Higgins criticises 'unrestrained profiteering' in services

The Taoiseach has today rejected a suggestion that the Government has taken no effective action to deal with services inflation in the State.

Mr Ahern was responding to a question in the Dáil from the Socialist Party leader, Mr Joe Higgins, who said a report published yesterday showed price levels in Ireland were 12 per cent above the EU average. This was evidence of "unrestrained profiteering in key parts of the services sector", he said.

This statistic was contained within research carried out by the National Competitiveness Council which noted that a lack of competition in the domestic economy was contributing to inflation in sectors like pubs, pharmacies, retailing and the professions.

This lack of competition was due in part to Government regulations which restricted entry into this sectors, the report claimed.

The Taoiseach told the Dáil he accepted greater competition was required. Speaking specifically about the insurance sector, Mr Ahern said there were a range of legislative measures before the house.

"While you can deal with some of the legislative mechanisms - which we will - we could also do with competition to try and put greater range in the market," he said.

Mr Ahern also pointed out that with a minimum wage that will be €7 per hour from February 2004 (the third highest in the EU) it was "very simple" that in other parts of Europe where the minimum wage was half that prices in the restaurant sector, for example, would be cheaper than Ireland.