (1) (d) the extension of the Prices Acts to charges for professional services. Where such a charge is a percentage of the price obtained for property or of the value of a contract, it is clear that recent inflationary trends have automatically increased the charge so that in some cases it may now be out of proportion to the value of the service given. The present Bill proposes to give power to the Minister concerned to require advance notice to be given to him of proposed increases in professional fees, and where necessary, to control such fees. The powers now proposed can be exercised even in cases where there may already be machinery in operation for the determination of professional fees.
Heretofore activities carried on by railway and road transport undertakings were excluded from the scope of the Prices Acts in accordance with section 5 (a) of the Prices Act, 1958. On the recommendation of the National Prices Commission, I tabled an amendment on Committee Stage in Dáil Éireann bringing the activities of such undertakings within the scope of the Prices Acts, and that amendment now appears as section 2 (1) (a) of the Bill. I am in agreement with the National Prices Commission that it is appropriate that the activities of railway and road transport undertakings should be brought within the scope of the Prices Acts, particularly as the activities of other service organisations are already within the scope of the Acts or are brought within the scope of the Acts by this Bill.
A feature of trading at the importing, wholesale and retail levels is the adding on in many cases of a customary percentage mark-up on buying prices. This practice, taken in conjunction with inflationary trends over the past number of years, can mean an increase in absolute margins to the trader concerned out of proportion to increases in his labour and overhead costs. There are situations where competition does not operate satisfactorily and traders continue to take customary margins which may have been reasonable in the past but, because of the inflationary trends mentioned, have ceased to be so. It is proposed, accordingly, in the present Bill in section 3 to extend the scope of the Prices Acts to permit of the investigation and control under those Acts of the margins of profit of importers, distributors, wholesalers and retailers as well as manufacturers. It is also proposed in section 3 of the present Bill to extend the scope of the Prices Acts to permit of the investigation and control of the amounts which may be added by traders for tax purposes.
In view of the importance of hire purchase and credit sale agreements it is proposed in section 4 of the Bill to bring hire purchase and credit sale charges within the scope of the Prices Acts. Powers for the control by the Central Bank of interest and other charges by banks and similar institutions are provided in the Central Bank Act, 1971.
Section 5 of the Bill will enable the range of products which may be covered by a retail price display order to be greatly extended and the prices of such products to be shown as tax-inclusive. The section will also enable price display orders to be made in respect of service charges. Quite apart from products which are the subject of a retail price display order, however, power is also being provided in section 5 to require by order that all prices marked on goods, displayed or quoted at the retail level shall be tax-inclusive. This provision of the Bill was recommended by the National Prices Commission and was inserted as an amendment on Committee Stage in Dáil Éireann. This provision stems from the commission's concern, which I share, that as much information as possible on the prices of goods should be available to the consumer, and that, as far as possible, the consumer should be facilitated in the matter of comparing prices as between one retailer and another. It would not be sufficient to compel retailers to state whether their prices were tax-inclusive or not, since this would mean that the consumer would still have the rather difficult task of comparing tax-inclusive prices in one retail outlet with tax-exclusive prices elsewhere.
Section 6 of the Bill provides for the amendment of the Prices Acts to enable the Government, by order, to transfer from the Minister for Industry and Commerce to any other Minister, powers and functions under those Acts for the investigation and control of particular prices or charges. For example, in the case of professional fees it is intended that powers to control legal fees will be transferred to the Minister for Justice.
The Bill provides in section 7 for the amendment of the second schedule of the Prices Act, 1958, so as to revoke the statutory requirement for maintaining a prices advisory committees panel from which members of any prices advisory committees must be appointed. In the period from 1963 to mid-1965 seven prices advisory committees were appointed, but with the coming into operation of the Prices (Amendment) Act, 1965, recourse since then has been had to the appointment of prices advisory bodies under that Act, whenever formal price investigations were warranted. The Minister may appoint any persons of his choice to be members of a prices advisory body, or he might invite nominations for appointment to a particular body from appropriate organisations. The amendment of the 1958 Act which is now proposed brings the position in relation to membership of prices advisory committees into line with prices advisory bodies. It would not in any way interfere with the Minister's powers to appoint such committees. I should also mention that great difficulty has been experienced in obtaining nominations for formal appointment to the prices advisory committees panel.
The Prices (Amendment) Act, 1965, specified that the Minister's powers under that Act for price investigation and control could only be exercised after the Government had made an order under the Act enabling him to use those powers. The Government made such an order on 7th October, 1965—the Prices Stabilisation Order, 1965. The Act required that the enabling order would have a maximum life of six months but that it could be renewed by the Government for periods of six months by continuance orders. Since 1965 the Prices Stabilisation Order has been continued in force for successive periods of six months by continuance orders; the amendment of the 1965 Act proposed in section 9 of the present Bill is necessary in present circumstances so as to remove the "temporary" element from the Prices Stabilisation Order, 1965, and to eliminate the need for further temporary continuance orders to be made by the Government.
As regards the implementation of prices policy generally, Senators will be aware of the activities in recent months of the National Prices Commission whose function broadly is to keep under review the prices of commodities and the level of charges and fees for services and to advise the Minister thereon. The commission, one representative of employer, trade union and consumer interests with an independent chairman. The commission, whose monthly reports are published, have been very active in regard to the re-orientation of price control from a policy which was largely oriented towards manufacturers to one which is increasingly oriented towards active surveillance in the distributive fields. The commission have been instrumental in showing up the shortcomings of market forces by comparison of prices of similar commodities in Dublin and Belfast and by regional price surveys.
I am confident that the object of the Bill commends itself to the Seanad and I recommend the Bill for its approval.