Bertie Ahern (Dublin Central, Fianna Fail)

Deputy Ó Caoláin asked about the work of the anti-inflation group. In the past few months, it had a detailed assessment prepared by the Central Statistics Office on contributors to the consumer price index and associated trends. It has been exploring the inflation drivers from a competitiveness perspective and was assisted by a detailed presentation given by the Competition Authority with the purpose of focusing on the areas in which we can make a difference. There are some areas in which we cannot make a difference but there are others in which we can. The National Consumer Agency and the Commission for Energy Regulation have been involved in the discussions in trying to make a difference. The purpose of these meetings is to ensure that the anti-inflation group can carry out its role in co-ordinating the fight against inflation on an informed basis. That analysis has been completed and it is now trying to make a difference, as it did four years ago.

In the longer term, the Government and the social partners acknowledge in the new social partnership agreement that adherence to its terms amounts to an important counter-inflationary measure. If one was to start conducting a review merely to chase inflation, all one would do is create a spiral. As that would be bad for the economy in terms of losing competitiveness and a disincentive to employment, it would be entirely the wrong thing to do. It is better that we focus our efforts and actions on those areas over which we have control. We cannot control interest rates and we can to an extent control energy prices, but can have an effect on many other areas which contribute to inflation.

On the pay issues, it is important to workers and everybody in employment that we reduce inflation, but doing so on the basis of pay increases or by having a review or introducing any other system would be wrong.

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