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Friday 2 December 2016

Government attacked for failure to rein in costs

Published 11/02/2010 | 16:47

Opposition politicians tonight attacked the Government for failing to rein in state-controlled costs despite consumer prices falling for 13 months in a row.

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The cost of living came down 3.9pc in the last year with the biggest reductions in housing and energy, clothing and footwear and drink.

But charges by state-run agencies were hit with increases - education up 11pc and health up almost 2pc in January.

Fine Gael labour affairs spokesman Damien English claimed companies were slashing prices to stay competitive while other costs keep rising.

"Many are finding it impossible to stay afloat, while others are laying off staff in order to keep going," he said.

"So it is deeply disturbing to see that prices controlled or regulated by the Government are still rising, when the inflation rate is actually falling."

The CSO said it had identified an increase in the price of dental and optician services, petrol and diesel prices, but at the same time a drop in airfares had been recorded.

The survey said the traditional winter sales played a large part in reducing costs.

The Irish Small and Medium Enterprises association (Isme) said the cost of Government-run services was out of kilter.

Mark Fielding, Isme chief executive, said: "The current level of negative inflation should not be used as an indication that all costs are being kept under control. Unfortunately this simple point is lost on the powers that be.

"The overall prize of reducing state-influenced costs is improved competitiveness, company survival and job retention."

He added: "Unless we can bring our business costs into line with our competitors we will continue to lose firms and haemorrhage jobs."

Torlach Denihan, Retail Ireland director, called for landlords to cut rents as shopkeepers continued to bring prices down.

Retailers have cut costs in an effort to save jobs and reduce prices," Mr Denihan said.

"Unless landlords face up to their responsibilities and cut rents, more retail employees will join the 30,000 former retailer workers who went on the Live Register in the last year."

Sinn Fein's Arthur Morgan claimed any reductions in the cost of living would be cancelled out by the Finance Bill.

Mr Morgan said the 15pc drop in housing, water, electricity, gas and other fuels will be short-lived as VAT charges are brought in for waste and public parking.

Ulster Bank warned inflation would return to positive but very subdued growth by around the middle of the year.

Chief economist Simon Barry said less aggressive than expected sales in January were a result of the discounts offered in the last few months of last year.

Budget changes also took effect over the New Year and Ulster Bank said lower prices were being charged in hotels and restaurants for drinks but the cost of off-sales spirits increased.

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