Bernard Durkan (Kildare North, Fine Gael)
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Question 129: To ask the Minister for Finance the extent to which he can identify and rectify areas of inflation throughout the economy; the extent to which corrective measures can be taken, having regard to the need maintain economic competitiveness; and if he will make a statement on the matter. [14436/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that the CSO produces detailed sub-indices of the CPI and HICP components and it is relatively easy to identify particular sectors where the rate of inflation is significant. Most recently, these include increases in energy-related, insurance and mortgage interest components. With regard to energy, given that Ireland is a price taker in the international energy markets, it is not surprising to see the recent surge in commodity prices reflected in consumer prices. There is an independent Energy Regulator who sets tariffs for both electricity and gas prices and the Government has no role in the decision making process.

Similarly, both insurance premiums and mortgage rates are set by participants in the private sector and the ECB and the Government has no specific role to play in regulating these prices. However, I am acutely aware of the difficulties faced by families on foot of the recent mortgage rate increases. In that regard, I would like to remind the Deputy that there are a number of measures in place or in train to assist these homeowners, which include the following: - A Code of Conduct on Mortgage Arrears has been in place since 1 January last, which helps to keep repossessions to a minimum, and mandates a co-operative approach on the part of banks; - Review of the Mortgage Interest Supplement Scheme; - Introduction of the deferred interest scheme in banks covering over 70% of the market; - The Department of Justice is working on bankruptcy and debt law issues; a commitment to legislation forms part of the agreement with the EU-IMF.

Looking to the future, it should be noted that inflation is projected to decline next year as the rise in commodities and the recent increase in mortgages fall out. It is also worth noting that on an EU-harmonised basis, Ireland has had the lowest rate of inflation in the euro area over the last two years, which represents a significant improvement in our relative cost competitiveness. Indeed, inflation this year and next year will be lower than in the euro area.

As our recovery will be export-led, it is crucial that the competitiveness gains made in the last number of years be sustained to take advantage of the global economic recovery. To this end, both the Programme for Government and the EU/IMF Programme outline a series of structural reforms, which will help to further restore competitiveness and support economic growth.