Deputy Boyle had asked to share time with me. I also wish to share time with Deputies Morgan, Finian McGrath and McHugh.
Consumer Protection Bill 2007 [Seanad]: Second Stage (Resumed).
Some 26 minutes remain in the slot.
I welcome the opportunity to speak on the Bill, which I generally support. There is widespread agreement in the House on the need to have strong structures in place to protect consumers from unscrupulous practices and to provide a framework for the protection of consumer rights so as to obviate the need for consumers to go the legal route, which is an expensive, stressful and in many ways unsatisfactory means of resolving some of the consumer issues people experience on a day-to-day basis.
The Bill has room for improvement and we will attempt to introduce this on later Stages of the Bill. I would be interested to hear the Minister's thoughts on the issue of Internet retailing at a later stage. This is the fastest growth area in retailing. What would be the powers of the agencyvis-à-vis businesses that operate in this area, given its international nature? It is a difficult area to police in terms of seeking legal redress, given the limited mechanisms that can be introduced by a national agency to deal with an entity trading on the Internet. This is an area we need to amend and improve to ensure legislation is up to speed with the extent of change that is rapidly occurring.
Deputy Boyle has spoken generally on the Bill so I will address specific points. One of the concerns I have is with the extent of overlap that may exist between different State agencies involved in the broad remit of consumer protection. As my party's spokesperson on communications, marine and natural resources, it is interesting that we are currently debating a Communications Regulation (Amendment) Bill which gives significant powers to ComReg — the communications regulator — similar to those enjoyed by the Competition Authority. In a sense, they are similar to the powers set out in the Bill, given that they aim, on behalf of the consumer, to ensure there is not unfair pricing, unfair billing nor improper use of market dominance to the consumer's disadvantage.
I accept the Bill sets out a provision enabling the Minister to direct the agency to work with other State bodies. However, in the area of telecommunications, which is one of large consumer expenditure, there is much concern about difficulties over the purchase of ringtones, for example. Internet shopping is related to the role of ComReg in communications. There is an overlap between the Competition Authority, the new powers given to ComReg and the powers outlined in this Bill. It is unclear which takes precedence or how each is intended to work with the other. Perhaps this could be set out more clearly to ensure the most effective use of resources.
I expect Deputy Boyle referred to the means by which we are setting up such new bodies, in terms of ministerial appointment on the basis of expertise criteria that are difficult to assess. There is genuine concern on this side of the House on this matter. In the past five years in which I have been a Member of the House, much of the legislation that has been introduced involved a Minister setting up various boards, which are expensive structures. It is also remarkable the number of people over which the Minister has the power of appointment, often on a voluntary or part-time basis. The Minister may say it is easy for me to say this on the Opposition benches but it is a genuine concern based on a desire to see the most effective agencies rather than a political point scoring exercise.
Perhaps we would be better off appointing agencies or boards on a similar basis to that on which we employ senior civil servants or members of local authorities. Perhaps a separate commission is required which would assess candidates and ensure there is a balance of expertise and skills. This is not to criticise the Minister in question. However, the continued use of ministerial appointments is open to criticism of political patronage and is not necessarily in the long-term interests of any agency being established.
I am conscious of time and the fact other speakers are sharing my time. In general, I am in favour of the Bill. My party will not hinder its progress through the Dáil. I hope the legislation will be passed and the agency which is already up and functioning will use the powers which have been assigned to it to good effect on behalf of consumers.
Sinn Féin welcomes the Consumer Protection Bill, especially the sections which establish the National Consumer Agency, NCA, and those which transpose the Unfair Commercial Practices Directive into the law of this State. This will have the effect of prohibiting unfair commercial practices, in particular misleading and aggressive commercial practices. In addition, we welcome the important measure to ban pyramid schemes that inevitably turn out to be fake and the rip-off scratch cards where one must pay some kind of fee before one can claim a prize which one has already won.
We welcome the fact that the National Consumer Agency will be a statutory body, independent in the performance of its functions and that it will also have responsibilities in the areas of consumer advocacy, research, educational awareness, information and enforcement and will finally combine with what the former Office of the Director of Consumer Affairs. It is important for the NCA to become a strong advocate for the consumer when it comes to consumer welfare issues. However, given that the NCA was established on an interim basis almost two years ago, it is most disappointing the Bill is only now being discussed in the House. The delay in their merger is unacceptable and shows how low consumer protection is on the Government agenda.
Despite welcoming the introduction of legislation that is intended to safeguard the rights of consumers, it is ironic that this Bill is being discussed in the Dáil only a matter of months after the groceries order was repealed by the Government. As well as its primary aim of promoting consumer advocacy, the Bill also aims to promote competition. The repeal of the groceries order was intended to promote competition. Instead, the repeal of the ban on below-cost selling has been proven to eliminate or reduce competition, not increase it. This Government initiative was sold to the public on the basis that retailers would pass on their savings on to the consumer. Clearly, this has not happened.
It has not shifted.
The statistics are there to prove it.
Deputy Morgan is defending big business.
Bring back Mr. Fingleton.
Is nothing sacred any more?
The new situation has enabled supermarkets to lower prices on certain high profile items, to be used as loss leaders to attract customers, while other goods are priced the same, or even higher than independent retailers. Is this the type of unfair commercial practice that will be covered by the Bill? Will the National Consumer Agency advocate for a reduction in costs in supermarkets? If it does, will it be a real vehicle for championing consumers' rights or will it be a cosmetic exercise at best, to attract people into shops, where it is not the supermarkets that pay for it, but the farm producers who receive a constantly reducing proportion of the final cost of items?
Buying a house is a consumer action. Will the National Consumer Agency be advocating on behalf of those who are faced with rates of house price inflation that are out of control? This inflation has all but priced working families and first-time buyers out of the private housing market, with average costs of €308,000 to €516,000 in the State. The average price of a new home was 11% higher in 2006 compared to the previous year. Figures for the same period show an increase of more than 17% in second-hand house prices in the Dublin area. House prices are increasing at almost twice the rate of wage increases. It is no wonder that public sector workers such as nurses, fire fighters and teachers cannot afford to buy a home in our major cities. My Sinn Féin colleagues hope that it is within the remit of the NCA's advocacy role to tackle the Government and get it to address the rising cost of purchasing a home.
The practices of some estate agents may also play a role in inflating house prices. They have an inbuilt incentive for inflation because they receive a percentage of the price of the sale. There is plenty of anecdotal evidence to suggest that some estate agents use underhand measures to increase the cost of housing for their own profit. This combination of incentive and opportunity requires a robust policy response.
Section 53(1)(a) deals with prohibited commercial practices:
A trader shall not engage in any of the following commercial practices:
(a) a representation that the trader has an approval, authorisation or endorsement that the trader does not have, or making such a representation when the trader is not in compliance with that approval, authorisation or endorsement;
That sounds very good but how will it work in practice? It is well known that estate agents tell a bidder that there are other parties interested in a property and that the other bids are higher. I hope that this section of the Bill will prevent potential buyers from being exploited in this way.
Management fees charged in new housing units is another area in which consumers are in need of protection. It is necessary to have management companies in blocks of apartments. The main problem with private management companies is that they impose a form of double taxation through management fees. It is fundamentally inequitable that some residents must pay for a service that their neighbours receive for free and we hope that the NCA will deal with this issue in a thorough manner.
Although they are subject to company law, such private estate management companies are unregulated. Many specific problems are associated with their proliferation in this State, in particular the total lack of accountability to the residents who pay for the services and the fact that the fees charged are often exorbitant and subject to huge increases. In some cases they rise by 300% in a single year without a corresponding improvement in service. The Bill partially defines one facet of unfair commercial practice as something that would be "likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make". The average consumer would not pay a 300% increased management fee unless they were forced into it and this is a perfect example of unfair commercial practice. I hope this Bill will deal comprehensively with these issues.
I welcome the Bill as far as it goes but I fear consumers will feel removed from the National Consumer Agency. If the consumer is notau fait with legislation, the Bill will not serve its purpose. The functions of the Office of the Director of Consumer Affairs, whatever they are, will be subsumed into the National Consumer Agency. What difference will that make to the consumer? Will the paraphernalia of the Director of Consumer Affairs be transferred to the National Consumer Agency so that we have the same service as before but with a new name? How can the consumer be better served by this move?
Many consumers feel far removed from the establishment and this agency will be seen as part of that establishment. Consumers will not bother dealing with the bureaucracy to vindicate their rights. It will prove too cumbersome. The Minister should simplify the system and bring the machinery closer to the people, making them feel part of the process and making the system more transparent and meaningful. He should consult the people who perceive the establishment as their enemy and should not commission another report. This would be prepared by some Dublin-based so-called professional who is part of the establishment. Such a person would not know or care how the consumer feels. The answer is not always to commission another report.
I have difficulty with the closeness that will develop between the Minister of the day and the National Consumer Agency. The Bill allows leeway for the Minister to consult the agency and seek reports from it, etc. Will the agency feel obliged to adapt its thinking to suit the Government? The agency should be completely separate from the Government. If it is to earn the respect and confidence of the consumer the new agency must be the champion of the consumer. Links to government will not achieve that champion status.
The new agency will be concerned with prices. Inflation is a major issue and some of the reasons for this are outside our control. Stealth taxes impact on people and we need a responsible debate on the matter rather than the tabloid approach of Mr. Eddie Hobbs. The National Consumer Agency can play an important role in an informed debate if it is seen as totally independent of government and a champion of the consumer.
Unfortunately, this new agency will not cover local authorities. The public are daily consumers of local authority services and need protection and support. Local authorities leave much to be desired in the manner in which they deliver services. The Minister for the Environment, Heritage and Local Government is no help in this regard. He only passes the buck rather than solving problems. Those who are dissatisfied with the service of local authorities have no simple route of redress. The service is not good enough. In recent years we have created a monster in local authorities where the buck never stops at anyone's desk. No one knows anything and everything is referred to someone who cannot be found, will not answer the phone and whose mailbox is full. Calls are not returned because the person is at the launch of something or other. Local authority staff never attend such events alone; they attend in numbers so nothing gets done. The consumer must put up with this and neither the Bill nor the Minister for the Environment, Heritage and Local Government will help this cause. Someone must accept responsibility. The Government must do so because the public expects action to be taken. They are fed up with being fobbed off.
In recent years local authorities have developed customer charters that contain high and mighty aspirations but nothing real. Worse, they fall back on the customer charter when challenged, even though it is nothing but paper and window dressing. They go through the motions but do not deliver.
I welcome the Consumer Protection Bill, which is progressive and sensible. Consumer protection is the message in this legislation. We must face the reality that many consumers, citizens and taxpayers are not protected and their rights are not vindicated. This is important.
The purpose of the Bill is to establish a body known as the National Consumer Agency and to define its functions:
to give effect to the Unfair Commercial Practices Directive (Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005), to make new provision in relation to pyramid selling schemes, to amend the Industrial Development Act 1993, and to provide for related matters.
When talking about consumer protection it is important to note that prices are going through the roof. In recent weeks there have been major price increases in food, vegetables, fruit, gas and electricity. This Government, and the Minister, must address this because matters are getting out of control, regardless of pay increases for workers and staff.
There has been a 15% rent increase for people living in Dublin City Council housing projects, particularly those living on the northside of Dublin. I will defend the rights of the people living in my constituency of Dublin North-Central who have contacted my office because that increase is a little too much for them. The price rises affect the elderly, the disabled and working people in general. We must respect these people as consumers but more so as citizens because they must put up with the high prices which affect everybody's quality of life.
There is a crisis in Dublin such that young couples are unable to buy new homes which is unacceptable. We need to develop new ideas to assist these couples, whether through affordable housing or other schemes. A radical new approach is needed to help them.
The Minister and the Cabinet have a responsibility not to waste public money. The now famous Dublin Port tunnel was €200 million over budget. This is a scandal, and coupled with the 294 homes in my constituency that have been damaged as a result, it is unacceptable. The electronic voting scandal wasted €52 million. The Minister for Justice, Equality and Law Reform, who says he is concerned about the costs of the tribunals, spent €30 million on a farm that most people on the northside of Dublin would say was worth only €4 million. The site of the Battle of the Boyne could have been bought for €2.7 million but was instead bought by a private business and sold to the Office of Public Works 18 months later for €7.8 million. In the Minister's constituency the revamp of the courthouse in Cork was estimated at €6.5 million but cost the taxpayer €26.5 million.
That is wrong.
That is the reality. These are the figures from the Departments.
That is not true.
I am giving the facts.
It is a fine courthouse. It is wonderful.
The Minister for Transport had 30 road projects which should have cost €932 million but ended by costing €2 billion. These projects were 86% over budget. This is what consumers talk about. They want value for their money. This money could have been used to end the patients on trolleys scandal forever, to build new schools, make a major dent in the housing lists, develop child care services or assist the elderly. These are crucial issues.
Section 8 of the Bill provides:
that the Agency shall have certain functions. The Section provides the Agency with a general function of promoting and protecting the interests and welfare of consumers and that it shall also be responsible for investigating, enforcing and encouraging compliance with consumer protection legislation including, where appropriate, referring cases involving possible indictable offences to the Director of Public Prosecutions.
The key phrase there is "the interests and welfare of consumers". The Independent Deputies will look after consumers and give value for money after the next election, no matter what people say in this debate.
I welcome the positive aspects of the legislation. Section 10 provides:
for membership of the Agency, its numbers, how they are to be appointed, paid, replaced, removed etc. The Section provides that the Agency shall consist of a chairperson and 12 ordinary members and that the CEO shall be a member of the Agency.
It is necessary to appoint a quality person as CEO of this agency, who will look after the interests and rights of consumers and operate the agency in a professional way.
Section 11 "provides that the Minister shall designate one member of the Agency as the chairperson and that the chairperson's term of office shall be 5 years". I welcome that as a sensible solution. A five year term is enough to deal with the situation. If somebody proves him or herself this could be considered in broader terms.
Section 41 "prohibits traders from engaging in commercial practices that mislead consumers". This is crucial because many people mislead consumers.
Section 43 prohibits:
commercial practices which would be likely to cause the average consumer to confuse a trader's product, trade name, trade mark or other distinguishing feature or mark with that of a competitor and to make a transactional decision that he or she would not otherwise make.
I welcome the opportunity to defend the rights of consumers and taxpayers. I have concerns about the financial implications of the Bill but I will waive those for the moment. The Bill is in the interests of the consumer and I welcome it.
I compliment the Minister for Enterprise, Trade and Employment on bringing forward this Bill. We are lucky to have such a strong, caring Minister as Deputy Martin. I strongly believe in empowering consumers and making their voices heard.
Can he deliver?
I also believe in promoting competition to keep prices down and strengthening competition laws to get the best deal for consumers. Much has been done in this regard. We have abolished the groceries order and amended the Competition Act to prohibit re-sale price maintenance, unfair discrimination and hello money in the grocery trade. While it may be too early to make a judgment, according to figures compiled by the Central Statistics Office the prices of products previously covered by the groceries order have fallen by 0.5% in the year to mid-January 2007. The prices of goods not covered increased by 5.1% over the same period.
We have removed the barrier to competition but it does not follow that prices will fall. The acid test of whether the abolition of the groceries order has been successful is whether grocery price inflation is lower than it would be according to other essential factors. We have increased funding for consumer protection substantially. The allocation for consumer issues in 2007 will amount to just under €8.4 million, an increase of 147% since 2004. The Competition Authority budget has been increased by 15% to €5.8 million, doubling resources in its cartel enforcement division.
We are determined to ensure prices are open and clearly visible to consumers so they can make their choices. In April 2003 the Government introduced new price display regulations to enable consumers see what they are buying and compare prices across goods. Shops must now display the cost by weight. We can compare the prices of biscuits, coffee or cereal per 100g irrespective of packaging. The Government also doubled the number of inspectors in the Office of the Director of Consumer Affairs.
Nevertheless, over the past decade, it has become apparent that by comparison with other highly developed countries, consumer power is weak in Ireland. In many areas of commercial and public decision making, the consumer has no voice. In many areas of daily life, consumers feel they have little power. In that context the Minister for Enterprise, Trade and Employment was right to establish the Consumer Strategy Group and ask it to make proposals for the development of a national consumer strategy. The Bill we are debating today is a result of the good work of that group.
The group commissioned the most extensive research ever carried out in Ireland on consumer issues. It revealed that the majority of consumers believe they are constantly being overcharged for goods and services. A large number believe they will not get satisfaction if they complain about poor quality or poor value in goods and services. Research conducted by the Consumer Strategy Group showed considerable gaps in policy and in the State institutions that support consumers. Ireland lags behind other countries in recognising the important role empowered and confident consumers can play.
Bringing the consumer agenda to the forefront of public policy requires close integration of consumer concerns into the better regulation agenda. There is no doubt that a process needs to be kick-started to shift the balance of power towards consumers. Doing so will not penalise Irish businesses or grind them down. It should strengthen them. In short, more consumer power will be good for consumers, businesses and the economy.
This is a major new consumer Bill. It replaces much of the existing body of consumer law with a modern, up-to-date statute that will provide consumers with the highest level of protection in their dealings with business. The new protection for consumers and overhaul of structures marks the biggest reform in 30 years. It will help to ensure that we have one of the strongest, most modern consumer protection regimes in the world.
The Bill includes bans and tough sanctions for 81 anti-consumer activities, including pyramid selling, prize draw scams and persistent cold-calling of consumers. It also formally establishes the new National Consumer Agency, which will have the funding and powers to act forcefully on behalf of consumers. It provides the agency with the power to protect consumers, and will prohibit a wide range of unfair or misleading trade practices. Traders who mislead consumers or act in an aggressive way towards consumers or who otherwise engage in the extensive list of practices to be prohibited by the Bill will be liable to fines of up to €60,000 or imprisonment for up to 18 months for a first offence, if successfully prosecuted on indictment. Lesser penalties will apply in respect of summary prosecution.
The agency will also be empowered to issue compliance notices and impose on-the-spot fines on errant traders. It will be able to accept undertakings of compliance with the law from traders as an alternative to court proceedings. It will be required to publish, on a regular basis, details of all traders who have faced enforcement action. Courts will be empowered to order offenders to pay compensation to consumers and will be able to require offenders to publish corrective statements. Undoubtedly, the adverse publicity of a name and shame policy can often be a more effective deterrent than a court imposed fine. This Bill leaves offenders with no hiding place in that respect.
A wide range of activity is prohibited by the Bill, from misleading consumers as to the price, characteristics and availability of a product, to exercising aggressive or undue influence on a consumer to enter into a transaction. Making false or misleading claims about a product, persistent, unwanted calling of consumers and operating prize competitions that require the consumer to make a payment or incur a loss before a prize can be claimed, are all outlawed by this Bill.
The principal function of the National Consumer Agency will be to promote and protect the interests and welfare of consumers. It will do that through enforcing the relevant provisions of the Bill and encouraging compliance with them. However, it is also being given a range of powers to ensure that it can be a powerful advocate on behalf of consumers in policy making and in public debate. The agency will be empowered to advise and make proposals and recommendations to Government on legislation that impacts on consumers, and will interact with other regulatory bodies to promote the interests and welfare of consumers.
The Bill also deals in no uncertain terms with the issue of pyramid schemes. The definition of such schemes is significantly strengthened to capture so-called "gifting" schemes, and it will be an offence to both promote and participate in such schemes. Offenders will face prosecution on indictment and be liable to fines of up to €150,000 and five years imprisonment. I did not know what pyramid schemes were until, unfortunately, my local town and the surrounding area was affected by one. Many local people suffered as a result of pyramid selling in the area. It had a serious effect on individuals and families. People thought that by investing hard earned money in the scheme they would make far more money. Some people even borrowed money to invest in these schemes. Unfortunately, they lost it all.
This Bill will safeguard people from such schemes. However, it will not help the thousands of people in my constituency who suffered. I thank the Minister for introducing this welcome Bill.
I wish to share time with Deputy Durkan. I welcome the Bill in general, although I fear that it lacks the teeth that are required in this area. Under the Bill, the functions of the National Consumer Agency will be to publish research, act as an advocate on behalf of the consumer, promote public awareness, impart information to the public, engage in educational activities and generally to raise awareness. These are fine and laudable functions and, like motherhood and apple pie, one cannot object to them. However, it lacks teeth and smacks of being a sop to consumers.
The Minister said that the Bill aims to give responsibility to consumers, to empower them and make them more assertive. In many ways that is nonsense. Consumers are only as assertive as the law permits them to be. What is required is real powers of enforcement and they are not in the Bill. It is a cop-out to hand over to consumers responsibility to defend their own rights. It is the State, through this agency, that should be defending the consumers' interests. Only if the agency has strong enforcement rights and powers will this actually happen. The powers given to the proposed body are those which the Director of Consumer Affairs has had for many years. The Minister rightly paid tribute to the director. However, it must be admitted that the consumer has not been well served. I do not entirely blame the Director of Consumer Affairs for this because the office has neither the powers nor resources to defend the consumer. No Member can suggest the consumer has been king.
The Bill proposes procedures for alternative dispute resolution. While it is a laudable proposal for the solution of individual cases, what is required is a culture change which is pro-consumer and pro-competition. If such a culture were established, it would obviate the need for a new dispute resolution forum.
The Bill proposes the Minister may consult the agency regarding legislation and the agency can recommend further legislation to the Minister. While very laudable and desirable, it does not catapult the consumer into a position of power in the way required.
The proposed structure of the body gives me most concern. The agency lacks the independence required to be successful. It is too much in thrall to the Minister and the Department and will be subject to their wishes. This body must have a similar independence to that of the Ombudsman, if it truly is to be a champion for consumers and put their interests before those of providers.
The legislation, as drafted, limits the agency's sphere of influence when it comes to protecting consumers' interests where those interests conflict with sectoral regulators. Despite the great expectations with sectoral regulators, they have not always served consumers as they should. There is the ever present danger of regulatory capture. In these circumstances, to force the new agency to enter into co-operation agreements with various regulators will negate the purpose of the legislation. For it to operate strictly in the interests of consumers, it should operate independently of the regulators. Their function is to provide a level playing pitch for producers and providers. It was hoped they would provide a better deal for consumers but that has not always been the case. To put them into bed with the new agency is not the way to proceed if the interest of the consumer is to be paramount. To put the agency in a position where it is in thrall to the Government and subject to narrow political or special interests is wrong.
The enforcement function is inadequate. Like the Competition Authority, the agency will have the power to investigate. Having investigative powers, however, is not sufficient. It should have the powers immediately to close down anti-consumer practices. The power to act immediately is crucial rather than having to go through the courts. When such practices come to light, they are once-off, time-related incidents such as the sale of tickets for the recent rugby international. What went on was scandalous. The courts are redundant and can give no protection to the consumer in such circumstances.
Government agencies and protected monopolies have ripped off consumers. As Deputy Hogan pointed out, the prices of internationally traded goods and services have remained relatively stable in recent years, as those providers must survive in a competitive market. The prices of goods and services in the protected sectors, particularly Government-traded sectors, have gone through the roof. Last month inflation went over the 5% mark.
With price harmonisation, the rate stands at only 2.9%.
If prices have gone up, services have not improved. Again and again, the special interests of providers have triumphed. Whether it is hospital consultants or concrete block manufacturers, their special interests come before those of the consumer.
The partnership talks involving the trade unions and business interests, which are all in bed with the Government, have decided how the State will be run for the next several years. The only party not at the negotiating table was the consumer, yet decisions that will have a major impact were made in those talks. The Government purported to be acting in the consumers' interests but decisions were made that were anti-consumer. For example, a deal was done preventing driving test instructors being employed, even though 400 people are killed on our roads each year. A benchmarking deal was struck to improve efficiencies and provide better services from the public service but none were delivered. It was an exercise in name only.
In the transport area, special interests have stymied necessary reforms and inhibited the development of a comprehensive integrated public transport system. I am surprised we have not yet had a commuter revolution. Commuters' interests have not been served by the Government or any of the transport agencies purporting to act for them. No extra buses, integrated ticketing or competing terminals have been provided. The dominant provider won at the expense of the consumer.
In the dying days of the Government, the Bill is a disappointment since so much was expected of it. It is too timid, a pale imitation of what is needed. It fails to galvanise the action needed for a clean sweep and change in culture of not rocking the boat or stepping on people's toes. It ensures there will be no risk of change and avoids the notion that the Government and providers have colluded. Providers across the board, particularly in the State sector, have colluded with the Government. Knowingly or unknowingly, willingly or unwillingly, they have acted to the consumer's detriment. This Bill does not go far enough in changing that culture.
I thank my colleague for sharing time with me and allowing me speak on this legislation.
I have been thinking about the reasons behind its introduction now. It was a guilt complex activated on the part of the Government, which recognised that it had failed to protect the consumer over the past five years. Now it is to go before the people with the fig-leaf of this Bill held prominently before it to protect it from the general public's wrath.
The Deputy thought long and deeply before making that statement.
It takes an appalling brass neck on the Government's part to introduce this Bill now. Who has protected consumers of petrol and diesel over the last 12 or 14 months? As prices rose ever higher, from what section of the Government or the consumer protection agencies came plans to protect the unfortunate consumer? At the same time, gas prices were coming down on world markets and in free fall on others, but in this country we defied the laws of gravity. The Government and regulator colluded to approve an increase in gas and electricity prices, the like of which had never been known before.
Who protected the unfortunate consumer in that case? No one did so, because the Government did not care. It could not care less, and the only thing that has pricked its conscious now is that it will shortly go to the people. Ministers began to scratch their heads, wondering how they could protect themselves. Without a shadow of a doubt, this Bill represents their answer. They have laboured and brought forth a mouse.
I could go on and on.
We are all well aware of that.
My colleague has already given other examples. In telecommunications, Smart Telecom's subscribers were arbitrarily left without services overnight without warning, protection, compensation or any word of comfort. Many of the victims are still owed a great deal for services they purchased but never received. What happened in that case? There were regulators, bureaucrats, technocrats, plutocrats, and all the other variations thereon, but they did not protect the consumer. No one acted in the consumer's interests, an extraordinary situation. All those bodies and quangos, as the late Brian Lenihan would call them in this House, are visible and make noises. From time to time they move around, coming within one's field of vision or cropping up on the radar screen. However, when it came to doing what they were meant to do in this situation — protect the unfortunate consumer — they were absent.
Regarding services provided by Smart Telecom, for months an argument was going on behind the scenes of which no one was aware. All of a sudden, the whole edifice collapsed. Amazingly, with such competition and consumer protection, 80% of customers have reverted to the original service-provider. Competition and regulators' interventions have achieved little. The regulatory system as transposed from European into Irish law is failing. There is a tendency on the part of our negotiators slavishly to follow the lead of their European colleagues. That may or may not be useful, but it is particularly sensitive in areas such as consumer protection, energy price increases and the provision of telecommunications services.
What happened regarding the provision of broadband services? When was consideration taken of domestic and industrial consumers, and who protected and stood up for them? Where were those on the various quangos, and the Ministers whose job it was to direct them? What has ordinarily occurred in such situations is that Ministers have become coy, shy, acting in a hands-off, detached, distracted, disenchanted fashion disconnected from the job they are supposed to do. It is the unfortunate consumer who suffers, being left unprotected every time and paying through the nose because Ministers do not act. Neither do the Competition Authority or the consumer protection agencies act, and the consumer is abandoned.
The events and experiences of recent years should suffice to galvanise Ministers, were it possible to do so. However, they are so accustomed to inertia that they are no longer capable. Alas and alack, the unfortunate consumer must pay. It is sad that we should see this legislation produced at the 11th hour and the last moment of this Government. We recognise that it is merely a fig-leaf allowing it to go forth and meet the electorate.
We have another three months.
They should gird their loins, since the electorate awaits them. When they come across them——
With open arms.
——the consumers of this country will remember how they were left unprotected for so long. They will recall how little the Government did in recognition of their plight and ask how it managed to avoid the issue for so long and why it introduced this Bill only now.
I have respected the Deputy from Kildare for many years, but as Chairman of the Committee on Enterprise and Small Business, I welcome the Bill before the House. Any fair-minded person would have to recognise that for the fulfilment of its aims the Consumer Protection Bill 2007 provides for the establishment on a statutory basis of the National Consumer Agency, the transposition into national law of the directive dealing with unfair commercial practices, and the rationalisation and updating of the existing body of consumer law. It also updates and signally strengthens the law on pyramid selling.
I am very pleased and proud of our work on the Committee on Enterprise and Small Business to improve the consumer's lot. I do not care for which political party Members were elected to the House, but we all agreed that it was the second-greatest challenge following the election, and I was delighted that the Taoiseach accorded me the opportunity and honour of chairing the insurance inquiry. That covered public liability, employers' liability, private motor and commercial motor insurance.
At the time, insurance costs had gone through the roof and the consumer was paying excessively. However, the Committee on Enterprise and Small Business provided a conduit for liaising with the industry itself, with 19 submissions given live on camera. The committee, led by me, went to the Government and persuaded the Taoiseach to make a commitment. At our parliamentary party meeting in Sligo the following year, he said that the Government would make insurance its primary legislative issue for 2004.
The Bill setting up the Personal Injuries Assessment Board has been enacted and the board established. The Civil Liability and Courts Act 2004 and the Safety, Health and Welfare at Work Act 2005 have been enacted. Penalty points, random breath-testing and all those other safety measures on which we made proposals are now also part of the law. The consumer has been the big winner. No matter what the insurance policy, premia today have fallen to 1988 prices, allowing for inflation. That is a marvellous achievement for a committee with members of all political persuasions coming together under the chairmanship of this Government appointee. We made our presence felt in addressing the difficulties in an industry that affects individuals and small businesses stretched to the limit by insurance costs. I do not wish to belabour the point but I welcome anything that will strengthen consumer demands.
I congratulate the Minister of State, Deputy Michael Ahern, who has been forthcoming in assisting me as Chairman of the committee over the past four and a half years. In fairness to the former Tánaiste, Deputy Harney, the Minister for Enterprise, Trade and Employment, Deputy Martin, the Tánaiste and Minister for Justice, Equality and Law Reform, Deputy McDowell, and the Minister for Education and Science, Deputy Hanafin, I must put on record the truth of what happened over the last four and a half years. I will give Deputy Durkan credit for one thing — I have been a Member of the Oireachtas for 25 years and both he and his party colleagues have been exemplary in Opposition.
We will not be there for long though.
They are incredible and we could never match them. They have a lot of practice in this regard and their expertise is shown from time to time. When the facts speak for themselves, however, the Opposition arguments do not stand up. In case someone might read and take seriously Deputy Durkan's views, I must reluctantly say that the job that has been done on insurance during this Government's period in office has been second to none.
Fear concentrates the mind.
Deputy Hogan stands to take just as much credit as myself for leading the Fine Gael side on the insurance inquiry. I welcome him here for this part of the debate. I commend the Bill to the House and thank the Acting Chairman for giving me an opportunity to express my views on the legislation.
I thank Deputies for their contributions to the debate which has been both interesting and stimulating. It has demonstrated beyond doubt that the welfare of consumers is an important and topical issue, and that the Government is right to afford this legislation a high priority.
Before responding to the comments of individual Deputies, I wish to make a few general remarks. There has been much talk on the Opposition benches of the need for an ombudsman for consumers and a consumer rights enforcer. It is a grandiose title but at the end of the day that it all it is — a title. Whatever one might call a consumer organisation — this legislation gives it the title of National Consumer Agency — the fundamentally important factor is the extent of the powers and functions conferred on that organisation by legislation, and the extent of its duties and obligations to the consumer.
As a result of the enactment of this Bill, Ireland will have the benefit of an extensive and unequivocal list, set down in one statute, of commercial practices which are prohibited because they are unfair to consumers. In that respect the Bill introduces a much needed modernisation of our consumer laws. Furthermore, and despite criticisms from the Opposition side of the House, the Bill creates an enforcement agency with real teeth. Not alone will there be a strengthening of the penalties for breaches of consumer law, particularly for repeat offenders, but the National Consumer Agency is also being given a range of enforcement options not available to its predecessor, the Office of the Director of Consumer Affairs. The agency will have power to impose on-the-spot fines and will be able to accept undertakings from traders to comply with the law. It will be allowed to issue compliance notices to traders who it believes are breaking the rules.
In addition, the agency will be able to ask the courts to award compensation to consumers and the courts will have discretion to do this. The courts will be able to order traders to publish corrective statements but, perhaps most tellingly of all, the agency will be able to publish the names of all those who have broken the rules and been the subject of enforcement action. This new emphasis on a name and shame policy is a critical element of the enforcement options available to the agency. It is not only a matter of sanctioning offenders — albeit that naming and shaming is a powerful punishment in itself, particularly if imposed on top of fines handed down by a court — but also of publishing the names of offenders, which represents an important signpost for consumers when it comes to identifying those businesses that may adopt a cavalier approach to consumer rights. Many businesses for which a financial penalty may be inconsequential, no matter how large, might think twice about breaching these laws if it means losing customers. I look forward to seeing this particular provision of the Bill in operation.
The powers in the Bill are as extensive as they are new, and provide alternatives to what can often be expensive and protracted court proceedings. They will allow agencies to take enforcement action quickly in the best interests of consumers. The Bill is not just about enforcement, however, and that is why it represents such a fundamental shift in consumer policy. The Office of the Director of Consumer Affairs has done an excellent job on behalf of consumers since it was established in 1978. However, it was largely confined to enforcing the law as handed down to it and was never designed to be an advocate for consumers when it came to designing that law. As a result, the consumer's voice in this country was weak and uninformed. When it came to national debate, trade interests were usually best organised, most knowledgeable and best resourced. Consumers rarely acted as a group and their contribution to the debate was, through no fault of their own, sometimes patchy and inconsistent, while at other times entirely non-existent. That will all change with the passage of this legislation.
The National Consumer Agency will have a statutory right to comment on the implications for consumers of existing and proposed legislation. It will be resourced to carry out research and will be empowered to access information from other regulators so that it can always speak from an informed position on behalf of consumers. The agency will have a statutory role to educate and inform consumers, and to promote public awareness of consumer issues. These duties go some way beyond the remit of the ODCA and signal a new era for consumer protection. The emphasis is very much on empowering consumers, letting them know their rights, and encouraging them to be assertive and stand up for those rights. It is about providing remedies and redress when those rights are denied, but the legislation is also about encouraging traders to be fair, equitable and transparent in their dealings with customers. Businesses should regard a satisfied customer as a valuable business asset, and be prepared to work at guaranteeing that satisfaction.
Deputy Hogan referred to his party's own Private Members' Bill which was voted down in the House. That Bill did not go nearly as far as this one in preventing unfair trading practices and empowering a consumer enforcement agency. Neither did it make any effort to transpose the unfair commercial practices directive, which would have left us in breach of EU obligations.
That is the Minister of State's job.
That is what we are doing. I want to respond to allegations that this Government has somehow neglected consumers. I reject the suggestion made in the debate that we have been slow in bringing the Bill forward or that we are only doing so because of rules forced on us by Brussels. The notion that Brussels legislates while member states stand idly by in the wings, meekly accepting whatever edict is eventually handed down, is nonsense and shows a lack of understanding of how the European Union works. Member states themselves contribute to the design of legislation and our public representatives all have their say in the eventual outcome through the involvement of the Council of Ministers and the European Parliament. Ireland contributed as much as anybody else to the negotiation of the unfair commercial practices directive. It includes many thoughts and ideas which this Administration brought to the debate. EU legislation is not some sort offait accompli and it is unfair to those who participate in the negotiation process to suggest that it is.
This is major legislation which repeals nine existing statutes and completely reforms our domestic consumer laws. Major legislative reform on this scale does not happen overnight; it is the result of many months of dedicated hard work on the part of officials in my Department, those in other Departments and the Attorney General's office, and the office of the parliamentary counsel. To devalue that work by suggesting that it could have been done sooner does a disservice to all those involved.
I would also dispute the contention by a number of Deputies that Parts 3 and 4 of the Bill simply copy out the provision of the unfair commercial practices directive. Although we were obviously constrained by the maximum harmonisation status of the directive, any considered comparison of the texts of the Bill and the directive will show significant differences. The directive's provision on pyramid schemes, for example, numbers just 42 words. By contrast, Part 4 of the Bill on pyramid schemes includes three substantial sections and is over ten times the length of the directive's provision.
Deputy Hogan also referred to the current rate of inflation. Rising inflation is a cause of concern to all governments and many of the factors contributing to Ireland's current high rate of inflation are outside the Government's control. Higher international energy costs, rising commodity prices on global markets, poor crop harvests and declining fish stocks are all factors contributing to higher prices. Where it can take action, in areas such as grocery prices and insurance costs, the Government has introduced remedial measures that have had a significant impact. We are committed to improving competition in the economy and improving the competitive environment for industry. The forthcoming White Paper on energy will address the strategic challenges facing us in that sector.
When this Government sought to remove one of the principal causes of high grocery prices, Fine Gael and others fought the proposal tooth and nail. Some, like Deputy Morgan, are still fighting it.
Deputy Hogan complained about a plethora of regulators and their lack of concern for the welfare of consumers. The National Consumer Agency can be a thorn in the side of regulators when they appear not to be acting in the best interests of consumers. The agency will be empowered and resourced to be a strong advocate for consumers with regard to the activities of regulated sectors and the regulators.
Deputies Hogan and Morgan both expressed concern at the duplication of the activities of regulators. If the Deputies have read section 21 of the Bill they will recognise that it is designed to avoid any such duplication.
Some Deputies, including Deputies Hogan and Upton, referred to the decision to revoke the groceries order this time last year. There have been conflicting views, not only in this House but among commentators in the media, as to the effect of this decision on grocery prices. Based on figures from the Central Statistics Office grocery items previously covered by the order have declined in price by 1.2% since last April, when the order was removed. Items not previously covered, mainly fresh meat, fish and vegetables, have increased in price by 2.4%. These are fresh products so, historically, their prices have tended to fluctuate to a greater extent than prepared or packaged foods.
Nonetheless, the overall statistics for a combination of grocery goods covered and not covered by the order show a decline in prices of 0.4% since the order was removed. The Government never predicted that prices would decline and it would be foolish to make such predictions because so many factors impact on prices that one cannot predict a future trend for any category of goods. The prediction made was that grocery products would be cheaper in the future without the order than with it. The question that should concern us is how much more expensive our grocery prices could be today had the order remained.
That is what they call moving the head rack.
In order to provide a proper answer it is necessary to examine what the order did. The groceries order stopped retailers competing and allowed wholesalers to fix minimum prices for grocery products. This is known as price fixing and is an offence under our competition laws. Deputies will be aware that in the recent past a number of individuals have been subjected to criminal sanctions for engaging in such activities in other sectors. The groceries order not alone legalised price fixing in the grocery sector, it made it compulsory.
There was a general consensus that Ireland was among the most expensive countries in Europe in which to buy groceries and all of the evidence suggested the order contributed to this. While CSO figures show that prices are moving in the right direction the real impact of removing the order will be felt over time as new entrants join the market, existing smaller participants expand their operations and competition among retailers increases.
Deputies Hogan and Upton asked about the resources of the new National Consumer Agency. It will have a budget that, when combined with that of the Office of the Director of Consumer Affairs, ODCA, will amount to €8.4 in 2007. Future allocations will depend on the work programme devised by the board of the agency and will be decided as part of the Estimates process. This year's budget is almost twice that available to the ODCA in its own right and the NCA will have its own staff so I reject any suggestion of a lack of independence.
Deputy Hogan asked about the application of this Bill to business to consumer transactions. This is a key part of the unfair commercial practice directive and we cannot go beyond its terms. However, it is also right that the NCA's resources and enforcement efforts should focus on consumers, and not be deflected to matters concerning business to business transactions.
Deputy Hogan also wondered about efforts to restrict the rights of the NCA when appearing before Oireachtas committees. There is no intention to do this and Deputy Hogan might like to know that the Minister for Enterprise, Trade and Employment, Deputy Martin, will be sympathetic to an amendment in this regard on Committee Stage. The NCA will be empowered to conduct and publish price surveys for the benefit of consumers.
Deputy Upton referred to the impact consumers in the UK have had on banks and banking fees and I agree entirely that this is a good example of how consumers can yield considerable powers when they act in concert. I encourage Irish consumers to learn from the experience of UK consumers.
Deputy Upton also referred to food labelling, in particular the marking of origin on food products, and I sympathise with her views. However, this is primarily a matter for the Minister for Agriculture and Food, Deputy Coughlan. While the Bill does not include a general prohibition on misleading consumers regarding the geographical origin of products, the NCA will enforce this provision and will be an advocate for stronger regulation in this area if it sees it as warranted. The NCA will be empowered to liaise with the Food Safety Authority of Ireland with regard to the issues raised by Deputy Upton.
I agree with a great deal of what Deputy Upton had to say, especially as she highlighted a number of important consumer issues related to food labelling. Many of these issues will be examined by the NCA when it is established on a statutory footing because the Bill gives the agency this power.
I agree with Deputy Upton's comments on ringtones and the ODCA tackled this issue with a good deal of success but the NCA will remain vigilant with regard to such practices. The cross-border aspect of the unfair commercial practices directive, UCPD, allows for co-operation with enforcement agencies in other jurisdictions to tackle such issues.
The issue of policing consumer protection in the area of Internet trading was raised. This is an increasingly popular way of transacting business and the provisions of the Bill apply to Internet trading as they do to all other forms of trading. EU cross-border infrastructure allows for co-operation between enforcement agencies in different jurisdictions making for easier policing of the activities of Internet traders throughout the 27 member states. This type of transaction is also governed by an EU distance selling directive that is currently being reviewed by the European Commission. My Department will actively participate in that review.
Deputy Morgan inquired about estate agents and the practice of arranging ghost bids on properties. This will be prohibited by section 43(2)(b)(ii) of the Bill.
Regarding Deputy McHugh's point, local authority services for which a charge is made are covered by this Bill.
I thank the Deputies who have taken part in the debate on this Bill which was supported on all sides of the House. I thank the officials for the work they did in recent months and I commend the Bill to the House.