Dáil Éireann debate -
Tuesday, 14 Feb 1989

Vol. 387 No. 1

Private Members' Business. - Enterprise (Competition and Consumer Protection) Bill, 1989: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Roche

The move from a control of abuse system to a prohibitive system, which is the primary proposal of this Bill, is not a particularly new suggestion. It was first made in 1977 when, oddly enough, the Leader of the party proposing this Bill was Minister for Industry and Commerce. He concluded then that the proposal was too costly. It is inevitable that we will move in the direction proposed by the Bill. However, there is a number of problems. There is inevitably a degree of inflexibility which could occur if we move in the direction proposed by the Bill. That is not adequately addressed. A second problem which is not addressed is the need for a substantial bureaucracy if we move from the present system to the proposed prohibitive system.

I have mentioned that there are constitutional considerations. I believe the additional powers given to the Director of Consumer Affairs would prove to be unconstitutional. It is somewhat ironic to see Fine Gael support this Bill when some time ago they objected to very similar powers being transferred to the Attorney General, who is, after all, a constitutional officer, on the basis that these could be potentially unconstitutional. Wavering on behalf of Fine Gael is not particularly new. The Minister outlined some significant drafting errors which will have to be addressed.

An investigation by the Fair Trade Commission of the possibility of incorporating Articles 85 and 86 into domestic legislation is currently in hand. The Fair Trade Commission in March 1988 invited submissions from interested parties. For a variety of reasons, not least the fact that they have had additional powers thrust on them over that period, they have not yet concluded their consideration of the submissions and of the issue. The study by the Fair Trade Commission should include a number of important constitutional issues. For that reason and other reasons which I have outlined, the proposals in the Bill — welcome as they are and inevitable as a move in that direction is — would represent something of a leap in the dark. While I am not prepared to condemn the Bill and its principles out of hand, it is premature and it would be better to await the Fair Trade Commission's proposals and introduce the necessary legislation on the basis of mature reflection on all the issues.

Mr. Lowry

I confirm Fine Gael support for this Bill, large sections of which seem to be extracts from a Fine Gael policy document. Despite what Deputy Roche has said about drafting and costing problems, it is impossible to justify the hostile reaction to this realistic and necessary measure. We have been treated in recent days to three public tantrums relating to this issue. First we had the bluff and bluster of the Minister on a radio programme on Saturday morning. Subsequently a statement was issued by an anonymous Government spokesperson and today we had the Government statement that they would not tolerate legislation emanating from Opposition parties. We will not be cowed or bludgeoned into submission. The Government are adopting a silly and selfish approach. Surely proper legislation containing measures for the betterment of society should be considered seriously and not dismissed because of the quarter from which it might come.

It is hard to believe that this minority Fianna Fáil Government would oppose a Bill which is in line with Government policy on 1992. I would remind Fianna Fáil that consensus works both ways and there is a responsibility on the Government in this area. Are Fianna Fáil irresponsibly looking for an excuse to go to the people? An issue such as this Bill is a disgraceful excuse and could not justify such action. How can a Government whose Ministers, including the Minister of State, Deputy Séamus Brennan, continually preach the marketing message that our domestic market is now Europe, justify at the same time our current restrictive practices legislation? When modern Irish industry was in its infancy the Fianna Fáil protectionist policies of the thirties and forties were the norm. This, perhaps, helped create an Irish sentiment that competition in the real sense should not become an issue. Competition is now a reality. We cannot afford an outmoded economy and we cannot wait to implement changes in structure.

The Government allocate resources for the promotion of competitive manufacturing industry through such organisations as the IDA, SFADCo, Udarás na Gaeltachta, CTT, CBF, etc, yet no State organisation is given the task of assisting and promoting competitive practices in other professions. With the evolvement of the internal market we cannot afford delays which reduce our competitive edge. We may soon be the only island nation in Europe, but this will not protect our economy.

The current legislation introduced by the Fianna Fáil Governments of 1972 and 1987 is too cumbersome and lacks realism. This Government have failed to address the issue of restrictive practices. Why is there a refusal by Fianna Fáil to take action dealing with restrictive practices? No significant study of enterprise has been published during any of Fianna Fáil's recent terms of office. The only studies in this area were published while Fine Gael were in office. It must be said that studies on enterprise published through the semi-State sector do not address the issue of restrictive practices. Three studies published in recent years virtually ignore the area of restrictive practices, yet they are being used as textbooks references by over 4,000 current marketing students. The studies to which I refer are Venture Initiation in Irish Society and Enterprise: the Irish Approach, both published by Joyce O'Connor in 1983, and Education for Enterprise — an Irish Perspective, published by John A. Murray in 1986. All these marketing students can see from current State publications and studies is an outmoded policy. The time has come — not for publishing more reports — but for taking effective action. The continuation of restrictive practices on the part of the professions, including restrictions on advertising and scale fees, are an outmoded source of frustration. Cohesive legislation is urgently required.

Current legislation means that the process of eradication of abuse is too narrow and this has been pointed out by previous speakers who referred to the prolonged procedure which takes place before this process is completed. A seal would cross Ireland on dry land quicker than action taken in this area. Uniform legislation on all trade practices is required. Practitioners and consumers must have access to information and the right to knowledge.

This Bill attempts to achieve the required measures to redress the situation, but it only does so partially. Under the Coalition Government the then Minister for Industry and Commerce requested the Fair Trade Commission in April 1984 to undertake a wide ranging study into the rendering of professional and analogous services. The investigation looked at two groupings, medical and non-medical. The commission have reported on advertising restrictions and scale of fees in accountancy and engineering professions. The report of the commission needs to be addressed by a more elaborate Bill. Much of this Bill is premature prior to having the results of the work of the Fair Trade Commission.

The commission are currently investigating the architectural and legal professions and this format will probably be used for all remaining investigations. Therefore, I suggest that the Bill should make an allowance for these reports, although I appreciate that time is of the essence in the 1992 race. The commission feel strongly that a supply of professional services is desirable in the public interest, leading to higher quality at lower prices, increased choice, innovative and more efficient forms of organisation and service. Fine Gael agree with this general approach.

We are about to face an enormous change for the professions, the right to freely establish in any country; technological development and greater consumer awareness will change the whole economic climate. More open and efficient professional services will be demanded. In 1992 it is estimated that the current number of companies will be halved. This will occur through economies of scale and standardisation.

We cannot compete on economies of scale in Ireland, our largest Co-operative, Kerry Group plc, would not rank as large in Europe, Larry Goodman may be the beef baron of Europe, but very few Irish companies can match anything the size of our European competitors. We must, therefore, rely also on efficiency and quality of service and products. Current restrictive practice legislation is against such development. Without a competitive environment within our own business sectors we will not survive. The competitive provisions of the European Community are being increasingly manifested and currently the international, not domestic trade, is subject to the application of Community competition laws. Under the Treaty of Rome, the Community is formally committed to the elimination of anti-competitive behaviour which is expressed in Articles 85 and 86 of the Treaty of Rome. Article 85 relates to anti-competitive behaviour by two or more undertakings and prohibits as incompatible with the Common Market all agreements between undertakings and concerned practices which may affect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition within the Community. This relates to price fixing between competitors, agreement on market shares, production quotas etc.

Article 86 is aimed at preventing abuses by firms in a dominant market position when an effect on inter-state trade is involved. Community law covers all agreements or practices which are capable of threatening the freedom of inter-state trade between members in a manner which could harm the objectives of the Single European Act, but conduct affecting member states only is governed by national legal order. We must as a nation do something to restructure our restrictive practices. This Bill at least tries to address this.

Consumer protection policy needs to be addressed but this Bill is only the tip of the iceberg.

We entered the European Community in 1973 to gain access to 320 million consumers and rid ourselves of the isolation which affected our economy for a generation. Our ability to go to the European marketplace, unfettered by the hitherto restrictive practices which hampered our growth potential over the years, has been the cornerstone of our unprecedented economic growth in the seventies and eighties.

Articles 85 and 86 of the Treaty of Rome govern business dealings between entities in the Community and ensure that the prejudices imposed by national boundries will not be used to the detriment of one European in his dealings with another. They do not protect an individual or entity within the borders of a country whose desire to earn a just living can be severly dented by the unscrupulous attitude of those whose interests are governed by considerations other than the common good.

We in Fine Gael have always believed that what is good for the child is good for the nurse and we find the reluctance of the Government to allow provisions which will afford Articles 85 and 86 type protection to individuals or companies in Ireland doing business with each other inconsistent with the dictates of reason.

The Enterprise (Competition and Consumer Protection) Bill, 1989, proposed by the Progressive Democrats expresses our thinking on the medicine which is required to ensure that enterprise will not be scuppered by unscrupulous monopolies whose interests are inimical to enterprise.

The arguments expressed by the Government speakers are not logical and do not impress me. The Government are looking for any excuse to scupper the Bill which, while it has limitations and does not go far enough, deserves full consideration. It will get the support of the Fine Gael Members of the House.

Mr. Abbott

I cannot fully lend my support to the proposals in the Bill. I support the Minister's cautious approach of waiting for the advice of the experts in the restrictive practices area to come back to him and for him to come back to the House to make recommendations on foot of the advice.

I do not purport to be an expert on competition law or policies but, from a quick perusal of the large volume of learned articles, regulations and legislation in the EC and of a national character, it seems to be a very wide, confusing and complex area. Under the Restrictive Practices Act, 1972, which was amended by ministerial order and the Amendment Act, 1987, we have had our own way of dealing with restrictive practices. While there may be criticisms of that system and dissatisfaction, now is not the time to rush headlong into changing it.

The fundamental thinking behind the Bill is not to assist Irish business or the consumer in any way but to force an ideological conviction down the throats of the public, the consumer, the worker and industrialists, which stems from a free trade mentality in America——

Mr. Cullen

What about Europe?

Mr. Abbott

——possibly from the 19th century, that competition is the only yardstick by which economic efficiency is to be judged.

Mr. Cullen

That is how the European economy operates.

Mr. Abbott

I put it to those who operate exclusively according to the laws of the competition that they should pause to think about where we are headed in relation to competition. In his address to this House last week Deputy O'Malley welcomed deregulation and lauded the efforts being made to ensure competition between airlines on particular air routes within Europe and worldwide.

Mr. P. O'Malley

Look at the benefits that have been brought about.

Mr. Abbott

Without doubt there have been benefits. There can be no argument about that. I welcome such deregulation but we cannot get carried away with deregulation despite the benefits and the cost reductions for those who use air transport. We have to bear in mind the possible links between deregulation and the headlong rush to a disjointed and possibly ill-directed concept of competition at the expense of safety.

Mr. Cullen

You are either in or you are out.

Mr. Abbott

In the air transport sector there have been grave public misgivings within the past few months, particularly following the tragedies at Lockerbie and in the Azores. It is suggested that the cost-cutting allegedly associated with these unfortunate disasters can be traced back to the competition in the skies. We need to take a look to see if competition policy in sensitive areas where there is a high risk to life and limb has gone mad. I venture to suggest that during the next year or so many a searching comment will be made in relation to this headlong rush by the airlines into competition and the consequences this may have for safety and on the methods used in the manufacture of planes and their components. Anyone who reads newspapers cannot be but concerned at the reports of cost-cutting and the allegations about the lack of attention to detail in the manufacture of planes. One would have to ask if this inefficiency is as a result of the mad pressure of a market economy gone wrong and of the need to ensure that politicians in various countries can claim political kudos for reducing airfares? I would not like anyone to think I am against the lowering of air-fares——

Mr. Cullen

The Deputy could have fooled me.

Mr. Abbott

——but for goodness sake can we not have a little bit of moderation, reason and foresight? It is in the context of those comments, dramatic though they may be, that I would consider the proposals contained in this Bill. In fairness to the proposer of the Bill and its supporters in Fine Gael, they all acknowledge that the Bill is defective, yet they say it should still be considered. What I am saying is that public safety, social policy and employment considerations along with other facets of human activity must be taken into account by each of us before we could give an undertaking to support the Bill. I advise caution on the part of those who propose the Bill.

It is argued that it is in the interests of the business community that this legislation be put through the House and that it is slightly provincial of us not to push this legislation through at the dictation of the Progressive Democrats. It is quite unfair to do so. The last Fine Gael speaker taunted the Minister of State, Deputy Brennan, in respect of his marketing message. I support Deputy Brennan and believe he has done a very good job in raising the consciousness of the business community on the importance of marketing. I believe and I would claim to know a little bit about marketing that each little producer in our disorganised, highly competitive economy should aim at the European market and should look at the possibility of entering into slightly restrictive arrangements, such as franchises, joint ventures, integration of production and marketing through other non-definable activities and, in the farming area, producer groups for mushrooms, beef and lamb. This would involve the altering of the competitive structure but not in a way that would be to the detriment of the consumer; quite the opposite in fact. It would be altered to the benefit of the consumer. There would be the assurance of a constant supply of goods, the quality of which would be properly controlled.

The Minister of State, Deputy Brennan, and the Government have been successful in pushing and promoting such an approach. In fairness, other governments have also pushed and promoted such an approach to their enormous credit. I would think that a farmer who wishes to get involved with a producer group, be it for beef, mushrooms or horticultural produce, would have second thoughts about getting involved in any such quite harmless relationship in the commercial sense when he is told that such a relationship would be illegal under this Bill unless an exemption is granted. It is not good enough to say that exemptions would be granted so as to allow these activities to continue. We are at too sensitive a stage of our economic development to allow such uncertainty to creep in and to place the business community, the agricultural industry and the workforce at the mercy of bureaucrats who are not in a position to make decisions quickly enough.

I doubt if we would be doing the right thing by pushing forward legislation such as this. I am all for waiting for the experts in the restrictive practices area who know how the system works to come back with very sound advice. It would be highly irresponsible of any Deputy to suggest that we ignore the advice of the experts. I am not saying that we should accept the advice they give us but it would be very foolhardy to go to court, so to speak, without a lawyer. In this case our lawyers are the civil servants and those who work with them in an advisory capacity who will make available their collective wisdom both to the Government and this House. I suggest we use their advice as a springboard to concentrate our thoughts. Because of its inadequacy and brevity this Bill, if enacted, would leave the business community in a tailspin of doubt as to what they would face.

For the purposes of this debate, the philosophy of competition has to be defined very adequately. Very often the concept of pure competition is associated with pure efficiency. If we know anything about the evolution of economic theory, we know that the concept of pure competition is purely theoretical and that pure competion, such as the pure competition in the traditional agricultural sector, in practice brings with it this destabilising cobweb theory which creates the cycle of surpluses and shortages, a cycle which plagued the food supply of the world for centuries until economists and administrators began to understand how this purely competitive market had within it the seeds of instability and the capacity to provide feast or famine. But this was to the great detriment of political stability and human welfare, leading to the consequence of regular, cyclical famines in the history of the world, many of which continue in the lesser developed countries because you have nothing going on except this mindless, natural, law of the jungle, free market competition and a large number of unregulated, unplanned producers of goods such as we have in the African states and many of the Asian states which are plagued with constant food shortages. I am not discounting the influence of natural plagues and disasters such as floods, drought or whatever. These interfere with the free market mechanism of these countries and in an exogeneous way knock out the workings of a free market. Of course, they themselves lead to instability and exaggerate and exacerbate the instability in these markets.

When we go to solve the problems of these markets and these countries where there is less development than in the so called western world, we immediately address the problem by saying we have to establish systems within the market which will control the market, and thereby we are introducing restrictions. These restrictions must not work to the extreme detriment of the consumer. They are medicine which used moderately can be largely and greatly beneficial. We will suggest to the farming population of many of these lesser developed countries that they introduce mechanisms, which we have found useful to us in our economy, whereby the market is not used merely as a vehicle for disposing of what is produced but whereby there will always be a means over and above the market which is governed by higher humanitarian motives to ensure that a surplus will be kept from season to season, from year to year, so that a population depending on that market will not starve.

That is putting the situation in relation to free competition in fairly dramatic and clear terms. I am not suggesting that the intent of the Bill goes as far as to say we should be totally and utterly at the mercy of the free market but is it technically possible to develop the vast range of law, regulations, case law and administrative structure at the expense of the State to put in place the total administrative and legal machinery which this Bill implies?

If the Bill is brought to its logical conclusion by having it go through this House and having whatever vast drafting errors it contains amended satisfactorily to a workable state, can this economy carry another layer of bureaucratic activity such as is associated with this Bill?

Mr. Cullen

It is certainly not doing that.

Mr. Abbott

This Bill would produce a layer of bureaucratic activity within Government, for a start. I have no doubt about that.

Mr. Cullen

Nonsense.

Mr. Abbott

It would also produce a layer of professional advisers, economists, lawyers and various commercial agents who would come in on the area of litigation, dispute and doubt which would involve every business person——

Mr. Cullen

That is a total red herring.

Mr. Abbott

——who wants to set up a reasonable marketing strategy by way of franchising, joint ventures, integrations or any relationship with any other person within the economy and very often with persons who come from outside the economy such as the European firms who will be coming in here to operate on the domestic scene. All these arrangements will be subject to doubt. If we set them up we will have to go to this vast hierarchy of experts, bureaucrats and judiciary who will be fostered by the thinking behind this Bill. We are looking to Government and this House to ensure policies of cost saving will be brought about in the Exchequer to ensure the level of taxation will not be as high as it has been, interest rates will be kept down and, above all, the economy will work on smooth wheels. Give or take a few instances in this economy where restrictive practices are working, we have an economy which is beginning to move in high gear, where restrictive practices are not an extraordinarily significant element which holds back the performance of the economy, but where taxation and interest rates are still major impediments to economic progress.

There will be procedural problems relating to the administration of this legislation when it achieves full flower through the various ministerial activities and dictates of precedent. We do not know how the legislation is going to work in practice under a common law system. We know how this type of legislation operates on the hybrid, mainly civil code system of the EC. We know there are problems about ensuring the confidentiality of legal advice and ensuring that trade secrets would not be revealed unfairly through possibly vexatious litigation. Given the propensity of Irish people to litigate issues in court, I am not at all satisfied that business will be sufficiently protected against vexatious litigation, brought not for the purpose of achieving an award or damages in court in respect of restrictive practices, but rather for the sake of achieving a competitive advantage on a reasonable and fairly acting competitor. The rules of procedure under this legislation would need to be fairly pointed out by the proposers of the Bill before I could give my wholehearted support to it. There are vast gaps to be filled between the prohibitive system of the EC and our present regulatory system. Persons could institute proceedings in court for the purpose of getting a long range of discovery against the defendant company against whom damages would be sought and providing no security for costs in the event of that defendant being successful against the michievous plantiff. None of these areas is dealt with by the legislation and all need to be dealt with. I will be interested to hear how these threatened difficulties can be avoided in the operation of this Bill.

I would expect more of Fine Gael than coming in here and doing in a soft hearted manner what they have done today. I would have expected them to examine legislation such as this with a more circumspect and responsible attitude rather than coming here and merely nodding the "yes" of approbation with no serious analysis of the difficulties of the legislation. I am not trying to raise red herrings, I am merely mentioning practical difficulties I see arising. If I was an expert on competition law or a practitioner involved in EC competition law I am sure I could more eloquently point out the difficulties.

When we consider the economic successes in Europe in the last few years we find that Community policy is not as well geared to free competition as the Progressive Democrats would have us believe. One of the greatest successes in EC policies has been the common agricultural policy. It has been a success because it ensured that Europe could feed itself. Europe came out of the Second World War almost in a state of famine and deprivation. The CAP has ensured that there will be stability in agriculture prices and that farming families, especially those in Ireland, will have an opportunity to plan their future on the land. I have no doubt that were it not for the somewhat regulatory practices, which in some instances might have been called restrictive, such as in regard to the quota and intervention systems, European agriculture, and Irish agriculture in particular, would have been like that of the US and other countries. In those countries there has been a total depopulation of the rural countryside and social structures there are dictated solely by the laws of the economic jungle. There is no countervailing influence of the social aspects of policies like the FEOGA policy of the EC.

We must pause and consider the benefits of the FEOGA policy. The competition policy of the EC is highly qualified by social considerations. Are the proposers of the Bill willing to import into it the social qualifications which hedge around the harshness of Articles 85 and 86 of the Treaty of Rome? I suspect they are not interested in maintaining levels of employment or in ensuring that we maintain our quality of life. In my view they are interested only in pursuing a narrow, single-minded concept of competition which is outmoded and alien to our system. The proposers of the Bill should await the advice of the Restrictive Practices Commission and then redraft their Bill. If not, they should await Government legislation on this topic and give Irish businesses an opportunity to pull out of their long-suffering misery under a system of high taxation and high interest rates. Businesses should not have to face the threat of further bureaucratic interference and uncertainty arising from the facile nature of the Bill.

Mr. P. O'Malley

I should like to advise the House that I am willing to give ten minutes of my time to Deputy De Rossa. I note he is not in the Chamber.

An Leas-Cheann Comhairle

Does the House agree with that request? Agreed.

Mr. P. O'Malley

I am pleased to have an opportunity to make a contribution to this important Bill which, as the House is aware, was introduced by my colleague, Deputy Cullen. Its main objective is to ensure that the Irish economy operates in a more efficient manner and that the Irish consumer benefits by paying a lot less for a whole range of products and services. The way this desirable and necessary objective can be brought about is by doing away with monopolistic controls and anti-competitive practices which at present exist in many sectors of Irish industry, private and public. I do not want any of my comments to be taken as applying solely to the public sector because there are many private sector companies who need to have the provisions of the Bill applied to them.

Most speakers have indicated a welcome for the general principles of the Bill. Even Deputy Abbott, almost grudgingly, gave some approval for the principles we are trying to address. However, he made some extraordinary comments during his contribution. He seemed to suggest that competition would give rise to a lowering of standards and that we were seeking to allow manufacturing to take place in an unregulated way. He appeared to link that suggestion to the Lockerbie disaster by claiming that if our Bill was adopted we would end up with more such disasters. That was a disgraceful comment. It is unhelpful and has no relevance to what we are trying to do. Most Members accept the need to end protectionist policies and to open up trade and services to competition. Obviously, that will be good for the consumer because he or she will get a better deal and it will make for greater efficiency in the way business operate. Those changes will have to come about if we are serious about preparing for the rigorous competition that will open up with the advent of the single market in 1992.

Last week the Minister acknowledged that the issues raised in the Bill were very important. He recognised the need to address them but then suggested that the Progressive Democrats should withdraw their Bill on the grounds that it was poorly drafted and was premature as the Fair Trade Commission were at present considering this whole area. He told us he was awaiting their report. That represents a complete cop-out on the part of the Minister, and he knows it. The Minister cannot on the one hand accept the need for greater competition while, on the other hand, oppose legislation that is designed to bring that about. I suggest to him that he cannot kick to touch forever on a vital issue like this by claiming that he is awaiting a report from the Fair Trade Commission. He is a Minister with responsibility in this area and he must face up to the fact that one of our major problems is the prevalence of restrictive practices and anti-competitive conduct in many sectors of industry, trade and professional services. He must be aware that they give rise to unacceptable cost handicaps for the Irish consumer and adversely affect our competitiveness.

The Minister acknowledged that this problem exists but, on the other hand, he is not prepared to do anything effective about it. Instead, he lectured the Opposition in the course of a radio programme last weekend and told us the Government would treat a defeat of their view on this issue as an election issue. I must ask him if he seriously thinks we are going to be cowed into submission and withdraw our Bill in the face of such a threat. He knows the Government cannot in all honesty run away from such a Bill which is required under the Treaty of Rome and which would be of such benefit to consumers here.

There was another lecture in this morning's issue of The Irish Times by an unnamed Government spokesman who pointed out that the Government's responsibility was to introduce legislation and that that responsibility should not be usurped by other parties, particularly smaller parties, and that we should not use our Private Members' Time in a way in which was never intended. That is the height of arrogance. We have a perfect right, as indeed has any party in this House, to introduce legislation which we feel is important and necessary. We fully believe that this legislation is important and necessary and we are pleased with the support that has already been indicated for it.

In case the Minister is under any illusions, we feel that this Bill is very necessary and if the Minister wants to make it an election issue, so be it. We have no qualms about that. The fact that there may be some drafting defects is not a reason for opposing the Bill. This party have already indicated our willingness in previous contributions to accept amendments which might improve the legislation on Committee Stage. I have no doubt that this can be dealt with in a constructive manner if the Government want to proceed in that way. It is the principle of the Bill that matters, not minor drafting defects. Calling on us to withdraw the Bill is ignoring the urgent necessity to update our domestic law to prohibit anti-competitive practices which are not appropriate to a modern economy and which are completely out of line with the spirit of 1992. We hear so much from the Government about 1992 and still, here is a measure highly relevant to it and the Government have indicated that they will not support it.

This Bill is purposely modelled on the provisions of Articles 85 and 86 of the Treaty of Rome with our courts being given power to award damages to persons who have been the victims of anti-competitive practices. What is wrong with that? It is the most effective way of breaking up collusion, price fixing, non-competition and restrictive practices generally. As I understand it, the Minister is resisting the prohibition approach that we have outlined on the grounds that we already have in existence a control of abuse system under our present legislation. This system is completely ineffective and very cumbersome. Orders under current legislation are rarely made. I put it to the Minister that it would be much better to prohibit these anti-competitive practices and to provide a system where the court could award damages rather than rely on the theoretical powers which are available to a commission and the Minister, especially as these powers are rarely availed of.

Last week previous speakers to this debate highlighted a number of problems in our economy because we do not have in force legislation such as that proposed in this Bill. My party leader drew attention to the excessive profit margins on non-alcoholic drinks in certain premises and to the ineffectiveness of the present law to deal with that. Similarly Deputy O'Malley pointed out the very high interest rates being charged by the two major banking groups on the credit card services provided. This is being done through a price fixing agreement that takes no account of the general low level of interest rates that currently prevail and the present low rate of inflation.

Deputy John Bruton in his contribution stated that when he was Minister for Industry and Commerce his hands were tied when he tried to open up the whole practice of conveyancing. He felt that conveyancing should not be the sole preserve of the legal profession and that people should be able to shop around to have this work carried out at a cost less than that set out in the scale of fees operated by solicitors. It is crazy to have to pay a hefty fee for this service where, for example, there is an estate of 300 houses being built on registered land and where there is no problem with title and the subdivision maps have been drawn up by a competent surveyor. In that case the solicitor still gets a fixed percentage on each of the 300 transactions for just rubber stamping the documents. That was given as an example of the difficulties that arise by not having in force legislation such as is proposed by the Progressive Democrats. Deputy Bruton indicated that had happened in 1982 when he was Minister and here we are, seven years later, and we still do not have an adequate means of addressing that issue. Indeed, if we do not pass this Bill it will be several more years before we are able to address the points I have just raised which need to be resolved because these practices are anti-competitive and the solicitors' profession are in a privileged position in relation to that issue.

There are other examples that could be given where monopolies or dominant positions have cost the consumer dearly. I will dwell for some time on CIE because they hold a monopoly under the 1932 Road Transport Act to provide passenger carrying services for the general public. At present anyone from the private sector who makes an application for a licence to provide public road passenger transport services has his application referred by the Department to existing operators for vetting. In the overwhelming number of cases the existing operator is CIE who are exempt from the licensing system so that CIE are effectively being asked whether the existing licensed service operating in or near the proposed new route is adequate. They are being given a veto on new entrants into the market. That is insupportable but it has been going on since the legislation was passed in 1932. It is absolutely ludicrous. It provides a complete block on competition. The monopolistic control conferred on CIE under the 1932 Act has not resulted in an efficient, reliable and cost effective service for the travelling public notwithstanding the fact that CIE received State subventions totalling £130 million last year. This is underlined by the fact that there is no growth in the passenger numbers using CIE services, despite the very high costs for motorists.

Minister of State at the Department of Industry and Commerce (Dr. McCarthy)

On a point of information. With the acquiescence of this side of the House and the other Members of the House Deputy O'Malley's good friend, colleague and ally, Deputy Proinsias De Rossa was to have ten minutes of Deputy O'Malley's time.

Mr. P. O'Malley

Is Deputy De Rossa present?

Dr. McCarthy

He has let you down.

Mr. P. O'Malley

I am not on my feet more than about ten minutes and if Deputy De Rossa comes, as I indicated at the outset, it is my intention to facilitate him.

(Interruptions.)

An Leas-Cheann Comhairle

For the information of the House, Deputy O'Malley has been speaking now for 16 minutes. The Deputy indicated that he would be happy to give Deputy De Rossa ten minutes if he so required. Deputy De Rossa has not come in as yet. He may come later but one way or the other Deputy Pat O'Malley will be in possession until 8.14 p.m.

Dr. McCarthy

I was just expressing my disappointment that Deputy O'Malley's colleague has let him down.

Mr. P. O'Malley

Given that I have a limited amount of time left and I have dealt with CIE, I would like to proceed by mentioning another State body briefly in case I do not get an opportunity to do so later. I refer to the ESB who have a dominant position in the market. They are charged with breaking even each year as far as their accounts are concerned, but the requirement does not really convey anything about the performance of the company since they are in a position in which they can pass on all their costs to the consumer. The company's track record has been very poor in relation to any commercial activities it has undertaken and my party leader drew some attention to that also. Because the ESB are able to cross-subsidise these loss-making trading activities with revenue out of the electricity account they are in a privileged position. Consequently, they can afford to engage in generous credit campaigns for the sale of white goods and other goods in their appliance shops. That constitutes an abuse of their position. The requirement on the ESB to show transparency in their accounts is justified but they do not have to do so. Consequently, they are able to cross-subsidise many of their loss-making activities which is unfair to other competitors in that sector. This is applicable not only to sales of appliances but also to repairs and installation contracts in which they are heavily involved.

The Joint Committee on State-Sponsored Bodies drew attention to this in 1986 and recommended that the ESB should divest themselves of this type of ancillary activity. That recommendation is gathering dust which is why we need the provisions of this Bill. They will ensure that such recommendations, well founded, are not ignored and that companies such as the ESB engaging in the practices I have outlined are forced to trade fairly with others in the marketplace.

Can you indicate to me, a Leas-Cheann Comhairle, how much time I have remaining.

An Leas-Cheann Comhairle

The Deputy has 12 minutes.

Mr. P. O'Malley

Therefore I have about two minutes remaining if I want to facilitate Deputy Mac Giolla.

I will not give other numerous examples. I could draw the attention of the House of companies abusing their dominant positions and engaging in anti-competitive practices.

I must emphasise that the provisions of this Bill are necessary if we wish to give our consumers a fair deal, render business generally more afficient and be ready for the competition we shall have to face in 1992. In the course of his remarks last week the Minister accepted the need for such change but it appears he is not prepared to do anything about it at present. He has advanced an outdated, irrelevant defence of the legislation obtaining. He uses the excuse that he is awaiting a report on this matter from the Fair Trade Commission, claiming that there are some drafting errors in this Bill. None of those constitutes valid reasons for opposing this Bill and the Minister knows it. He also knows he is responsible for ensuring that anti-competitive and restrictive practices are eliminated in the interests of our economy and of giving the consumer a fair deal. Rather than blustering about an election and issuing threats, he should take the principles of this Bill on board. At the very least, he should not oppose it.

I will now give way to Deputy MacGiolla.

An Leas-Cheann Comhairle

Deputy MacGiolla has until 8.14 p.m.

Tomás Mac Giolla

This Bill is somewhat deceptive. It is somewhat like the impression one gains on first looking at Chapman's Homer. It appears to be a great protection of consumers' interests. All the hype in recent days has been to the effect that nobody could possibly oppose a Bill that protects consumers rights and so on. Of course its provisions do not really protect consumers. Deputy Pat O'Malley's contribution gives an indication of what was in the minds of the Progressive Democrats in introducing this Bill, which was that the people they really want to nail are semi-State companies who, they claim, have a dominant position in the marketplace.

As Deputy De Rossa has said, it is contended that unbridled competition is sufficient to protect the interests of consumers, with everybody competing on the open market, allowing the best man to win. The falsity of that argument has been demonstrated repeatedly, in recent years adequately demonstrated in the United States where unbridled competition among airlines had meant that there are now fewer airline companies operating there than heretofore. We can see the effects of unbridled competition here in the supermarket business, which has led to one endeavouring to gain a dominant position in the market, a good example of which at present is Dunnes Stores. It is interesting that they are endeavouring to do so by way of the most basic commodity, the loaf of bread. If one achieves a dominant position in that commodity one is then in control of a large segment of the food chain and also of the type of bread that will be produced. This means one is in an almost monopolistic position vis-à-vis the most basic commodity.

That is the end result of unbridled competition. Of course, when one would achieve that dominant position then the Progressive Democrats would be endeavouring to do something about that. While in the short-term it may be in the interests of consumers to dash from one supermarket to another to buy the cheapest product, it will not be in their interests in the long term. It may appear for the first four to six years that the whole exercise is in the interests of consumers but in the long term it will be they who will lose.

The provisions of the Bill would appear to be aimed at the semi-State sector whose practices seem to annoy the Progressive Democrats enormously. They have endeavoured constantly to emphasise the damage being done by the semi-State sector through lack of competition, price fixing, contending that they are playing some type of dirty deal role. Of course, the fact is they are run by public servants who have nothing to gain themselves but rather who want to produce the best possible service for those they serve. It should be remembered that the top executive among them will be earning a wage perhaps high in some cases but not as high as his counterpart in the private sector. Yet, they are working on behalf of the community in order to provide the best possible service.

Of course they are restricted in many respects in what they can do through lack of capital for development and so on. That has been the case particularly with regard to transport. One only has to think of all the mud heaped on CIE and various transport companies over the years. The only reason a semi-State company was put in charge of transport here was that private sector competition led to such chaos people in many areas did not have any transport. In fact, in the areas with greatest potential for transport there was unbridled competition leading to two, and sometimes three, buses competing for passengers in the same queue.

That is what unbridled competition leads to. Therefore, the State had to step in to give a service to all the people of the country, to provide the service that the people wanted. To break CIE into private companies again would be going back to the old system of fantastic transportation in areas of high density population and none at all in areas of low density population where transport is more needed because of distance and so on.

The argument that Deputy O'Malley used in relation to the ESB is a very strange one. He is simply dealing with the area of ESB shops selling electrical goods. Everyone in the electrical trade will agree that the ESB are not being over-competitive but are charging a higher price than anybody else. They are depending on people coming for the security and the service for the goods they sell, and the HP arrangements. Those are the major factors. There is very good reason for people to go to the ESB to buy electrical goods at a much higher price than they could get them from many other electrical dealers around the country when they look at the number of electrical dealers selling goods cheaply who have suddenly closed shop and disappeared off to Spain or some such place, leaving people with "guarantees" for a certain length of time covering service, maintenance, repairs etc. and walking out on all those guarantees. The last was Cannon Electric. I cannot remember all the names, but there was a whole series of electrical firms that disappeared; some of them were featured in an RTE programme a couple of years back. To suggest that if the ESB handed over all their shops to private enterprise there would be a better service for the consumer is a total lie.

Mr. P. O'Malley

I am talking about competing on an equal basis. They are cross subsidising. The ESB have an unfair advantage, and the Deputy knows it.

Tomás Mac Giolla

What is being asked is that all the ESB shops be closed down, that the ESB get out of the business of selling electrical goods.

Miss Colley

If they cannot do it on a competitive basis; they cross subsidise.

Tomás Mac Giolla

Why can they not sell electrical goods? They are dealing with electricity. They are best at servicing electrical goods and they know the best electrical goods. They stand over the quality and standard of their electrical goods. People who have bought electrical goods from them, although they paid a higher price than they would have paid in other outlets, are very happy that they have done so. Deputy O'Malley says that the ESB are in another business so that if they can make a profit here they can transfer that to cross subsidise another area. Let us just look at private enterprise. The thing to do now is to diversify. People who are into selling beer, like Guinnesses, are into things like boats on the Shannon. People in the sale of cigarettes, like Donal Carroll, are into various other projects and can cross subsidise also, and there are no complaints whatever about that from the Progressive Democrats.

Mr. P. O'Malley

Yes, but they do not short-change the consumer.

Tomás Mac Giolla

This Bill is a flawed Bill. It is a cover up of the main attack. It is not a Bill to protect the consumer's interest. It is a Bill to protect traders' interests. Deputy Cullen says that this has nothing to do with privatisation, yet suggests that the ESB should close down all their shops and let the other electrical traders take them over. That is why we are opposing this Bill.

Mr. Cullen

Privatisation has nothing to do with this Bill.

Tomás Mac Giolla

This Bill has nothing to do with consumer protection and everything to do with the Progressive Democrats' policy of attacks on the public sector.

(Interruptions.)

An Leas-Cheann Comhairle

Deputy O'Malley, the fact that you have allowed somebody to take some of your time does not justify your interrupting him.

Mr. M. Kitt

I welcome the opportunity of contributing to this debate. There is a continuing assertion from the people who proposed the Bill that there is a lot of collusion involved in price fixing and a lot of abnormality in commercial practice here that this Bill would deal with.

I have heard some examples from the speakers opposite concerning the problems of the banks, the problems in connection with the ESB, the margin of profit for soft drinks in our public houses and, in the last contribution by Deputy O'Malley, in regard to CIE.

We need to put the whole Bill into perspective. If we are talking about four areas only there is not a very great problem with competition. Perhaps we will hear more examples as this debate continues. Even in regard to the examples that have been given a lot of points could be made, and a lot of action has been taken by the Government to deal with the so-called monopolies, for example, CIE. One of the best deals one can get as regards comfort and efficiency is the early morning CIE train from Ballinasloe to Dublin which makes the journey in one hour 35 minutes. If one were Stirling Moss one could not do better than that. That is for a £10 return ticket and, as the advertisement says, one can have the freedom of the city with free transport on the Dublin buses all day if one has nothing else to do. However, Deputies like myself are usually anxious to get to the Dáil as early as we can. That is an example of a very good service. I admit that the private buses which run in competition with CIE have led to the service being so good.

Mr. P. O'Malley

That is the point.

Mr. M. Kitt

That is not a reason for saying that CIE provide a bad service. They provide an excellent and very comfortable service for people from the west. Nobody needs to worry too much about the service we have from CIE. There is competition there already through the very good bus service and the CIE train service. That is one example that refutes the Deputy's argument.

Similarly in regard to the banks, we were discussing only last week a Bill from the Minister for the Environment on the building societies whereby the building societies will now provide a full range of banking services, conveyancing and all the services that we would normally associate with the bank. That Bill has been welcomed on all sides of the House. The assumption that there are a lot of problems with anti-competitive practices in this country is very wrong.

Mr. Cullen

Look at the position with regard to bread.

Mr. M. Kitt

What needs to be stressed is that we are competitive, costs have been reduced, we have low inflation and low interest rates and we can compete as has been shown in the food industry, specifically the meat industry. That should be highlighted here. Deputy Mac Giolla made an interesting point on the bread war. Even if anti-competitive practices were removed in that case there would still be a bread war.

Mr. Cullen

It would give the small businessman the opportunity to take the supermarkets to court for putting him out of business.

Mr. M. Kitt

The supermarkets may say that the customers will get cheaper bread, but at what cost? It will result in a loss of jobs in the bakery industry and also in very bad quality bread. It is only right that the Minister should have the powers to bring in orders, as he did recently, to ensure that below cost selling will not continue. As Deputy Cullen has said, Ministers do not like doing that but it has to be done where industries, such as the bakery industry, are put under threat.

Miss Colley

It would not have to be done if this Bill were enacted.

Mr. M. Kitt

To say quite glibly that we have anti-competitive problems and that if we get rid of them everything will be all right is not the answer. We do not want instability because that leads to monopolies, as the Deputies opposite said.

When listening to the debate in the last number of weeks about the bread war, it brought to mind the issues we discussed in the Dáil in the late seventies when we were concerned — and as a rural Deputy I am still concerned — about the proliferation of multinationals coming into this country, opening big supermarkets, and putting the small family shopkeeper out of business. No reference has been made by the speakers on behalf of the Progressive Democrats to the fact that there are social considerations that should be adverted to in this Bill.

It would be only right to stress that as a small open economy in which we have shown that we can compete, we should not be scaremongering about anti-competitive practices. The suggestion in this Bill that Irish law should be changed from the control of abuse system to the prohibition system was made by the Restrictive Practices Commission in 1977, but it was not acted upon because it was considered that a prohibition system would be much more costly to enforce.

The Minister for Industry and Commerce, Deputy Burke, has stated very clearly that he does not want to bring into legislation a system that will be very costly, a bureaucratic system which would ordain that extra costs would be incurred by the country and by the Government on behalf of the people of the country. He said very clearly that in a time of scarce resources he would prefer to await the final report of the Fair Trade Commission. I agree that we should wait until that report is produced.

The investigation by the Fair Trade Commission of the possibility of incorporating Articles 85 and 86 of the Treaty of Rome into domestic Irish legislation is currently in hand. The Fair Trade Commission, in March 1988, invited submissions from interested parties, representative bodies and undertakings in relation to the proposed study. Completion of this study has been delayed by the increased workload faced by the Fair Trade Commission in carrying out their new functions under the Mergers, Takeovers and Monopolies (Control) Act, 1978, as amended, as well as the need to get the Attorney General's advice on legal aspects. The Minister has given those reasons — the cost involved and the constitutional question — and it would be only practical that they would be accepted by the proposers of this Bill.

While there is mention in the Bill of the role of the Director of Consumer Affairs and Fair Trade, we are not too clear about the role that is envisaged for the Fair Trade Commission. When replying to this Bill we should be told what will be the role of the Fair Trade Commission in future. In this country there is a Director of Consumer Affairs and Fair Trade and a Fair Trade Commission. The Minister has the power, as has been seen in the bread war, to make orders under section 8 of the 1972 Act. The orders cover such goods as radios, building materials, motor cars, groceries, carpets, motor spirits, intoxicating liquor, jewellery and electrical appliances. These are very important orders.

The Government, since coming to office, have acted on matters like below cost selling of groceries and the receipt in the grocery trade of what is known as "hello money." The former Minister for Industry and Commerce, Deputy Albert Reynolds, who piloted legislation through the House and the present Minister, Deputy Burke, who as Minister for the Environment brought in planning laws to deal with multinationals getting involved in major supermarkets in this country, have a very good record in trying to ensure that anti-competitive practices do not affect the smaller business.

A very good point was made by Deputy Pat O'Malley when he said we must talk about competition on an equal basis. One of the major problems for our small retail outlets, whether in the bakery business or any other small family business, is that they are operating very much on an unequal basis when competing with the major supermarkets and multinationals. I would like, with your permission a Cheann Comhairle, to share my time with Deputy Chris Flood, if the House is agreeable.

An Ceann Comhairle

I am sure that will be in order, but you will appreciate there is very little time left in this debate. We shall be going on to other business in two minutes' time.

Mr. Flood

I welcome an opportunity to participate in this debate referring as it does to anti-competitive practices, particularly in the various commercial and other sectors of the economy. My comments are to some extent based on experience. Coming from a commercial background, I have had some involvement in the economic development of the country. I have also had an opportunity to participate in the commercial interaction of the economy.

While the whole question of anti-competitive practices needs to be addressed in the interests of the orderly development and expansion of our economy, we have to extend great care as to how we devise legislation to deal with the issue which is addressed in this Bill. From a fairly cursory examination of the Bill I am not convinced that this is the correct way forward to deal with anti-competitive practices.

Debate adjourned.