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.