Brian Cowen (Laois-Offaly, Fianna Fail)

I am not suggesting there are simply deficiencies in the regulatory framework. I am saying this is the discipline imposed on the market by the introduction of the independent regulatory framework. In the past, prices in these areas were regulated by Departments working through the commercial semi-State sector. All sides in this House long ago agreed that commercialisation of the semi-State sector is a requirement for our continued sustainable competitiveness.

Services inflation has added some 10% to overall inflation. It is a wide-ranging concept covering electricity, gas, telecommunications, alcoholic beverages consumed on licensed premises, meals out, housing, rent, mortgage interest repayments, insurance, public transport, entertainment and recreation, education, household services and miscellaneous services including child care, social protection and package holidays. Where inflation in health and education is running at close to 5% it should be noted that these sectors have relatively small weights in the basket of consumer goods and services and that their impact on overall inflation is relatively low. Many factors that influence health inflation, such as doctors' and dentists' fees, are outside Government control.

I said in my reply that the level of service inflation is a cause for concern and that we are working to deal it with as comprehensively as possible, recognising the changed structures of some of these markets and how they operate in Ireland.

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