Neale Richmond (Dublin Rathdown, Fine Gael) | Oireachtas source

I thank the Deputies for raising these important matters and allowing us time to discuss them. As mentioned, we will not oppose the motion. In fact, it is fair to say we are largely in agreement. Needless to say, I do not agree with some of the language that has just been used. I, too, do the weekly shop for my household and see people suffering, be they in Nutgrove, Rathfarnham, Stillorgan or Dundrum, where they have to make those horrendous decisions between bread or nappies and butter or washing powder. It is completely unacceptable in a progressive modern society and it lends itself to genuine and real concerns. However, there is no monopoly on compassion in this Chamber. We work best when we work together. We have identified a very clear issue on which we do not necessarily disagree. I will take some issue with some of the points made during the debate but I do not want this to devolve into a political tit-for-tat debate. We are all, I hope, looking for an agreed solution. The Government has done quite a bit to support households. We recognise there is a cost-of-living crisis. There will always be those who, understandably, want us to do more or, indeed, less but we fundamentally stand over what we have done, not just in the context of the previous budget but in light of the issues at hand as per this motion.

I will use this opportunity to set out some of the context for the current situation we face and the unprecedented supports the Government has provided. The current rise in grocery prices is not attributable to one sole factor. A combination of issues was responsible for the initial rise in prices since mid-2021, from rapid economic recovery from the pandemic, to international supply chain issues that were partly related to China's zero Covid stance, and weak price trends in 2020. We cannot dismiss the impact of the war in Ukraine and cannot just say that it is being used as something to blame. It is having a very real impact, especially when it comes to food production, the cost of fertiliser, the global cost of energy and core supplies early in the food chain, be they the global price of grain or anything else. Events, therefore, have put an exceptional pressure on prices and, as such, costs have gone up substantially.

However, we are now at a point where inflation is decreasing. It is down close to 6% from a high of 10% and will drop even further towards 4.5% this year, on which I will go into more detail later and, of course, we expect to see food prices to come down. We are not just looking for it. We fundamentally expect to see food prices come down as input costs fall. The motion states the Government has not taken action while grocery prices rise. Quite frankly, this is false. In my time in the Department, I have met with retail sector representatives and retailers weekly, if not daily, and discussed this issue quite clearly with them. There is no refusal to act on the part of this Government. It is acting and engaging. It is not reaching for draconian measures straight off and not going nuclear. It is genuinely trying to act with retailers, producers and food companies to deliver the best result for customers at the checkout, who include our neighbours, friends and the constituents we represent. That is what we are looking to do.

As was mentioned, part of my role as Minister of State is to chair the retail forum in the Department, which was established by Deputy Nash during his time in ministerial office. It is a good forum that brings together the major retailers in Ireland as well as their representative groups, and includes the large multiples, the smaller shops and corner shops. I have found it to be a very open forum for a frank and honest exchange. The next meeting of the forum was set to be on 21 June but I have called a special meeting for tomorrow at 2 p.m. solely to discuss the single issue of grocery prices. I have made it perfectly clear what I expect and hope to get out of this meeting. I will seek assurances from the sector that the reduced input costs have come through and that it will pass these reductions on to its customers. I will make the point raised by Deputy Mitchell absolutely clear.

We all know that inflation is high in Ireland but it is not as high as earlier this year, when we saw prices skyrocket. Not only have we seen inflation fall, we have also seen many business customers receive cuts to their electricity bills on top of supports from the Government, including the temporary business energy support scheme, TBESS, which allows them to receive up to €15,000 per month, or €45,000 per month for those with multiple locations, off their electricity costs. In recent weeks, we have seen that retailers have been able to lower prices. Major retailers have reduced the price of milk by 10 cent per litre and butter by 40 cent per pound. This is very welcome and is a clear indication that competition in the retail sector is having an impact, with retailers matching their competitors' lower prices.

I went around the supermarkets in my constituency this morning before coming to the House - they include the five major multiples that everyone knows and are in most people's constituencies - to compare prices. We see a consistency in price, especially in the staple goods that so many households rely on, including the real basics and the ones we simply cannot do without. Anyone with a young child simply cannot do without nappies, let alone bread or butter. The fact that Irish food inflation is less than the EU average suggests that Irish supports to business and the level of competition in the market is, however, having an impact. Relations between the Government and the retail sector have been very strong and positive. From Brexit to Covid and now on the cost-of-living crisis, we have worked together very closely and effectively. I see no reason this situation will be any different. Retailers provided an enormous service to the country during Covid-19, in particular, and they in turn were very well supported by the Government when it came to energy costs. We think of the risk at which those people who work in our large, and smaller, retail stores put themselves and their families during the years of Covid to ensure we could put food on the table. That should not be forgotten. It should not be forgotten by the Government, or any of us in the House or those people's employers.

As I said, one of the key issues driving food prices is energy costs. This Government has provided enormous supports on this front, as we have done for all households during the cost-of-living crisis, despite claims made this evening. I regret getting too political, but the notion of providing certainty and the constant referral to price caps is not a policy that will work in this country.

It is a policy that failed in London and the sooner it is disregarded by some in this House, the better. Due to this and to the Government's responsible handling of the economy, we have, however, been in a position to be able to continue to respond to a series of unprecedented events in recent years. In a European context, Ireland’s economic recovery from the pandemic has been remarkable. Part of the attraction of doing business in Ireland is the stability to be found here, including a predominantly open market that is a positive place for business. The notion of wage suppression has been raised across the House, but we have seen the minimum wage increased and we are moving towards a living wage sectoral agreement and other sectoral agreements for wages to increase. While we accept that real wages went down last year, as the Taoiseach said in Leaders' Questions today, we are confident that they will go up this year. We will work to ensure the political environment to allow for that is in place.

We are well aware of the pressure families, households, workers and businesses have been under in the past year with rising costs and bills and we have acted on it. We have introduced measures totalling €12 billion to reduce pressures on people and families. There is a notion that childcare costs are going up but in fact they have come down. I have seen that because I pay childcare costs every week. We see it because determinative action was taken in the last budget and more action will be taken in that regard in the next budget.

The Government also introduced a €2.4 billion package of supports during 2022 and an additional package of one-off measures worth €2.5 billion in budget 2023. In February of this year, we announced a further €1.2 billion package to help families, businesses, pensioners, carers and people with disabilities to cope with the rising cost of living. These supports would have been unthinkable a few years ago. It is important that we remind ourselves once again of those supports and how they benefit people. Through the first and the second electricity credits, more than 2.1 million households automatically received €800 of income support through their electricity bill at a total cost of €1.59 billion between the first quarter of 2022 and the second quarter of 2023. Approximately 99% of all eligible customers had the credit applied to their account. This has worked and had an immediate effect in each of the instances in which it was applied in reducing the number of houses which were late with their payments. As well as some universal measures to help all households, we specifically targeted those most at risk. That is why the Government increased funding for supports such as the fuel allowance; reduced VAT on gas and electricity bills; reduced excise duty; and allocated a total of €267 million, of which €202 million comes from carbon tax receipts, to the Sustainable Energy Authority of Ireland, SEAI, to allow households at risk of energy poverty to reduce their costs.

Budget 2023 also contained a number of measures aimed at assisting businesses with rising costs. The main one was the aforementioned €1.25 billion allocated to the temporary business energy support scheme, TBESS, alongside which the reduced rate of VAT on gas and electricity - reduced from 13.5% to 9% - was extended until the end February 2023. Through supporting businesses in meeting energy costs, this scheme will not only help protect the jobs of those working in impacted sectors, but also help businesses pass on savings to customers. That is something I already referred to and which I absolutely expect to see.

There has been some talk in the media about the possible introduction of price caps. This is something we are extremely reluctant to look at as a route to go down. In Europe, Croatia and Hungary both introduced food price controls, although their food inflation peaked at 20% and 50% respectively. Not only were they in a different position to Ireland, but they have found that the caps have not been successful as they related to specific products. However, in France the equivalent of the Retail Forum was called and there was engagement with the Minister and a commitment for the months from April to June to seeing real and tangible reductions in food costs.

There is considerably more in this motion about the Agricultural and Food Supply Chain Bill 2022, the role of the Competition and Consumer Protection Commission, CCPC, and much else, which my colleague, the Minister of State, Deputy Calleary, will refer to in his summing up when he also addresses many of the points raised across the Chamber.

I will end on the issue of grocery prices, which is the most topical issue, not only this week but for a number of weeks. It has been raised in this Chamber by Deputies opposite, including Deputies Nash and Higgins. I look forward to the meeting tomorrow. It will be an effective one and I look forward to briefing the House in due course on its outcome.

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