Seanad Éireann díospóireacht -
Tuesday, 18 Jul 1972

Vol. 73 No. 7

Prices (Amendment) Bill, 1971: Committee and Final Stages.

Section 1 agreed to.

SECTION 2.

Question proposed: "That section 2 stand part of the Bill."

Mr. Alexis FitzGerald

I should like to get from the Minister an explanation of this section. Section 5 of the Principal Act is being amended by subsection (1) of section 2 (1) so as to delete provisions contained in section 5 and which prevent the Act applying to certain activities. Section 2 (1) states the series of activities to which the Act applies, whereas section 5 sets out a series of activities to which the Act does not apply.

The Prices Act is not to apply to any activities carried on by or on behalf of a Minister under section 2 (1), a local authority, within the meaning of the Local Government Act, 1941, a vocational education committee and an air or water transport undertaking or a harbour authority. All those activities are under section 2 (1), and are left without control.

I do not know whether section 2 (2) is designed to have the effect of subjecting those activities which are left not controlled by section 5 of the Act to some type of control, but subsection (2) (a) states:

A power to control, regulate or specify the price of a commodity or the charge for a service that is vested in a person other than the Minister of State ... shall not be exercised without the consent of that Minister.

Subsection (2) would seem to affect section 5 only with regard to the activities I specified to the extent that price control, if there be such in relation to those activities, is now to be subject to the consent of the Minister if the present price control is vested in any other person. Section 5 (a) stands as amended in the way I have said. Section 5 (b), (c) and (g) go and section 5 (h), in relation to charges for services in connection with insurance, is deleted but charges for services rendered in connection with banking remain.

Perhaps the Minister could help me in relation to these various other charges which can be made for activities by Ministers or on their behalf by local authorities, by a vocational education committee, by an air or water transport undertaking or a harbour authority. If there be control in relation to those activities, where is it? If there is not control, why is there not? What is the position in relation to —I illustrated this case when speaking on Second Reading—charges for telephone services and postal charges?

Mr. Lalor

The most convenient way would be to take the 1958 Act. The Act does not apply to any of the following: activities carried on by or on behalf of the Minister of State, a local authority within the meaning of the Local Government Act, 1941— that is controlled by the Minister for Local Government. The type of activity there calls for the striking of a rate and it is a local activity from that point of view. The vocational education committee would be covered under the Vocational Education Act by the Minister for Education and the air and water transport undertakings and harbour authorities are controlled by the Minister for Transport and Power under his legislation.

In relation to section 5 (d), the prices of stated producers or received by dealers at factories for primary, or agricultural products including eggs, poultry, milk and milk products and horticultural products are controlled by the Minister for Agriculture and Fisheries under the provisions of his Bill. The charges for artificial insemination are also controlled by the Minister for Agriculture and Fisheries. The export prices of fish and all transactions of An Bord Iascaigh Mhara are also covered by the Minister for Agriculture and Fisheries.

I am taking the power in section 5 (g). In section 5 (h) I am taking half the power in relation to the charges for services rendered in connection with insurance. They are now brought in under this Bill. The charges rendered for services in connection with banking are controlled by the Central Bank under the Act of 1971. I take it that "the prices for commodities sold for export or exported for sale" speaks for itself. It is not controlled by any Government Minister and the same would apply to "services rendered outside the State". Both those items would be excluded anyway.

Mr. Alexis FitzGerald

I am only trying to understand a statement made by the Minister. In his Second Reading speech the Minister said:

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...

I take that to refer to section 5. The Minister went on to say that this fact

has meant that some large firms and organisations were subjected to price control on a less rigorous scale than under the Prices Acts. This had 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.

I should like to know which firms and sectors are to remain in the position they were in before this Bill is enacted. It is quite clear that the insurance sector is to be controlled by this Bill whereas the Act of 1958 did not apply to it. It is equally clear, if I understand the Minister's reply to my statement correctly, that activities carried on by or on behalf of the Minister of State are not to be subjected to the kind of rigorous price control that will be brought to bear on the activities within the ambit of this Bill.

I should like to know what were the nature of the complaints? What, specifically, were the sectors in mind? Where was the decontrol which gave rise to the complaint and necessitated this Bill to make the appropriate change? I gave one example to the Minister. There have been complaints about the rise in postal charges which affect business undertakings and so on. Is this sector not to be subject to the same rigorous control they would have been subjected to if the Minister, or the Minister for Posts and Telegraphs, had control under the prices code?

Mr. Lalor

Yes. The Senator asked me to give him some idea of the reasons for the statement I made on the introduction of the Second Stage. With regard to hotel charges and railway and road charges the Minister for Transport and Power has had this power to deal with such charges. The most convenient one to deal with in this regard is hotel charges. Even in relation to a battle that the Minister for Industry and Commerce had with the Licensed Vintners' Association before last Christmas—I think justifiably so, although I did not concede it at the time—I was attacked by the licensed vintners for threatening them that if they collectively increased the price of drinks then I would fix a maximum price for their full range of drinks. At that time I discovered I had not the power to deal with drink prices in hotels, because that was controlled under another Minister's legislation.

Similarly, cement and gas prices were excluded under previous legislation. Flour prices were tied in with the Minister for Agriculture in relation to wheat prices. In the operation of my price controls last year I ran into a number of snags in this regard. Despite the fact that I am including in this legislation items previously excluded, I still feel that the responsibility for fixing postal and telephone charges is more appropriate to the Minister for Posts and Telegraphs and not to me. The Minister for Posts and Telegraphs has to administer his Department. He has the responsibility of ensuring that the Department of Posts and Telegraphs pays for itself. This necessitates his coming to the Dáil now and again to announce increased postal charges, which ultimately have to be thrashed out in the Oireachtas.

There is no justification for my taking over the responsibility of postal and telephone charges from the appropriate Minister, because if one were to refer postal charges separately to the National Prices Commission, I could not see how that body would be able to succeed in keeping down postal charges, if they are separated from telephone charges. This would be more appropriate to the Minister for Posts and Telegraphs and would be the one exclusion. It would naturally generate the greatest comment because if we take out railway and road charges— which we have taken out—and included power to cover them in this Bill, it is the one which probably has the greatest general overall public effect.

Mr. E. Ryan

While I do not necessarily disagree with what the Minister has said, I should like him and the National Prices Commission to bear in mind that many companies have to pay their own way. In spite of the fact that they have their problems, the National Prices Commission do not always look at it in the same sympathetic way as the Minister suggests they would have to look at the situation of the Department of Posts and Telegraphs.

Question put and agreed to.

SECTION 3.

Question proposed: "That section 3 stand part of the Bill."

Mr. Alexis FitzGerald

It is difficult to understand the effect of this section. This section inserts after section 22 (e) in the Principal Act a new section 22 (f). Section 22 (e) was inserted in the Principal Act by the Prices (Amendment) Act, 1965. The effect of the insertion of 22 (e) in the Principal Act is to enlarge the chapter or the new part which is contained in the inserted section of the 1965 Act. I think there are other amendments made by the later section —section 5—of this to section 22 (a) and 22 (c) (ii) of the Act. The effect, therefore, is to apply all the remaining parts of this part, which was provision for temporary measures in relation to prices and charges, to the whole business of additions to prices. I would like to question the Minister with regard to section 22 (f) which it is proposed to insert into section 3, as to the language used. It is stated:

The Minister may inquire into the amounts by which the prices at which any specified commodity is sold in the course of business by persons engaged in trade or commerce, being importers, manufacturers, distributors, wholesalers or retailers of that commodity or any other specified class of such persons, exceed the prices at which that commodity is bought by those persons and may by order fix the maximum such amounts, and different amounts may be fixed in relation to different classes of such persons.

Is this an intention to limit the inquiry to the additional margin which is put on by anyone in the chain of distribution to what he has paid in acquiring it?

Mr. Lalor

It is the mark up.

Mr. Alexis FitzGerald

The inquiry relates exclusively to the amount of the mark up. "Amount" is not the word I would have used, if I was thinking of a mark up. I would think of a percentage rather than an amount. Is the inquiry incorrect?

Mr. Lalor

That would be incorrect. I spoke about that in my Second Stage speech. "Percentage" is too vague, I think. In an inflationary situation one talks about percentages.

Mr. Alexis FitzGerald

Amounts are constantly changing with the change in the price to the person who is doing the mark-up. The only satisfactory way he has of doing his mark-up is by doing a percentage.

Mr. Lalor

That can be determined.

Mr. Alexis FitzGerald

The inquiry is limited to an inquiry into the amount and not the percentage. I make the point that the Minister's power to make the inquiry may be found to be limited if the proper word has not been used.

Question put and agreed to.

SECTION 4.

Question proposed: "That section 4 stand part of the Bill."

Mr. Reynolds

The Minister said that he could not control the price of flour or the price of drink sold in hotels because they were tied up with another Department but under this measure he will have the power to do this. Under this section he is going to control hire purchase and credit charges, but he is leaving bank charges out. As regards bank charges he states that powers for the control of interest and other charges by banks and similar institutions are provided in the Central Bank Act, 1971. Does the Minister think that these charges will have to be controlled in the near future? Recently every bank and company in the country got circulars from their head offices changing the whole banking system. The day of the overdraft is gone. The banks have changed their lending system into three categories. Category (1) includes the Government, local authorities and big companies; category (2) includes business accounts, not included in category (1), but excluding hire purchase; category (3) includes all other borrowers.

The rate of interest for people in category (1) for a term loan—one to three years is 7 per cent; three to five years is 7½ per cent; five to seven years is 8 per cent and over seven years 8½ per cent. Those under category (2) will have to pay 7¾ per cent for one to three years; 8¼ per cent for three to five years; 8¾ per cent for five to seven years and 9¼ per cent over a seven-year period.

Those under category (3) will pay 8¾ per cent for a three-year period; 9½ per cent for three to five years; 10 per cent for five to seven years and over that period 10¾ per cent. It is here the price should be controlled. It is essential that this should have been embodied in this particular measure.

Mr. Lalor

The Senator is drawing a comparison between what I said regarding my powers in relation to controlling drink prices within a hotel and also my powers to deal with flour prices. All hotel charges were tied into legislation within the jurisdiction of the Minister for Transport and Power. There was an element of doubt as to whether I had power in relation to flour prices or whether it was a power exercised by the Minister for Agriculture and Fisheries under the Flour and Wheatenmeal Act.

When preparing the last Central Bank Bill, we had the situation whereby the Minister for Finance and the Central Bank had the power to deal with bank interest charges under the Central Bank Act, 1971. The Minister for Finance has the power under that Act to deal with bank charges. There was an element of doubt which I wanted to clear up in relation to the Flour and Wheatenmeal Act, as operated by the Minister for Agriculture and Fisheries, and also the various transport Acts. Under the Central Bank Act, 1971, there is no doubt about the State's capacity to deal with charges.

Mr. Reynolds

I am happy if somebody is responsible for it, if he is earmarked—and specifically pinpointed.

Mr. Lalor

There is a responsibility. Bank charges were excluded in the original 1958 Bill. The power to deal with that was taken by the Minister for Finance under the Central Bank Act, 1971.

Question put and agreed to.

SECTION 5.

Question proposed: "That section 5 stand part of the Bill."

Mr. Alexis FitzGerald

There will be great fun when you tell solicitors and barristers that they have to give you notice of an increase in their fees for the variety of services they are asked to perform, however they perfrom them. I wonder how this is going to work out as a matter of practice. I wish the Minister well in his effort.

Mr. Lalor

It is a notice of intention.

Question put and agreed to.

Section 6 agreed to.

SECTION 7.

Question proposed: "That section 7 stand part of the Bill."

Mr. Alexis FitzGerald

For my own information, can the Minister say under which Act were the National Prices Commission appointed?

Mr. Lalor

Section 22 (b) of the 1965 Act.

Mr. McDonald

On section 7 I would like to ask why Members of the Oireachtas are disqualified from serving on committees such as the National Advisory Committee? Most Members of the Oireachtas get more than their share of complaints from the public and surely they would be well qualified and kept up-to-date to serve reasonably well if they had been members of such committees before their election.

Mr. Lalor

Basically, Members of the Oireachtas are disqualified from membership of such committees.

Mr. Reynolds

Are we not represented by the Minister?

Mr. Lalor

The recommendations are discussed in both Houses of the Oireachtas and this gives Members an opportunity to discuss them.

Question put and agreed to.

Sections 8 to 11, inclusive, agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.

Business suspended at 5.50 p.m. and resumed at 7.15 p.m.