Tom Kitt (Dublin South, Fianna Fail)

The point I made with regard to the negotiations on wages and a new partnership deal was that inflation is a significant consideration in negotiations and the question of the appropriateness of taking account of a measure which includes tobacco can be considered when the pay terms of Towards 2016 next come up for consideration. My comments are made in the context of discussions on wage agreements and pay, etc, taking account of such a measure. Countries throughout the European Union have already done so. In Belgium and France, for example, it is a legal requirement to use a CPI sub-index which excludes tobacco products for the indexing of wages and collective bargaining agreements. This was agreed as a result of negotiations with social partners. The matter arises in the context of social partnership bargaining.

With regard to the methodology, Deputies are aware that the Central Statistics Office works independently of Government. Deputy Rabbitte referred to ministerial colleagues. In checking with the CSO, the only intervention by Departments or Ministers was made recently by the Department of Health and Children, which raised the possibility of excluding tobacco from the consumer price index as a result of an observation made by the Irish Cancer Society. This is an ongoing discussion.

As the Deputy will be aware, an increase in excise duty of 25 cent adds approximately 0.4% to the rate of inflation. The price of tobacco is, therefore, an issue. Nevertheless, we must respect the independence of the Central Statistics Office. The basket of consumer items used in the CPI was rebased to take account of the many new consumer products people purchase. Tobacco is still one of the items adjudicated on as part of the calculation of the consumer price index.

See this speech in context