Medical fees rise is inflationary - Harney

Increases in prescription costs and doctors' fees are among the causes of rising inflation in recent months, the Tánaiste, Ms Harney, told the Dáil yesterday.

There were "many examples of the cost of professional services having increased way beyond what anybody could expect", she said. Expressing her concern at the upward trend in inflation, she suggested that a "host of things" were needed to deal with these increases.

Deregulation, a stronger consumer culture and the use of the new competition Bill to enforce competition and prevent collusion were among the measures she recommended. "As consumers, we have to be more vigilant and use our collective purchasing power more wisely."

Ms Harney, who is Minister for Enterprise, Trade and Employment, was responding to Fine Gael's deputy leader, Mr Richard Bruton. He asked about the "rip-off" of Irish consumers shown in a survey which found that a basket of groceries cost 23 per cent more in Dublin than in the expensive French Riviera resort of St Tropez.

Prices here, he said, were "rising much faster than in other European countries" and he suggested that "out-of-control Government finances" were fuelling this problem. The price of groceries had risen last year by 14 per cent, a rise "unparalleled anywhere in Europe", and he asked if Ms Harney would amend the Groceries Order. She replied: "As of now, we have made no decisions. We have an open mind." The Government would await a Forfás survey on the price increases.

Labour's deputy leader, Mr Brendan Howlin, got a laugh when he asked if the Tánaiste's attention had been drawn to comments by IBEC's director of consumer and economic affairs, Mr Brian Geoghegan, Ms Harney's husband, that he was worried about public finances, that the Government had no room for manoeuvre and that inflation was at a critical stage.

She replied that Mr Howlin was putting her in a "difficult position". She said, however, that indirect taxes were higher in Ireland on some products and there was insufficient competition, particularly in services. Deregulation, which was often strongly resisted in Ireland, played an important part in enhancing competition, reducing prices and improving the quality of services, she added.