Restrictive Practices (Amendment) Bill, 1987 [Seanad]: Second Stage

Minister for Industry and Commerce (Mr. Reynolds)

I move: "That the Bill be now read a Second Time."

I am glad to have the opportunity of bringing this Bill before the House. The Bill is, I believe, an important step in strengthening competition and consumer protection policy.

The primary purpose of the Bill is to streamline the operation and to extend the scope of existing competition and consumer protection legislation. I am introducing this Bill on the basis of a detailed examination of the matter which has been undertaken in my Department. The previous Government undertook to strengthen competition policy through the restructuring of current institutional arrangements and by means of new legislation to amend the Restrictive Practices Act, 1972. The examination which has been carried out included consideration of the overall effectiveness of the work of the Restrictive Practices Commission, the Examiner of Restrictive Practices and the Director of Consumer Affairs in the promotion of greater competition and efficiency in the economy.

In considering the need for new measures in the regulation of competition, it is important to bear in mind the purpose of competition legislation and, indeed, the function which competition itself fulfils in the economy. When operating fairly, competition is a healthy element in the market. It should not be viewed as an aim in itself but rather as an essential means towards the improvement of production so as to encourage an efficient economy and to benefit the consumer. Restrictive practices reduce the choices open to the consumer and can lead to higher prices than might otherwise prevail in an unrestricted market. Also, an informed consumer is a valuable stimulus to industry, requiring producers to remain efficient and in touch with consumers' requirements.

Before moving on to dealing with the contents of the Bill it may be useful to describe briefly the nature of the various institutions at present involved in the implementation of competition and consumer protection policy here in Ireland. Before the enactment of the Restrictive Practices Act of 1972 the functions which are now carried out separately by the Examiner of Restrictive Practices and the Restrictive Practices Commission were discharged by a single body, the Fair Trade Commission. This situation was regarded as unsatisfactory by trade and industry as it was felt that the Fair Trade Commission, in the conduct of inquiries, were both prosecutor and adjudicator and therefore could not be acting impartially in their adjudicating function. In response to these arguments, the 1972 Restrictive Practices Act created the new post of Examiner of Restrictive Practices who was given the investigatory functions under the legislation, with the adjudication aspect being retained by the new Restrictive Practices Commission. The later Mergers, Take-overs and Monopolies (Control) Act of 1978 conferred further functions on the examiner and the commission. Under that Act, the examiner is required to investigate any proposed merger referred to him by the Minister, while the commission carry out inquiries into apparent monopolies, again at the request of the Minister.

In the area of consumer protection, it is the Director of Consumer Affairs who acts as watchdog. The post of director was set up under the Consumer Information Act of 1978, which was the first major piece of consumer protection legislation in this country. Generally, the functions of the director under this Act and under the Sale of Goods and Supply of Services Act, 1980 are to ensure the reliability of information conveyed to the consumer in the advertising, promotion and sale of goods and services.

The posts of Examiner of Restrictive Practices and Director of Consumer Affairs are now occupied by one person. This was, in my view, a necessary first step on the road towards improved efficiency in the areas of competition and consumer protection. The Bill goes further down this road by assigning the examiner's functions under the 1972 Restrictive Practices Act to the retitled Director of Consumer Affairs and Fair Trade and most of the examiner's functions under the 1978 mergers Act to the Restrictive Practices Commission, to be renamed the Fair Trade Commission. This rationalisation, together with a number of provisions in the Bill designed to strengthen the powers of the commission and the director, will result in greater overall efficiency and a reduction in the number of State bodies. This will, I believe, help towards the more coherent and integrated administration of related policy measures.

A second element in the strengthening of competition policy is the extension of the scope of competition legislation to include a number of regulated service sectors such as communications, banking and electricity. These services were generally excluded from the legislation on the basis that they were already subject to the control or direction of another Minister or regulatory body. In recent years, however, the international trend has increasingly been to re-examine the rationale for the exclusion of such "regulated" sectors. In the area of competition policy, in particular, the OECD have urged member countries to review the matter in order to establish whether the original justifications for exemption were still valid. The areas of energy, transport and banking were particularly mentioned in this context.

The Bill also brings within the scope of competition legislation anything done in the exercise of statutory duty. This will ensure that State and semi-State bodies engaged in commercial activities which are in competition with the private sector, will be subject to scrutiny by the competition authorities.

In addition, the exclusion relating to services provided under a contract of employment is being removed from the Restrictive Practices Act of 1972. In view, however, of the responsibility of the Minister for Labour in this area, I am proposing that his consent will be necessary before any regulatory activity in relation to such services can take place under the Restrictive Practices Act.

I am also availing of the opportunity presented by this Bill to remove a significant exclusion from consumer protection legislation. I believe it to be untenable that banking is not subject to the provisions of the Consumer Information Act, 1978. While acknowledging the controls exercised by the Central Bank over the licensed banks in relation to various matters, I believe that the banks should be subject to the same controls as other businesses in relation to advertising. I have, therefore, provided in the Bill that the exemption which the licensed banks enjoy at present will be removed. I will, however, be introducing an amendment on Committee Stage which is designed to ensure that the confidentiality of individual bank accounts will continue to be assured.

In pursuance of the policy of increased efficiency, I am providing in this Bill for the centralising, as far as possible in a single agency, of the enforcement functions contained in a whole range of legislation in the consumer protection area. I am speaking here of enforcement in relation to such areas as food labelling, textile labelling, price display and safety standards for particular products. What I am proposing is that the Director of Consumer Affairs and Fair Trade should be the principal enforcement agency. Enforcement functions, including powers of prosecution, are at present vested in me, as Minister for Industry and Commerce. I have provided in the Bill for the transfer of these functions to the director. The director will assume these functions in addition to his existing functions and I am confident that this arrangement will lead to the more effective enforcement of legislation in the consumer area and hence to better protection for the consumer.

Finally, I am availing of this Bill to effect a number of amendments to consumer legislation which will, I hope, serve to improve the efficiency of the administration of that legislation. For example, this Bill will confer on the Director of Consumer Affairs and Fair Trade the power to seek an injunction against someone who is attempting to evade his obligations under the Sale of Goods and Supply of Services Act, 1980. I am also providing for the creation of a number of specific offences relating in particular to the impersonation of authorised officers and the supply of short weights or measures.

I now want to turn to the content of the Bill and to explain the main provisions in the Bill to the House. Part I of the Bill contains the usual preliminary matters common to all Bills. There is no need to go into detail except, perhaps, on section 3. This section provides for the repeal of the enactments listed in the Second Schedule to the Bill. These repeals are, to a large extent, designed to remove my powers of prosecution under various pieces of consumer legislation. These powers are, as I have already indicated, being transferred to the Director of Consumer Affairs and Fair Trade.

I have explained that the Bill will extend the scope of competition legislation by removing the exemption which relates to certain services. Section 25 of the Restrictive Practices Act and section 52 (1) of the Postal and Telecommunications Services Act, 1983, are being repealed as part of this proposal.

The repeal of section 13 (1), and paragraphs 1, 2, 4 and 5 of the Second Schedule of the Restrictive Practices Act, is consequent on the abolition of the post of Examiner of Restrictive Practices, to which I have already referred. These provisions relate to the appointment of the examiner by the Minister.

Section 16 of the 1972 Act, which is also being repealed, deals with the reporting procedures of the examiner on the basis of investigations carried out by him. These procedures, which will henceforth be carried out by the Director of Consumer Affairs and Fair Trade, are being simplified in the interest of improved efficiency. The new reporting procedure is contained in section 15 of the Bill, which amends section 14 of the 1972 Act.

The repeal of section 2 (2) of the Prices (Amendment) Act, 1972, follows from the abolition of detailed price control which the previous Government decided on in 1986. At present, under section 2 (2), any statutory power to fix or control prices may only be exercised with my consent. With the lapsing of price controls generally, it is appropriate to remove the requirement for this consent and to permit the statutory powers to revert to the Ministers and bodies concerned.

Section 23 of the Consumer Information Act, 1978, is also being repealed. This section is being repealed in order to remove the exemption which licensed banks at present enjoy, thus making them subject to the supervision of the Director of Consumer Affairs and Fair Trade in so far as advertising is concerned.

The final repeal which should be mentioned is that of sections 48 and 49 of the Postal and Telecommunications Services Act, 1983. These sections deal with the appointment, composition and functions of the Postal Services Users' Council and the Telecommunications Users' Council. Their repeal follows the recent Government decision to abolish these two councils. This decision was taken as part of the ongoing review of public expenditure.

Part II contains the major thrust of the Bill providing for amendments to the Restrictive Practices Act, 1972, and the Mergers, Take-overs and Monopolies (Control) Act, 1978. Sections 5 to 7 are concerned with the change of name of the Restrictive Practices Commission to the Fair Trade Commission and the Director of Consumer Affairs to the Director of Consumer Affairs and Fair Trade, and with the transfer of the functions of the Examiner of Restrictive Practices to these agencies. Section 8 is designed to make the procedure for making orders under the 1972 Act more efficient by allowing me, as Minister for Industry and Commerce, to make such orders, subject to consultation with certain interested parties, without having first received a report from the Fair Trade Commission as is required at present. I should point out, of course, that any orders made under this section are subject to confirmation by Act of the Oireachtas, as are all orders made under the 1972 Act.

Section 10 contains the new definition of "service" for the purposes of the 1972 Act. This definition takes account of the removal of the exclusions which I have already outlined to the House.

The purpose of sections 11, 12 and 14 is to strengthen the role of the commission by allowing it to exercise its powers under the Act on its own initiative that is, without the existing requirement to have first received a request to do so from either the examiner or myself. Sections 15 and 17 also strengthen the commission's powers by conferring on the commission power to require information when conducting a study or analysis under section 12 of the Restrictive Practices Act. Considerable powers of investigation are also being given to the authorised officers of the commission under section 17. These powers already apply to authorised officers of the examiner under section 15 of the 1972 Act. As a further measure to strengthen the commission's powers, section 16 of the Bill allows the commission to request the director to carry out an investigation under the 1972 Act. At present, only I, as Minister for Industry and Commerce, can request the examiner to carry out such an investigation.

Sections 18 to 20 are designed to ensure the efficient and effective enforcement of restrictive practices legislation, first by giving the Director of Consumer Affairs and Fair Trade power to seek an injunction to enforce compliance with an order made under the 1972 Act; secondly, by giving the director powers of prosecution under the 1972 Act; thirdly, by extending to 18 months the time during which offences under the 1972 Act may be prosecuted; and, finally, by increasing the fines payable on conviction of an offence to a level which will bring them into line with present-day money values.

Deputies will also be aware of the Bill, currently before the House, which gives effect to the provisions of the Restrictive Practices (Groceries) Order, 1987. This order bans below-cost selling of grocery goods and the payment or receipt of "hello money" and includes intoxicating liquor and own brand goods under the terms of the order for the first time. The effectiveness of this order, which is currently a matter for the examiner of Restrictive Practices, will be greatly improved by a number of the provisions of this Restrictive Practices (Amendment) Bill. The penalties for offences under restrictive practices orders are being substantially increased, the amalgamation of the Offices of Examiner of Restrictive Practices and Director of Consumer Affairs will result in a larger field staff at the disposal of the new Director of Consumer Affairs and Fair Trade and, finally, the director will have power to seek an injunction, where necessary, to enforce compliance with the terms of the order.

The amendments to the Mergers, Take-overs and Monopolies (Control) Act, 1978 are contained in sections 22 to 24 of the Bill. Section 22 provides the new definition of "service" for the purposes of the 1978 Act. This definition takes into account the broadening of the scope of the Monopolies and Mergers Act to include communications, transport and electricity. Sections 23 and 24 are designed to improve the efficiency of the administration of the legislation. Section 23, for example, permits the Fair Trade Commission to delegate one or more of its members to carry out a particular investigation into a proposed merger. This type of investigation is at present one of the examiner's functions but is being transferred to the commission under section 7 of the Bill. Section 24 of the Bill gives to the director power, first, to seek an injunction to force compliance with an order under the 1978 Act and, secondly, to prosecute for summary offences under the Act.

Parts III and IV of the Bill are, for the most part, designed to effect the establishment of the director as the principal enforcement agency in the consumer protection area. Sections 25 to 27 confer on the directors powers of prosecution under the Prices Acts and makes some consequential provisions in relation to authorised officers under those Acts. I should like to emphasise once again that although detailed price control has been abolished all the powers under the Prices Acts available to me as Minister are being retained. I have, in fact, used these powers recently to effect substantial reductions in the price of petrol and I will not hesitate to use these powers again in this and other areas if the need arises.

Sections 28 to 37 contain the major amendments in the consumer protection area, and I would like to deal with these, if I may, in some detail. The main purpose of section 28 is to confer on the Director of Consumer Affairs and Fair Trade the powers necessary to enable him to carry out his functions efficiently. For instance, the provisions of the Consumer Information Act, 1978, in relation to authorised officers are being amended to take account of a recent Supreme Court decision affecting authorisations. The section also removes local authorities' powers of prosecution under the Consumer Information Act and the Merchandise Marks Acts. This is in line with the policy of having, as far as possible, a single enforcement agency. However, the powers of the Minister under the Consumer Information Act are being retained as there may be circumstances in which use of such powers by me may be necessary in the public interest.

Section 30 confers on the director power to seek a High Court order to ensure the observance of the obligations imposed under the Sale of Goods and Supply of Services Act, 1980, and the Sale of Goods Act, 1893. Section 33 confers prosecution powers on the director in relation to a wide range of consumer protection legislation. The full list of the legislation in question is in the First Schedule to the Bill and, as I have already mentioned, concerns matters such as food labelling, textile labelling and product safety. This legislation is at present enforced by myself, as Minister for Industry and Commerce, but these powers of prosecution are now being transferred to the director. Sections 34 and 35 further strengthen the enforcement function by, first of all, prohibiting the disclosure of information obtained in the course of an investigation and, secondly, providing for the creation of a specific offence for the impersonation of an authorised officer under any competition or consumer protection legislation. The offences created under sections 34 and 35 will be prosecuted by the Director of Public Prosecutions.

I should like now to deal briefly with just a few of the remaining sections of the Bill. Section 29 amends section 40 of the Sale of Goods and Supply of Services Act, and has the effect of bringing electricity services within the scope of the Act. This amendment is in keeping with the overall policy of bringing regulated services within the scope of competition and consumer protection legislation.

Section 36 provides for a pension scheme for the holder of the office of Director of Consumer Affairs and Fair Trade. This scheme will be subject to the approval of the Minister for Finance and must also be approved by both Houses of the Oireachtas. Section 37 introduces a new offence in the consumer protection area which will form part of the weights and measures legislative code. The section prohibits the sale to the public of short weights or measures. It is an important provision in the context of consumer protection. Prosecutions for an offence under this section will be brought by the weights and measures inspectors. Finally, section 38 is a straightforward section the purpose of which is to provide that judicial notice should be taken by all courts of the signature of the director or a member of the commission. Under the existing legislation, it is necessary for the relevant officer to attend in court to prove his signature.

I hope that the House has found this explanation of the Bill of use. I will be happy to answer points on which further clarification is needed. I recommend that the Bill be read a Second Time.

Mr. J. Bruton

The Minister can say it is for other people to figure out that sort of thing, that he does not have to explain it, that he is after all the Minister and that it is somebody else's problem. It is not someone else's problem. It is his problem and responsibility to explain any changes he makes to legislation here in this House and he has not done so on Second Stage of this debate.

Mr. Reynolds

I tried to help the Deputy to stop making a fool of himself, but if he does not want to listen, that is OK.

Mr. J. Bruton

The Minister has failed to explain changes which he introduced and he hopes, perhaps, to avoid a debate on the subject. He will not.

I am particularly concerned at the poor record over the years in enforcing orders made under the Restrictive Practices legislation. I want to know what improvements in regard to enforcement the Minister envisages as a result of this legislation. I should like to remind the House of a number of orders made under this legislation in the past. We had the Restrictive Practices (Groceries) Order, 1973, under which there was one prosecution. A second order of the same type was also made in 1973 which did not result in any prosecutions. Similarly there were no prosecutions under the Restrictive Practices (Motor Spirit) Orders of 1975 and 1978. The Restrictive Practices (Groceries) (Amendment) Order, No. 2, 1978, led to no prosecutions. There were no prosecutions under the Restrictive Practices (Motor Spirit) Orders of 1979 and 1980. A second order of the same kind in 1980 still resulted in no prosecutions. The Restrictive Practices (Groceries) Order, 1981 led to 11 prosecutions — I concede that. The Restrictive Practices (Motor Spirit and Motor Vehicle Lubricating Oil) Order, 1981 resulted in no prosecutions. It is not surprising that there have been no prosecutions following the Restrictive Practices (Groceries) Order, 1987.

Of the 12 orders made under Restrictive Practices legislation there have been prosecutions in respect of only three. The rest have not been the subject of any prosecution. I do not believe that our people are so law-abiding that every one of these orders was in all cases entirely abided by, yet there have been no prosecutions. Certainly no one can say that enough time is not taken in drafting the legislation to make sure it is capable of being the subject of prosecution. The procedure by which such orders are drafted is immensely cumbersome. There has to be an inquiry and a report before an order is prepared. The order must be approved by the Minister and then by the House. Yet after all that trouble in making these orders, the prosecution record has been extremely poor.

It is also worth noting that of the 12 orders made only three are still in force. One must ask what was wrong with the original attempt to deal with the problem that the vast majority of the orders had to be dropped. Was it that the problem was solved? I know that in virtually all cases it was not. I am referring only to orders made since 1972. There were earlier orders which had an equally dismal record. It would appear that the orders were not competently drafted in the first place. We have an example of that in other legislation currently before the House in regard to below cost selling where there are some quite incredible definitions, relating for instance to seasonal goods. One must ask whether competition policy is really working. We have a very cumbersome procedure for making orders, but having made them we cannot or do not prosecute under them. In many cases the orders have to be dropped because they appear to be unworkable. I am sure there are explanations and more than one Government has been involved in this problem. I am not directing my criticism at the present Minister; it is a criticism applicable to all of us.

One of our besetting sins is that we have a tremendous ability to make new rules and laws and to announce these new rules and laws on numerous occasions with photo opportunities and the like, but when it comes to enforcing them our record is worse than dismal. The record of the number of prosecutions under this legislation and the fact that so many of the orders had to be dropped speaks for itself. We also have another order under this legislation concerned with banning below cost advertising. That order has proved to be unenforceable. The prosecutions failed on some form of technicality before one of the superior courts. I want to know if all the defects in the law which prevented the prosecutions being successful where there was a genuine case or defects which prevented prosecutions brought at all are now being remedied. Could we have an explanation as to why in respect of all but three of the orders made since 1972 no prosecutions have been taken?

I would argue that this Bill is welcome. I can claim to have been responsible for having got this Bill up and running, but I recognise that in itself it is not a full adequate response to the problem of competition policy in this country. It is a step forward certainly, and a good step forward, but it is not enough and we must not rest on our laurels. I would ask the Minister if he would consider an alternative approach. Under the 1972 Act, if a practice is decided to be either unfair or in restraint of trade, there can be an investigation into it. After that investigation a report is made and then an order is made banning that particular practice. But that investigative process takes up to two or three years, and meanwhile the consumer is potentially being ripped off. This process means essentially that no law is made without prior investigation and any law made is specifically in respect of a particular complaint and a particular practice. The fact that analogous practices are going on in other sectors of the economy does not matter. It is only the sector which is investigated that is affected by any ban on a practice that is unsatisfactory.

It would make more sense to see if certain types of activity should be made illegal ab initio, either in the sense that the Minister or the examiner would prosecute if people broke the law, or, and this might be less expensive, anybody adversely affected by a particular practice which is determined to be against the law could take a civil action for damages. Therefore, rather than introduce new general norms of competition policy into criminal law, we could introduce them into the civil law.

We should consider doing what they have done in Greece. They have taken the competition policy provisions of the Treaty of Rome — Articles 85 to 90 — and said that these competition policy rules of the Treaty of Rome shall apply in Greece, directly in Greek law, not solely in respect of trade between Greece and other countries, which is the province of the Commission, but in respect of trade between citizens of Greece, which is the province of the Greek Government. If you like, they have bought off the shelf a readymade system of law, and a system of precedents as determined by the European Court as to what is fair and unfair practice and that is applied directly domestically in Greece. For example, the sort of things that are banned outright in Community law would include the direct or indirect fixing of purchasing or selling prices, limitations or control on productions, marketing technical development or investment, sharing of markets or sources of supply, applying similar conditions to equivalent transactions with other trading parties never placing them at a competitive disadvantage, making the conclusion of contracts subject to acceptance by other parties or supplementary obligations which by their nature and current commercial usage have no connection with the subject of such contracts, and any agreements or decisions prohibited pursuant to that article shall be automatically void. Therefore any contract introduced which is anti-competitive is knocked out under the provisions of the legislation. That would be a much more effective way of dealing with our competition policy.

I have discussed this matter in recent times with the Commissioner responsible for competition policy, Commissioner Peter Sutherland. He indicated that from his point of view he would welcome the introduction of general bans on anti-competitive practices along the lines of what has been done in Greece, in other words, introducing into domestic Irish law the provisions of the rules in the Treaty of Rome banning competition.

This would be good for business because Irish firms engaged in practices here which were legal would know that they could engage in the same practices in trade with Northern Ireland because the same rules would apply to international trade as apply to domestic trade. At present one set of rules apply to what a person may do when he is supplying a service across a national boundary, say from Leitrim into Fermanagh, and another set of rules apply when he is supplying the same service from Leitrim into Cavan. If he is supplying the service from Leitrim to Fermanagh he is bound by EC rules on competition, in other words, by Article 85 and subsequent Articles of the Treaty, but if he is providing these services from Leitrim into Cavan, he is bound by this Bill which essentially does not give him much guidance because there will be no prohibition unless and until the investigation of a particular practice is introduced. That is wasteful and is not helpful to business.

It might make a lot of sense if, rather than approaching the matter from the point of view of building incrementally on our existing legislation and tightening it up as we are doing, we should look at a more radical approach of introducing bans on practices which would prevent them ever starting as against the present situation where a bad practice has to be in existence for some time, then investigated and an order made before it is banned.

I will concede the Minister the point I am sure he wants to make that this is a radical idea and that if I approved of it why did I not do it when I had the opportunity. The fact is that the discussions I had with Commissioner Sutherland which drew this approach to my attention occurred rather late in the period of office of our Government and this legislation was already on the stocks. While I did ask the Department, if I recollect correctly, to look at the general question of banning certain practices outright rather than this cumbersome investigative procedure, I did not get to the point of being able to do anything substantive about it.

I feel this is the next stage in the development of competition policy in Ireland and it would be a much better way of dealing with the problem than the one we are using in this Bill. I urge the Minister to investigate this as a matter of urgency. There is a particular problem in regard to this legislation regarding imports. There is a danger that some of the orders made under this legislation may have the effect of encouraging imports, a difficulty which would not exist if we adopted the approach I was suggesting of incorporating the provisions of the Treaty into domestic law because the same provisions would apply to imports as well as to goods supplied from within the State.

I should like to explain this by reference to another debate progressing in the House without getting involved in that debate. Under the below-cost selling provisions we have a requirement in regard to invoices that one may not sell below a certain published invoiced price. That is fine if both the supplier and the receiver of the goods are within the jurisdiction but if the supplier is from outside the jurisdiction he can manipulate his invoice prices and the examiner has no way of investigating whether they are genuine. Equally, a supplier who has stores or manufacturing facilities in this jurisdiction and in Northern Ireland or a retailer who has stores here and in Northern Ireland has the possibility of manipulating prices internally so as to show almost any price he likes. Those people can supply goods to Northern Ireland and transport them back here. Unless somebody is employed to follow the trucks it will not be possible to know what the prices are. That provision cannot be enforced.

What will happen in respect of the ban on below-cost selling is that it will be much easier for people to buy imported goods because there will not be any of those controls, the examiner will not be able to check on whether the prices are genuine or not or whether there are two sets of invoices. That will lead to a diversion of trade from domestic suppliers to importers. That is an illustration of the possible area of danger that can exist in legislation like this. This type of national approach to the elimination of restrictive practices was fine when there was relatively little trade but now not only can goods be supplied across boundaries but, increasingly, services are being supplied across boundaries. Having one strict régime applying in the Republic is of very little use if a much more lax régime applies in Northern Ireland or the United Kingdom. People will divert activity to the part of the Community where the restrictions, reporting requirements or whatever mechanisms of enforcement are used are less onerous.

Any attempt to enforce competition policy more rigorously could lead to a diversion of trade out of the State. That is something I am most concerned about. I should like to raise a query about an amendment to the Bill passed by the Seanad. In the Bill as initiated section 10 reads:

Section 4 of the Principal Act is hereby amended by the insertion in subsection (1) after "may" of "on their own initiative or", and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

(1) The Commission may, on their own initiative or on the recommendation of the Examiner or at the request of an association representing persons engaged either in the supply and distribution of goods or in the provision of services, prepare and publish rules representing, in the opinion of the Commission, fair practice conditions with regard to the supply and distribution of such goods or the provision of such service.

Only one person can be in charge. My main concern is that there should be no dilution of the scope of competition policy legislation. In other words, banking and local government services should be included. Amendments introduced in the Seanad should not have the effect of excluding them from all the powers that are applied to others. In the medium and long term, rather than proceeding with the present cumbersome procedure dealing with unfair competition, which involves the practice growing up, the practice being investigated, orders being recommended, orders being made and the practice being banned in a particular sector, we should go for a more general statement of what shall be illegal, either under civil or criminal law, in the area of competition using the Treaty of Rome as the basis.

I recommend that as part of a review of competition policy legislation which, hopefully, will take place soon, that a more general approach be adopted. If that happened — and this is a point I did not make before — a lot of the staff time taken up at present conducting inquiries and investigations could be devoted to prosecution. There would be no need to carry out these inquiries anymore. The law could be established by the incorporation of the Treaty in domestic law. All efforts could be devoted to enforcing the law and officials would not have to engage in the rigmarole of investigations, which are so time-consuming. I am aware that the Restrictive Practices Commission have to conduct hearings which are almost as laborious as court hearings and to which they invite people, some of whom are legally represented, and all sorts of obstruction is engaged in by those who do not want certain practices to be banned. The report to be published has to take its place in the queue in the Government printing office because it cannot be brought into effect until it is published. All that sort of delay would be swept away if the provisions of the Treaty of Rome were incorporated in Irish law in relation to unfair competition. All those resources could be devoted to going after people who break the law. Indeed, to a great extent, it would not fall on the Minister to enforce this law because the commission would enforce it if there was any involvement of trade and people who are adversely affected would take civil action against those who were adversely affecting them, seeking damages for particular practices. It would only be in the case where civil remedies had failed that the Minister or the enforcement authorities would be involved in taking prosecutions. That would be a better way of dealing with the problem in the long term and I urge the Minister to look seriously at it.

Mr. Keating

I am pleased to have the opportunity of making some observations on the Bill. First, I should like to comment on the aspect of the Bill which I believe to be deficient. The Minister said that the primary purpose of the Bill is to streamline the operation and to extend the scope of consumer protection legislation and existing competition legislation. I should also like to make some observations in regard to the general approach underlying the Bill and comment on specific aspects without going into too much detail which can be reserved for Committee Stage.

When I had some time on my hands I took the liberty of reading the Minister's speech to the Seanad which is identical to that which he made this morning, with the exception of a few paragraphs. I do not know whether that is normal, it must be very boring for the Minister to have to read the same speech twice. Perhaps it is a new public expenditure cost saving device but I was certainly struck by the fact that not just the sense but the wording of the speech is identical.

Mr. Yates

It is proof of the single mindedness of the Government.

Mr. Keating

It is not so much single mindedness, it is more a semantic problem.

Mr. Reynolds

I thought the people who worked on it for so long would understand it.

Mr. Keating

The Minister said in the Seanad that the Bill removes the exclusions from the Restrictive Practices Act, 1972, and the Mergers, Take-overs and Monopolies (Control) Act, 1978 in the areas of communications, banking and electricity. Therefore, some confusion is not unreasonable and there is a point to be answered. The Bill appears to be tinkering with the problem to a large extent. I know it is not possible to deal with all aspects of consumer legislation in one Bill but if its primary purpose is to streamline consumer legislation, it is reasonable to say what those priorites should be.

One must come back to the basic point that there is obvious evidence of fairly massive consumer exploitation, particularly in relation to exorbitant pricing and profiteering. It is clear, taking all things into account, that the Irish food basket is the most expensive in Europe and that much of this is not justified. It is due to greed and inadequate consumer protection, which is not helped by the Bill, and exorbitant profits at a number of levels. For example, there is evidence from a variety of sources to show that the Irish housewife pays an average of £6 more per week than she should be paying for basic foodstuffs. There are also serious problems relating to standards in terms of quality, cleanliness and inadequate labelling. Some imported foodstuffs, treated with radiation for the purpose of prolonging shelf life, are freely sold without any labelling or qualification and without any scientific evidence being available as to whether detrimental effects could arise from such artificial prolongation of their natural life.

As the Minister also indicated, when he referred to the scrapping of price control, it is now very clear that scrapping it and surveillance machinery was a serious mistake. Such monitoring by the State, which is the ultimate — the last guarantor — acting on behalf of the public, must be reintroduced. Very severe sanctions should be imposed on those abusing the system. Many foodstuffs are sold with inadequate labelling or none. Many labels contain generalities using such words as "colouring", "permitted preservatives" and so on. Generalisations should be outlawed and regular random checking of the accuracy of labels and prices should be undertaken with severe penalties for abusers. This is not so much a matter for business ethics as a fundamental matter of public health and I am not convinced that this legislation will do anything in those respects. All irradiated food, which many people believe incurs nutritional deficiencies, should be clearly labelled so that the consumer can choose that food or something else.

All Acts governing public services, such as An Post, Telecom Éireann, the ESB, communal television, publicly funded education and so on should be reformed to give consumers the same rights in relation to these as obtained in the case of most private services. The State and semi-State sector should account for themselves following the same criteria which applies to other services. The Minister should introduce consumer legislation to ensure a right of access to personal files in public agencies such as hospitals and credit assessment bodies with the right to have corrections made where needed. It is preposterous that a citizen does not have an automatic right to medical records of their immediate next of kin, for example, and that in some cases they have had to have recourse to law to obtain death certificates and medical data. That is an area of funadmental consumer priority.

Severe sanctions should be introduced for non-compliance with enforcement of price display orders but it seems that surveillance in that respect is more honoured in the breach than in the observance. That whole area has simply been dismantled. Tough legislation regularising the growth of monopoly firms, including suppliers, middle men, supermarkets, distributors and so on should be introduced providing for such bodies, if necessary, to divest themselves of outlets or subsidiaries rather than tinkering with trading conditions on the ground that they are costly to implement, bureaucratic and ineffective. Much of our approach to legislation is precisely that, it is micro management, dealing with the symptoms rather than the root causes. It will not succeed because it would need an army of civil servants, inspectors and people in the field to police these regulations, particularly when most of them are backed up by fines and penalties which are woefully inadequate and which are derisory in the context of the profits made by some of the people abusing the present system.

Rigorous analysis of price variances should be reintroduced by the Department. The prices of goods and services, where overcharging is suspected, should be published. The names of stores who abuse the law or regulations should also be published and severe action taken in the consumer interest. The Minister should introduce a small claims court to give cheap, informal and rapid decisions on small claims. That would be extremely relevant and of interest to consumers who are increasingly uninterested in reporting or complaining, simply because they no longer believe that there is adequate recourse for them. In short, the Bill is merely tinkering with existing legislation rather than making fundamental changes or proposing serious innovations. I do not believe that it makes a significant contribution towards dealing with the fundamental problems of consumer exploitation which is rampant and in respect of which we should be particularly concerned.

The Bill tries to tidy up aspects of the present arrangements for dealing with the consumer interest in general. Unfortunately, those arrangements, well intentioned as they are and hard working as the people behind them are, are inadequate because there is overriding evidence that at every level the consumer is being exploited. I and my colleagues will produce our own consumer charter proposing legislation which we hope will help, and which will be based on extremely severe sanctions which we hope will be pre-emptive in terms of clearly demonstrating to anyone concerned that crime in this area will not pay. This will apply whether it relates to abuse of standards of quality affecting public health or whether in relation to extracting exorbitant profits from a public already suffering from economic burdens including taxation.

It is unfortunate that the Bill misses much of those points. It might be said that that is not the purpose of the Bill. If this House is to deal with priorities and if the purpose of the Bill is, as the Minister said, to deal in a particular way with aspects of consumer legislation, it misses the target. Our basic approach to this issue would be what is called the prohibition approach, the underlying principle being that in normal circumstances economic efficiency is promoted through the promotion of competition, that any significant interference with that competition may be contrary to the public interest and that in that context certain practices will be prohibited absolutely or might be subject to an overall prohibition with the possibility of exemption in the context of specific applications. General principles will be laid down that certain things will be unacceptable but a business or an organisation could apply for exemption.

This Bill is an approach which attempts to control abuses. It tries to spot trouble points on the consumer landscape and deal with them by regulation. That approach has failed. It is not the approach favoured throughout Europe. Throughout Europe norms are set in place which by definition protect the public. Any deviation from those norms is automatically seen as a breach of the law unless an exemption has been obtained. Such a prohibition approach is what we recommend, rather than the nit picking micromanagement which goes on in terms of regulation by Government and which this Bill epitomises in many respects. The control of abuse system is cumbersome and slow and sometimes unfairly discriminatory. It will respond where a complaint is made but it will not deal with a bigger abuse about which no one complains. That approach lacks legal certainty and is less effective in its enforcement. The general prohibition system is more effective in preventing the restrictions on competition and it is more efficient and fairer. It also has the advantage of greater clarity in the assessment criteria and a greater degree of legal certainty. Prohibition, with the possibility of exemptions, can be used positively to stimulate competition and to encourage co-operation between small and medium sized firms. This latter, in the European context would include most Irish firms, especially, in the development of export market activities.

Four founder members of the EC have long had this kind of prohibition type of legislation which I am recommending to the House, Germany, France, Luxembourg and The Netherlands. Prior to accession, the three newest member states, Greece, Spain and Portugal introduced competition laws along the lines of Community law. At the end of 1986 French competition law was amended to reflect more closely Articles 85 and 86 of the Treaty which are the underpinning Articles of this philosophy. Adoption of this approach is now being strongly urged in the UK. We urge the Minister to adopt the principle that Irish competition law should be based on prohibition with the possibility of exemptions, and that that prohibition should apply to agreements and concerted practices and to the abuse of a dominant position and should be supervised by a competition or a fair trades commission so that the positive aspects can be emphasised. It is not possible in the light of our experience of the woefully inadequate implementation of regulations or the clear examples of abuse throughout the system, for Bills of this nature, based on a control of abuse system using Government regulations and civil servants to protect the consumer, to work. Such legislation has not worked as can be ascertained from a glance at any of the reports of the Director of Consumer Affairs of the Fair Trades Commission or of the Restrictive Practices Commission.

We need a more fundamental approach which lays down basic rules, for example, to the effect that certain types of practices are unacceptable, or that there cannot be a concentration of ownership in relation to multiple chain stores more than X percentage. We should not work on the basis of complaints from frustrated consumers. That has not worked and the people in Europe involved in this area of industry and commerce have told us that. We need a fundamentally different approach. We should not tinker around with the Restrictive Practices (Amendment) Bill, 1987. We need a different outlook on how to protect the consumer, setting broad standards, laying down the law and indicating that those who abuse the law will pay severely for it. Anyone who breaks the law by putting public health at risk or by using inadequate labelling or by mislabelling is a criminal and should be treated as such. Anybody who systematically steals from the consumers is a criminal and should be treated as such.

The fines we have are derisory. We have a very weird idea as to what are appropriate responses in these cases. I recently had a constitutent who was sentenced to six months in jail for stealing 200 cigarettes and on the same day somebody got out of court having allegedly robbed from the taxpayer something like £200,000. If we are to depend on individual consumers to complain before we have investigations and inquiries — and I am allowing for the fact that the system set up by the Minister can initiate certain complaints — what will happen is that we will only nibble at the edges of this problem instead of having a centralised attack on the key issues at its heart. The people exploiting consumers must know that we are serious about this and they should be able to see in place the kind of laws and norms which are now becoming standard throughout Europe. That is what I and my party are asking for.

A number of practices which would adversely affect competition would in these circumstances be prohibited, for example, price fixing and withholding of supplies, practices referred to in the most recent report of the Director of Consumer Affairs, market sharing, entry limitations, and collusive tendering. All of those facets of business which arise from either a dominant position in the market or from the safe knowledge that by the time the Department catch up with the abusers, it would nevertheless have been a good investment, will be eliminated. It is pitiful to meet people who have been abused and who in truth have no redress because the kind of redress they get is far too little and far too late. There should be a notification requirement for restrictive agreements, for example, and a complaints procedure.

There should be a notification requiretions, for general and individual agreements. I do not suggest that there are not a lot of cases where the norms laid down will be unfair in specific instances, but the onus should be put on those areas of trade to apply for such exemptions. Either the Minister or the appropriate body should grant such applications if they are warranted, but not in the way it presently operates. Coverage should be extended to sectors currently exempted, for example, to energy, transport and banking, about which there has been some talk this morning. Mergers, since they require individual assessment, would be treated more by way of a control of abuse approach. There should be provisions for price control in the event of the malfunctioning of competition in certain markets. That is our broad philosophy in that respect.

I do not know if it is my place to say this, but I have just been informed that the dentist who was kidnapped has been released. I am sure I am not out of order in saying that all of us in this House extend our heartfelt and sincere congratulations to the Garda for their excellent work in the past number of weeks. We also extend our heartfelt best wishes to——

Acting Chairman (Mr. Leonard)

Perhaps the Deputy will confine his remarks to that.

Mr. Keating

I do not intend to go on but it is right that we express, on behalf of everyone in this House, our solidarity and best wishes to Mr. O'Grady and to his family who have suffered an incredible trauma. We express our unanimous pleasure at this very happy outcome. I have no doubt that in due course the Minister for Justice will wish to make a statement on the matter in this House. To the Garda and to the O'Grady family we extend our sincerest congratulations and good wishes.

With regard to the Bill before the House, it is perfectly clear that some measure of improvement was necessary. The Restrictive Practices Act, 1972, has not worked well. Very few inquiries were made, the prosecution of breaches of the orders was disappointing and the relations between the examiner and the commission, and sometimes perhaps even the Minister, were strained. It was simply inadequate. Under that Act the powers and the functions of the Fair Trade Commission were divided between the Examiner of Restrictive Practices and the Restrictive Practices Commission.

Under the Mergers, Take-overs and Monopolies (Control) Act, 1978, mergers above a certain size should have been notified to the Minister who might allow them. However, under that Act there were very few referrals to the examiner and there was no prohibition of a merger, although admittedly the existence of those procedures may have discouraged some undesirable mergers. There have been no referrals to the commission under monopoly provisions. One might say that perhaps they were pre-emptive and discouraged abuses but it is perfectly clear that on the economic horizon there are dominant conglomerate ownerships which are not in the public interest. It is only right and fair to ask if the legislation worked why was it not more usefully exercised?

Under this Bill, the Restrictive Practices Commission are to be retitled the Fair Trade Commission and the post of Examiner and Director of Consumer Affairs is to be merged to create a Director of Consumer Affairs and Fair Trade. The scope of the legislation has been extended, with certain services which were previously exempt now covered, for example, banking, electricity, road transport, air transport and shipping and harbour authority services. However, there is a doubt about the banking provision and I would appreciate if the Minister would clarify that matter. It now appears to be included in the legislation.

I am concerned by one point which the Minister made this morning. Deputy Bruton raised the matter of the status of the banks in terms of this Bill and the Minister said that section 23 is being repealed in order to remove the exemption which licensed banks at present enjoy, thus making them subject to the supervision of the Director of Consumers Affairs and Fair Trade in so far as advertising is concerned. It is the policy of my party, and that policy has been increasingly pressed upon us in recent times by the activities of the banks, that the banks in particular should be amenable to standards and criteria which are the norm throughout the economy. They should not be in any sheltered position and should be open to be investigated not just in relation to their advertising standards but in all of their practices whether they be restrictive practices, the practices of usury, the practices of setting up subsidiary bodies, which now have the same impact on people's socio-economic standards as hire purchase companies had when the banks reviled them, or any other area of their activities. There should be disclosure not of personal accounts but of general trading patterns in relation to the banks.

If that was the norm I have no doubt that we would not have had the spectacle some months ago of the banks being publicly associated with the extension to creditors of the H. Williams chain of assurances that everything was all right when it was clear to everyone in the business that not only was everything not all right but was on the point of collapse. I want the Minister to clarify in the House, without equivocation or qualification, whether the banks are involved in this legislation on the same basis as every other service to which the legislation extends. That is the key issue in that respect.

I note that services provided under a contract of service were brought within the scope of the 1972 Act but not the 1978 Act. While local authority services are outside the scope of both of these Acts, the saver for anything done in the exercise of statutory duty is dropped from the 1972 Act.

The powers of the commission are being extended. They may initiate inquiries except in the case of a monopoly. They may request the director to undertake an investigation. They, instead of the director, may investigate mergers. They are given powers to obtain information under a study outlined in section 12 and they are given power to appoint authorised officers. I am interested in obtaining some elaboration on this. I want to know whether the director and the commission can initiate these inquiries of their own accord or do they have to be prompted in some way? For example, will there be any response by them to prompting from, say, individual Members of this House or members of the public? In other words, are there criteria which might hedge or inhibit them from pursuing inquiries which they would wish to pursue or are they unfettered and unlimited both in terms of self-initiated inquiries and inquiries suggested by the public?

The director is given power to prosecute offences and I am pleased with that. The Minister is given the power to make an order without a prior inquiry, but after possible consultation with the commission, the director and other Ministers. That is a step in the right direction. We feel that the EC law is directly applicable in Ireland and is perhaps particularly appropriate here because of our relatively vulnerable and isolated market position. The EC law co-exists with the fundamentally different Irish competition law. It is based on the prohibition principle which I spoke about, whereas the Irish law is based upon the control of abuse principle. I want to see a quantum movement, a shift, in the direction of the EC norm rather than the control of abuse principle which we have tried to operate here. Articles 85 and 86 are obviously the foundation stone on which that approach is based and countries have already taken major steps in that respect.

I note that in spite of statements in the industrial policy document, the White Paper of the previous Government, in the document, Building on Reality and certain observations made in the Fianna Fáil election document, Programme for National Recovery, the post of Examiner of Restrictive Practices, regarded as an unnecessary quango-type additional layer of bureaucracy, is not being abolished. Instead, the new relationship between the commission and the director could be even worse than the old strained and unsatisfactory relationship. While the commission can initiate inquiries under the proposals, the director can also require the commission to hold an inquiry as before. At the same time, the commission can require the director to undertake an investigation. The director seems to be at the same time both the master and the servant of the commission and the converse is also true, both having considerable autonomy. This seems to be asking for trouble. It is putting these officers in very difficult positions and it is also a questionable use of resources particularly when there are limited resources available to both bodies.

There seems to be little or nothing in the proposal to replace the National Prices Commission and the prices division that will ensure effective price control and price surveillance. I am not interested in who dismantled these or why. I am simply saying that it was a mistake. The consumer has to resort to Government as being the ultimate guarantor. There is now effectively no way of complaining because there is no one who can handle those complaints.

If one looks at the documents produced, for example, the Director of Consumer Affairs annual report for 1985, one will see that out of the whole of this country and out of all the activities, commercial and otherwise, the director summarises activities that year as follows: 540 complaints were received relating to allegedly false or misleading descriptions; prosecutions were taken in 11 cases resulting in a conviction on at least one count in nine of those cases; there were over 14,000 complaints and inquiries about unsatisfactory goods and services received, mainly by telephone, during that year. The director goes on to say how they were dealt with. It is obviously, to any thinking person, a vast understatement of the size and scale of the problem to suggest that that was the net problem. It clearly was not. It is no wonder that people have virtually given up complaining and now accept the rip-off factor which is highlighted, day in and day out, often in popular radio programmes such as the "Gay Byrne Hour" which has been doing this for years and doing it accurately and well. The frustrations of the ordinary citizens are vented on such programmes because they cannot be ventilated or pursued in any other way.

A major omission from this Bill is a mechanism for effective price control or price surveillance to replace institutions which may have had problems but at least were there and did some work in that respect. The emphasis is on producing competitive markets to do the job instead. Even if this is achieved, which is far from certain, it will be difficult and will take a very long time. Whatever about the abolition of the National Prices Commission, experience has demonstrated that the scrapping of price control and surveillance machinery was completely mistaken, badly mistimed and should be redressed.

I note as well that in relation to European practice it is perfectly clear that this country lags behind in a number of respects. The bulletin of the European Community, supplement 6 of 86, entitled A New Impetus for Consumer Protection Policy says that the first impetus for consumer protection policy was given by heads of State and Government in October 1972 and deals with the main thrust of that particular policy which was essentially the protection of the consumer against health and safety risks, the protection of consumers' economic interests, the improvement of the consumers' legal position, improvement of consumer education and information and appropriate consultation and representation of consumers in the taking of decisions affecting their interests. It is fair to say — and I am sad to say — that under each of those five headings this country has to be close to the bottom of the international league whether it is the protection of consumer health, economic interests, legal position, consumer education which is nonexistent, or appropriate consultation and representation of consumers in the taking of decisions affecting their interests. In that latter context we have one voluntary organisation, the Consumers' Association, which has to exist from hand to mouth. Would it not be an idea to channel towards them some of the savings now being garnered from this move to assist them in their work?

Under the key points of policy which apply and are pursued throughout Europe, there is no achievable demonstrable progress here. The bulletin I referred to gave four reasons for that. The first adverse influence was the economic recession; another break in the development of community legislation was the view that matters of issue in this area are the business of individual Governments, not of the community; the third issue was the question of unanimity required for the approximation of laws and an example was given of one particular country blocking a proposal to deal with doorstep selling for over a year while the fourth limiting factor was the practice of proposals prescribing rules for a restricted range of goods and ingredients. There are reasons why everything cannot be done at once. But a look at any of the other European countries will tell us how we should proceed in this respect. To date we have fallen very far behind.

What I and my colleagues in the Progressive Democrats want to do is to put consumer legislation and protection back at the centre of the agenda and not as a peripheral area of industry and commerce. It is our view that the two should perhaps be separated. The interests of pursuing industrial activity and economic development may very well be, in many cases, at their heart, the antithesis of that which should be the case in relation to consumer legislation, because industrial policy will often concern itself with output, with growth, with employment, with economic activity without regard or reference to rights of individuals. But the interests of the consumer is a person centred, careful qualitative area of concern. I wonder whether it is appropriate that consumer legislation should fall at all within the remit of the Department of Industry and Commerce. I and my colleagues have a doubt about that because we see that the same Minister, who may very well be harried and harassed in terms of trying to get industry into Ireland or industry in Ireland up and going, will at the same time be told that in some cases that proposal may very well act against the interests of the consumer. To some extent therefore there is a conflict of interests at the heart of that juxtaposition and it should be reconsidered.

In section 3 we note the removal of some exempted services, and that may be desirable. Banking is still excluded however from the mergers and monopolies provisions of the Bill. That is challengeable. I am convinced that is what Deputy Bruton was talking about this morning. I do not know why there should be this exclusion. If there is any area that is more open to abuse based on a monopolitic position in the marketplace surely it is the banking area underpinning all economic activity. Perhaps there is some other way of dealing with it. Perhaps the Minister has something else in mind, but he should tell us. I do not see a reason for excluding from mergers and monopolies provisions, and the law governing those provisions, the areas of banking and the Trustee Savings Banks simply because of their pivotal role in the economy. I am not satisfied to be told that the Central Bank has certain controls or supervisions in place. Ultimately this House has to accept responsibility in relation to governing banking standards and practice and there is ample evidence, as I have already indicated, to indicate basic causes for concern in the way the banks operate in this economy. We have had examples only recently in the H. Williams case.

The inclusion of restrictive labour practices could be a major problem. It should be explored. There are still important exemptions however and there is nothing to stop a service being exempted under other legislation as happened, regrettably, in the case of telephone services. One of the things we want to do there is to ensure that in that particular case the various kinds of services excluded by various Acts, services which have a monopoly of essential supply, become again accountable to the public. Unfortunately one of the drawbacks of removing them from within the ambit of control directly of the Minister has been a shift in accountability and the refusal by some of them to be accountable to the public. So an essential element in this Bill which is headed the Restictive Practices Bill — there is hardly anything more restrictive than, for example, a State controlled or semi-State controlled monopoly of telephone or communication services — should have been a provision in which public services such as An Post, Telecom Éireann, the ESB who are increasingly arrogant in the way they treat inquiries, communal television and publicly funded education and a range of other services should now be examined and reformed with all the areas of legislation that impinge on them so that consumers would have the same rights there as they have elsewhere and so that these bodies would become accountable.

I wrote recently to the Chief Executive of the ESB, sending on a letter from my constituent saying that he had observed a group of men regularly — as we say in North Dublin — dossing, doing nothing but nevertheless in the employ of the ESB. I sent this letter confidentially to the ESB top brass in the hope that something would happen. I got back a letter which was arrogant and discourteous, which took me to task for passing on a letter like that and for entertaining a constituent who would make that suggestion. The letter said that the chief executive had other things to do with his time than be worrying whether people on the ground were working or not. I am deliberately taking this public opportunity of saying that the arrogance underlying that letter indicates that there is unfortunately a cocoon of non-accountability surrounding people like that. I replied saying that, unfortunately or otherwise, I am accountable and must answer these questions and that if the gentleman concerned and others like him were doing their jobs properly they would have been appreciative of public interest and would have said that they would attend to the problem.

If the gentleman involved wants to respond publicly, he is quite welcome to do so. I have the correspondence and will make it available to anyone. I am just using it as an example of the difficulties which one has in getting accountability from some bodies once they are removed from the State's ambit. Bear in mind that that letter was from a public representative, not that that makes it a big deal per se, but it basically means that the ordinary citizen simply will not get a reply and regularly does not from people like those in the semi-State bodies that I have mentioned. They do not bother answering awkward questions. I want any Bill which is entitled a Restrictive Practices (Amendment) Bill to deal with bodies like that and make them comply with standards which are seen as the norm and in the public interest. They are and should be accountable and if they are not accountable voluntarily, then I am all for regulating and legislating to ensure accountability.

In section 5 the change of the name to the Fair Trade Commission is a positive step but the title of director seems to give him the appearance of competition supremo, which is misleading. That is not what he is, but I have no doubt that there will be misunderstanding about that unless the matter is clarified and his title perhaps changed.

In sections 6 and 7 a transfer of some powers from the examiner to the commission is welcome, although there are some anomalies with which I should like the Minister to deal. For example, under the 1972 Act the Minister can now approach the commission directly rather than having to go through the examiner, but he must still go through the examiner in the case of a monopoly inquiry under the 1978 Act. In addition, while the commission may initiate a restrictive practices inquiry under the 1972 Act, they cannot initiate a monopoly inquiry under the 1978 Act, although they can initiate a study into a monopoly under the 1972 Act. It is an anomalous position. The Minister has a different capacity to respond under the 1972 Act and the 1978 Act. That seems to be problematic.

In section 8 the Minister gives himself powers to make an order after consultation without the need for a prior inquiry. This could be useful because a study at present cannot be followed by an order but only by full scale legislation and it could lead to orders being made without proper consideration of the issues beforehand. This just could happen, but I hope it will not. In addition, in providing for consultation with, among others, the director before making an order, this seems to give an unacceptable role of adviser rather than investigator to the director. It gives him a different job fundamentally from that which he at present has, or indeed should have. His job is to investigate, to act in pursuit of inquiry, not to be, as it were, the policy director. There is again a conflict there. The role of adviser is a function properly belonging to the commission and that should be seen to be so and explicit in the Bill.

Sections 10, 11 and 13, where powers of initiative are given to the commission, are acceptable and commendable; also section 14 where power is given to the commission to obtain documents and information in the course of a section 12 study is essential. I should like to know the scope of that, whether it might extend to areas that I have mentioned earlier on in relation to documents and data in the hands of, for example, medical authorities. As somebody who has had some unpleasant experience in that respect, I should like to know whether it is conceivable that that recourse to insisting on documentation would extend to medical data on, for example, the next-of-kin of an applicant.

In section 15 the commission are further directed to undertake investigation, which could be useful but could lead to difficulty. In any case, the commission are now empowered to carry on their own investigations under section 16 which is very desirable, so recourse to the director could be unnecessary duplication. The Minister might clarify that point.

In section 17 and 19 the giving of powers of prosecution to the director is a major improvement, if there is to be a director. This should be the director's only, or certainly primary, function. A major defect in implementing competition law to date has been the appallingly poor record of enforcement undertaken by successive Ministers. That enforcement simply has not happened.

In section 18 the penalties are increased under the 1972 Act but the increase is insufficient. It is still arguable, to anyone who makes a calculated, cold assessment of the facts and figures, that taking a chance will ultimately result in a better return economically, even if one has to take on board the penalties suggested in this Bill. The penalties should also be increased under the 1978 Act but they are unchanged in this measure. The actual penalties imposed, for example, for advertising at below cost have been derisory. They were used deliberately by multiples who abused the system as a means of getting free publicity. They advertised saying that they had been prosecuted for selling below cost and that they were going to carry on doing so and asking the public to come and shop in their stores and, of course, the public flocked in as naturally they would.

It is regrettable that there is no requirement for the commission to produce an annual report whereas one must be produced by the director. That commission are the primary body in domestic competition matters at the moment and in EC matters, as they attend the advisory committee and are involved in the OECD. While they can produce an annual report and have always done so, it seems that there should be a statutory requirement that this be done and that the report be published in order to get very clear standards and to assure that people will not, on their own initiative, have a cost cutting exercise and decide to dispense with a particular document or report.

There are other matters that I should like to discuss, but I do not wish to delay the House. There are points which I look forward to discussing on Committee Stage. I note in passing that the Consumers' Association have specifically asked that the penalties for offences be increased and also that they would be dealing with the monopoly situation, particularly in relation to Telecom's monopoly, to ensure adequate performance and service. I hope that the Minister will take on board those reasonable requests, which we support. I look forward in due course to having an interesting Committee Stage of the Bill and I am grateful for the opportunity of being able to contribute today.

Mr. Flood

I, too, welcome the Bill and compliment the Minister for his continued great activity in bringing forward reforming legislation. A number of Bills have emanated from his Department. It is a great tribute to the Minister, the Minister of State and the Department as a whole that we are discussing this and other legislation which, from the consumer's point of view, will strengthen their rights and entitlements.

The Bill contains a great deal which is new but one of the fundamental aspects is the concentration in one agency, the Fair Trade Commission, of a whole plethora of existing legislation which, as already referred to by previous speakers, has resulted in very few successful prosecutions over the last ten years or so. That is probably an indictment of the legislation that has been in position. There is no doubt that consumers still feel hard done by in relation to their rights and entitlements with regard to the purchasing of a product or a service.

The Minister says that the primary purpose of the Bill is to streamline the operation and to extend the scope of existing competition and consumer protection legislation. I am sure we all welcome that proposition because in our own way we have all come up against situations where the ordinary man in the street feels cheated of a service or a product rightly sought and paid for. That is the nub of the problem which this Bill is trying to address.

The main intention of this Bill is to strenghten competition policy and it is an extension of the scope of competition legislation. This is to be welcomed. There has been much reference to the regulated services sector including communications, banking and electricity. Under this Bill the Minister will be in a position to investigate bank charges and, again, that is most welcome. Many people are becoming increasingly critical of the level of charges on their transactions with the banks. The banks seem to be able to impose any charge they wish on the customer. Under this legislation the Minister will be allowed for the first time to investigate these charges, to see how they are compiled and levied and, if necessary, take action to strike them out. He is to be complimented on this provision.

There is much concern among the public at the level of charges which are levied by the banks and about the failure of the banks to offer interest on current accounts. This amounts to unfair treatment on the part of the banks who can set their own interest rates. The Minister should find out how the banks compile these charges, how they levy them and should take any action possible to strike out these charges. In doing so he would have our full support. He should make it impossible for the banks to levy these charges.

The same applies to the ESB. The main complaint which consumers have of the ESB is about the additional charges which have been appearing over the last number of years on the bills issued every two months. These additional charges can amount to a very considerable sum. Many people ask why the ESB should be entitled to levy these extra charges without giving any explanation to their customers. With the ESB holding a monopoly in the supply of power the customer is at a distinct disadvantage when seeking to query his bill with the ESB or when seeking to come to any alternative arrangement or understanding with them. When making representations to the ESB on behalf of people who find themselves in difficult circumstances I have found that they can be a very difficult organisation to deal with. Presumably this has something to do with the fact that they hold the monopoly in the supply of electricity.

The ESB have been criticised consistently on the grounds of their lack of accountability in levying charges. The people would welcome a commitment from the Minister that he will tackle both bank and ESB charges. The results of his investigations could prove interesting and also very fruitful if he were then to proceed to the next step which would be to deal with the charges which are levied by the ESB and the banks. I hope the Minister will be in a position to address himself to these two issues.

The same also applies to the level of charges which are levied by Telecom Éireann. Again, they hold a monopoly in the supply of communication services. There is increasing concern at the level of charges imposed by them for the use of the facilities they provide, such as telephone, telecommunications, Fax services and so on. The Minister should find a way under this Bill in which to investigate how these charges are arrived at. This Bill has its merits and in due course, when enacted, will prove very beneficial for the consumer.

I want to refer very briefly to the part of the Bill which deals with fines. I take the view that the fines outlined in section 19 of the Bill are considerable. Those multinationals who have been referring in their advertisements to the fact that they have been prosecuted for below cost selling are not likely to commit that offence in the future because of the provisions contained in this Bill. The strength of this legislation will lie in the ability of the Fair Trade Commission to secure prosecutions. There was a failure over the last number of years to obtain prosecutions. If this legislation is to be effective we must ensure that if prosecutions should take place they do in fact take place.

Under this legislation the Minister is transferring from himself to the director of the Fair Trade Commission the power to prosecute. The Fair Trade Commission should be in a position to initate the prosecutions and see them through rather than having to wait for the Minister to initiate the process. The inability to obtain prosecutions was one of the failures of the previous legislation and as a result it was considerably weakened.

The new fines are quite substantial. On summary conviction a person will be liable to a fine not exceeding £500 together with, in the case of a continuing offence, a fine not exceeding £50 for every day on which the fine is continued. On indictment a person will be liable to a fine not exceeding £10,000 together with, in case of a continuing offence, a fine not exceeding £1,000 for every day on which the offence is continued or, at the discretion of the court, to a term of imprisonment. I do not think any organisation, large or small, will treat these penalties lightly. Neither do I think that any organisation should be entitled to flout the law and use the fact that they have done so to enhance their own market share. That is an objectionable practice. In the past we have seen advertisements in which these organisations drew attention to the fact that they had been convicted for below cost selling or improper advertising. No senior management official should sanction that type of advertising. Many conclusions could be drawn from such behaviour. All of us in this House should object to such practice.

Section 28 of the Bill provides that where an advertisement in relation to the supply or provision of any goods, services, accommodation or facilities is published and does not include the name and address of the person who procured such publication, or his agent, the publisher of the advertisement, shall, if the director or an officer of the Minister so requests within 12 months of the publication of the advertisement, give to the director or officer the name and address of such person or his agent. That is a good insertion and I welcome it.

The authorised officer of the Fair Trade Commission in the pursuit of his duties will have under this Bill considerable powers of entry. He will have the right of entry to any premises to assist him in his investigations and so on. That is a very good provision. An investigation can be impeded by the authorised officer's need to gain access to a premises, a manufacturing process, a packaging or storage area or to the whole process whereby a service was provided or a product manufactured. The right of entry of the officer provided in this Bill is welcome. When an officer must enter a premises to carry out his or her investigation the people or organisation involved will know that this is a serious matter and that they are well advised to co-operate fully with the officer during the investigation.

The Minister referred to labelling which sometimes can cause great confusion and can be an area of misinformation. Any provision in the Bill enabling the Fair Trade Commission to become involved in investigation into the whole labelling procedure is welcome. A person going into a store and picking up a product may read that it is packed in Ireland or specially made for such and such a native Irish industry or multiple but the small, fine print somewhere at the bottom of the package indicates that it is made in Holland, Belgium or some other country. That brings labelling into grave disrepute. The Minister will be familiar with this type of practice. People will buy products on the basis of their labelling because they are becoming conscious of the need to buy Irish and to have products that are manufactured or assembled in Ireland. Products should be properly labelled to convey that information and people should not feel compelled to initiate their own little investigation of a product to find out its country of origin. In the clothing industry, for example, products labelled as emanating from an EC country come in here but people in the clothing industry who are familiar with products and their components can tell us very quickly whether such and such a product was not manufactured within the EC but came from a Third World country or other source. This has very serious implications for the clothing industry in Ireland which has suffered greatly in the last five or six years because of labelling which gave an incorrect impression of the product's origin, probably in breach of EC law on importation controls. We in this city have seen not very far from this House the destructive results of such importation based almost entirely on improper, inadequate and misleading labelling. Obviously boundaries are ignored in terms of the EC and of the countries of origin of the products. An Irish consumer is anxious to purchase an Irish product where possible and if that consumer has to undertake a major investigation to find out the source of manufacture of that product because of inadequate labelling that is of no help to this economy. I am glad that the Minister referred to that.

State or semi-State bodies engaged in activities in competition with the private sector will be subject to scrutiny by the competition authorities under this Bill. For too long State organisations have been immune from proper and adequate investigation and accountability. Under this provision they will have to account for themselves when they are in competition with the private sector. They will have to account for the manner in which they trade and compete and in all other details which apply to the private sector. It is right that that be so.

The centralisation in this Fair Trade Commission is to be welcomed. The failure of previous legislation to deal effectively from the consumer's point of view with the manufacturer is an indication that maybe our efforts in trying to protect consumers were spread too widely and thinly. The Bill provides for the centralisation in the Fair Trade Commission of the various powers etc. and gives to the commission a certain autonomy and a right to act within their own terms. The transfer of enforcement functions, including the power to prosecute, which were formerly vested in the Minister for Industry and Commerce are to be transferred to the Director of the Fair Trade Commission. That is a wise decision on the Minister's part. We can all understand the implications for the Minister if he is to be the final arbiter of prosecution of those who do not conduct their activities in accordance with the provisions of the Bill. It is right that the Fair Trade Commission have those additional powers to initiate prosecution procedures. I compliment the Minister on his decision to, as it were, give away some of his own powers. Perhaps he was happy to do so, but in any event that is proposed in this Bill and it is a welcome step which will indicate to the consumers that the Fair Trade Commission have something to say for them, that they have a job to do for them and have received powers from the Minister to that effect.

Deputy Bruton referred to the fact that there were so few prosecutions. Presumably the Minister for Industry and Commerce at the time the Deputy referred to had the powers to initiate prosecutions. If there were so few prosecutions at that time was it because the Minister did not initiate them or because there were no complaints or no reasonable grounds for prosecution? That bears out what I have suggested, that really it is as well for the Minister not to have those powers but to transfer them to the Fair Trade Commission. The evidence of lack of prosecutions under the direction of the Minister for Industry and Commerce of the day suggests that the course taken by the Minister in this regard is correct.

The Minister has been extremely busy on behalf of the consumer. We have been discussing the Restrictive Practices Bill and he signed an order last May dealing with "hello-money". He has shown that he is prepared to move rapidly on behalf of the consumer and he is to be complimented on his actions. This legislation is part of the campaign to improve the consumer's lot so that he gets a fair deal. The consumer has not been getting a fair deal and it is recognised that we need legislation to strengthen his hand. When consumers have a complaint they must be assured of a fair hearing with a reasonable expectation that action will be taken. Variations in prices, for example, will probably be referred to the Fair Trade Commission.

There was much disappointment when the Prices Commission were abolished. It was an unfortunate step and people felt its impact by what they perceived as increased prices. Many organisations expressed their disappointment at the removal of a body which gave some form of protection to the consumer.

I have referred to charges which have been creeping into various organisations providing almost a monopoly service. The Minister has given an assurance that this matter will be looked at. This could have a beneficial effect for the consumer who resents these creeping charges which seem to go up every six or 12 months, sometimes without notification. I know the Minister will not shirk his responsibility in this regard. He has shown himself capable of bringing forward a whole range of measures designed specifically to protect the consumer.

The Fair Trade Commission are to have new powers to initiate public inquiries. At present inquiries can only be initiated at the request of the Minister or the Examiner of Restrictive Practices, or by any person whose request for an inquiry has been refused by the examiner. This change is to be welcomed. It is very beneficial to inquire publicly into major problems affecting consumers' rights. For far too long many of the problems resulting from consumer concern have been dealt with behind closed doors. That unnecessary practice is to be discontinued. Public inquiries to which people and organisations can contribute are to be welcomed.

The enactment of this legislation will strengthen the position of the consumer and will probably send out signals to those who may not always have been inclined to take reasonable account of consumer interests. Such people will now have to account for themselves. There is a procedure which the consumer can follow in order to seek redress. There should also be an increase in fair competition. In a small economy it is easy to get into the situation where certain protective measures are taken with regard to competition and there are understandings between suppliers of goods and services which are not to the benefit of the consumer. The powers of the Fair Trade Commission to regulate competition are welcome and I know the Minister will ensure that the spirit of the legislation will be implemented. This is very important if it is to make any appreciable difference to the position of the consumer.

I have referred to the question of fines, which I believe are quite stiff. The possibility of imprisonment also exists. One felt that the fines could have been higher in relation to "hello-money" and the various restrictive practices involved, but in this case the fines are very substantial. This will show the consumer that his needs are taken into account and that he has a court of appeal to which he can take his complaint.

This is only part of the programme on which the Minister is engaged to improve the lot of the consumer in a variety of areas. First he must have the necessary legislation available. The future is looking better for the consumer in terms of the protection of his or her rights and the availability of a forum to which complaints can be taken. It is a sign to those who have a product or a service to sell that they cannot get away with a slipshod approach and will have to account for themselves if there is cause for complaint or reason to query the manner in which they provide their service or the quality of the goods they sell.

I congratulate the Minister on bringing in this legislation and continuing his programme on behalf of the consumer.

Mr. Yates

This legislation is not contentious. It was prepared by different Ministers in different Governments. I would not like anybody to get the impression that what is being done in this Bill is very important. Often we have the wrong impression of what is important. What we are doing here is changing structures and powers which in themselves are good and worthy but we are not changing things in any material way.

This day last week we dealt with competition policy in the grocery trade and I outlined in some detail my view on competition policy in Ireland as it affects all sectors of the trade and I dealt with the OECD reports on buying power. This morning I will not repeat myself and deal with those issues again. Instead, I will deal exclusively with consumer policy in Ireland. This is a very neglected area. For some months I have had meetings with the Irish Housewives' Association, the Consumers Association of Ireland, Jim Murray and his staff who are excellent people, and the environmental health officers who all have a role in this area. I have tried to develop a charter for consumers and have come to the conclusion that there is an Irish rip-off factor. Although the consumers are the largest section of the free market, they are the weakest section because they cannot and do not act together and are treated as individuals.

In the area of consumer law we have slavishly followed the EC directives three, five or ten years later and have not at any stage pioneered consumer legislation. A lot has been said today about consumer legislation but the important point which has been missed is that we have excellent documents from the Director of Consumer Affairs on what are people's rights under the Consumer Information Act, under the Sale of Goods Act, information from the Incorporated Law Society and so on. The fact is that consumer law in Ireland is unenforceable because it is too costly, too time consuming and too remote from the ordinary public through the court structure. Until we develop a new system of redress, consumer legislation will not work. It has not worked when implemented by the Director of Consumer Affairs or through the civil process. Any cursory discussion with any consumer groups will prove that. Any study of the United Kingdom will show that unless there is a system of redress the whole thing is a waste of time.

The number of cases relative to the number of complaints the Director of Consumer Affairs takes up — he gets approximately 17,000 telephone queries annually — is minimal. We need a proper system of redress because it can cost up to £600 to go to the District Court for redress. I suggest that we have proper legislation to set up a small claims court system in the Republic similar to that in Northern Ireland. If there is a delay in setting up this system, we should set up an interim arbitration system where the consumer and the vendor can go to, say, a retired judge. There would be no legal representation, no wigs and gowns, the people could state their case and have quick access to the law. If we look at other countries we will see that this system works and is enforceable.

What is the up-to-date position of the consumer forum set up by the previous Minister of State, Deputy Richard Bruton? When we in the small businesses committee were trying to set up a small claims court for debt collection — where a businessman was trying to collect a debt of a few hundred pounds but found it was more difficult to collect it through the ordinary court system — the Department of Justice set the face against such a suggestion.

The magazine "Consumer Choice," January 1987, sets out the different reports produced in 1983 published by Alec Schuster and Jack O'Farrell, both of Trinity College, and subsequent reports by Brian McMahon of UCC. Those reports set out in detail the structure of such a small claims court system and how it could be set up quickly, effectively and cheaply. This court would deal with debts up to a limit of £600 and the District Court would take over after that. Unless we can find a remedy along these lines, we will not have any worthwhile consumer protection.

This Government in their restrictions on expenditure have, unfortunately, seen fit to exclude consumers' needs. I remember from our time in Government that one of the considerations in the abolition of the National Prices Commission and in the restructuring and streamlining — a nice word for rationalisation — of these structures was the cost saving. There is no denying that. It is disappointing to see the abolition of the National Consumers Advisory Council whose members represented different types of consumers. We have seen severe curtailment in the expenditure for the Ombudsman's office and we have seen the abolition of the National Savings Council which provided valuable advice as to the merits and demerits of different types of savings.

We have seen a gradual and steady erosion of the consultative process in which consumers have been involved. This process can only be reversed if politicians take it seriously. As a matter of urgency the Government should set up a proper structure of political responsibility for consumer affairs by appointing a Minister of State at the Department of the Taoiseach with exclusive responsibility for this area. Many of the consumer issues I am about to outline deal with drugs, food, the Department of Health, the Department of the Environment at local authority level, the Department of Industry and Commerce, the Garda as regards weights and measures and so on. There is a multiplicity of departmental responsibility involved but no single group co-ordinating consumer affairs, and there are no teeth in the approach we are taking to deal with these issues.

We have also seen an abandoning of funding in this area. For as little as £40,000 the Government could give invaluable aid to the voluntary bodies in the consumer area. Perhaps we could get EC support for these organisations which would not have to produce magazines to remain in existence. They could spend their time and effort working at European level by being affiliated to European consumer groups and by being directly involved in a policy and lobbying role which is not the case at the moment.

The lobby of vested interests far exceeds the consumer lobby. Every restrictive group, whether dentists, doctors, solicitors, architects, big business or small business, has an effective lobby and the only people who do not are the three and a half million consumers. Business men must realise that if they are to compete, their goods must have reached certain quality consumer standards. That is one of the reasons in terms of indigenous industries, we have such an appalling track record in the area of exports.

I would like to see law reforms in certain areas. What is the position in regard to one's legal right to a receipt? I have asked this question of the Director of Consumer Affairs and a number of barristers but this seems to be a very grey area. This point should be clarified because this technicality has led to cases under the Sale of Goods Act being dismissed. We need also to deal properly with the area of public information. While there is a hot line service provided by the Director of Consumer Affairs and the Consumers Association of Ireland, there is no facility in our education system for people to be taught any facet of consumer affairs. That needs to be changed so that people will have some concept of the standards they should demand in respect of services and value.

In the Book of Estimates one can find the Vote for the Office of the Attorney General, the Director of Public Prosecutions, the Stationery Office, and other independent bodies — I wasted half an hour this morning searching through that publication — but one cannot find a subhead for the Office of the Director of Consumer Affairs in the Vote for the Department of Industry and Commerce. An indication of the amount of consideration given to consumer affairs is that it does not get a ranking of its own within its Department Vote. Therefore, it is impossible to scrutinise the percentage cut in the expenditure between 1987 and 1988 although I have no doubt that a parliamentary question will elicit that information. Giving the Minister and the Government the benefit of the doubt, I believe that information will show that expenditure has stood still instead of a net curtailment. We must be prepared to invest in enforcement and back up services. If we do not we are wasting our time. Deputy Bruton was critical of the lack of a proper approach to enforcement and I agreed with his remarks in regard to that.

The onus of proof in regard to misleading advertising still lies with the consumer. If a person in business who produces, for example, a washing-up liquid and claims that it is superior to any other in the market and a consumer holds that the claim is wrong and that the advertisement is misleading the onus is on that consumer to drag the producer through the courts. In my view the onus should be on the producer to prove that his or her statements are correct. We need to reorientate aspects in regard to misleading advertisements. We must put the onus of proof on those who make misleading claims. There are so many grey areas of subjectivity in that regard that the consumer can be easily misled.

I am sure the Minister, like most of us, has seen signs on items like fridges with a figure of £200 crossed out and a figure of £80 inserted. One thinks that one could save £120 on that item but the item may not have been for sale at £200; it may have been on offer at £120. There is no law to say that a shopkeeper cannot put up such a sign. I note that the civil servants are shaking their heads but I must point out to them that the statements I am making arise out of discussions I had with the Director of Consumer Affairs. I accept that there are laws which state that one cannot mislead in terms of advertising but there is no precise wording as to what price an advertisement should relate to. There is no law to say that a person, when offering a discount, must state the original price.

We then move into an area where there is no control whatever. There is an even bigger scandal in the whole area of public relations. Marketing managers, and others, no longer spend their money on straight advertisements telling people that their products are the best on the market. When they are selling products they wine and dine motoring correspondents and so on to ensure that they have every facility to test their new cars in the expectation that the correspondents will write flowing reviews about them. In some cases they even go as far as to produce supplements to newspapers which do not spell out clearly that they are advertisements. People may think that an article decorated by advertisements is a bona fide commentary by an independent journalist on a car but, in fact, the entire supplement is an advertisement. Such articles have been bought and paid for, like the advertisements. In my view the whole thing is an effective con job. While we are talking about structures we are light years behind the whole area of public relations which has taken over advertising. No longer does a manufacturer have to say that his or her washing-up liquid is the best because it is now possible to get the washing-up liquid correspondent to say it is the best by adequately wining and dining him or her. A supplement, whether it is a property or motoring supplement should carry a banner headline to the effect that it is an advertisement from start to finish. People should be told that articles contained in it are not written by independent people, that such supplements are bought and paid for by advertisers.

We have all read articles in the newspapers telling us how brilliant new cars are. I heard an advertisement by a company telling people that Ted Bonner, or some other motoring correspondent, had said their car was excellent. The public have no idea of the expenditure involved in such public relations exercises. There are areas where technical claims are made about products which only an IIRS test, costing in the region of £20,000 or £30,000, could prove. The position is different in Britain because with about 50 million consumers they can afford to scrutinise the claims of the various manufacturers, whether it is a claim by a manufacturer of washing machines or a claim by a car manufacturer as to the petrol consumption of their product. The cost of such a test here is very high. The public should be protected and producers should not be allowed make claims because nobody will go to the expense of testing them. We must look at the many misleading advertisements and claims particularly in regard to PR exercises.

Another area of the law that needs to be revised is in regard to liability. At present if I have a complaint in regard to any goods I make a claim against the vendor although he may not be responsible. If I buy a tin of baked beans and find it defective the retailer or the wholesaler is not responsible but I must make a claim against them. We must review this area and put the blame on the real culprit. Retailers should be given some protection because in regard to product liability at present the retailer is always responsible. I accept that the Department published a discussion document in regard to that some weeks ago. Up to now suppliers have been able to escape litigation and retailers do not want to have a double legal bill by having to deal with the consumer and, in turn, being forced into further litigation against the manufacturer. We must introduce changes in this area and give an element of discretion to a judge as to who is responsible in the case of an item such as a can of beans, the shelf life of which is not relevant to the retailer. There are many injustices in those areas at present.

The new areas of inclusion in the Bill are banking, electricity and communications. The banks are responsible for some outrageous, restrictive and unfair practices against the public. Their opening hours are more restrictive than those of any other business dealing with the public. Their charges are exorbitant and the Minister should pay particular attention to the profits of Visa and Access. I know inquiries are taking place in Britain in regard to plastic money because of the profits made. The cartel of the associated banks and the standing committee has effectively been broken up but the cartel in relation to Access and Visa has never been stronger. If I have a meal tonight which costs £50 the owner of the restaurant will have to pay 5 per cent to Access or Visa. Their profits are very high and there is limited competition as different cards have been amalgamated into a single card. Perhaps there could be a public inquiry straight away under this legislation.

The banks are bad but the ESB are far worse. The ESB are a public disgrace in relation to their consumer approach. I am sure that every TD has had experience of their practices. If someone wishes to have electricity connected to a caravan or house they are quoted an outrageous capital cost to bring it across a field or road. The cost is between £2,000 and £4,000 and when the customer asks how many poles and transformers are involved he or she is told that the company are not under an obligation to give such information. They add that they cannot reduce it and that if the offer is not accepted within six months the cost will be even higher. There is a need for an immediate inquiry into the inefficiencies of the ESB and the method by which they calculate capital costs for new installations and works generally. I have no doubt that they are unaccountable, uncompetitive and inefficient in their dealings with the public. I should like to see an inquiry which would result in them giving a detailed breakdown of the cost per pole, the man hours involved and the cost of a transformer, coupled with an independent body being able to say whether their practices are fair. The cost of installing your own generator is prohibitive, especially for a domestic dwelling. It would only be justified in the event of a strike or for a milking parlour where the emergency value would be worthwhile. The ESB are not interested in the public perception of fair play and are not answerable to the NPC or anybody else.

The total arrogance with which the ESB disregarded the Fletcher and other reports in relation to their accounting system and double depreciation leads one to believe that they have no concern for the public. I am delighted that they have been brought under the scope of this Bill because they have got away with very unfair, monopolistic practices for too long and have been totally unaccountable for their actions. That is the good news but the bad news is that this legislation does not deal with a further list of culprits who have been completely let off the hook. Of course we must ask what rights the public have in relation to State services provided by local authorities and health boards. There must be some independent performance related body supervising some of these bodies and someone to whom the public can go as voluntary and independent arbitrators. At present one can point to the Ombudsman but he can only make a recommendation. I have seen cases where the Ombudsman made a recommendation in favour of the complainant but that is as far as it went because the Department decided that they were not prepared to go any further. That is not satisfactory and I should like to see fresh powers given to the Ombudsman to strengthen his position or a proper structure put in place so that in the case of local authorities codes of practice would be developed to ensure uniformity. These codes of practice should be available to the public so that they would know where they stood.

Perhaps the Minister could clarify whether the insurance sector is included under banking. At present people are travelling all over the country as agents and brokers selling life assurance policies and making claims about returns which are totally misleading and unfair. Unsuspecting widows and old people are taken in by these people. The Director of Consumer Affairs has expressed the most serious concern about this matter and has asked for a voluntary code — in the event of politicans taking no action — to be set out giving genuine rates of return on some of these investments, the benefits and a clear understanding of the small print on these policies. This is an open area at the moment and we are depending on quasi-ethical behaviour which does not exist, especially in relation to some companies. I heard of a case the other day where a man paid into one of these companies and, when he died, his sister was convinced she would collect his insurance. The sister came to me telling me that she wished to collect £2,000 which she thought was now payable. I wrote to the insurance company concerned who informed me that the money was payable only in the event of a range of very limited accidents. As the person concerned had died of natural causes he was not covered. There are many cases of this kind where people are totally misled. We assume here today that we are making a major contribution to consumer policy by changing the structures but that is not the case. These are the real issues and I should like to see an immediate code being put into practice as far as the insurance sector is concerned, especially in regard to investment. Fire, theft, employers' and public liability is another day's work.

Another area in which there has been a lack of any political backbone in dealing with consumer issues is the classic one of the professions. Members of these professions are not allowed to compete and the public are not even allowed to know in advance what they will be charged for certain services. There are no regulations in regard to doctors, dentists and opticians. There is no scope for finding out the range of prices. Up to a few years ago opticians were merely allowed to put up a name plate but they were not allowed to put prices on their display of glasses. Thank heavens, something has been done about that but, generally speaking, the professions have got away with behaviour in this country which would be inexplicable in others. There should be a universal code for professions to help the public. They should be obliged to display prices, and to give quotations in advance so that people can compare prices, and they should be allowed to advertise their services in whatever way they see fit. These are three very basic areas of information. All of our consumer legislation has exempted the professions. I know they have political clout but it is in their own interests that the good practitioners succeed and do well. No other line of business would sustain the type of practices that they have been allowed by the professions. People should be able to assess who is the best doctor in town, the best solicitor, the best and cheapest architect and so on. I have not done enough research on chemists but I suspect that there are here a whole series of practices that should be looked at.

Consumer legislation should be brought into the ambit of the Minister of State at the Department of the Taoiseach because a lot of the basic tenets of consumer law deal with health, hygiene and safety. They do not come within the remit of the Minister for Industry and Commerce. The Sale of Drugs and Food Act, 1875 is basic legislation which protects the consumer if for instance he goes into a restaurant and asks for pork but is served with rabbit. However, despite legislation if one complains to the local friendly environmental health officer, one will find that he has a limit of 28 days in which to bring a prosecution. He must take the sample immediately, send it to a laboratory for tests, await the results and go to the prosecutor's office to bring a prosecution. It cannot be done in 28 days. That law is unenforceable. We have a completely outdated law. It is well over 100 years old and the fines are still only £20 no matter what type of fraud one commits. That legislation is redundant. Also samples in the ratio of 2½ per 1,000 taken by EHOs are not sufficient in any one town. Consumer law in Ireland has not come from politicians but it has been built up by case law. I am outlining here a litany of neglect by successive Governments and politicians over decades in giving our population a fair ride.

Another example where the law is an ass in relation to consumer rights is, if I go into a shop and buy a loaf of bread and find when I cut it that it is full of maggots or other foreign bodies, I can only take a case against the retailer. A case like this should be extended to include the culprit. Fine Gael will put forward detailed amendments to the Sale of Drugs and Food Act, the Health Act of 1947 and the Food Standards Act, 1974, which will give a proper legislative base for this aspect of consumer affairs. A single Act is required.

A number of areas are not covered by legislation. For instance, if one goes into a hairdressing salon for a straight wash and cut and a mistake is made the hair is dyed, there is no statutory provision for compensation. Another area of concern relates to swimming pools. One can get many diseases in swimming pools, eye sicknesses, skin rashes and so on and there are no regulations governing the running of public or private swimming pools. It is very common in summer time when, for instance, a pool attendant is on holidays, that his replacement will put in too much bromide or chlorine into the water and the public are not made aware of the dangers. Nobody checks up on this and even if somebody did there are no regulations to deal with it. There are areas where the consumer is totally neglected. If one has to suffer disgraceful smells from a nearby meat factory or from noise pollution — and there are ways of quantifying these things — there is no protection here although there is in every other country. I appeal to the Minister to ensure that appropriate consumer legislation is introduced.

Another area in the remit of the Minister relates to the operation of the ASAI, the Advertising Standards Authority in Ireland. The House has abdicated its responsibilities in relation to that body. This body have traded on the basis that there is consumer representation on the body when in fact they do not have consumer representation. Voluntary bodies have withdrawn from them and although the Director of Consumer Affairs had a representative there, he has not withdrawn his imprimatur from that association. We cannot accept that there should be only voluntary controls, on a self-policing basis, in advertising. The pressures and the competitiveness of business make people cut corners and the public can be misled. The Minister should ensure that the code under which this association operate is far more stringent. Coming up to Christmas there is misleading advertising of toys. The size of the toy is grossly inflated and one gets a very quick glimpse of the size of the toy relative to the size of the child. Children pressure their parents into buying these toys and only afterwards do they realise that it is not what they thought it would be. The credulity of children has been exploited by marketing and advertising executives.

There is also sex discrimination in advertising. I was down at the Ard-Fheis in Cork at the weekend and I saw a hoarding with a very sexist although witty advertisement. One saw a very attractive woman laid across a sofa with a glowing fire in front of her and the caption read, "Rekindle an old flame — Bord na Móna". There is no doubt that that was very witty, that it was a nice pun but it was also very sexist. Some people might object to that but I have no doubt that the ASAI would pay scant regard to such an objection. There is need for the Minister to put the boot in and for the Director of Consumer Affairs to put the boot in to ensure that the consumer has a majority on that body, if he is not prepared to make it statutory. The people who are supposed to be chairing it are not involved at all. It is self-policed by those who are dealing with it.

I have dealt with public relations which is very misleading. I recently came across a case of a person who was misled by small print. This person was told that if one uses a Visa card when going on a holiday one's insurance would be provided. This person's Visa card was stolen out of her handbag with the result that she had no insurance cover on the holiday. At the same time, we have seen the abolition of the price line inspectors who provided a very valuable service. Undoubtedly, the Cinderella of public life has been the protection of consumers. There is an immediate need for an all-party study to provide activity in this area.

Another matter which has become outrageous in recent times is door-to-door selling. Not a month goes by but there are complaints on "The Gay Byrne Hour" about Italians or other people selling shoddy goods and we are doing nothing about it. There is an EC directive on door-to-door selling but why should we have to depend on an EC directive? Why do we not introduce an order — the Minister has the power to do so — which would give a right to a person who makes a door-to-door purchase get a legal receipt on which must be stated the address from which that business is trading and within seven days the consumer can revoke the deal he has entered into and can obtain a refund if the item is not satisfactory. That is a very simple and basic right that should be provided to consumers.

If you go to a shop or to any place of trading you can go back to that shop or office a month or a week later if the item is not up to the required standard and you can ask for a refund or to have the item repaired. I ask the Minister to do more than what is proposed at EC level and to introduce a simple directive that would give the consumer three basic rights for any door-to-door sales. First, they should have a legal right to a receipt; secondly, on that receipt should be the name and address under which that business is registered which could be used for any future correspondence and, thirdly, written on that receipt should be the legal right for the consumer to revoke, within a period of seven days any deal entered into and if the seven days elapse then the deal must go ahead. There are housewives who are hustled and bustled into buying items which they do not want. Something needs to be done about that matter.

Recently it came to my attention that there are over 6,000 food additive drugs being used in this country. When one realises the number of people involved in this area it is obvious that many products are being sold which are injurious to health. The National Food Advisory Council do not have the facilities to check every product in every way. I know checks are made by the EC on imported products. It may be the case, and there is no way it can be disproved, that we are now consuming products which, in a couple of years time we will be told, caused some illness. Nobody is doing anything about it. Each report I read on food additives gives a different recommendation on the same food additive, as to whether they are carcinogenic or whether they are the cause of one health problem or another. The public are guinea-pigs for many foods which contain additives. This is a matter for the EC but I hope the Government will give priority to consumers' interests.

As has already been mentioned, the CAI have made two proposals. Under section 18 it is proposed to increase fines from £500 or six months imprisonment to £10,000 or two years imprisonment. In terms of restriction of competition legislation, the fine for breaches of the law under the Air Transport Act is one year or £50,000 and under the Dentists Act, where a restrictive practice is incorporated whereby people cannot make and sell dentures, the fine is £1,000 or 12 months imprisonment. I suggest that a doubling of the fines would be reasonable in this case if we want to get a balance on our priorities.

The national communications monopoly has already been referred to by Deputy Keating and I will not dwell on it. I wish to make a few other brief points. First, the public should have rights of access to information. There is more to the rights of information than public education and public information on consumer law. In particular there must be rights of access particularly with regard to public administration so that if some element of impropriety exists the public are entitled to a detailed explanation. Much of the time of politicians is taken up trying to get explanations for certain decisions made which seem to the public to be arbitrary. There is merit in what Deputy Bruton said in relation to competition policy in terms of incorporating some of the articles of the Treaty of Rome in our competition law. There is also a case for widening the civil process as opposed to the criminal process in terms of retribution.

This legislation is commendable and will be supported. It is non-party political but let us not cod ourselves into thinking that is a significant step forward for consumers' rights. It is the practical nitty-gritty issues, of being misled by PR and advertising, the perception of good value, the nitty-gritty issues of comparing prices and having competition in the professions and the issues of getting quality when one is under the impression that one is buying quality which are the kernel of Irish public concern at present. The only way we will bring about an improvement in the position is to appoint a Minister of State at the Department of the Taoiseach with responsibility for consumer affairs who would immediately set up an interdepartmental committee to do something about the matter. I hope to publish in the next few months a detailed consumers charter for Ireland. I commend this legislation. I wish it a speedy passage through the House and I hope there will be early action taken on the measures which I mentioned.

Mr. Lawlor

I welcome the Bill and compliment the Minister on bringing it forward. He has already proved in a number of areas that he is prepared to take decisive action where necessary, particularly in relation to petrol prices. It is a very positive step in the right direction to streamline the agencies related to consumer protection, restrictive practices and so on. It is a cliché that competition is the life of trade but there is a need for watchdog bodies that will ensure the consumer is getting value for money and is being protected. One does not want to interfere with the free market or open competition but, with the smallness of the world today because of improved communications, there is a need to ensure that the consumer is protected. This Bill is a decisive step in that direction. We are at a stage now where the OECD is drawing attention to the need for regulation in a number of crucial areas specifically transport, communications and banking. Because of advanced technology in these areas competition can transcend borders so there is a need for the various countries to have adequate legislation to ensure that the consumer does not fall the victim of unfair trading practices, price fixing, defective products or whatever.

I concur with some of Deputy Yates's points on advertising. There is a definite need for strict regulation of the promotion and sale of goods because often products are inaccurately described and unsuitably presented in such a way as to over-enhance the product. No doubt the Minister will look at this and see the need for guidance and proper control in that area.

The Minister referred to energy, transport, communications and banking in his address to the House this morning. Let me deal first with energy. The country is crying out for some form of integrated energy programme. There is a ridiculous overlap with duplication of overhead costs and so on relating to State and semi-State bodies. The taxpayer is footing a very heavy bill due to lack of efficiency and co-ordination. Bord Gáis and the ESB are both trading on the high street from different outlets, both carrying substantial overhead costs and competing with each other for the energy market. While we do not want to restrict the available choices to the consumer, we need to see a great deal of efficiency introduced in this area.

Deputy Yates referred to the typical monopoly situation of the ESB who had down quotations for different types of work on a take it or leave it basis. There is no justification for some of the charges but because they control the national grid they can dictate the terms of service. The whole area of energy has such implications for job creation and is such an essential service that it is important to look at this area.

It is likewise with transport. The Joint Oireachtas Committee on semi-State Bodies are at the moment looking at B & I and the very complex issues of transport. Again, there is duplication and a lack of co-ordination particularly between the State bodies such as CIE and B & I. In this area there has been much empire building and the consumer is not getting good value for money and there is not a good return on the taxpayers investment.

Banking is increasingly before the public with the whole range of banking services, competition with building societies and colossal spending on advertising which is a very substantial overhead cost being passed on to the consumer. Many of the costs incurred by the banking organisations are not in the interest of the consumer but are undertaken to promote the organisation. The larger they are the greater their financial muscle and the greater the lack of a responsible approach. When this legislation is effective, the director will have a key role in ensuring that the financial institutions, the banks in particular, are providing value for money.

The whole area of credit cards was referred to. This particular service is costing the consumer far too much. The Minister referred this morning to an amendment to be brought in on Committee Stage and designed to ensure that the confidentiality of individual bank accounts would continue to be assured. This area needs to be properly scrutinised and the director will have a very important role in that area in the future.

A number of comments were made about food labelling, textile labelling, price display and safety standards. The labelling of products can be very confused and there should be some standardisation so that consumers can see readily whether they are getting value for money. Safety standards cause particular concern. In the past various products dangerous to the purchaser or to children have been sold in the rush, for example, of Christmas shopping. It is important to lay down standards to avoid this type of risk particularly to children.

The Minister is to be complimented on the fact that in this legislation he is passing over many of his present functions to the Director of Consumer Affairs. That is a step in the right direction. The director has a major task ahead because of the ever changing market which has already been dealt with by the Minister when he spoke about the issue of "hello-money". The director's task will be complex but it will be his responsibility. The delegation of that power was a decisive step in the right direction.

Debate adjourned.

Mr. Birmingham

On the Order of Business this morning, I attempted to raise the question of AnCO trainees being required to carry out work on the house and holiday home and block of flats owned by the Director General of AnCO. Since then I tabled a Private Notice Question and that has been ruled out of order for reasons I understand and I would now like to give you notice of my intention to raise the matter on the Adjournment.

Dáil Éireann debate - Thursday, 5 Nov 1987

Restrictive Practices (Amendment) Bill, 1987 [Seanad]: Second Stage

Dáil Éireann debate -
Thursday, 5 Nov 1987