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Dáil Éireann debate -
Wednesday, 9 Nov 2011

Vol. 746 No. 1

Competition (Amendment) Bill 2011: Second Stage (Resumed)

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

I welcome the opportunity to speak on the Competition (Amendment) Bill 2011 and on the subject of competition generally. The Minister for Jobs, Enterprise and Innovation may not acknowledge it while he is in his present position but he would have previously agreed that competition is not something we do well in this country. The extent of the problem is suggested by the fact that only 32 criminal convictions have been achieved since 2002. I cannot help but believe that a lot more is happening underneath the statistics. These 32 convictions involved a number of smaller players and, while there should be no distinction, there are concerns that the bigger players are still using their weight to stymy competition. These bigger players have yet to be investigated or prosecuted.

This Bill was published under the memorandum of understanding with the troika. There is satisfaction that it was published on schedule and before the end of quarter three but I am concerned about the rush across every Department affected by the memorandum to publish legislation ahead of that deadline. All the Departments wanted to be the good boys and much of this legislation is now in the queue for Second Stage debate in this Chamber. I congratulate the Minister on getting the Bill through that queue. However, despite the publication of these reforming Bills we are no closer to our goal of enacting them. The rush to publish legislation to keep the troika happy has diluted the original aims set out in the programme for Government and the various election manifestoes.

The programme for Government rightly sets out ambitious targets on competition and addresses the many areas of the economy which continue to hide from the full force of competition and the benefits it can bring. Given the Minister's track record, I am confident he will be able to achieve these objectives but this Bill falls far short of the programme for Government's ambition. I ask him to outline in his concluding remarks the timescale for implementing the more ambitious and important legislation outlined in the programme for Government.

Everybody agrees that the cost base is out of kilter. Over the past several years, significant adjustments have been made to our cost base, with labour costs in particular decreasing significantly compared to our EU partners, and we have made some efforts to reduce energy costs. We have also worked on transport costs although, as an island nation, many elements of transport are outside our control. In regard to the cost of inputs, we are still dependent on conditions outside our control. The cost of agricultural inputs has, for example, experienced extraordinary increases this year. We are championing agriculture but nobody is highlighting the increasing costs that are eating up the gains that have been made.

In the many sectors of the economy over which we have control, however, the State is sponsoring shelters from competition. This is particularly apparent in the transport sector, which does not provide a level playing field. A range of new bus services has been introduced over the past several years between towns and Dublin Airport and along suburban routes in the cities and larger towns across the country. These routes responded to the changing places in which people were living in a way that the old State-run system was not able to do, whether because of a lack of thought, ambition or innovation. In nearly all the cases in which new routes were being introduced, particularly for bus services, the Department and Bus Éireann did their best to block their introduction. If they did not block them, they suddenly had the bright idea that there was customer demand to introduce their own route. All Members of the House have received correspondence from independent coach operators who made substantial investments in their businesses in introducing new routes that responded to consumer demand, only to find the State-sponsored organisation on their tail with new, flashy State-sponsored services. That is just one example.

No one can say we have a fully competitive broadcasting industry in this country. We must pay a tax in the form of the licence fee. Anybody with a television and a radio must pay the fee. One has no option. We have a choice in what stations we watch and the radio stations to which we listen. People living outside Dublin tend to listen to independent local radio, but these stations do not have the same rights or access to the tax revenue that the State-sponsored organisation has. For as long as this continues it will cost jobs and creativity in the independent sector. We do not have a level playing field for the broadcasting media. The Government, including the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, has signalled that it intends to address this issue, but it would be good to see a timeline as to when that will happen.

It is all very well to introduce legislation to increases penalties and strengthen the law, as we are now doing, but what we need is not new legislation or new penalties but a complete change in mindset at official and State company levels where competition is seen as something good that improves services and innovation in service delivery and can increase the bottom line and protect and create employment. The current mindset dates back to the early or middle part of the last century, when the fledgling State needed to protect services from the big beasts that surrounded us. There is no need for us to be in that space anymore. We must have confidence in our abilities and confidence that State companies and services can be run well, efficient and innovative and no longer need the shelter of that mindset or the protection of a protectionist law.

Everybody agrees that the Competition Authority needs more resources, although the Minister danced a little around this point in response to Deputy O'Dea last night. The areas it investigates are technical and complex, while the companies it investigates are well resourced and have many ways of hiding their actions. Therefore, we need to give the authority not only more resources but also more powers. In the investigation of white collar crime, particularly in the banking sector, extra powers were needed and these were introduced in the Criminal Justice Bill last summer. We are aware of the lengths to which people will go to avoid detection of white collar crime. When one considers competition and breaches of competition law, one will note that for many companies, false competition and protection from competition are very important to their bottom line. One can be sure they are using the same evasion techniques and tactics to avoid detection if — it is a big if — the authority pursues them.

We must assess whether the Competition Authority is fit for purpose in a 21st century open economy that is trading with partners all over the world and which is being used by some of the biggest companies in the world for business and to make a profit. In the justice area, for example, we brought forward the Criminal Assets Bureau as an international model. Every week different police forces and enforcement bodies from throughout the world come to this country to see how it operates, with a view to replicating it. In fairness to the Minister for Justice and Equality, Deputy Alan Shatter — I disagree with him on virtually everything besides this — he intends to replicate the bureau at European level. Can we or do we wish to do this with the Competition Authority? Can we say the authority could be replicated across the world as a model of good practice and as a model that will detect offences and deter people from engaging in anti-competitive behaviour? I do not believe we can, but that is not to say we should not set it as an ambition. The Minister intends to reform the authority, which would be a reasonable and fair ambition to set for the new authority.

I do not favour unfettered competition, a situation in which a big bulldozer comes in, clears all around it and sets up shop. That is not competition. That leads to what we have seen happen around the world. On our neighbouring island one can see the effects of unfettered competition in what has happened to the retail sector. However, unless we have the right debate about competition and face the fact that the State has so much in its mindset and legislation that does not foster good competition, we will not be able to move forward.

In many sectors there is the appearance of competition; there are a lot of players and offerings and the consumer is purported to be happy. However, when one digs under this, the reality is very different. One of these sectors is the retail sector. I was a member of the previous enterprise and employment committee under the chairmanship of the Minister of State at the Department of the Environment, Community and Local Government, Deputy Willie Penrose. That committee spent a number of days in 2009 examining the retail sector. The big multiples proclaim that the reason prices here are so much higher than those in Northern Ireland, elsewhere in the United Kingdom and across Europe is the cap imposed in retail planning guidelines. They also say our cost base is higher, as well as the cost of transportation. The committee examined this and the planning issue. The Minister is interested in this matter and the reports are available. The position is not as clear cut as they claim. We also examined their pricing policies. We were treated to two days of utter evasion of the questions asked in the attempt to seek information. What was striking was the number of lobbyists accompanying every retailer and the number of former Members of the House, from both sides, who were monitoring the hearings. I remember thinking we were onto something, given that so much attention and resources were diverted to a day of committee hearings. I have maintained my interest in this area since.

Deputy Heather Humphreys spoke about farmers and what was being paid at the farm gate. This is a very serious issue. What is being paid at the farm gate is very different from what is being paid in the supermarkets, yet the only investigation in this area was into the Irish Farmers Association. The IFA raised this concern on behalf of its members, and the only raid we saw was not on a head office of any of the multiples but on the head office of the IFA. In trying to draw attention to competition breaches and where there might be a problem, the body which had called attention to it was raided and those against whom the complaint had been made appeared to have been let away with it. The country is trying to create a culture of whistleblowing, in which people will step forward and give information, but that does not offer a very good example. It does not say to organisations campaigning on this issue that they should come forward with information and that it will be investigated. It says the opposite.

I hope the new committee will return to and advance that investigation. It is time to revisit the issue because there is no doubt that there is the appearance of competition in the large retail sectors, particularly in food, but the reality is very different. It would not require a huge amount to investigate this issue. Has the Competition Authority not just the financial resources but also the legislative resources to investigate it? Can it state to consumers who are shopping every week and struggling to pay their bills because prices are so much higher: "These are the reasons consumers are paying so much more and this is what we can tackle"?

The energy sector is another sector in which there is the appearance of competition, but is there actually competition in it? There is not. Last year, two State companies set up a price war for electricity. One made an offer that was 25% to 30% cheaper than that of the other State company. It hooked people and reeled them in with flashy advertisements and promotions but within a few months of so doing, the price rose again. While there are some independent operators in the system, they are struggling against the might of the two State operators. They are struggling to get a presence in the marketplace. Moreover, they also are struggling against a culture shared by all Members — I do not distance myself from it — to protect State companies. However, by so doing, Members are depriving people of lower energy prices, lower retail prices and lower prices across the board. One can introduce all the legislation one wishes but until that mindset is changed and challenged, one will be barking up the wrong tree.

The only way to change and challenge this culture is to review the Competition Authority. An objective should be set that within two years, the Irish Competition Authority will be the one to which people around the world will come and which they will seek to replicate in their countries. They will do so because it is the authority that has delivered results to its country's consumers and has brought investigations to the Director of Public Prosecutions and the Garda Síochána that have resulted in people paying some of the prices outlined by the Minister in this legislation, including fines and jail if necessary, for breaches of competition law. To achieve this objective, consideration must be given to conferring some of the powers that are available in the commission of investigations model to the Competition Authority. Moreover, some of the powers that were made available to inquiries into child abuse should be considered. Some of the aforementioned powers in respect of inspection and the power to follow up complaints must be made available.

In addition, far more resources must be made available. While I acknowledge the budget to so do is not there, it must be allocated by finding it from other areas that are less important to ensure delivery on the ambition of implementing a restructured and reformist Competition Authority that will investigate those breaching or possibly breaching the State's competition laws, rather than investigating those who make complaints.

I wish to share time with Deputy Barry and welcome the Minister to the House. I emphasise, and possibly agree with Deputy Calleary with regard to the respect within the corporate world and beyond for the Competition Authority in Ireland. It is a model of best practice and has the potential to be replicated. It is something of which to be proud. Obviously, the authority has challenges with regard to resources, which is a dilemma across the board.

I raise an anomaly I encountered recently in respect of European Regulation (EC) No. 1072/2009 introduced in May 2010, which governs cabotage, that is, the national carriage of goods for hire or reward carried out by non-resident hauliers on a temporary basis in a host member state. The rule states that nationally registered vehicles driven by holders of international and national road freight transport licences can only enter another member state fully loaded and carry out these operations in a given week before being obliged to leave that state. Britain and Northern Ireland have implemented this cabotage regulation but as far as I am aware, the Republic of Ireland has either not done so or may be in the process of doing so. This has created unfair competition for hauliers in the Republic who wish to do business in Northern Ireland. I encourage the Minister to engage with the Minister for Transport, Tourism and Sport to address this anomaly because hauliers from the Republic of Ireland cannot compete with hauliers from Northern Ireland. Hauliers from Northern Ireland can operate freely within this jurisdiction but the opposite is not the case, I would appreciate the Minister's intervention in this regard.

When one talks about competition internally, one must be conscious that Ireland is a small open economy and that the world in which we live and do business has changed completely. There is a great deal of emphasis on export-led activity at present and I acknowledge the Department of Jobs, Enterprise and Innovation is greatly focused on this issue. During his recent trip to London, the Minister emphasised that 42% of our exports go to the United Kingdom and a massive two-way street exists in respect of such business. Consequently, any competition laws introduced within this jurisdiction should take cognisance of different fiscal barriers and jurisdictional challenges arising from crossing the Border into Northern Ireland, as well obviously on an east-west basis. This is a difficult question as there are two separate jurisdictions, two different fiscal regimes and two different parliaments working under different sovereign directions. Nevertheless, I compliment the Minister on his reaction when the proposal to reduce the rate of corporation tax in Northern Ireland came on the table. While the obvious reaction from the perspective of the Republic of Ireland would have been to be defensive and to argue against it, I welcome that the Minister put on record his support for this measure. Having a 12.5% corporation tax rate in Northern Ireland policy would lead to ancillary benefits because given all the North-South interactions and business links, we could benefit were companies to come to Northern Ireland that would otherwise go elsewhere in the United Kingdom. This constitutes one example of where we are trying to work together and is an example of goodwill and proactivity from a positive perspective.

As for competitive responsibility, I note the recent announcement by Vodafone's wing in the United Kingdom of a six-monthly revenue figure of £23 billion and a profit in 2010 of £8.7 billion. An onus must be placed on competitive responsibilities for mobile telephone operators. I always have emphasised that vast amounts of money continue to be spent on mobile telephone communication, as nearly every individual in every household has a mobile telephone, and consequently, these companies are making vast profits. What onus is being placed on the operators' competitive responsibility to reinvest part of their profits into infrastructural construction? In recent years, I have noticed there still are areas in which mobile telephone coverage is not available and in which gaps exist. This raises the question as to whether it suits existing operators to retain the present infrastructure, which will not facilitate new entrants. Some questions arise in this regard that must be dealt with.

At another level, I refer to roaming charges and the periodic announcements from Vodafone, O2 or Meteor to the effect that they have done away with roaming charges on a North-South basis. That may well be the case if one connects into the specific equal band. However, if one drives through Northern Ireland with a roaming telephone that seeks 100% coverage, one will go through three or four different areas. Consequently, a question arises as to this State’s commitment to the North-South integrated strategies that were written in stone in the Good Friday Agreement. There is a role for Members to emphasise the importance of data roaming, which can involve a colossal amount of money. I note the work being done by the Ceann Comhairle and his Northern Ireland counterpart, Mr. William Hay, on a North-South basis through the North-South Parliamentary Forum. If one brings one’s iPad, laptop or mobile telephone to Northern Ireland, these additional charges constitute a barrier for this type of movement. If this acts as a barrier for policymakers, it is an obvious barrier for business and this is an issue of which Members must be conscious.

As for competition within the university sector, the Good Friday Agreement places emphasis on integrated strategies in respect of education. While this may be the case, 1% of students from Northern Ireland attend southern universities, whereas 3% of students from the Republic of Ireland attend universities in Northern Ireland. Why is that access issue not being addressed? Why are we not opening up the island, with universities accessible to everybody? Traditionally, there has been the movement of Northern Ireland students to universities such as UCD and Trinity College, Dublin but a minimal number of students are participating in universities such as the University of Limerick, NUI Galway or UCC. We must consider the issue of access as one of competition.

EU guidelines always emphasise that in tendering for contracts — for example, in my local authority area — every small business, be it in Northern Ireland or the Republic, will have equal access, which is acceptable and normal. However, there is a paradox when one considers the different cost bases. A Northern Ireland contractor in tendering for a contract with Donegal County Council, to tar a road for example, will have a comparative advantage because it will benefit from lower costs, including energy, and a lower wage structure, as the previous speaker noted. While EU directives and legislation state the Border does not matter when it comes to tendering for contracts, it does because there are different jurisdictional challenges and barriers in terms of wage and energy costs. This is putting small companies in this jurisdiction against the wall because we cannot compete freely. This is an issue we need to examine. We need to consider the possibility of providing for a community and social contract where the emphasis would be placed on the different costs to be met.

To return to my point on east-west relations, the Queen's visit this year will be pointed to in terms of its historical and symbolic importance. It has created a new space for legislators to network, get to know each other better and work with each other on programmes and projects that will affect our constituents. What it has also done is to emphasise and increase the potential for further east-west and North-South relationships from a business point of view. Our job as legislators is to create the environment and introduce the positive policies that will make business easier. That is the challenge for the next generation of politicians on a North-South and east-west basis to give hope to students who are going to universities or in secondary school and thinking about where they will get work. We must look to our closest neighbours.

I will conclude by giving one figure. There is €200 million worth of business being created by Irish companies in London for the Olympic Games. This is an example of the positive influence exerted by Irish companies on an east-west basis. There is potential in that regard. We have to give students in universities hope that there will be quantity surveying and engineering jobs available in our closest neighbouring countries. To that end, I would like to see greater emphasis on the need for closer co-operation. It can and will be done. With the Minister's interventions and unique understanding of the North-South and east-west dimension, that will be a possibility in the future.

I welcome the Bill. Competition is highly important in the economy, never more so in the situation in which we find ourselves.

Section 2 of the Bill deals with sanctions. While I acknowledge that sanctions are needed, I sound a word of caution with regard to financial penalties that such penalties are more penal today than they were a number of years ago because funds are more difficult to access and it is more painful to pay them. We need to consider, therefore, the spirit of the scheme and encourage people to be law-abiding, as opposed to trying to wag a stick at them.

By their nature, fines are meant to punish, severely if the situation requires it. However, they are also meant to allow businesses to continue after they have taken their punishment. This is not just a point to be made in regard to this Bill, as we need to examine the business of increasing fines. We can have the best will in the world, but it is the adherence to the spirit of a scheme that is important.

Section 3 separates private and public enforcement. I agree with this change, as it brings clarity. It is correct that these two issues are being separated. Section 4 amends subsection (7) to add the requirement for a discontinuation of the abuse of a dominant position, where actions are contrary to Article 102 of the Treaty of Functions of the European Union, which is positive. Addressing the abuse of a dominant position in actions such as the sale of assets is very important. Large businesses can find themselves in a dominant position and, when times are tough, it is very tempting to abuse that position. The Bill must state clearly that this is not good enough. To be fair, setting this out in legislation is very important. Section 6 allows for persons not to be appointed as directors as a result of infringement offences, which makes sense.

Competition must be examined in all its aspects. In the retail industry rebates were common. In the business in which I was involved many years ago they were a scourge. One would buy products at the same price as everybody else, which was fine for a small business, but if it was not one of the favourites, it did not receive rebates. That placed a huge financial burden on new businesses trying to enter a sector.

Below cost selling is witnessed all the time. We have so-called milk wars, bread wars and so on. Using products, especially food products, to attract customers is wrong because it hinders primary production. While we are all used to cheap food which we have had for almost 20 years, or two generations, it has been holding back inflation artificially for a long time and the springs are beginning to stretch to a point where they can no longer handle it. We will see a situation, as outlined by Deputy Calleary and others, where production costs for fertiliser and other products will reach too high a point. We saw house prices reach artificial levels during the boom and they came down with a bang. It is the opposite with food products. Food prices are being held down to such a level that they will spring up and cause great trouble. Allowing below-cost selling of food products cannot be allowed to happen as it will cause major problems in the longer term.

On the stranglehold of the multiples, there was a recent case in which a retailer went into a designer receivership and many of the suppliers to that supermarket chain were afraid to speak up because, over time, their products would not be placed on the shelves. It is a question of deciding how to address these issues, which are not easy. While it is very easy to state the obvious, it is very difficult to fix the problems.

I have dealt with the Competition Authority and know it is under-resourced. While its intentions are good, it must pick cases on which it believes it will be successful. What it needs is a rapid response unit that will go in quickly and make an assessment. If it considers a case merits more attention, that should happen and, if not, it can pull back. We do not want there to be a perception that it is an organisation which is slow to act. It encourages some of the larger businesses to continue poor practices. An investigation into the cement industry, which is welcome, is under way. I have purchased a lot of cement and concrete in my time and it was remarkable when I sought quotes from four or five companies, that the cost was the same, regardless of the distance the product had to be transported. Some products might have been transported two miles and others 40, but it was remarkable that the cost was the same.

It is difficult for new entrants to gain access to markets when these practices are happening, but it is also difficult to prove they are occurring. Large companies have funds to fight these accusations and they use evasive tactics to get around them. However, we need to be aware of these issues and what is going on.

We import so many of our goods that it is difficult to generate competition in various sectors. For example, fertiliser companies were shut down. As a result, it is difficult to generate competition among fertiliser suppliers.

Incorrect labelling of sugar is also an issue. I was stunned when I visited a large multiple recently and saw a packet of sugar labelled as having been produced in Ireland. The sugar was not produced in the Republic of Ireland or Northern Ireland, yet such labelling is allowed. This cannot be good for competition down the road because the customer does not have the option to buy Irish.

Farmers understand meat factories face a similar issue, while Deputy Calleary referred to the Bus Éireann issue which I have also dealt with. The State allocates significant sums to the company, yet it does not provide separate accounts for its school transport service and its bus network, which means the Government could be allowing a scenario in which a public business is being subsidised to the detriment of private bus companies. The Mazars reported stated it cost Bus Éireann €28 million a year to administer the school transport scheme, which equates to €8,000 per bus. This issue needs to be examined in more detail.

Competition in farming is different. Imported grain and beef, for example, are not produced to the standards applied in this country. This issue will have to be examined in the longer term because primary producers are not being rewarded for meeting the cost of complying with high standards. The Competition Authority should look into providing a service, whereby new businesses would be informed about and know their rights. This would give them a resource which would allow them to establish whether they were being treated in a poor fashion.

Social welfare fraud is another form of poor competition. Genuine operators are trying to deal with people who have an unfair advantage over them.

I welcome the Bill, which is a move in the right direction. We need to embrace and encourage the true spirit of competition.

I wish to share time with Deputy Clare Daly.

While I do not oppose the Bill, I do not see it as the be-all and end-all. I have a difficulty with competition, given the big failures in the banking sector and the housing market. This demonstrates that competition without regulation is likely to produce horrific results. The Bill has great limitations and has been produced because of the obligation included in the memorandum of understanding with the troika. The debate pack is useful in highlighting limitations regarding civil fines and a potential constitutional conflict.

At a time when incomes are being reduced, a corresponding reduction in prices is essential in order that purchasing power can be maintained. Clearly, the additional sanctions proposed in the Bill are welcome from that point of view. There is a differentiation between hardcore and other offences in the context of companies abusing a dominant position in the market.

The briefing note we have received shines a good light on one difficulty. The Competition Authority has highlighted the complexity of the cases it tries to pursue and that it requires expertise and financial and physical resources. The fact that only 32 cases have been successfully prosecuted since the Competition Bill was enacted in 2002 indicates how difficult it is to pursue significant players. The authority has also highlighted that it is almost impossible to prosecute minor offences.

I welcome the provision to allow a private action to be taken by individuals who are aggrieved, but it is questionable whether they will have the wherewithal to do so because it will be a case of smaller players in the market taking on, for example, large multiples. A number of us have been briefed on the cement industry in which individuals have pursued the issues involved in the courts for years. The cost of using one product in the building of a house increased by €2,000 during the same period, while the same product was exported at a much lower price to countries with competitive markets. Clearly, there were warning signs regarding uncompetitive practices and that a cartel was operating in the cement industry. Perhaps it did not come to the fore before now because of people's desire to put a roof over their heads. Very often they have to do so under their own steam because the dominant arrangement is for people to purchase or build their own homes. The relevant section is useful, but it needs to be strengthened.

The institutional arrangements which provide for the merger of the Competition Authority and the National Consumer Agency will probably be useful. It is a pity the Government is using public sector reform as a code for cuts because there are great opportunities to put good, robust institutional arrangements in place which are simple and user friendly. This would make agencies more transparent and make them act in the interests of the people on whose behalf they are intended to act.

The fact the legislation has been introduced highlights a weakness in the political system in that nothing was done about this issue previously. One of the provisions proposed gives the Judiciary powers to call expert witnesses, a provision originally included in the Competition Bill 2002.

The broad increase in fines is welcome, but one must question the sanctions provided.

I do not support the jailing of people unless they pose a risk to the public. When we compare the sanctions applied in the case of white collar crime and those applied to regular criminals, there is an unequal arrangement. Often fines imposed are not a deterrent because they will be outweighed by the financial gain for a corporation.

There is no means to verify that retailers are demanding hello money. Discounts are funded by suppliers who are afraid, because of the dominance of the three major operators in the retail sector, that if they make a complaint, their products will be removed from the shelves. That fear is understandable. Therefore, it is difficult to see how what is proposed will happen in practice. Large retailers do not reveal their profits and there is no requirement to have a proportion of Irish goods on the shelves as happens in other European countries, although producers want other European retailers to take their products outside the Irish market. The groceries order was scrapped in 2006 to provide for enhanced competition, but there does not seem to be robust monitoring of the sector to see if it produced the intended result.

The Minister for the Environment, Community and Local Government is looking at a reduction of the cap on floor space, which is not necessarily good for Irish suppliers. If we look at the dominance and locations of large supermarkets, they benefit from having large car parks because they can cover the costs involved. They wipe out many of the small suppliers, those which will create jobs and use Irish raw materials. The evidence is that indigenous industries import less and use more Irish raw materials, which is better for us because foreign companies tend to import produce. Therefore, there is a further knock-on effect on job creation.

The document pack provided by the Library and Research Service was particularly useful. Obviously, more legislation is necessary because this measure may be in conflict with Article 38 of the Constitution, under which civil fines can be imposed. That is what the Competition Authority states is required. When will that legislation be drafted or when will we know if it can be drawn up in the absence of a change to the Constitution?

I agree with Deputy Murphy that there is no great reason to oppose this legislation, but neither is there cause for excitement about it. It provides additional sanctions for "lesser" transgressions of competition law to overcome some of the evidential requirements for certainty, as opposed to the balance of probabilities concept that applies in civil cases. In that sense, it is okay, but the idea that it offers a way forward to the regulation of the economic system in which we live or provides a solution to our economic problems is ridiculous. It does, however, give us an opportunity to stand back and look at the bigger picture.

The legislation is being introduced as part of the memorandum of understanding with the European Union and the IMF to strengthen competition law. It is interesting to note how speedily we are moving on these issues compared to the lack of progress in dealing with so many other important issues which remain on the Order Paper for years and are never addressed. For some reason, we are able to move on this issue incredibly quickly.

This legislation must be seen in an international context, with the introduction of a raft of new company and financial legislation implemented across many of the western economies in response to the global financial crisis. This is largely being done after the horse has bolted. In some ways, this legislation seeks to achieve a situation similar to the one in the United States achieved after the stock market crash of the late 1920s that introduced regulation of the system. Unlike today, through the Pecora commission and the Glass-Steagall Act, significant laws were put in place to impose a system of regulation on the financial markets. It has been argued that this led to a certain degree of stability, but the key point is that it did not; rather, it allowed for a period of stability as ultimately the system ran into problems.

We must look at this aspect because even in this debate the point has been made that we must support competition, as it is good for everyone. It is the Holy Grail of the system of neoliberalism and is pushed by politicians and economists. Deputy Calleary has said wages were uncompetitive and that it is good they are no longer so. That simply is not true. Irish wage levels were below the EU average and are even lower now. How has this benefited Irish society or the economy? This argument was made during the debate on JLCs and wage rates, but the only consequence has been that it has facilitated the driving down of the conditions of workers in Ireland, while possibly boosting the profits of some employers. It has not increased the numbers in work.

The mantra that competition is good is constant. I come from the airline sector. If we were to stop people on the street and ask them if Ryanair had forced Aer Lingus to reduce prices, many would say it did and that it was a welcome addition to the market. It is simply not true, however, because travelling by air became more common internationally and when something becomes more widely available, the price inevitably falls; therefore, it had nothing to do with the arrival of Ryanair. It is not the case that competition leads to the offering of a better service to consumers and enhances conditions for workers. Examples have been given in the energy and communications markets, in which we have more electricity and telephone service providers operating, but prices have not fallen for the average consumer; rather, they have increased, while in many instances services are significantly worse. We see this clearly in the waste management sector, in which the turning of the public refuse collection service into a commodity to make profits has led to the ridiculous situation where every day multiple refuse company trucks empty different bins belonging to different people in housing estates. The only outcome has been to drive council-operated services out of the market to be replaced by a private monopoly. As a result we have seen prices rise and a reduction in the service to the consumer, particularly for the most vulnerable who were in receipt of a waiver.

As other Deputies indicated, the opposite position obtained in the transport sector. I refer to the fact that public bus companies were unable to utilise the Dublin Port tunnel, which was built using taxpayers' money, because a private bus company bid successfully for the route. This is the madness of competition. I am of the view that competition is not a progressive force. One could legitimately argue that, as a system, competition covers up for the race to the bottom and that it pits the interests of one worker against another. Those who benefit from competition are not society as a whole, consumers, etc., but rather the very wealthy owners of private companies.

Let us consider a few examples of competition and the logic which underlies it. A couple of years ago Dell uprooted its operations from Limerick and thousands of jobs were lost as a result. This did not happen because Irish wages were uncompetitive at the time. Many of those who worked for Dell in Limerick earned approximately €11 per hour. In the year in which it left Limerick, Dell realised profits amounting to €80 million in this country and profits of hundreds of millions on a global scale. Why did the company move out of Limerick? The answer is that the opportunity arose for it to transfer operations to Poland and pay people wages of €3 per hour. We are continually informed that our low rate of corporation tax guarantees employment here. The corporation tax rate which obtained in Poland when Dell moved there was 19%. What was far more inviting for that company was the chance to exploit a workforce which would accept lower rates of pay.

Where does the logic which underpins competition lead us? The answer is that on a global scale it leads to a cul-de-sac. It did not prove beneficial to the workers in Limerick. Neither was it of benefit to their counterparts in Poland because a year or two after it moved out of Limerick, Dell decided to move on again. It sold its operations in Poland to Foxconn, a company from China whose workers were committing suicide on a mass scale at the time as a result of the horrendous conditions in which they were expected to work. That is the logic which underlies competition, which is not actually capable of taking society forward. It is enormously wasteful, it is a key part of the current phase of globalisation and it simply cannot be regulated. That is the lesson which has been learned from previous efforts to regulate the financial system.

In the current phase of globalisation to which I refer, massive amounts of money, goods and services are being moved across national boundaries. There is an inherent contradiction in this. On one hand, the system requires regulations but, on the other, it needs those regulations to be relaxed. Global corporations are now operating on a transnational basis and they have far greater clout and influence than many national economies. This is not in anyone's interests. The relocation of industries from western Europe or the US to Asia and elsewhere has led to the purchasing power of workers in the former decreasing. This led to many of the problems which gave rise to the crash we experienced in recent times.

In my opinion, competition is a cul-de-sac. It is demanded by a system where everything is commodified and where production takes place only on the basis of turning a profit. Competition is incredibly wasteful and completely irrational. It would be far better if we were to examine a more rational economic system under which production would be for use value and would provide for people's needs. Under such a system, information would be shared rather than promoting a situation where workers are pitted against each other in the interests of protecting the profits turned by a small number of people at the top.

I wish to pick up on one or two points made by Deputy Clare Daly. One matter in respect of which she is wrong is the Glass-Steagall Act, which was introduced in the US in 1932. The Deputy stated that ultimately this legislation could not cope with developments in the banking system, the fall-out from which we are currently dealing with. It was the repeal of the Glass-Steagall Act, rather than its lack of effectiveness, which laid the seeds for the collapse in the banking sector worldwide. If the legislation had remained in place — ensuring retail and investment banking would have been kept separate — then I have no doubt the disaster with which we are dealing would have been significantly smaller in scale and might not have happened at all.

Deputy Clare Daly stated that competition is not good for consumers and that it is a cul-de-sac. It must be remembered that vast numbers of people in this country remain in work. Ireland is the only country which is part of an external aid programme and which has a balance of payments surplus. Despite our major financial difficulties, we are producing a balance of payments surplus the value of which is comparable to many of the mid-ranking economies of the European Union. It is obvious that Irish workers have the ability to compete and trade very successfully in a competitive environment.

Let us consider the level of performance in the pharmaceutical, agricultural and green technology sectors. A large number of green technology businesses are based in the constituency Deputy Clare Daly represents. The level of performance to which I refer is being driven by Irish workers and Irish companies being competitive and recognising where competitive advantage lies and delivering it for their own benefit. The idea that the profit motive, of itself, is not capable of delivering increases in standards of living, employment and incomes is clearly wrong. It is a tragedy that so many people are out of work but there are still huge numbers of people who remain in employment. The latter still have jobs because they are in a position to deliver goods and services — which people at home and abroad wish to purchase — in a competitive manner.

It is clear, however, that there are difficulties with existing competition policy and with the environment to which this policy has given rise. Criticisms of that policy were made by members of the Judiciary when they were evaluating cases which came before them. When sentencing two participants in a cartel in May 2006, a judge stated that being involved in a cartel is theft and clearly spelled out why this is the case. In 2007 Mr. Justice Liam McKechnie stated:

[W]hile society has an interest in preventing, detecting and prosecuting all crimes, those which involve a breach of the Competition Act are particularly pernicious .... These activities in my view have done a shocking disservice to the public at large.

There is a real need to ensure that in the context of an economy which is so reliant on being competitive and which operates in the global arena, we must do everything possible to ensure that competition policy is fit for purpose.

There are three particular aspects of the legislation which represent clear progress. The first of these, to which previous speakers referred, relates to the fact that the sentences and fines relating to core and non-core crimes will be increased. This is an important development. Where I differ from Deputy Clare Daly is that I do not see profit as being bad. However, I do understand her point in respect of where seeking to make a profit can be transformed into greed.

Share the wealth, share the profits.

The wealth must be created in the first instance and that is why the type of policy to which I refer is required. The greed which can motivate people to engage in the type of activity which is clearly not in the public interest can sometimes be driven by a rational calculation to the effect that if the level of fine to be imposed is not too great, then it would be worth it to take a chance and proceed with such activity. The low fines which obtained in respect of this kind of activity in the past were recognised as being a failure. Steps are being taken in the legislation before the House to increase those fines to make them a more potent deterrent.

The second element of the legislation I welcome is the specific reference to a regulatory body which can take action against someone it believes to be in breach of the law. The legal costs incurred by this body in respect of individual cases will be paid by any person convicted of being in breach of competition policy. I hope this will create an environment within which authorities of this nature will be more willing and able to take the type of action that is required.

The third element I welcome is the fact that private citizens will be able to play a greater role in ensuring competition policy is enforced and in taking action on their own part. In that context, I quote from a paper, entitled "What Happened to Competition Policy?", by Mr. David McFadden and Mr. John Evans, delivered at the recent Kenmare Economic Conference. On the issue of private enforcement, they state:

What seems remarkable, however, is the fact that the private enforcement provisions contained in the 1991 Act were retained unchanged from the 1991 Act up to and including the 2002 Act. As the private enforcement model had not worked under the 1991 Act and was superseded by a public enforcement model, why then retain the private model?

They make the point that there were clear shortcomings in allowing persons to take successful private action. Hopefully, the Bill will make it easier for persons to do so. Assuming the only ones who will take action are the regulatory authorities and not making it clear that private citizens can take action and can be rewarded for it, is clearly an omission and is something on which the Bill will make progress.

I will conclude with two observations on the Bill. First, as important as competition policy is — I speak as somebody who worked in the retail and manufacturing sectors and has experience of many of the tensions to which other speakers have referred — we need to ensure consumer policy does not end up being the poor relative. One of the matters being looked at is the merger of the Competition Authority and the National Consumer Agency and we need to ensure the rigorous implementation of competition policy does not come at the cost of diluting consumer standards and that consumer policy and the protection of the consumer are still kept to the fore and are vigorously prosecuted.

The second point concerns regulatory capture. We have seen to our considerable cost the number of times on which regulatory bodies were captured and influenced by the industries that they were meant to regulate. The additional power that will be made available to the courts and to the Competition Authority by a body such as this does not absolve others of their responsibility in ensuring such policy and law is implemented purely with the national interest in mind. As such, some of the other Bills the Government is bringing forward must be recognised. The additional measures that are being put in place to encourage whistle-blowing, included in a Bill that came through the House a fortnight ago, continue to be important to ensure that a Bill such as this can be properly implemented.

I welcome this legislation. It forms part of a suite of measures that the Government is implementing on the structure and costs of the legal sector. It is also accompanied by a measure on the structure and costs of general practitioner services and dealing with some of the impediments to persons entering that sector. All of these are measures that will make a significant contribution to ensuring Ireland continues to be a place in which business can flourish, but not at the expense of consumers or those who depend on a level playing pitch being created, in which manufacturers and businesses can operate and from which consumers can benefit.

I am sharing time with comrade Deputy Ross.

I thank the Acting Chairman, Deputy Joe O'Reilly, for the opportunity to speak to this new legislation, the Competition (Amendment) Bill 2011. I welcome the debate as it gives us the opportunity to examine the issue of competition, competitiveness and the radical changes in the country over the past couple of years. It also deals squarely with enforcement and the penalties issues.

It also provides an opportunity in the House for us all to face up to the reality of where we are going and what type of country we want. The banks, the church, business leaders and politicians all have taken a major hit on confidence and respect over the past few months. The people voted for change and reform and it was the same old story. They got U-turns and the same old cronyism. Is it any wonder the people are fed up and the country is in such a mess? We need action on this issue. We have had enough talk. The people are crying out for proper and effective leadership.

On the competition issue, and before I get down to the brass tacks of the legislation, we need to ask ourselves how a country can be really competitive if, for example, Anglo Irish Bank, which is now operating as the Irish Bank Resolution Corporation, will continue to use taxpayers' money to pay unguaranteed unsecured senior bondholders. We cannot get out of the competitive mess we are in if we keep doing this. On 2 November, the Government allowed Anglo Irish Bank to pay a single unguaranteed unsecured senior bond to the value of almost $1 billion despite enormous public opposition. Nobody listened except members of the Technical Group. On 25 January 2012, Anglo Irish Bank will go ahead again and pay out a single unguaranteed unsecured bond to the value of €1.2 billion. I raise these issues because they are connected with the competition that we need. We cannot be competitive on the Irish market or on the international market if we still have these matters around our necks.

I want to put forward the idea to the Taoiseach and to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, that we should enter immediate discussions with the European Central Bank to have the promissory note withdrawn and to remove this toxic private liability from the State and the taxpayer. The Government should seek support from our European partners in this endeavour on the grounds that removing the obligation created by the promissory note would reduce our debt to GDP ratio to approximately 87%, easing the State's transition back to the international bond markets and assisting in reducing the deficit and returning the economy to sustainable social and economic development.

Finally, the practice of using taxpayers' money to repay the promissory note must end. I call on the Government to intervene to prevent Anglo Irish Bank from using taxpayers' money to repay the unguaranteed senior bondholders and I say this in the context of the debate.

The purpose of the Bill is to strengthen competition law enforcement by providing for new and increased sanctions and penalties. Section 2 provides for the amendment of section 8 of the Competition Act 2002 which will increase the levels and range of sanctions available to the competent authorities in their enforcement of competition law. There are important sections in the Bill in that regard.

When we are dealing with the competitive issues, I regularly hear the Taoiseach and Ministers state that we never put forward other solutions to problems. Let me take a simple solution in the economy dealing with competitiveness and jobs. The Irish betting shops have told me that they can create up to 500 jobs if they are allowed to open for winter evening racing on selected nights when racing and important football matches are on. There is a sensible proposal. These shops will also contribute an extra €5.5 million to the Exchequer through the extension of opening hours. Of course, there will be additional PRSI contributions through new jobs created.

Another sensible proposal is that there is need for an urgent review of betting legislation to allow for the introduction of new technology in betting shops to allow them compete effectively with online, iPhone and mobile betting platforms. The Government needs to introduce a fairer system of taxation of betting in Ireland that brings all platforms into the net. The current levy of 1% paid only by betting shops is unfair. A possible option would be like that which there is in England, the proposal to make the source of the bet the point of liability and that all betting providers must have a licence to bet in that market and to ensure compliance and fairness for all operators. The Government should examine a gross profits tax model for shops to replace the 1% levy. There is a sensible proposal which would create 500 jobs and help those involved and interested in sport, but also bring in €5.5 million in extra tax revenue which could be used to fund the special needs assistants. I put forward these ideas as sensible issues.

On the competition issue, we also need to face up to the reality that we need to deal strongly and effectively with the unemployment issue. Both issues are strongly linked. Ireland's unemployment crisis continues, with almost 450,000 people on the live register, ongoing job losses and poor economic growth. We must consider whether austerity is working. Most reasonable people agree that austerity alone will destroy the country. If the Minister speaks with small businesses, they will confirm that they are being hammered by high rents and insurance costs. I regularly meet people in my constituency who have been forced to let go one staff member, or perhaps two part-time workers because of these factors. We need to regenerate the sector. The number of people who have been on the live register for longer than one year continues to grow and now accounts for more than 40% of those signing on. We must tackle this serious situation.

The more money that is taken out of the economy, the less there is that can be spent in the small economy. Deputy Donohoe referred to wealth and profit, but these are not the issues. Rather, sharing wealth and burden sharing are the real debate. We should not be afraid to consider the examples of good practice across the sector.

Section 4 addresses the right of action of the competent authority and inserts a new section 14A to provide for separate public enforcement provisions. As with the original section 14, this provision gives the competent authority the right to take action in the Circuit Court or High Court.

I welcome the debate on competition and I hope the Government gets its act together and returns people to work so that we can all get out of this mess and start to build a new, inclusive republic that puts citizens at the top of the political and economic agendas.

I thank Deputy Finian McGrath for the privilege of being able to sit and listen to his speech before I make mine.

Deputy Ross is welcome.

It is a privilege I had not anticipated before the Chair called him.

One could not fault this Bill in and of itself, in that fines and prison terms are being increased and there is an effort to punish in a more severe way those who commit offences against competition law. However, it lacks detection provisions. It is a well-known tenet of the philosophy of punishment that detection is better than punishment. A problem in Ireland is that many cartels have not been challenged. Where there have been convictions, fines have been imposed, but the Competition Authority has often refused to investigate and, consequently, has not been able to enforce. Constant complaints come from the Competition Authority, as they do from everywhere else, about being under-resourced. This is undoubtedly true.

We are about to face a critical situation in the banking area, in that it will be dominated by two pillar banks. We will need competition more than ever. The exit of Bank of Scotland Ireland, the disappearance of Irish Nationwide and Anglo Irish Bank and the merger of EBS with AIB mean that the pillar banks will be able to return to their original position, that is, zero competition, in the years to come. What measures does the Minister propose to introduce to ensure that competition returns to the banks when the pillar banks regain their extraordinary duopoly or dominance? We need a strict regulatory regime and Competition Authority. We also need enforcement to ensure that the banks do not take their customers apart in the way they used to do. I am not confident that the Government intends to or will be able to take these measures. History teaches us banks and bankers continuously find ways to impose a cartel on their customers. Were I in AIB or Bank of Ireland, I would be rubbing my hands with glee at the easiness with which they will be able to make a significant amount of money on the back of running a silent or open cartel.

Another issue arises directly from the question of resources. Dr. John Fingleton, who was in charge of the Competition Authority some years ago, stated that €4 billion per year was lost to the economy in the 2004-05 period as a result of uncompetitive practices. According to him, the Competition Authority could only hold one proper investigation per annum. This is laughable. Considering our history of cartels and a lack of competition, it seems that we need a vastly more resourced Competition Authority. If Dr. Fingleton's figures were right and there was a €4 billion saving to be made, the cost benefit must show a profit. I would be interested in the Minister of State's comments in this regard.

There is further evidence. In or around the same time that Mr. Patrick Massey resigned from the Competition Authority as its director of competition enforcement, he stated that it did not have the resources available to him to carry out his job properly. It is all very well introducing more fines, but if no one is brought to court or no investigations are carried out because the authority does not have the resources to challenge the big players, that introduction is meaningless. It is a minor deterrent and will not prevent cartels or anti-competitive practices.

I hope the Minister of State will answer a specific question. I will leave the bankers aside. I sympathise with Deputy Clare Daly's comments. The most successful Irish company is supposedly CRH. It has a good profit record, but it has not had much competition. CRH disturbs me. Only last year Poland fined it €26 million for uncompetitive practices. This was a great deal of money and was based on a percentage of turnover. I am told, although I am open to contradiction, that the practices of which it was found guilty in Poland are the practices it is happy to engage in here. Why has CRH been the subject of so many investigations in Europe yet none in Ireland? It was also fined by the European Court of Justice in the mid-1990s. Many complaints have been made about it by various groups. One such group, comprising a small number of private cement industrialists, is called Framus and has been campaigning against CRH's activities for 15 years. Year after year, small concrete producers have claimed that price fixing, cartel-type activities and all sorts of practices of which the Competition Authority would disapprove, condemn and outlaw have been practised by CRH, yet any effort to get their case to the authority has been refused or frustrated. Why? The evidence from overseas appears clear, in that CRH is not the white sepulchre of a company that it is made out to be. Rather, an examination of CRH's activities overseas finds that it has been indulging in activities of which we would not approve. However, the Competition Authority has refused to carry out a wholescale investigation. Let us face it: this company is a quasi-monopoly. It has one or two competitors but in effect it has a huge amount of dominance. It is exactly the type of company of which we should beware. This type of company, activity and dominance leads to abuses. The monopoly could be tolerated if we were sure it would be investigated. However, we are not sure of this as evidenced by the number of small producers of concrete and cement complaining. What is stopping a serious investigation by the Competition Authority? Is it simply resources or that it does not think there is a case? The evidence appears to be that it is a matter of resources which is stopping it rather than the absence of a case against the company.

I appeal to the Minister of State not to take the attitude that CRH, like many other companies in Ireland, is too big to tackle. We learned much about companies being too big to tackle; they are accidents waiting to happen. We saw with the banks and the Quinn group and all private companies which abuse a monopoly that governments refuse to take them on. How did so many companies which have dominance get into so much trouble in the end? We must be very careful about this company. What the public, small companies and those companies being put out of business by CRH need, and the least they deserve, is to be reassured that an independent investigation can and will be held. They will then be reassured, whatever the findings, that at least we are not sparing people in business because they are as powerful as the Government or because they have good connections in the right places. This has always been the situation in Ireland with regard to business. Big business is too close to government and the big banks were too close to government. Big business has too many people who have the ear of people in positions of power and CRH is no exception to this. People in Europe stand and stare when they find out there really has not been any proper investigation of this monolith in Ireland.

I appeal to the Minister of State not only to state that something is being done about competition and that people are being fined far more money and longer prison sentences can be applied but to give us the reassurance we need that there will be detection of breaches of competition law so that it will be prevented and that there will be impartial investigations. This is an opportunity to tackle the largest company in the State and to state that we are prepared to challenge it, powerful as it is. I ask the Minister of State to take this proposal extremely seriously.

I take to heart some of the remarks made by Deputy Ross. It is important that there be detection of wrongdoing. Yesterday, I spoke on a similar matter during the Topical Issues debate with regard to the fact that petrol stations are selling laundered fuel. It is very important that detection be pursued to the maximum. It is worth investing money in this area because it would yield revenue as well as, it is hoped, reducing prices for people.

In speaking on the Bill, I raise one anti-competitive practice which some of my constituents brought to my attention. The practice is not in the best interests of the public. As we know, the country's automotive industry supports a great deal of employment, and it is essential that it have a good working relationship with the insurance industry when dealing with damage to vehicles involved in accidents. However, I understand the insurance industry has adopted a practice of steering claimants to use certain motor service providers to have their cars repaired, most particularly with regard to windscreens, to the point whereby consumers who choose to have their cars repaired by a service provider who is not on the inside track with the insurance providers have considerable difficulties. For example, insurance companies are slow to process claims for consumers who use service providers who are not on the inside track, to the point of obstructing business.

I have received reports of insurance companies insisting on claimants using service providers who may be some distance away, when perfectly good local service providers would be able to do just as good a job at the same price. A particular concern is that some insurance companies have set up dedicated claims lines, which are routed directly to motor service companies on the inside track, thereby railroading consumers into using the insurance companies' preferred suppliers, thus depriving small service providers of any chance to get the business.

The combination of these practices is anti-competitive and deprives consumers of the choice of motor service providers to which they are entitled. This is leading to considerable hardship among some motor service providers, who are fully qualified, registered, trustworthy and competent in their field, but are not able to stay afloat due to the fact that they are not on the inside track with insurance companies and are completely deprived of any share of the quite considerable trade. The Irish Automotive Glass Repairs Association, which represents 20 small independent windscreen companies, has stated that as a result of these practices, the majority of its companies are struggling to survive the recession, and that this practice will inevitably cost jobs, if it has not done so already.

The insurance industry claims that approved repairer programmes were established to reduce the cost of claims and thereby to lead to reduced premiums for consumers. One major insurance company recently announced it has established an approved panel of builders that its policyholders must use for household claims. However, Dermot Jewell of the Consumers Association stated of these practices that the move could restrict choice and competition and give builders on the panel an unfair advantage over other builders. He stated, "This happened with motor insurance policies and it did not lead to lower premiums for consumers but did lead to less choice."

The Competition Authority has looked into this matter and it has washed its hands of what is an anti-competitive practice. I contacted the Minister, Deputy Bruton, on this matter but it seems to have gone into the sand. I ask him to make the necessary amendments to the legislation to put an end to the steering in which the insurance industry is involved and to help out small businesses such as those to which I referred to stay afloat in the teeth of the current recession. If the Government is serious about helping small businesses and giving consumers choice, this industry is a good place to start. I hope the Minister of State is listening to what I say and will take measures to put an end to these anti-competitive practices. I look forward to hearing the response.

I thank the House for the opportunity to speak on the Bill and I commend the Bill to the House.

One of the core problems affecting our economy has been a lack of competitiveness. I am very glad that recent figures show improvements in the past six months. A key element in restoring our economy to growth is to continue to improve our competitiveness.

During the boom years, excessive credit and excessive activity in the building sector led to a huge increase in personal and household income. This led to far less vigilance by the general public and excessive prices were paid for a wide range of goods and services. While incomes have dropped considerably, charges in other protected sectors have remained high. Higher prices lead to new wage demands in the future. Higher wages make the country less attractive to inward investment and slow export growth, which is a central and most important element in our recovery.

The troika of the EU, IMF and ECB has put considerable obligations on us to reduce our budget deficit and resolve our banking crisis. It has also put equal emphasis on the necessity to make structural reforms with the clear objective of increasing competitiveness. This includes action on specific services including legal services and GP and medical expenses. The EU and IMF identified specific services that were way out of line with the countries we are competing with across the world. Apart from these protected areas, the general expectation of large profits across all sectors, which was evident during the boom, must be curtailed.

We must encourage new indigenous businesses and create a competitive environment for them to set up and grow. By strengthening competition law enforcement, this Bill will help create a level playing field for all businesses and benefit both consumers and businesses alike. This item of legislation is a central plank in our economic recovery. The Minister, Deputy Bruton, realises the importance of getting results quickly in this area and is introducing very heavy penalties. The main provisions of the Bill include an increase from five to ten years in the maximum prison sentence, large increases in fines, and that a body convicted of competition offences may have to pay costs of its investigation and it will be possible for the first time to disqualify a person convicted of indictable competition offences from being a company director. Also, a person convicted of certain competition offences will not be eligible for probation and it will be easier for private individuals affected by anti-competitive practices to prove an action for damages against a cartelist once public enforcement proceedings have successfully been taken. This legislation means that price fixers, cartels and those involved in white collar crime will face tougher jail sentences of up to ten years. This stronger deterrent can only be good for consumers and businesses. The harsher sentencing regime is being imposed after Ireland was ordered to toughen enforcement of competition rules by the EU-IMF team.

Most importantly, the changes will make it easier for ordinary people and small businesses to make claims against companies found guilty of price fixing. The message must get across to the business community that price fixing harms the economy as a whole and will not be tolerated in the future. Consumers must be convinced that this legislation, when properly enforced, will reduce the cost of living. When achieved, these objectives will benefit the whole economy.

We must be continually vigilant; especially in growth areas, that inflation does not creep in. In recent years the farming sector has been doing well after many difficult years. In good times, as we saw during the building boom, there is a tendency to increase the price of inputs. This will erode competitiveness, restrict expansion and have a devastating effect in any downturn for the agriculture industry. The haulage area can also be examined now. As an export country, most of our goods are exported on roads. People now buy diesel abroad rather than here because of rebates and the cost of diesel here. I hope to bring a more detailed view on this in the next couple of weeks.

As has been identified by the EU and IMF, this comprehensive legislation on competition is long overdue but the mere introduction of legislation is not enough. Laws and regulations must be strictly enforced and the general public and businesses affected by anti-competitive practices must be encouraged to take action. The Department and Minister have undertaken to review the implementation of the legislation and I have no doubt this will be done under the Minister's supervision as well as under the watchful eye of the EU and IMF in the coming years. It is important to recognise that as a nation we took our eye off the ball during the boom years. This cannot be allowed to happen in the future. I therefore commend the Bill to the House.

The Competition (Amendment) Bill marks the completion of the requirements set out in the terms of the EU-IMF programme of financial support for Ireland. This Government, and particularly Ireland, has again lived up to its commitment; in this instance, to strengthen the enforcement of competition law. The Bill provides for new and increased sanctions for anyone who engages in anti-competitive activities. It is envisaged that the enhanced measures will be a more effective deterrent. The negative effect of anti-competitive practices should not be underestimated and it is the aim of this legislation to further protect and benefit the consumers and people of Ireland.

Ireland has not been immune to the effects of collusion and price-fixing. The car industry, the IFA and more recently the concrete industry are among the industries that have come under the spotlight in recent years. The benefits of competition to society are immense and far-reaching. Competition is the crucial driver of performance and innovation and it benefits everyone by enabling us to choose from an array of excellent products at affordable prices. Competition also encourages the adoption of innovation as companies evolve and new ideas flourish in the marketplace. This has never been more important to Ireland and, in particular, it is of crucial importance if Ireland is to rebuild itself and restore competitiveness.

Consumers stand to gain most from greater competition and the reduction of anti-competitive practices. Competitive markets encourage lower prices and greater choice. Fair and open competition means lower prices and greater choice and this is what the legislation will achieve. Limiting consumers' freedom of choice stalls innovation. Impediments to innovation are a setback for the people and the country. Market conditions that permit a single person, company or entity to become the sole judge of price and quality set a dangerous precedent. Thus, the enhanced sanctions in this legislation should ensure a decrease in cartel-type activity and price-fixing.

In addition, conditions that allow industry stakeholders to collude over commercial pricing or supply should be eliminated. Through severe sanctions, this legislation goes a long way to providing extreme deterrents where collusion is contemplated. Anyone considering such anti-competitive and ultimately corrosive actions must consider the implications of their actions very carefully. I expect a significant reduction in queries and complaints to the Competition Authority as a result of this legislation. Fair play and open competition in the market enables vendors and manufacturers to deliver a greater variety of competitive products to their customers and often results in lower prices and higher performance. When competition allows market forces to prevail, leading companies can offer the best products to a broader array of customers and consumers. This is only good news for Ireland.

Competitive pricing, product innovation and performance improvements, coupled with competitive practices, helped to ensure that Government authorities get the best value for the public they serve. Furthermore, transparent and unbiased procurement practices are essential components of open government and a healthy, free-market economy. This Government actively encourages such practices and is ever conscious of securing the best value from spending on behalf of the Irish people.

There are numerous reasons competitive markets are beneficial for consumers and the economy as a whole. This Government regards creating a competitive environment as a cornerstone of the supply-side economic policy. Vigorous competition between firms is the lifeblood of strong and effective markets. It encourages firms to innovate by reducing slack, putting downward pressure on costs and providing incentives for the efficient organisation of production. This results in consumers obtaining better value for money. As such, competition is a central driver of productivity growth in the economy and hence Ireland's international competitiveness.

A competitive market exists when there is a genuine choice for consumers in terms of who supplies the goods and services they demand. Competitive markets are characterised by various forms of competitions between sellers bidding to increase or protect their market share. The overall impact of increased competition should see an improvement in the economic welfare of Ireland. This is what Ireland needs and the legislation is enhancing the environment where such economic activity can grow. This economic activity is the very lifeline of Ireland and that is what the Government is providing. I welcome this Bill as forward-thinking legislation that will further aid the economic revival of Ireland. I have no hesitation in commending this Bill to the House.

While there is nothing directly objectionable in this Bill——

Does the Deputy support it?

To be honest, I am indifferent to it.

Why is Deputy speaking to it then?

Because, having listened to the speeches from the other side of the House, the Government is trying to suggest enacting the Bill will do something to deal with the reasons we are in the deepest economic crisis the State has ever faced and the European economy is teetering on the edge of an abyss. These measures on which the Government is being dictated to by the European Union and the IMF are supposed to improve the situation and deal with the economic conditions that led to the crisis. It is important for us, therefore, to discuss whether the measures being brought forward by the Government are in any way adequate to deal with the task of confronting the economic crisis we face and the economic conditions that led to the crisis. Frankly, the legislation fails on all counts; it is for the optics. To put it mildly, it is shutting the door after the horse has bolted, but even that metaphor does not go far enough in describing——

I actually think the Deputy is bluffing.

The Minister of State can think what he likes, but I think the Government is bluffing.

The Deputy will give us the usual diatribe about the state of the globe and his political view.

I am sure the Government side has had its opportunity to speak, has it not?

Why does the Deputy not talk about the legislation before us?

I will talk about it.

The Deputy should give us a critique of the legislation, as he sees it.

The Minister of State should allow Deputy Boyd Barrett to continue.

The Minister of State should be aware that I know what is contained in the legislation. The Government is proposing to impose extra penalties on those who abuse competition law. In addition, it is proposed to change in certain cirumstances the burden of proof where infringements, or alleged infringements, of competition law have taken place in order that it will be somewhat easier to prosecute the people concerned and to make it possible to remove directors who have been found guilty of infringing competition law and disbar them from sitting on company boards.

Is that not laudable?

Is the Minister of State speaking or am I? I can sit down to enable the Minister of State to have a go and I will then come back in, if he wants. I understand precisely what is contained in the Bill and I also understand what the Minister of State is saying it is supposed to do.

In the various eulogies to the legislation, we have had an attempt to repeat the ideological claptrap constantly regurgitated and recycled by the Government, the IMF gurus and our EU masters who got us into this mess. Talking about higher penalties and shifting the emphasis, while not objectionable, is a little like deliberately letting a ferocious tiger loose in society and later bemoaning the fact that it savaged people. It is like saying the zookeeper should have looked after the animal better. The real problem is that the tiger should not have been let loose because it is a dangerous creature.

The legislation is predicated on the belief that competition is good and the best way of organising an economy. I have often heard Fine Gael Ministers and representatives, in particular, using competition and sporting analogies in discussing how we should run our society. However, running a society or an economy is not like playing a football game. It is not about competition and scoring goals; rather, it is about meeting the needs of ordinary people and ensuring this is done in the most effective and efficient way possible. We are trying to do this in a deep crisis when our economic system has catastrophically failed to meet society's needs. The European economy is teetering on the edge of the abyss, while the Irish economy is in dire straits. It is, therefore, beholden on the Government to ask how we reached this point. Only somebody who is being dishonest would not acknowledge that competition played a pivotal role in getting us into this crisis. Even the Nyberg report on the banking crisis acknowledged this fact.

Competition between private banks is precisely the reason the people concerned engaged in dangerous and reckless lending practices. Financial institutions, which were cowboy operations, were allowed into the Irish market and engaged in reckless lending to individuals who were not able to afford to pay back the money loaned to them. So-called respectable financial institutions, under competitive pressure from these cowboy financial institutions, began to engage in the same reckless lending. That is what happened. That is what was stated in the Nyberg report; it is not just the leftists who said it. That is a fact. What are we going to do about it? Are we going to rein in this dangerous animal of competition that caused that crisis? In what sense will any of the measures included in the Bill prevent such actions? They will not do so and it is not just because they are inadequate or ineffective. The Bill slightly increases the penalties in place before the crisis. Therefore, there is no fundamental change.

At the same time, in their other actions, the Government and the troika state they will reward those financial institutions which, driven by competition to make a profit, engaged in reckless lending. On the one hand, the Government is stating, for the optics and public consumption, that it will take tough action against these reckless private entities who pursued only profit, regardless of the impact on the economy and society, while, on the other, it is stating it will bail them out, no matter what they do. In fact, the Government's actions in creating pillar banks are leading to the removal of competition. We are financing these pillar banks, although we do not control them, as they will still be subject to the same competitive imperatives that led them to wreck the economy, yet the Government is doing nothing about this. It is giving the banks this power, while making it absolutely clear, even though we are financing them, that as soon as they have been nursed back to health, through the pain of ordinary people, they will be allowed to float off into the market again as private entities, in other words, we will bail them out and take the pain and then they will engage in blind competition to make a profit. This issue needs to be highlighted when the Government engages in play-acting and pretends that it is doing something about the circumstances that led to the economic crisis.

If one sets the optics beside the troika demands, with which the Government is going along, to privatise State assets as part of the conditions of the so-called bailout programme, the Government is giving power to the cartels and big multinationals it states it wants to control. Who will buy the State assets? It will not be the corner shops which are going out of business. The Government waxes lyrical about how it wants to introduce competition which is the lifeblood of the economy, but has the Minister of State noticed that as a result of the austerity measures taken, small businesses which the Government claims to support are being slaughtered all over the country? Only the big entities remain. Throughout Europe the multinationals are dictating to the European Union and the IMF that our State assets should be sold in order that they can buy them. These entities include Helvetia Wealth, a money-laundering operation in Switzerland which has a subsidiary called the International Forestry Fund, of which the chairperson is Bertie Ahern. His little office is to be found in Dún Laoghaire and it is pushing to take hold of Coillte. These are the sorts of entities that will get hold of our State assets as the Government continues to obey the diktats of the European Union and the IMF. Although the Government says it is trying to take action to control cartels and price fixing, everything it is doing increasingly gives control over economic and natural resources and key enterprises to cartels. It is utterly laughable that one of the people invited to the economic forum is none other than Mr. Denis O'Brien, who is trying to obtain a complete monopoly over Irish media. To put it mildly, there are major question marks over how he became fantastically wealthy as a result of his irregular arrangements and his relationship with Deputy Michael Lowry, a former Fine Gael Minister. He got the second mobile phone licence in this country and consequently became extraordinarily rich. He lives as a tax exile and is now busy trying to obtain a monopoly over the Irish media. He is invited to give advice on the Irish economic crisis by the Government, yet the latter expects us to take seriously its statement, through this legislation, that it is trying to do something about cartels, monopolies and abuses associated with holding a dominant position. This does not add up at all. It is a question of optics and play-acting to pretend it is doing something when it is doing absolutely nothing.

Big corporate entities, which are being encouraged and whose interests are being championed by the troika and Government, do not result in lower prices for the consumer; the very opposite is the case. The result is domination by those big entities of entire markets. Perhaps for a brief period there is a drop in prices as the entities try to undermine a public enterprise. This occurred in the waste management sector, where there was an effort to undermine local authority waste collection services that were free or paid for through central taxation. Central taxation is somewhat fairer than other mechanisms. Local authorities have been forced by Fine Gael, the Labour Party and Fianna Fáil to introduce charges to pave the way for competition in the waste sector. Pensioners and the poor now must pay bin charges whereas they once had a service paid for through progressive central taxation. Their circumstances are now worse. As a result of the inevitable privatisation of the waste management sector and the introduction of competition thereto, waste collection prices have increased. The waiver schemes that supposedly exist to protect the less well-off have been done away with progressively or cut substantially.

Let us consider electricity, which is pretty important because it provides heat in the homes of ordinary people. Has the opening of the electricity market to competition helped the consumer? It clearly has not because prices have increased continuously since the market was opened up. The diktats of the market and its desire for profit come first in an open market. The public, through its public representatives, can tell a State enterprise that it wants subsidised prices for the more vulnerable and less well-off sectors of society, and that this should be paid for through progressive taxation. Behind all the bogus talk of competition to encourage the economy, whose lifeblood is believed to comprise small businesses, small businesses are being wrecked by the deregulation of the electricity market. The electricity price rises were directly responsible for small businesses going out of business. That is the reality. Rising costs, attributable to control by monopoly interests in privatised markets, are killing small businesses. In every sector of the economy, small businesses are being eaten up and replaced by multiples, chains and big entities. This is what is happening in the recession. This Bill is just meaningless and will achieve absolutely nothing.

If the Government were in any way serious about dealing with the circumstances that led to the current economic crisis and the abuses and dominant position of super-wealthy individuals who use their wealth to exert power over key industries and sectors of the economy, it would take the vital sectors of the economy back into public ownership. Public ownership gave some control to ordinary people and public representatives who are at least notionally accountable to the public for industries' strategic priorities, prices and investment decisions. If the Government were serious about helping small businesses, which I agree comprise an important part of the lifeblood of the economy, it would do something about excessive rates, excessively high prices for small businesses, upward-only rent reviews and, more generally, stimulating the economy. These are the steps we need to take.

Shambolic optics, closing the door after the horse has bolted, legislating and pretence are but verbiage on paper. They achieve nothing and fly in the face of the real decisions being made by the troika to shore up and protect the interests of big corporate entities or the financial institutions whose blind competition for profit wrecks the Irish and European economies, and who are now trying to use the crisis to further centralise and consolidate their control over those economies. I have outlined for the Government what it needs to do but it has no intention of doing so because it is addicted to the failed economic dogma that got us into this mess in the first place.

I support the Bill. Competition is extremely important within the market. One example of where it really made a difference was in the airline industry. In the 1980s, Aer Lingus was a dominant provider of air travel but Ryanair entered the market and forced prices downward. That very much helped consumers.

Are they not starting to rise now?

That is an issue but consumers have the opportunity to shop around and do so daily.

They will not when Ryanair takes over at Aer Lingus.

Deputy Terence Flanagan without interruption.

That may possibly occur. Who knows? I welcome the improvements in the Bill. The legislation was committed to under the EU-IMF agreement and was introduced in the third quarter of this year. It helps to strengthen the enforcement of competition law and provides more effective deterrents for individuals or organisations engaged in anti-competitive practices. It is extremely important that we see an improvement in the detection of offences by organisations involved in cartels and anti-competitive practices and that these organisations be prosecuted and subjected to the full rigour of the law. Many offences have been detected but, to protect consumers, we need to see more high-profile cases coming before the courts.

The Bill makes practical changes to competition law. The maximum prison sentence has been increased from five years to ten where an individual is indicted for hard-core competition offences such as the setting up of formal price fixing or market-sharing agreements. Under the Competition Act and the operation of the Competition Authority, a cartel immunity programme is available. It is helpful for any individual or organisation who wants to be a whistleblower and bring a matter to the attention of the Competition Authority to avoid prosecution. Legislation on this general area needs to be introduced at a later date.

The legislation proposes that fines for competition offences will be increased across the board. Private individuals who are affected by anti-competitive practices will need to prove an action for damages against a cartelist once public enforcement proceedings have been successfully taken. In other words, the burden of proof will be eased for private plaintiffs taking on a follow-on case for damages. That is a new and positive provision in the legislation.

The courts can make a convicted undertaking liable for the costs and expenses incurred in relation to the investigation, detection and prosecution of the offence. Such court cases can be complex and considerable time, effort and cost can be involved in taking a case against a company. It is a good provision that the individual concerned will be made responsible for that. A person convicted of certain competition offences will not be eligible for probation. The Bill includes the dis-application of the Probation of Offenders Act 1907 to competition law offences. That is another provision that is an improvement on the current position.

A person convicted for the first time ever of a non-indictable competition offence cannot act as a company director. There have been cases in the past where that has happened and the people concerned continued on in their roles, but this provision will now outlaw that for the first time. The Bill provides for an amendment to section 160 of the Companies Act 1990. The court either on its own motion or on foot of an application from the Competition Authority or ComReg will order that a person shall not be appointed as a company director where he or she is guilty of infringement of offences under the Competition Act 2002, other than indictable offences which already result in automatic disqualification.

The Bill distinguishes between private enforcement and public enforcement of civil actions with regard to competition law and provides for separate public enforcement provisions to be taken by the Competition Authority. It also updates certain fines within the classifications contained in the Fines Act 2010.

Having regard to the state of our public finances, bid rigging by companies that agree to come together to bid for public procurement is covered in regard to the building of roads and schools. That is an important provision in terms of keeping an eye on the public purse.

Significant breaches of the Competition Act are viewed seriously. The Bill provides for an increase from €4 million to €5 million in the fine for indictable offences. The increases in fines and the provision of lengthy periods of imprisonment of up to five years will focus people's minds on this area and there are adequate deterrents in the Bill to persuade them not to get involved in practices that are indictable offences.

The Minister of State needs to examine the low level of detection of competition offences. Action needs to be taken on the more high profile cases, as the previous speaker said. The Competition Authority can prosecute offenders in the criminal courts or the civil courts and it examines the operations of cartels in particular. Irish Rail and Mayo waste companies were prosecuted, as were heating oil companies involved a cartel price fixing operation in Galway and other areas of the west in the recent past. Some of the fines imposed on these companies have been on the low side. Some of them were fined €5,000, €7,500 and €12,000. That increase in the level of fines in the Bill is an improvement.

The high level of professional fees, including solicitors' fees, doctors' fees and consultants' fees, is not addressed in this legislation but that issue must be tackled by the Government. We know from our constituency clinics and from knocking on doors that people find it difficult to keep up to date in the payment of their utility bills. Doctors' fees are €60 a visit, on average, and parents only bring children to the doctor now when it is absolutely necessary. The level of doctors' fees and consultants' fees has not decreased in line with the current economic circumstances and that issue requires attention.

Deputy Boyd Barrett referred to energy prices in terms of the ESB and Bord Gáis. That area also requires attention. It is subject to regulation but there must be a way of moving forward with the times and helping people who are in extreme difficulty. Another tough budget is on the way because the national accounts are not as good as they should be. We need to keep an eye on the cost of living for people and the various costs with which they are being hit. Will the Minister of State indicate whether there are there any large profile companies and cases pending, the statistics in this respect and how his Department monitors the position?

Competition is necessary and more competition is required in various markets. Anyone in business who is creating a dominant or monopoly position and not operating competitively for the benefit of consumers needs to be brought to task.

I am delighted to speak on this Bill. While I welcome the changes proposed, they only tinker around the edges of what is required. The imposition of higher fines and the threat of imprisonment are not sufficiently substantial or anything like what is needed. The Government promised so much in so many areas that what is required in this respect might have gone under the radar. Considerable funding and resources need to be given to the Competition Authority for it to have inspectors on the road. Goodness knows there are enough inspectors in many other bodies such as NERA. Could they not be transferred from that area to this area?

Lack of competition is destroying our economy and that has been going on for decades. While the Government has only been in office for eight months and this measure is a starting point, the Government must know, as previous Ministers were aware, that cartels operate freely and above the law here. It is sickening what is happening across a wide sphere of activities, especially if one is involved in a family business or is a small independent operator. Such cartel operations range from the construction and retail industries to the agriculture sector.

I compliment the Minister of State, Deputy Sean Sherlock, on this appointment and wish him well. I know that he has strong views on this area and that he means well. In this context, I refer to the collapse of the banking system.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
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