Professor Karl Whelan:

To that I add price controls are a natural response when one sees high inflation. Inflation is prices going up so let us go straight for the target and stop the prices going up. I am sure the Deputy and I could have a great debate about the role of prices in the market system and we could talk about Hayek versus Marx and so on, and all that good stuff. Beyond the philosophical issues, the practical point is in general the evidence shows price controls do not work and that people get around them. Businesses get around them and people are willing to pay more for things to get reasonable supplies. Almost every place around the world where one has seen high rates of inflation, eventually they go and implement price controls of some sort and they never really seem to work. I also point out that in this country, some of the background discussion that has been had on the current rent controls concerns the legal limits on the State's ability to intervene with people's businesses and their property rights in terms of what they can actually do, how they run their business and how they use their assets. On widespread price controls, even if one did think there was a man in the Department of Finance who knew the right price for everything - and even the Department would not claim there is such a man or woman - then even if that is something we thought was desirable it is unlikely to be legal.

However, we have to take things like higher energy prices. On energy prices, we cannot on the one hand send people off to COP26 and talk the talk about global climate and then say now is not the time to continue with the carbon tax and that it should now be suspended and so on. Given how poor our performance has been on climate change targets it is the wrong policy approach to roll back carbon taxes at this point and for this reason. That is not to say we do not look at the distributional implications or the effect on people and the cost of people heating their homes. That is why we have fuel allowance. We should keep a very close look at what happens with energy prices in the next couple of months. If the fuel allowance that was provided for in the budget is not big enough then it should be changed and increased. We should always accompany any analysis of carbon taxes or energy-related policies with a distributional analysis of how it affects the poorest and what we can do with the money that has been raised by these taxes to offset that. There are other cases and clear cases where governments should set prices below market level and I fully endorse Deputy Boyd Barrett's call for subsidised public transport. Of course if we want people to use public transport more then it should be an awful lot cheaper than it is.