Bertie Ahern (Dublin Central, Fianna Fail)

One can look back on the intensive work done. The anti-inflation group did some good work in 2003 in identifying, through the CSO data, indicators for the precise areas where there were inflationary pressures, and in using the agencies I mentioned earlier to tackle those issues. It tackled them directly by examining the issue of profit-taking in the relevant sectors and also through the Competition Authority, in terms of going after some of the sectors and making regulatory changes to improve competition. This proved quite effective in the given timeframe.

One of the issues on which the Competition Authority particularly focused at that stage was insurance, which was identified as a huge problem in the reports of 1999 and 2003. The authority likes to quote this as its greatest success because we are now paying premia at 1997 levels, which has been hugely beneficial for inflation, particularly for large employers which must pay public liability insurance, workers' liability insurance and general insurance. There are concerns about numerous other professions and while the Competition Authority has not finished all its work, it has produced fairly detailed reports on most sectors. I have not reviewed its progress in the last two or three months but it has done significant work on the pharmacy, medical and legal professions and in consultancy in terms of architects and engineers. It is has looked into all those sectors in great detail.

It has also done much work on the services sector, although that was in 2003. Services inflation was identified last week by the CSO as an area of particular concern, with inflation growing at 9.1% in the year to May. The authority intends to intensify its work in this area. It is clear there are a number of elements in that, identified by the CSO, where companies have had large hikes in terms of price increases in every quarter for the past year, protecting themselves at a time when inflation — excluding interest rates and energy which the companies cannot include in their figures — was 2.5%, while inflation in their sector is 9.1%. Therefore, they are taking profit of four times the rate of inflation. Those sectors are being analysed. It is not always easy to drive down prices there. The anti-inflation group and the high level group on manufacturing believe this area should be of prime concern.

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