Brendan Ryan (Labour)

We served here when he was in a far less significant role. He is very welcome and we worked together in many places.

The Irish Government and Margaret Thatcher's government persisted for years in protecting a cartel between Dublin and London. I want to emphasise the two governments involved. Ryanair is the beneficiary of deregulation and not the cause of it. It is the beneficiary of the decision by two governments — one of which is paraded as the model of pro-businees in Europe — to delay deliberately the ending of a cartel to fatten up British Airways before it was privatised. We knew then that controlled pricing in the airline industry was insane. It is a matter of regret that Ryanair was the beneficiary rather than a more civilised airline, but that is a separate issue.

We have stood back and allowed public demand for access to reasonable, sensible, licensed premises to be left out of line with the supply of such premises. Even as the two vintners' organisations cry yet again that the wolf is at their door, we see pubs changing hands in Dublin for enormous sums of money. Those pubs are opened following enormous payments for rural licences. The figure quoted in one instance is €170,000. If one is running a small family business for a small income, then €170,000 is not to be sniffed at. There is a fear that the rampant demand for licenses for the greater Dublin area and for most of our big urban areas is the biggest single cause of the decline in the licensed trade and the closure of licensed premises in rural areas. When one is offered the security of €170,000 for one's license and that is contrasted with the uncertainty of a rural licensed trade, many older people will choose the security. That has very little to do with smoking bans or anything else.

The report published today makes it clear that restaurants and pubs have contributed spectacularly disproportionately to our price increases. I am not entirely sure why that is and I am always reluctant to claim that people are ripping us all off. However, I have not heard a convincing explanation of the situation where a half litre of beer in an off-licence costs around half of what it costs in a pub. We were told that the fundamental problem was the breweries, yet the licensed trade and the off-licensed trade pay the same amount. Then we were told it was Government duties, yet they are the same for both trades.

We are now expected to believe that the 50% price difference between an off-licence and a pub is a consequence of labour costs. This is untenable because labour costs are directly related to the volume of sales and there is a good case that the volume of sales in an off-licence may well demand a greater outlay in labour costs. One can accept a marginal difference to pay for the comfort and ambience one expects in a pub but the significant gap is entirely questionable.

This price difference arises because pub owners in most of our towns and cities do not live in a world of real competition but rather in a world of pretend competition. Irish people have decided they want to spend a large proportion of their newly found affluence on alcohol and publicans have been satisfied to accommodate them in this. They are also satisfied to take advantage of the fact that for a long time, we were profoundly indifferent to the price of alcohol in licensed premises. The solution to this problem is to ensure the existence of real competition. This was not done, however, and it is difficult to know why.

Some years ago, in a restaurant in a tourist area, I overheard the owner lament the difficulty of making a living in the restaurant business. This particular restaurant closed in October and opened in May every year during which time the owner lived in the Canaries. He also mentioned that one child of his was attending the most expensive boarding school in the State. He complained, however, that he could not make a living. The expectation of many people in the food and drinks industry of what constitutes a living seems to be entirely unrelated to that of ordinary people. A significant part of the problem may be these excessive expectations on the part of many of those involved in businesses critical for tourism.