Dáil Éireann - Volume 648 - 28 February, 2008
Written Answers. - Economic Competitiveness.
Deputy Kieran O’Donnell Deputy Kieran O’Donnell
Deputy Kieran O’Donnell asked the Minister for Enterprise, Trade and Employment the action he will take to close the 23% price gap between the cost of consumer goods and services here and the rest of the EU, as identified in a recent Forfás report on the single market; and if he will make a statement on the matter. [8491/08]
Deputy Micheál Martin Deputy Micheál Martin
Deputy Micheál Martin: The Forfás report on its “Review of the European Single Market”, which was undertaken at the request of my Department and which was published earlier this month, found that although Irish consumers were enjoying real benefits from the single market in terms of the range of available goods and services, the price of some goods and services were higher in Ireland than in many other member states.
The January 2008 Consumer Price Index published by the Central Statistics Office shows that inflation in Ireland continues to fall and that consumer prices decreased by 0.5% in January with a consequent fall in the annual rate of inflation to 4.3% down from 4.7% in December  2007. In terms of comparisons with other member states, the EU Harmonised Index of Consumer Prices, as recorded in the CSO’s bulletin, shows that the annual rate of inflation decreased from 3.2% in December to 3.1% in January which is 0.1% less than the annual rate for December 2007 for the harmonised index for the EU as a whole.
Notwithstanding these welcome reductions in the rate of inflation, it is a matter of concern that the price of certain goods and services in Ireland remains high. Government action in terms of tackling price inflation is focussed on promoting competition, choice and raising consumer awareness in relation to price and value for money.
In relation to the price of services, the Forfás report, in quoting the findings of previous surveys of Eurostat found that the cost of some services to Irish consumers was considerably higher than the cost of such services to consumers in many other member states of the EU. The Deputy will be aware of the recent adoption of the Directive on Services in the Internal Market (2006/123/EEC) and the fact that member states are obliged to transpose this Directive by December 2009. The free movement of people, goods and services across EU borders, providing greater choice and price competition, is one of the main benefits the EU has to offer its citizens and businesses. In this regard, the Directive is intended to create a genuine single market for commercial services and is a key provision of the Lisbon agenda. It creates a framework to enable service providers, who are mostly SMEs, to become established in another Member State or to provide services to another Member State without being established there, thereby providing consumers throughout the Union, including Irish consumers, with much greater choice in terms of the provision of services.
The transposition of the Directive will facilitate cross-border provision of commercial services. The Directive contains important provisions on administrative co-operation between Member States, provisions which are intended to generate trust and confidence between them as well as giving consumers and service providers the confidence to engage in cross-border transactions. Forfás has estimated that the Directive will benefit the Irish economy to the tune of approximately €300 million per annum, mostly through access to services by Irish consumers at more competitive prices.
I am confident that the initiatives being undertaken by bodies such as the Competition Authority and the National Consumer Agency, the impact of specific legislation such as the Services Directive in terms of greater choice and availability of services together with the vigilance of consumers themselves will have the effect of ensuring that Irish consumers do not pay unnecessarily high prices when purchasing goods and services.
Dáil Éireann 648 Written Answers. Economic Competitiveness.