Taoiseach promises action on high cost of living

The Taoiseach has promised action on the Forfás report on the economy. The report, as revealed in The Irish Times yesterday, shows that the cost of living in the Republic is now the second-highest in the euro zone, and has identified sectors where prices rose sharply during the euro changeover period.

Mr Ahern, who said that the Government had not yet received the report, promised close attention would be given to its findings.

"As we have done in recent years, we will focus on bringing about greater competition, in the interest of consumers, in the areas identified. Those are clearly the professions."

He added that the root cause of a number of problems in the professions was the "fairly closed" regulatory regime operated.

The Fine Gael leader, Mr Enda Kenny, said the report confirmed what many people had believed for some time, namely, that inflation was growing and price increases were being introduced across a range of consumer products and services.

"Does the Taoiseach accept that the Government has taken its eye off the ball? Does he accept that the continuing rise in the inflation rate is now one of the most serious economic difficulties facing the country and that it is affecting the daily lives of thousands of people struggling to make ends meet?" The Labour leader, Mr Ruairí Quinn, asked if the Taoiseach regretted the refusal of his previous government to introduce some form of price control in January, three months from the conversion to the euro, so that the profiteering which seemed to have taken place in a limited number of areas could be clearly monitored.

Mr Ahern said that Forfás had commissioned the report last February to identify any unusual price movements during the euro changeover and to examine comparative price levels across the euro zone.

"I do not have a copy of the report. Forfás has not yet given the report to the Government, but, according to the reports, which I assume are accurate because they usually are in these cases, the findings were that there was no widespread profiteering associated with the euro changeover.

"However, in specific areas some unusual price increases have been identified. These include doctors', dentists' and opticians' fees, food prices in restaurants and the price of alcoholic drink in pubs and off-licences."

He added that other comparative work done over the past six months had also shown that wage increase had risen and outstripped those of other countries.

"Together with the fact that inflation has been quite high over the past number of years, this means that our ranking will have gone right up.

"We have been rising in the rankings for the past seven or eight years, so the fact that we are second does not surprise me."

Mr Kenny said he did not know whether the Taoiseach had noticed the increased price of drink in his local pub, but it seemed that everybody felt they were getting less for their money.

"We may have the second highest level of prices in Europe, but we do not have the second highest level of wages. This is a critical matter for hundreds of thousands of families."

Mr Ahern said that with economic growth rates averaging 7.5 per cent to 8 per cent over a number of years, inflationary pressures were inevitable.