Paul Murphy Demands Price Controls as Families Turn to Food Banks
Paul Murphy challenged the Taoiseach over rising food poverty, saying one in ten parents rely on food banks and urging the government to use consumer protection laws to impose price controls on key food items. The Taoiseach responded that poverty had fallen in recent years, listed a range of wage, welfare and cost-of-living measures, and argued that price controls would create shortages and are not a panacea.
Question on food poverty and price controls
Paul Murphy asked whether the Taoiseach was ashamed that, in one of the richest countries, one in ten parents are forced to use food banks or donations to feed their children. He noted grocery prices rose over 16% in the last year while food companies doubled their profits, linked profiteering to high food price rises, called for wage and welfare increases and urged the use of Consumer Protection legislation to freeze prices on basic goods, citing a Greek example.
Government response and recent measures
The Taoiseach said poverty and income inequality had been trending down in recent years and attributed that to government policies, but acknowledged the cost-of-living crisis has caused a setback. He listed measures already in place or recently enacted - a 7.8% increase in the national minimum wage, a public sector pay deal, employment regulation orders, pension and welfare increases of €12 a week, extension of the fuel allowance, income tax reductions including a rent credit, reductions in the social wage costs such as public transport, school transport, child care, college fees and free school books, and an energy credit with a further €200 off bills in March.
Arguments against price controls
The Taoiseach argued that price controls have not worked well in the past in Ireland and warned they can lead to shortages because governments can cap retail prices but not suppliers' costs. He said price caps often force governments to repeatedly raise caps, as happened with energy price caps in the UK, and so are not the simple solution some deputies propose.
Targeting support and next steps
The Taoiseach acknowledged that existing measures do not reach everyone and said decisions in the March-April-May period will focus on targeting those suffering most. He also noted research by ESRI and other bodies showing the combined measures largely or fully insulate many households from the cost-of-living rise, while accepting gaps remain.
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I want to ask the Taoiseach whether he is ashamed to lead a government in one of the richest countries in the world and yet have a situation where one in ten parents are forced to go to food banks or rely on food donations to be able to feed their children. I mean it is an incredible indictment of what is happening in this country and the policies of your government. We know that the price of groceries has increased over the course of the last year by over 16%, obviously far outstripping any meagre wage increases that people are getting or meagre increases in terms of social welfare. We also know that last year food companies globally, and the same goes for Ireland, they doubled their profits. And there is a relationship between those two things. The driving factor behind the very, very high increases in food prices is incredible profiteering going on by the food companies. So clearly we need an increase in people's wages, we need an increase in social welfare payments. But I want to particularly ask the Taoiseach whether he agrees that the government should use the power that they have under the Consumer Protection Legislation to introduce price controls on key food items. I just draw the attention of the Taoiseach that his sister party in Greece, New Democracy in government, has introduced a list of 50 basic goods that supermarkets are expected to freeze prices on or scale back future increases. Does he not agree that we need to have price controls in this country? In relation to the first matter raised, I think it is important, and it was not acknowledged in the questions, that poverty had been trending downwards in Ireland for a number of years, as had income inequality and inequality in Ireland, as judged by the Gini coefficient, or one of the few countries that has not seen inequality increase in recent years. And I think it is important that it should be acknowledged, and that is largely down to the policies pursued by government in recent years. But the cost of living crisis does change things, and it has caused a huge setback. And I acknowledge that a lot of people, a lot of families are really struggling to make ends meet, make ends meet to pay for very basic things, whether it is energy or fuel or food. We are taking a lot of actions, there are wage increases, the increase in the national minimum wage, 7.8%, just kicked in in the last few weeks, is in line with inflation, and we are now likely to see inflation of less than 7.8% this year. It might not have been in line with inflation last year, but if you take inflation over a 3-, 5-, or 10-year period, the national minimum wage has increased ahead of the rate of inflation and ahead of the cost of living. We have the public sector pay deal as well. We have increases coming through, through employment regulation orders, and across the private sector, pay increases are happening as well. We have pension and welfare increases, again, just kicked in in the last few weeks, an extra €12 a week. And then more targeted measures, like the extension of the fuel allowance to tens of thousands of more people. We have income tax reductions, including the rent credit, which I know will be welcomed by a lot of renters. We are taking action on the social wage, reducing the cost of public transport, school transport, child care, college fees, free school books. All of these things make a big difference. And there is the energy credit too, and another €200 will be knocked off people's bills in March. And research by ESRI and other bodies has shown that for a lot of people, it does largely or fully insulate them from the cost of living. But I absolutely acknowledge that's not the case for everyone. And certainly when it comes to deciding what we do in the March, April, May period, we'll have regard to the fact that we need to target those who are suffering the most. To be very frank, I don't think price controls are a good idea. They have been done in the past in Ireland. They didn't work very well. And while the government can cap what retailers can charge for a certain product, they can't cap what the retailer has to pay to get the product. And where price controls and price caps have been introduced, it often leads to shortages. So, for example, you might find that if you introduced a price cap of, let's say, 120 cents for petrol or diesel, that you'll just have no petrol or diesel because there's no margin there for the retailer. And that's often one of the problems with price controls. Another problem with them, and we saw this play out in the UK, where they had energy price caps, the government just had to keep increasing the caps because the retail, the wholesale cost of energy kept going up. So I don't think it's the panacea that some deputies have suggested. I accept Deputy McDowell's point, by the way, in relation to domestic violence leave in Northern Ireland, but I don't think you can see things in isolation. Take sick pay, for example, in Northern Ireland. What we offer people in terms of sick pay is more in a day than you get in a week in Northern Ireland, and you have to take it into account in the round. The same applies to the minimum wage, for example. The government says,
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