Seanad Éireann debate -
Tuesday, 14 Jul 1987

Vol. 116 No. 17

Restrictive Practices (Amendment) Bill, 1987: Second Stage.

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

Minister for Industry and Commerce (Mr. A. Reynolds)

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

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

In considering the need for new measures in the regulation of competition, it is important to bear in mind the purpose of competition legislation and, indeed, the function which competition fulfils in the economy. When operating fairly, competition is a healthy element in the market.

It should not be viewed as an aim in itself but, rather, as an essential means towards the improvement of production so as to encourage an efficient economy and to benefit the consumer. Restrictive practices reduce the choices open to the consumer and can lead him to pay higher prices than might otherwise prevail in an unrestricted market. Also, an informed consumer is a valuable stimulus to industry, requiring procedures to remain efficient and in touch with consumers' requirements.

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

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

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

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

The Bill, therefore, removes the exclusions from the Restrictive Practices Act, 1972, and the Mergers, Take-overs and Monopolies (Control) Act, 1978, in the areas of communications, banking and electricity. In addition, the exclusion relating to services provided under a contract of employment is being removed from the Restrictive Practices Act, 1972. In view, however, of the responsibility of the Minister for Labour in this area, I am proposing that his consent will be necessary before any regulatory activity in relation to such services can take place under the Restrictive Practices Act.

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

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

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

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

I have already explained that the Bill will extend the scope of competition legislation by removing the exemption which relates to certain services. The relevant parts of the definitions section of both the Restrictive Practices Act, 1972, and the Mergers Act of 1978, together with section 25 of the Restrictive Practices Act and section 52 (1) of the Postal and Telecommunications Services Act, 1983, are being repealed to give effect to this proposal.

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

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

The repeal of section 2 (2) of the Prices (Amendment) Act, 1972, follows from the abolition of detailed price controls, which the previous Government decided on in 1986. At present, under section 2 (2), any statutory power to fix or control prices may only be exercised with my consent. With the lapsing of price controls generally, it is appropriate to remove the requirement for this consent and to permit the statutory powers to revert to the Minister and bodies concerned. The final repeal which should be mentioned is that of section 23 of the Consumer Information Act, 1978. This section is being repealed in order to remove the exemption which licensed banks at present enjoy, thus making them subject to the supervision of the Director of Consumer Affairs and Fair Trade in so far as advertising is concerned.

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

The purpose of sections 10, 11 and 13 is to strengthen the role of the Commission by allowing them to exercise their powers under the Act on their own initiative, that is, without the existing requirement to have first received a request to do so from either the examiner or myself. Sections 14 and 16 also strengthen the Commission's powers by conferring on the Commission power to require information when conducting a study or analysis under section 12 of the Restrictive Practices Act. Considerable powers of investigation are also being given to the authorised officers of the Commission under section 16. These powers already apply to authorised officers of the examiner under section 15 of the 1972 Act. As a further measure to strengthen the Commission's powers, section 15 of the Bill allows the Commission to request the Director to carry out an investigation under the 1972 Act. At present, only I, as Minister for Industry and Commerce, can request the examiner to carry out such an investigation.

Sections 17 to 19 are designed to ensure the efficient and effective enforcement of restrictive practices legislation, first of all by giving the Director of Consumer Affairs and Fair Trade power to seek an injunction to enforce compliance with an order made under the 1972 Act, secondly by giving the director powers of prosecution under the 1972 Act, thirdly by extending to 18 months the time during which offences under the 1972 Act may be prosecuted, and, finally, by increasing the fines payable, on conviction of an offence to a level which will bring them into line with present day money values.

The amendments to the Mergers, Take-overs and Monopolies (Control) Act, 1978, which are contained in sections 21 and 22 of the Bill are, once again, designed to improve the efficiency of the administration of the legislation. Section 21, for example, permits the Fair Trade Commission to delegate one or more of their members to carry out a particular investigation into a proposed merger. This type of investigation is at present one of the examiner's functions but is being transferred to the commission under section 7 of the Bill. Section 22 of the Bill gives to the director power, first, to seek an injunction to force compliance with an order under the 1978 Act and, secondly, to prosecute for summary offences under the Act.

Parts III and IV of the Bill are, for the most part, designed to effect the establishment of the director as the principal enforcement agency in the consumer protection area. Sections 23 to 25 confer on the director powers of prosecution under the prices Acts and makes some consequential provisions in relation to authorised officers under those Acts. I should like to emphasise once again that although detailed price control has been abolished all the Minister's powers under the prices Acts are being retained and will be used where necessary.

Sections 26 to 35 contain the major amendments in the consumer protection area, and I would like to deal with these, if I may, in some detail. The main purpose of section 26 is to confer on the Director of Consumer Affairs and Fair Trade the powers necessary to enable him to carry out his functions efficiently. For instance, the provisions of the Consummer Information Act, 1978 in relation to authorised officers are being amended to take account of a recent Supreme Court decision affecting authorisations. The section also removes local authorities' powers of prosecution under the Consumer Information Act and the merchandise marks Acts. This is in line with the policy of having, as far as possible, a single enforcement agency. However, the powers of the Minister under the Consumer Information Act are being retained as there may be circumstances in which use of such powers by me may be necessary in the public interest. Section 28 confers on the director power to seek a High Court Order to ensure the observance of the obligations imposed under the Sale of Goods and Supply of Services Act, 1980, and the Sale of Goods Act, 1893. Section 31 confers prosecution powers on the director in relation to a wide range of consumer protection legislation. The full list of the legislation in question is the First Schedule to the Bill and, as I have already mentioned, concerns matters such as food labelling, textile labelling and product safety. This legislation is at present enforced by myself, as Minister for Industry and Commerce, but these powers of prosecution are now being transferred to the director. Sections 32 and 33 further strengthen the enforcement function by, first of all, prohibiting the disclosure of information obtained in the course of an investigation and, secondly, providing for the creation of a specific offence for the impersonation of an authorised officer under any competition or consumer protection legislation. The offences created under sections 32 and 33 will be prosecuted by the Director of Public Prosecutions.

I should like now to deal briefly with just a few of the remaining sections of the Bill. Section 27 amends section 40 of the Sale of Goods and Supply of Services Act, and has the effect of bringing electricity services within the scope of the Act. This amendment is in keeping with the overall policy of bringing regulated services within the scope of competition and consumer protection legislation.

Section 34 provides for a pension scheme for the holder of the office of Director of Consumer Affairs and Fair Trade. This scheme will be subject to the approval of the Minister for Finance and must also be laid before both Houses of the Oireachtas. Section 35 introduces a new offence in the consumer protection area which will form part of the weights and measures legislative code. The section prohibits the sale to the public of short weights or measures. It is an important provision in the context of consumer legislation. Prosecutions for an offence under this section will be brought by the weights and measures inspectors. Finally, section 36 is a straightforward section the purpose of which is to provide that judicial notice should be taken by all courts of the signature of the director or a member of the commission. Under the existing legislation, it is necessary for the relevant officer to attend in court to prove his signature.

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

I might add that in the period since this Bill was circulated originally we have taken the opportunity of introducing some technical amendments and indeed one amendment to take account of the abolition of the post office users' council and the users' council in Telecom Éireann as well. Basically those are the amendments that will be brought forward on Committee Stage.

Mr. G. Reynolds

This Bill is the product of work carried out by Fine Gael in Government. I am glad to see that the Government are adopting Fine Gael policy in this area as well as in other areas. This Bill gives due recognition to the importance of competition policy and consumer protection. It also seeks to streamline the operation of the present Restrictive Practices Commission, the Examiner of Restrictive Practices and the office of Director of Consumer affairs. From an efficiency viewpoint it is correct that these separate offices be combined. This will centralise information and expertise and should lead to more effective use of resources both in financial terms and in terms of people.

This charge is also important for the general public as it provides a local point for the protection of consumer interests. Up to now responsibility for protecting consumer interests was spread throughout too many agencies. The Examiner of Restrictive Practices carried out investigations into unfair or restrictive practices in the supply and distribution of goods and the provision of services. Meanwhile another body, the Restrictive Practices Commission held public inquiries on the recommendation of the examiner or at the request of the Minister for Industry and Commerce. A third agency under the Director of Consumer Affairs was concerned with consumer interests generally but dealt primarily with accuracy and reliability of information conveyed to the consumer in the advertising promotion and sale of goods and in the provision of services. At the end of the day the most effective way of ensuring that consumers get a fair deal is through competition. Hence the best approach is one which ensures that the conditions for effective competition exist and that competitive pressures operate. For this reason I hope that the new position of Director of Consumer Affairs and Fair Trade will be one which will be active rather than passive in the way it is operated.

The director should be in a position to carry out studies and investigations of all markets to ensure that those markets are operating in a competitive manner. The director should not have to wait for problems to arise before carrying out investigations into markets or into practices which operate in an anti-competitive way. Sections 10 to 13, inclusive, of this Bill must be welcomed as they give greater initiative to the new fair trade commission.

The explanatory memorandum states that competition legislation is being extended to include banks, communications, and electrical services. On reading the Bill I could find no reference to this. Perhaps the Minister will inform us as how he proposes to include these activities and when he will do so. Indeed I see no reason why any market for goods or services, be they public or private sector, should be excluded from competition policy and from the protection of consumer interests. Some of the worse abuses of competition take place in the public sector. While in the past there was a greater belief in the role of the public sector in providing certain services through a monopoly, today it is increasingly the case that people see a greater role for private involvement in providing these services. There is no reason why there could not be private involvement in providing, for example, telecommunications. Indeed the introduction of an element of competition into many of these types of services could only operate to benefit the consumer. Given the move towards the removal of barriers to free trade in the internal market of the EC it is imperative that we in Ireland prepare for the increase in competition by getting our own act together here at home. We must be more willing to adopt a positive attitude to competition rather than a fear of competition. There is some respects of legacy of the old protectionist attitudes in our approach to new entrants in to supplying goods and to other areas such as opening hours of premises, licensing arrangements for different businesses, etc. All of these issues should be subject to analysis with a view to ensuring that the consumer gets a fair deal. Only by adopting a positive approach to competition in Ireland will we be able to cope with the efforts at European level to complete the move towards the internal market. We can, if we wish, sit back and merely react as changes take place in Europe, or we can prepare in advance for such changes and put ourselves in a position to capitalise on the changes.

The benefits to Ireland will be far greater if we instil an aggressive attitude to competition rather than adopt a purely defensive approach. The new post of Director of Consumer Affairs and Fair Trade has a key role to play in this respect in generating a fresh and positive approach to competition and to the interests of the consumer. This new approach will pay dividends in other respects also. For too long our attitude in industry, agriculture and the services has been based on the interest of the supplier rather than the consumer. If we are to maintain our share of the domestic market and to obtain a greater share of overseas markets, we need to adopt an approach in tune with consumer needs. The only sure way to guarantee greater sales for our products and greater job opportunities is to become more aware of what the markets and consumers want rather than what is most convenient for the suppliers to provide.

This Bill, prepared by Fine Gael in Government, is important and can represent an opportunity to bring pressure for change of attitudes. It can help make us more competitive on the international stage by ensuring that enterprises pay greater attention to the needs of consumers and adopt a positive attitude to competition. It can also ensure that we are prepared for the challenges which will come when measures are adopted to bring about greater competition in Europe. However, I hope that the passage of this Bill will not see an end to the attempt to bring about greater competition. Whether we like it or not, markets are changing. Deregulation is the order of the day, be it in airlines or financial services. Possibly we can withstand such changes temporarily but there is a certain inevitability about such changes that we will have to adopt to.

Having continued Fine Gael policy of rationalisation of some of the agencies involved in competition policy and protecting consumer interests, the Minister should now go on to consolidate all this legislation and gather together the various Acts ranging from the Weights and Measures Act, 1889, and the Sale of Goods Act, 1893, up to the present day legislation. The effort involved in such work will be well rewarded through the benefit it will bring to the economy. Consolidation of all this legislation will provide a clear picture to consumers and suppliers of their rights and duties and act as a positive boost for competition, bringing with it greater benefits to the economy through higher sales in both the home and export markets.

Mr. Mulroy

I welcome the opportunity to contribute to the debate on this Bill and I welcome the measure wholeheartedly. The Bill is an amending Bill amending the Restrictive Practices Act, 1972, the Mergers, Take-overs and Monopolies (Control) Act, 1978, and a number of other consumer protection Acts.

The main purpose of the Bill is to extend the scope of competition and consumer protection legislation and to improve the efficiency of the operation of this legislation, as the Minister pointed out in his introduction. This is being done by amending the institutional arrangements under these Acts. The post of Examiner of Restrictive Practices is being abolished and his functions are being transferred to the new Director of Consumer Affairs and Fair Trade and the Fair Trade Commission. The powers of the Fair Trade Commission are being strengthened principally by their being given power to exercise their functions on their own initiative.

The next important aspect of the Bill is the removal of the exemptions which apply at present to certain services, in particular those of banking, electricity and communications. Until now banking was excluded from the Restrictive Practices Act. Therefore, the activities of banks or building societies could not be investigated by either the examiner or the Restrictive Practices Commission. I understand that these exemptions have resulted in the Minister not being able to make restrictive practices orders in such areas as conveyancing, advertising by solicitors and banks, tour operators and travel agency services and the policies of building societies in regard to insurance for mortgaged properties. I welcome the removal of these exclusions as I feel it will contribute towards a more competitive economic climate.

The Bill also brings those activities of Bord Telecom Éireann and An Post which are subject to competition within the scope of the Restrictive Practices Act and the Mergers, Take-overs and Monopolies (Control) Act. This in no way affects the monopoly position of An Post and BTE but will, I feel, ensure that the other activities of these bodies will be operated in a competitive manner. For example, BTE have set up a company called Telecom Éireann Information Systems who supply communications equipment in competition with other suppliers. It is important that the monopoly position of BTE should not be used to give an unfair advantage to them, and this Bill will ensure that this will not happen.

On the consumer protection side, the Bill provides for the enforcement by the Director of Consumer Affairs and Fair Trade of the consumer protection legislation. Up to now, some of this enforcement was the responsibility of the director with some Acts and regulations being enforced by the Minister. This resulted in areas of overlap and possible confusion for the consumer. This rationalisation of the administration of consumer protection legislation will benefit the consumer greatly.

Section 28 of the Bill will help to increase the level of protection available to consumers. Under the section the director is being given power to seek an injunction in the High Court against the person who fails to comply with his obligations under the Sale of Goods and Supply of Services Act, 1980. This will add more muscle to the existing protection of the 1980 Act. Overall, this is a very welcome consumer oriented Bill and will give the man in the street ammunition in the event of having a grievance whether it be by virtue of a restrictive trade practice or being sold faulty goods or equipment.

In conclusion, the Bill is a cleaning up operation of bits and pieces of legislation in the consumer affairs area. It centralises all the functions under one office, namely, the Director of Consumer Affairs and Fair Trade. I am very pleased to support the Bill.

Mrs. Robinson

I also broadly support the objectives of this Bill which, as has been stated, is a carry over of a proposal from the previous Government for a streamlining and rationalisation both of our competition and our consumer protection legislation. It is an important Bill and it will have very considerable implications. That is why I made a request, which I repeat, that we would have a reasonable opportunity for discussion on Committee Stage. I say that in particular because the Minister is going to introduce amendments on Committee Stage and we have not seen them. I hope we will not go straight to Committee Stage: I will be quite happy if we take it later tonight or tomorrow. For reasons which I will develop, the Bill has far-reaching implications and it merits close attention. There is no reason to rush it through because the Dáil is not sitting at the moment. We can either consider it fully on Committee Stage before the end of this session or we can come back in September and consider it on Committee Stage then.

As the Minister has already made clear in his speech when introducing the Bill, it basically provides for rationalisation by establishing a Fair Trade Commission to replace the present Restrictive Practices Commission. It enlarges the powers of the Commission, particularly to inquire into anti-competitive and unfair trading practices and also gives it the function of investigating any proposed merger or takeover, which is referred to by the Minister under the Mergers, Take-Overs and Monopolies (Control) Act, 1978. I would like the Minister, in his reply, to give the House some indication of how the existing provisions have been operating. Previously those functions were carried out by the Examiner of Restrictive Practices. For example, how many requests for investigations have been made by the Minister to the Examiner of Restrictive Practices? Have the commission a substantial workload? How have they been operating? I ask these questions so that we can see the background to the replacement of the examiner by the newly established Fair Trade Commission.

Another significant purpose of the Bill is to broaden the jurisdiction or the remit of the Director of Consumer Affairs. This is recognised by the fact that the director will be retitled Director of Consumer Affairs and Fair Trade. When looking at the Bill, my overall impression is that the Director of Consumer Affairs and Fair Trade will be one of the most powerful offices in the land. It will be an extremely important position. The office will be in charge of legal enforcement, almost entirely in the competition and consumer protection areas. That involves not only competition law and consumer protection but it also involves, in so far as there are European Communities provisions, European Communities competition regulations or European Communities provisions in the area of consumer protection, which we have implemented by the European Communities statutory instruments. I hope the Minister will outline the extent of that European jurisdiction, particularly under Council Regulation No. 16/72, the main Council Regulation. Will it be the Director or the Fair Trade Commission who will be represented at the advisory committee under Regulation 16/72? Regarding the various hearings which the commission holds to investigate competition policy, how is that to be tied in with the changes the Minister proposes in the Bill.

Bearing in mind that the director will have a very wide range of subject matter over which he will exercise important powers and also bearing in mind that he alone will have responsibility for consumer protection and competition, it would be useful to obtain information from the Minister about, for example, the staffing and resources of the director. If the director is to fulfil all the functions which are now being rationalised and streamlined under this Bill, he will require substantial manpower and resources for that purpose. I would like an assurance from the Minister that that will be provided for, notwithstanding cutbacks etc., in the public service.

I welcome the extension of competition legislation to include banks, communications and electricity services. I agree with the Minister's approach and with the recommendation of the OECD that these areas should be brought in under national competition legislation. I support that extension. I hope the Minister, in his reply, will explain how the competition legislation will extend in the area of communications. How is it to be reconciled with the monopoly exercised by Bord Telecom in certain areas of communications? That is an important feature on which I would welcome clarification from the Minister.

There are certain specific provisions in the Bill with which I am not entirely happy. These would be normally more appropriately dealt with on Committee Stage but since I am not clear when we are going to take Committee Stage or how long we will have to discuss it, perhaps I could refer to some of them now. Why does the Minister feel it necesary to take to himself the wide powers in section 8 of the Bill? In his introductory speech he said:

Section 8 is designed to make the procedure for making Orders under the 1972 Act more efficient by allowing me, as Minister for Industry and Commerce, to make such Orders, subject to consultation with certain interested parties, without having first received a report from the Fair Trade Commission.

He pointed out that any orders made under the section would be subject to confirmation by an Act of the Oireachtas. It is clear under section 8 (3) that there is that control, that it requires an Act of the Oireachtas to confirm the order. However, I am sure the Minister will agree that Restrictive Practices (Confirmation of Orders) Bills go through Leinster House like a dose of salts, usually at the end of an evening when they go through before anybody realises it and nobody quite knows what order is being confirmed. It is not always a very effective method of control and I would have some worries about it. What is the basis for giving the Minister the power to make these very wide-ranging orders without requiring, as in previous legislation, a previous report of the Restrictive Practices Commission? That was the basis on which the Minister would make an order. It came to him on the basis of a report from the Restrictive Practices Commission.

I would find it very difficult to draft section 8 in broader terms. Section 8 allows the Minister to "empire build"— it really is extremely broadly drafted. Whenever the Minister considers it expedient, in the interests of orderly and proper regulation of competition, then he has to consult, but only with the commission, the director and any other Minister. Under section 8 (1) (a), (b), (c) and (d) the Minister has very broad powers. For example, under paragraph (c) he may make such provision as the Minister thinks necessary to ensure the equitable treatment of all persons in regard to the supply or distribution of goods or the provision of services. What does that mean? What are the constraints on the Minister under that subsection? Perhaps he could tell me how limited he feels by that wording. It seems to be a sort of omnibus provision. The Minister is divesting himself of certain powers — for example, he is handing over the role of enforcement to the director and there is a coherence and a rationalisation in that. Is section 8 just one of these reserve sections in an Act which makes sure there is a safety net and which gives very wide powers to the Minister? If so, then to have a measure such as that in a Bill is not good legislation and I feel it would be appropriate to consider amending it.

The other section about which I am concerned is section 14 of the Bill which amends section 12 of the Principal Act by extending the powers of the commission. I am not against the Fair Trade Commission's powers being extended. I want to make that clear because it is necessary in certain circumstances, that they should have the power, for the purposes of their functions when conducting a study or analysis, to require a person to produce to the commission any document in his power or control or to give the commission any information which the commission may reasonably require.

I am not sure that the protection for the individual is a helpful measure. It seems to be terribly cumbersome and rather unwieldly. Under section 3, it is a criminal offence to refuse to give the information or to produce the document. But then there is the possibility for a person who has been asked to furnish the paper, the document or the information and who has refused, to apply to the High Court and there is expense involved in that — within seven days. Secondly, they are to apply to the High Court for a declaration — they are to apply to the High Court for declaratory release. It is clear from section 14 (4) (c) that it is intended that there should be a full hearing because it says: "The High Court, having heard such evidence as may be adduced and any representations that may be made by the commission and a person..." is being asked to furnish the document or the information. What is envisaged is a full High Court hearing. At the end of that hearing, the High Court has to make an extraordinarily difficult declaratory order.

What is sought from the High Court is a declaration that the exigencies of the common good do not warrant the exercise by the commission of the powers conferred on them by this section. I am not so sure how competent High Courts would consider themselves to be in weighing up the exigencies of the common good in this particular context. It is a difficult one, but it seems to be a very elaborate mechanism for protecting somebody against a possible abuse of power by the Fair Trade Commission. If the Fair Trade Commission are abusing their powers and wrongly looking for information, I do not see it as being a particularly appropriate way to approach that.

There are a couple of other technical points which are very detailed and I do not propose to go into them at this stage but I think we are beginning to realise— certainly lawyers are increasingly beginning to — the importance both of consumer protection legislation and competition legislation. This Bill will reinforce and, to a welcome degree, rationalise the existing bodies. The director will be the Director of Consumer Affairs and Fair Trade. I am concerned that we should have an opportunity for very careful consideration of the implications of this legislation and that we have a fuller opportunity to examine the existing situation so that we will know why we are rationalising it to the extent we are. For example, to some extent, there has been a gap in control. I am interested to see whether the Minister has any views on that which he could make known to the House since price control legislation has not been in operation for some time. Has that had an impact on prices? If not, to what does the Minister attribute that? This would be useful to know.

Normally in a Bill of this kind where you have for the first time certain significant areas included, such as, for example, banking or telecommunications, it would be anticipated that there would be representations from certain sectors. I do not know whether it is because this Bill has been recently reintroduced, revised and introduced to this House — it was presented by the Leader of this House on 23 June and it is now being taken for debate today — but I have been surprised not to have received representations in the normal way from certain sectors. Whether or not I would agree with the representations, it is important that Members should have a feedback from those who are to be affected by the Bill. I have personally been able to carry out a certain amount of consultation on it. There is a danger if this Bill goes through the House today that we will not have done the job which we have the time and the opportunity to do if we simply regulate our business more carefully.

Broadly I welcome the Bill. I support the purposes of it, but I am worried about such a far reaching Bill reinforcing and extending such an important office as the Office of the Director of Consumer Affairs and Fair Trade without fuller and more reflective consideration in this House.

Mr. McGowan

I join with other Members in welcoming the Bill and I believe the general public are very interested in it. The improved legislation will encourage those who engaged in fair practices.

The Bill will help in some key areas, not least those who are promoting industry, especially small industries. I believe some people starting up small industries are discouraged when they find they have to offer their merchandise to monopolies. I can see this Bill making a useful contribution and encouraging those people who have to depend on distribution and sales outlets. The Minister's recent statement of his intention to bring the oil companies under notice was very useful and very helpful but the Bill — Fine Gael may claim credit for having drafted it— is much more important than that, and I do not think there is any serious division within the political parties on how necessary the Bill is.

The whole area of trading stands to benefit. There are a number of areas of distribution which, unfortunately, are controlled by monopolies, some of them bread and butter areas. When the legislation is passed I hope some positive action will be taken.

The distribution of flour is essential for a big number of families but it is controlled by a monopoly. The distribution and price of bread and flour can vary by as much as one third from one supermarket chain to another. I see the Bill providing the important machinery to deal with such situations and I hope it will be successful and that it will be implemented on the ground. You can pass as much legislation as you like but if it is too cumbersome and too difficult to implement, it will not bring us one step further. I urge the Minister, when this legislation is passed, to provide the backup machinery to implement it.

On the question of pricing, it puzzles me how some major distributors and supermarket chains can sell an item at a third below its recommended retail price. That is a deterrent and is destroying the small distributors and retailers. Another area in which there is much abuse is in the distribution of drink. Some of our major drink suppliers have agents who continually operate a monopoly in certain areas and very severe restrictions are imposed on the licensed trade.

I know of a case where a distributor for a major drink firm also distributes soft drinks. If the retail licensed trade do not buy the soft drinks manufactured by the local distributor they will not get the supply of the brand name drink in question. I hope that no firm, distributor or monopoly will be too big to avoid effective action being taken against them under this legislation. The general public are very interested and will be keeping a keen eye to see how effectively the new legislation will work.

There can be as many amendments as one likes. Perhaps some Senators feel they would like more time but the legislation has been necessary for a very long time and is long overdue. There is nothing rushed about its presentation to this House and I hope it will have the desired effect. The trading section are very interested in this legislation, especially the small trader. The reason is that there is serious monopoly control, much of it from outside the State, which must be tackled. I support the Minister's efforts and I hope this legislation will succeed.

Mr. Kennedy

Is mian liomsa ar dtús fáilte a chur roimh an Bille seo, an Bille um Chleachtais Srianta (Leasú), 1987. In his annual report dated 26 March 1986 Gordon Borrie, Director General of Fair Trading in the United Kingdom stated:

As one man's keen business practice is another man's unfair trading, it is never easy to be the referee. But to the best of my ability I will endeavour to carry out the philosophy implied in the title of my post and do what I can to ensure fair trading conditions.

It is in the spirit of that philosophy that I support this Bill to ensure fair trading conditions.

I welcome the timely introduction in Seanad Éireann of the Restrictive Practices (Amendment) Bill, 1987, the main purpose of which is, as indicated by the Minister, to streamline the operation and to extend the scope of competition and consumer protection legislation. The provisions of the Bill were announced as far back as 17 January 1986 by Deputy John Bruton when, as Minister for Industry, Trade, Commerce and Tourism, he outlined major new measures to promote competition and efficiency in the economy and a radical shake up of the existing consumer and competition bodies. These measures will enhance the role of the new Fair Trade Commission in a number of ways: one, by bringing banks, electricity and transport undertakings within the scope of the legislation for the first time; two, by giving the Fair Trade Commission the power to undertake and to initiate inquiries on their own initiative for the first time and three, by giving the Fair Trade Commission additional powers to obtain information for the purpose of any studies which they undertake.

The extension of competition legislation to banks, electricity and transport services is an historic step forward. Up to now these had been restricted from scrutiny for restrictive and unfair trading practices. Ireland is now in the forefront of European countries in opening up these important sectors to the scrutiny of fair trading agencies. Both the OECD at international level and the National Economic and Social Council at national level have advocated a widening of the scope of the legislation to enable it to deal with unfair and collusive practices affecting the consumer in hitherto excluded areas. In the words of Deputy John Bruton:

It is very important that anti-competitive practices in all forms of public transport, electricity and banking are capable of being attacked. It is not right that any sector of the economy should be exempt.

Section 10 of the Bill gives the Fair Trade Commission new powers to make fair practice rules on their own initiative with regard to the supply and distribution of goods or the provision of services. At present the commission can only make these rules on the recommendation of the examiner or at the request of a representative association.

Section 11 of the Bill gives the Fair Trade Commission new powers to initiate public inquiries, again on their own initiative. At present such inquiries can only be initiated at the request of the Minister or the Examiner of Restrictive Practices or by a person whose request for an inquiry has been refused by the examiner. These new powers, the power of initiative and the power directly to investigate, are of crucial importance. In the words of Myles O'Reilly, the present chairman of the Restrictive Practices Commission:

We will in future be able to authorise and organise dawn raids."

With the power of initiative comes the transfer of responsibility to the commission for ensuring competitive markets. This new legislation, therefore, should bring about a radical transformation in competition policy activity. As a result of the changes proposed in the Bill, the number of bodies dealing with competition in prices and restrictive practices will be reduced to two, namely, the Director of Consumer Affairs and Fair Trade and the Fair Trade Commission.

The remit of the Director of Consumer Affairs is being widened to include fair trade and additional functions in the area of consumer protection, including the enforcement of prices and other consumer related legislation. The title of the office is, accordingly, being changed to the Director of Consumer Affairs and Fair Trade. The director will take over the role of Examiner of Restrictive Practices under the Restrictive Practices Act, 1972.

Section 19 of the Bill provides that prosecutions under the 1972 Act may be brought by the Director of Consumer Affairs and Fair Trade and may be initiated within 18 months of the date of commission of the offence. As the Minister has indicated, at present the Minister for Industry and Commerce is the prosecuting authority and proceedings must be initiated within 12 months. The problems associated with the enforcement of restrictive practices orders have been summed up by Myles O'Reilly, chairman of the Restrictive Practices Commission, when he stated in a recent publication:

Under the legislation up to now, enforcement of Restrictive Practices Orders has, in the first place, been the responsibility of the Examiner. When the Examiner was satisfied he had a case, then he advised the Minister who in turn asked, if he considered he should do so, the Chief State Solicitor's Office to prosecute. The effect of all this was that there were not many prosecutions and of those that were brought not all that many were successful and even where success was achieved, the fines imposed were paltry.

Therefore, one of the most encouraging features of the provisions of this Bill is that prosecutions will be undertaken directly by the Director of Consumer Affairs and Fair Trade in the same way as the Director of Consumer Affairs has successfully enforced the provisions of consumer affairs legislation.

The Bill provides for a Fair Trade Commission which will replace the present Restrictive Practices Commission. The new commission will have greater powers to inquire into anti-competitive and unfair trading practices. They will be able to initiate examinations rather than waiting for someone else to do so. They will be empowered to get people to release documents and provide information or else run the risk of being in breach of the law. The Fair Trade Commission will also assume the responsibility for investigating any proposed merger or take-over referred to them by the Minister under the Mergers, Take-overs and Monopolies (Control) Act, 1978. As the Minister has indicated, such examinations are at present being carried out by the Examiner of Restrictive Practices whose office is being abolished. Mr. Jim Murray, the present Director of Consumer Affairs, who is also the Examiner of Restrictive Practices, is in favour of this change. Since his appointment as examiner he has had to deal with just one referral — Cantrell & Cochrane's take-over of Dwans. Mr. Murray states in regard to that:

It confirmed my view that the review process would be better if it involved up to three people rather than just one person.

Fines for offences against fair trade orders are also being increased. This is most welcome. Section 27 of the Bill abolishes the exemption from the provisions of the Sale of Goods and Supply of Services Act, 1980, which currently applies to contracts for the supply of electricity.

I share the views expressed regarding the importance of this Bill so aptly expressed by the then Minister for Industry, Trade, Commerce and Tourism, Deputy John Bruton, when announcing these major measures in January 1986:

The new arrangements aim to create a more positive and active competition policy and better measures to protect the consumer's interests. From now on the Fair Trade Commission and the Director of Consumer Affairs and Fair Trade will be taking the initiative in pushing for changes to improve competition and efficiency and benefit the consumer.

In addition to their statutory duties, under the Acts, the former Restrictive Practices Commission acted as Ireland's representative on Restrictive Practices Committees of the OECD and the EC. Within the European Economic Communities member states are trying to establish the so-called four freedoms— the free movement of people, goods, services and capital. Since Ireland joined the European Economic Communities on 1 January 1973 the competition rules of the EC are directly applicable in this country. These rules of competition are derived from several sources, namely, the Treaty of Rome, particularly Articles 85 and 86, the regulations issued by the Council of Ministers and by the European Commission, the formal decisions of the commission and the judgments of the European Court of Justice.

The objectives of European competition policy can be summarised as follows: first, to prevent companies from reestablishing by means of market-sharing agreements and export bans — less visible but equally effective barriers to trade — to replace the customs frontiers abolished by the EC. Both consumers and traders benefit from this policy. The consumers benefit because they can take advantage of the lowest prices available in any of the member states and traders benefit because they are given access to a market on a European scale. Second, to prevent excessive concentrations of economic power from damaging the interests of consumers, competitors or subsidiaries, free competition and free movement of goods are protected by preventing companies from abusing dominant market positions and preventing the concentration of economic decision-making in too few hands. Third, to prevent national aids from affording unfair advantages or distorting competition in such a way that economic forces are disturbed and the very existence of the Common Market threatened.

Apart from the fact that all firms in Ireland are subject to EC rules of competition, EC competition policy has particular relevance to Ireland because of its approach towards small and medium-sized enterprises, namely, the SMEs which, in the European context, includes most Irish firms. First, the EC competition rules aim to protect the SMEs against unfair competition from groups of other firms and from dominant firms. For example, an SME which feels that its competitors are behaving unfairly, may complain to the European Commission, or the European Commission itself may act to expressly prohibit certain types of behaviour and may impose very heavy fines on those who breach the competition rules. Second, the European Commission have actively encouraged certain types of co-operation especially among the SMEs. Provided that firms have a combined turnover and market share below certain limits, any agreements they make are regared as of minor importance, applying the de minimes rule, and escape the prohibition of Article 85 of the Treaty of Rome.

As regards consumer affairs, although there is no specific reference to consumer protection policy in the treaties which set up the European Economic Communities, the first impetus towards consumer protection policy was given by the Heads of member states in October 1972. At a meeting in Paris they called on the Community to adopt a programme to augment and co-ordinate national measures in favour of the protection of consumers. This policy was formally inaugurated in April 1975 with the adoption of the first programme of consumer protection. The programme set out to guarantee briefly five basic consumer rights: First, the protection of the consumer against health and safety risks; second, the protection of the economic interests of consumers; third, the improvement of the consumers' legal position; fourth, the improvement of consumer education and information and, fifth, appropriate consultation and representation of consumers in the taking of decisions affecting their interests.

In a publication of the Commission of the European Communities entitled The European Community and Consumers published in Brussels June-July, 1985, they state as follows:

The variety and complexity of the goods and services available to consumers often cause confusion and frustration. Over the years as prosperity has increased, marketing conditions have been transformed and the traditional relationship between supplier and consumer has been overturned. At one time the consumer shopped locally in a limited market where he or she often knew the suppliers personally. Nowadays the consumer faces a mass market where producers and retailers are relatively faceless. They have gained considerable power through the process of mergers and are better placed than the shopper to control market conditions. For this reason, consumers are becoming increasingly conscious of the quality and safety of goods. They crave objective information on which to base their purchases, according to their needs and financial means. They also want an improved right of redress if the goods or services purchased do not match up to expectations.

It is in that context that I welcome the provisions contained in this Bill and the strengthening of the powers and functions of the Free Trade Commission and of the Director of Consumer Affairs and Fair Trade because I believe that these measures will ensure fair trading conditions. I wish to compliment the Director of Consumer Affairs and the Restrictive Practices Commission for all that they have done in the past and I wish the director and the commission every success in their endeavours in this regard in the future. I am pleased therefore to welcome this Bill.

Mr. Lanigan

I shall not delay the House too long on this Bill, except to say first that I welcome it. I would like to comment on the remarks of Senators Reynolds and Kennedy. One would imagine that this Bill was being brought in by a Fine Gael Government and that Deputy John Bruton was the Minister who was in the House today. Unfortunately for them, it is not John Bruton who is in the House; this Bill was introduced by a Fianna Fáil Government under Minister Albert Reynolds and is being taken here today by the Minister of State, Deputy Brennan, Indeed, Fianna Fáil had been to the forefront in introducing legislation of this nature and this Bill is a follow up to the Restrictive Practices Act, 1972, the Mergers, Takeovers and Monopolies (Control) Act 1978 and, indeed, the Sale of Goods and Supply of Services Act, 1980, all of which were brought in under the aegis of Fianna Fáil Governments. Fianna Fáil have always been to the forefront in caring for the consumer. There are many people who are of the belief that consumers are not as well protected here as they would be in other countries within the EC.

The purpose of this Bill is to try to maximise the efficiency of those bodies who have as their remit the protection of the consumers. I am delighted that a new title of Director of Consumer Affairs and Fair Trade has been created and that this director will have assigned to him the role of the former examiner's functions under the Restrictive Practices Act. Each time that legislation is adopted which is for the protection of consumers, there are many people who feel that they will be affected and one will hear cries from manufacturers and distributors that the more restrictions that are placed on them, the higher the cost of goods is going to be and that, whereas there might be a certain amount of extra protection given to the consumer, this protection is at a cost.

In the past, there have been extra cost factors involved in the increasing protection of the consumer, particularly where it has meant the re-labeling and re-packaging of many materials. There was a hullabaloo when the Sale of Goods and Supply of Services Act, 1980 came in; we were told that it would add at least 4 or 5 per cent to the cost to the consumer. I do not think that these forecasts have proved true. There is no doubt in my mind that consumers benefit from Bills of this nature.

I am glad that the only people who were affected by the introduction of the Sale of Goods and Supply of Services Act, 1980 were the fly-by-night and back street operators. It is no harm that these people should be got at. Legitimate suppliers and manufacturers were not affected to any great degree. Competition is the life of trade. It is essential that not alone should there be competition but that competition should be true competition. For this reason I am delighted that banking, in particular, is being brought under the aegis of this Bill.

There is a consensus view around the country that there is not competition amongst banks, that the banks operate a cartel, that they are fairly well controlled under various Acts and by the Central Bank. Nevertheless, there may be slight differences in the way fees and charges are operated but at the end of the day fees and charges for banking in Ireland are much higher than they are in other countries throughout Europe. I am not mentioning interest rates here because interest rates vary throughout the EC and, indeed, throughout the world. I am glad that we have seen today one of the major banks, AIB, bringing down their interest rates.

I would at this stage appeal to all of those who are in the banking world to consider carefully any actions they might take over the next few months in terms of strikes, go slows, or disputes within the banking system. I would appeal to the unions involved and in particular to the IBOA, an association of which I was once a member, and to the associated banks to consider carefully the problems that could accrue to Irish industry at all levels if disputes come to the fore in the banking system at this time. It is unfortunate that today in one part of the country a dispute has reached the stage where pickets have been placed on the premises concerned. Those of us who were in business during the periods of the two last protracted bank strikes saw the damage that was done to businesses because of these strikes. I am not laying blame on any side. I am asking all involved to consider their own positions.

Bankers are in a relatively safe situation. They are relatively well paid. Bank profits are increasing and though it might appear, because of the takeover of one particular bank, that banking was not as profitable as it might be in this country, when one looks at the returns for what was the Northern Bank in Ireland one finds that the problems the Midland Bank had were not associated with any problems that the Northern Bank have had here in the South.

There are many small firms in this country which could not afford to bear a bank dispute of any nature for a short or a long period. We saw the situation in the past where business people were asked to act as unpaid bankers. They cannot afford to do that now. They cannot afford to hold moneys, to cash cheques or to hold cheques for even a day. Equally, a protracted or short bank dispute would have huge effects on our credibility as a manufacturing nation. In the past, maybe suppliers from outside this country would supply goods on extended credit during the period of a bank dispute. I do not know that there are any companies outside this country who would do that now. I appeal to those in the banking community to iron out their differences before they have an effect on the Irish economy which might not be easy to overcome.

I am glad that the area of communications has been brought in under the aegis of this Bill. Since we have a virtual monopoly situation, it is essential that the communications area should be regulated and examined. I am sure that when this Bill comes into force there will be cries to have that particular area investigated thoroughly. I notice that when the Ombudsman gives his report each year the biggest proportion of criticism deals with the communications area and in particular with the area of telephone charges and costs. Because Telecom have a total monoploy on communications in the telephonic area, it is essential that they produce telephone bills which are legible and which everybody can check out.

I noticed in the papers again over the last few days that bills which were under dispute were not being dealt with as they should be, that customers were cut off even though the bills were still under dispute and that Telecom would not take from the subscriber the amount of money that the subscriber felt was the amount due. That is something that a normal business would not be able to stand over. It is essential, in an area where there is a virtual monopoly, that the company should be open to scrutiny and not alone open to scrutiny by the Director of Consumer Affairs but equally that each telephone subscriber should be able to look at his bill and decide from the evidence in front of him whether he or somebody else was responsible for the amount of the bill.

The supply of electricity is another area that is now being brought under the aegis of this Bill. Many statements have been made by people in business that the cost of electricity is too high. There may be very good reasons for this and there may not be. The cost of electricity and the strength of the ESB can be checked out. I welcome the removal of a number of exclusions from the Restrictive Practices Act in these three areas. I expect that this Bill will be welcomed by most people.

Mr. Cregan

I welcome the Bill. The many points that have been made by other speakers have been the subject of major discussion for a long time. The Minister had no reservations in saying there are many areas where he feels there is not fair trading.

I am glad the Minister made reference to the cost of banking in our country in comparison with other countries. For a long time I have been saying that the banks were bringing about a situation where we could not be competitive vis-a-vis other countries. If a business person is prepared to change a customer's cheque whether it is a cheque from the Allied Irish Banks, the Bank of Ireland or any other bank he is asked to pay a fee to the bank. The banks charge this fee even at a time when the amount of money they seem to be making is enormous.

According to their annual reports the Allied Irish Banks had profits in the region of £43 million in 1984 and of over £104 million in 1987.

In a country that has been going through so much trauma since 1980 it is wrong that three or four groups can be so demanding, can even question what Governments do while making so much profit for so few people. The four major banking groups are sucking from their one million customers — the other two million either do not save or do not spend — something in the region of £750,000 a day. That is not an exaggeration. It is the amount the major banking companies are making. Yet up to now nobody has had the right to question them about this.

I would hope the Bill is not going to be put on the shelf, because there are many areas we could have questioned but never did so because of the pressure these people were able to put even on Governments. I am not saying that we should not heed what the Central Bank say but they are telling many people to make sure this, that and everything else is done, yet we have no right to question the amount of money that is being made by so few.

Up to 1973 when a Coalition Government came into power no moneys had been coming into central Government from banking practices. After seven months in power the then Government asked the banks for £5 million a year and after another 12 months they asked for £20 million per year. This money is still being paid by the banks. As soon as the order for paying the money was implemented the banks took more money from their clients — I will not say "customers" because the definition of a "customer" and that of a "client" is different. A client is a person one tries to hold on to and from whom one may get more money than would be got from a customer. Banks use their clients in every way possible to get every penny they can from them.

I am a businessman and when I am making a lodgment or get a cheque book I have to pay for those services. If I change a cheque for one of my customers — not a client — the banks charge me for that transaction. What an insult it must be to have to charge people 12p, 13p or 18p for changing their cheques. Because of the problem of terrorism people are encouraged to pay by cheque. Yet the banks make sure that they are charged for doing so. Nobody questions why they are allowed to do this. Irrespective of what Government are in power somebody should question the banks about the profits they make. The profits of the Allied Irish Banks rose from £43 million in 1984 to £104 million in 1987. That is an increase in profits of over 100 per cent and we never question them about that. How can we say to the general public that we are not going to give them an increase of 50p a week in their social welfare allowance or we are not going to give them a double week's social welfare allowance at Christmas when we do not question people who make over £1 million a day? I hope that the Bill will address that issue so that at long last the silent majority of clients will see that somebody is asking questions. We all know that the vast majority of people and in particular business people, owe money to the banks but they are not going to ask questions because there might be intimidation in an indirect or even in a direct way. Unfortunately that is a fact of life in our country. Now that we are prepared to question the banks I hope we will continue to do so for a long time.

The cost of electricity is 30 per cent higher here than anywhere else in Europe. We have nearly 300,000 people unemployed and we expect industrialists to set up here where energy costs are 30 per cent higher than they are 60 miles across the Irish Sea, in Britain. How can we compete? Yet they argue that there is no way there can be a reduction. It is unbelievable. If I said to somebody who lives in South Wales or in Holyhead that to use the same one horse power motor car in Dublin would cost me 30 per cent more I would be told to get lost. That is a fact of life and we are not getting to grips with it. They have no right to say they should be charging higher than anybody else. If we are to be competitive— I understand the way the Government of the day are talking — our costs generally should be in line with those of everybody else. Otherwise we are, and we all know it, dying the death.

That does not necessarily point to Bord Telecom or the ESB. Let me give one example in the ESB; they are the only energy company who can provide energy. During the ESB strike some time ago it was recognised as an energy which is needed all the time. Yet if a new client is looking for energy such as light, he must get some other customer to act as a guarantor. In other words, the ESB are not prepared to take the responsibility of saying: "We will not give you power unless you get somebody to sign as guarantor." Yet that person cannot go somewhere else for electricity. That is illogical. How can the ESB say they want more clients? The ESB do not treat the person looking for power as a customer. That person is not a customer but rather a client because a client cannot go anywhere else. There is no reason why the ESB as a company should say that client must get a guarantor when he cannot get that commodity elsewhere.

We have a responsibility, in this House, to say to the ESB they they must give power to the person seeking it. The reason they ask for a guarantor to sign is in case that person, whether setting up house or renting accommodation, runs away or does not pay the bill. The guarantor must take responsibility for the bill. A similar situation obtains with the banks. How can the ESB say to me that they provide energy which I cannot provide on behalf of the State and that they need a guarantor for the person looking for electricity? Is it possible that the ESB cannot find the said person? Is it possible that the ESB cannot take the responsibility without another customer taking it? It is immoral to ask another client — not a customer — to accept responsibility. I would like to be corrected if I am wrong in saying that a person receiving a commodity which can be provided only by one person is a customer. We have every right to question that.

Bord Telecom have brought about a situation in which telephone bills— Senator Lanigan referred to this and I am aware of cases in Cork — were unbelievably high for private customers. They are not customers. These people cannot go anywhere else. We must protect them, but we are not doing so. I question whether the Bill will be strong enough. I have been in the Seanad for nearly five years and we have discussed similar issues before but nothing has come of them. We must question these people.

I should like to refer to one area where there have been vast improvements, that is the Office of the Ombudsman. Problems are being solved for many people. He has proved, even to us as Oireachtas Members, that something can be done. With a small number of staff and the amount of money being spent by that office he has shown his concern, and interest is being shown by the public in that area. I deal with ordinary people many of whom have said that they have written to the Ombudsman. The public know they can now go to somebody. It has proved to us as Oireachtas Members that the right people should be involved.

We read about oil prices and the cost of fuel generally in other countries. A similar situation applies to the banks where there are cartels. Oil companies will give such things as a dozen glasses, wares, footballs and so on, but they will not give a reduction in the price of fuel. I would like to ask the Minister if it is true that the prices commission were eliminated. I understood when the Minister eliminated the prices commission that he could always question prices. Have we still got the right to bring in price controls on fuel? If we have, we should make it quite clear that price controls are not eliminated. I understood the commission were in abeyance and that we had the right at all times to bring them back.

I welcome the Bill and congratulate the Minister and I hope that in the immediate future, we will see vast improvements in this area.

Mr. Mooney

Like other Members of the House I welcome the Bill and the thinking behind it which is to tighten up and streamline several pieces of legislation. The statutory bodies are being brought together and rationalised. Indeed, looking at Part II of the Second Schedule — the revocation of statutory instruments — I note that 20 Acts are affected by this Bill, one dating back to 1851. It is interesting, however, that of the 20 Acts going back over a period of 130 years, well over half—in fact 13—which affect the consumer, were introduced in the past 20 years while four were introduced in the last century. Only three Acts affecting consumer rights were enacted from the foundation of the State until the late fifties. This is an indication not so much that there was any lack of caring on the part of the founding fathers of the State, or of the people they represented, that there is a growing — and has been for many years — awareness and consciousness of the length to which some companies, some product merchandisers and marketeers will go to bring before the public products that are questionable either in the quality or manner in which they are promoted and marketed. All this legislation is being affected by this Bill. From that point of view, since it is a help and a benefit to the consumer, obviously it is to be welcomed.

I want to concentrate on one or two aspects of the Bill as the inclusion of the regulated service sectors interests me. The Minister stated:

A second element in the strengthening of competition policy is the extension of the scope of competition legislation to include a number of regulated service sectors such as communications, banking and electricity.

I know previous speakers have touched on this and on the monopoly that these three areas, in particular, have enjoyed. It seems the reason the Minister is now looking at this area is that the communications, banking and electricity sectors traditionally were set up to do business in a specific area. For example, communications, formerly part of the Department of Posts and Telegraphs and now Telecom Éireann, were set up primarily to service and to provide telephones and telecommunications generally. Similarly with banking in their area. The ESB were set up primarily and exclusively to provide energy for people and the means to avail of that energy. However, in the way of the world, with modern technology these companies have expanded into many other areas which impinge on the private sector. The private sector felt for some time that these three areas — specifically communications, and electricity to a lesser extent than banking had an unfair advantage. The services were generally excluded from consumer legislation on the basis that they were already subject to the control and direction of another Minister or regulatory body. To that extent the fact that these areas are now being included in the scope of the legislation is to be welcomed.

Banking has been discussed and, I suppose, will always be a somewhat emotive subject, as the question of money is concerned. The fact that banking is being brought in under this Bill is welcome because it has to result in the long term in greater benefits for the consumer.

The abolition of price controls and with it the termination of the activities of the National Prices Commission resulted in a legal limbo which some powerful international companies exploited to their own advantage in recent years. I refer, among others, to the petrol companies. The timing of the abolition of the NPC by the last Government was somewhat foolhardy. It came at a time when petrol and oil prices generally were falling as a result of the difficulties faced by the OPEC countries in coming to an agreement on production figures. Consequently the price of oil reduced dramatically in the past 18 months to two years, at a time when we in Ireland abolished price controls. The oil companies, in the scramble to provide some order in what had become a chaotic situation, were not too concerned about the consumer and were more concerned about protecting their profits. The Minister is negotiating with the oil companies and attempting to get them to reduce their prices, particularly their prices at the petrol pump which, of course, is to be welcomed.

The suggestion is that the oil companies are charging the consumer more than is fair. Because they have a monopoly both nationally and internationally, in that they operate a cartel, they have an opportunity to take unfair advantage in the marketplace. A previous Minister attempted to curb the excesses of the oil companies in this regard some years ago and was unsuccessful. I hope the present Minister is more successful. Knowing him and his temparament I have no doubt but that he will ultimately provide petrol at the pumps at a fairer price. In the context of the abolition of the National Prices Commission the Minister said: "The repeal of section 2 (2) of the Prices (Amendment) Act, 1972, follows from the abolition of detailed price controls, with the previous Government decided on in 1986. The Minister went on to say:

With the lapsing of price controls generally, it is appropriate to remove the requirement for this consent——

—that is, the consent to fix or control prices—

—and to permit the statutory powers to revert to the Minister and bodies concerned.

The suggestion is that since the abolition of the National Prices Commission—and Senator Cregan touched on this briefly in his contribution earlier — a legal limbo, or a grey area has operated over the past 18 months to two years. Obviously, with the introduction of the Bill that legal limbo will no longer exist and the Minister will have the statutory power and the full powers accorded to him to decide on price controls, not only in regard to oil and petrol but in a wide variety of areas. The nation as a whole will welcome any reduction in the price of petrol at the pumps.

I welcome in a general sense the whole thrust of the Bill to provide an environment in which competition will flourish fairly. Competition is a healthy element in the market place. We are an open market economy. Obviously the legislation has been long promised and its introduction how is timely. I might add that a section of the Bill refers to food labelling, textile labelling, price display and safety standards for particular products. Obviously, providing enforcement in these areas will be of benefit in the long term to the consumer.

I hope the Irish consumer will take cognisance of the new statutory instruments in this Bill and will realise that their rights are being continually updated and protected. It seems to me, as someone who travels a great deal, the Irish, taking their cue from their near neighbours in Britain, are a somewhat passive people when it comes to complaining about shoddy standards, be it in quality or in packaging. For far too long companies, perhaps because they have been in a protected marketing environment, seemed to adopt that attitude that anything would do for the Irish consumer. The Irish consumer seemed to reciprocate by saying: "We will take what you give us". It is only in very recent times — and I would not say there is a coordinated effort in this regard; it seems to be very patchy — that the consumer is beginning to fight back and is beginning to talk back to the people who provide various products. I hope that, after the passage of this Bill together with the publicity which will obviously surround the debate in this House, the consumer will become less passive. I do not know whether it is part of our national psyche. It does not happen in other countries, specifically in America where there are very tight consumer laws and where there are consumer watchdogs who constantly keep a weather eye open for any company whose products do not come up to acceptable standards. That does not seem to be the case here. The public are to blame to a great extent. I do not think in this instance they can blame the legislators. The legislators have provided the framework and the laws. If anybody goes into a store and is not happy with what he gets and if the shopkeeper refuses to facilitate him, the law is there to back up the consumer if the merits of the case deem it to be so.

Without repeating myself I hope that after the passage of this Bill the Irish consumer will not accept second or third rate goods, that they will demand what is their entitlement and, if products in stores are not to their advantage or not what they seem, they will complain on the spot. If they are not accommodated by the shop owner or the manufacturer, whichever the case may be, the remedy is there. The Director of Consumer Affairs and all the various statutory bodies are there to help them out. Overall I think the thrust of the Bill and its contents are to be warmly welcomed.

Mr. Hogan

I welcome the introduction of this legislation in the House. I am glad the Minister had decided to initiate this legislation so quickly in order to speed up the process by which we can remove some of the appalling restrictive practices currently in existence. It is now over 30 years since the Fair Trade Commission, the predecessor of the present Restrictive Practices Commission, submitted the first report on an inquiry into the grocery trade in Ireland. In the interim there have been two public inquiries, two reviews of the operation of restrictive practices orders relating to the grocery trade and one informal intervention undertaken by the commission. However, price competition in Ireland 30 years ago was nothing like it is today.

The 1973 groceries order contained a prohibition on advertising below cost products covered by the order. It was the first attempt to stamp out the malpractice of below cost selling but, in my opinion, the commission had not the staff or the will to pursue the matter to a successful conclusion. In their 1980 report on their inquiry into the retail sale of grocery goods the Restrictive Practices Commission examined again the situation regarding below cost selling. The commission considered that below cost selling was an undesirable practice involving a distinct element of unfairness. Never-the less, the commission did not ban the practice but said that if concentration in the grocery trade reached such a stage where competition between the multiples appeared to fade or the independent sector ceased to be economic, all factors which might increase the degree of concentration, including the practice of below cost selling, would have to be seriously reconsidered.

This is the background against which the Bill is introduced before the House today. Undoubtedly, the supermarket chains have increased their share of the market substantially, to such an extent that small family grocer, a feature of every town and village in the country, is beginning to disappear. It is regrettable that it has taken so long for successive Governments to act on the need to ban below cost selling by the retail sector. This House must come down firmly on the side of the family business which is keeping many rural communities alive and protecting much rural employment. At present 174 multiples are operating in Ireland with a turnover in excess of £1,200 million annually. That would absorb a tremendous amount of the existing market and inevitably it is leading to a monopoly, which is undesirable.

I am glad the Minister has initiated a total ban on below cost selling, that he has increased the penalties to which multiples will be subjected and has enlarged the scope of the director and the Fair Trade Commission to encompass other consumer areas such as electricity supply and banking. A ban on below cost selling will not necessarily mean higher prices, as has been propounded by many supermarket chain chiefs. It will not mean higher prices to the consumer but, more important, it will help to protect about 22,000 jobs in the retail food sector.

I urge the Minister to use the opportunity to examine the amount of credit being levied by multiples on some of their smaller suppliers. Often the length of time a small supplier has to wait to receive payment from a supermarket owner, in the first place, to get the order leads to the winding up of a small business and drives that supplier out of business. This is an infringement of what a supermarket chain is all about, an infringement no Minister for Industry and Commerce should allow to continue.

The food industry at the moment is working on very low margins of about 2 per cent. Obviously, this will create enormous pressure on the grocery trade. The leaders of the attack on below cost selling for many years have been RGDATA and I take this opportunity to compliment them on keeping the pressure sustained on successive Governments in order to bring forth this measure. I hope the necessary stability which RGDATA seek for the trade will come to pass as a result of this measure. Buying power in this country is very concentrated and the Restrictive Practices Commission report found that we are in the top four of 23 countries in the concentration of buying power. I quote from that report:

It is apparent that the large multiples in particular...have significant buying power and they use it to obtain better terms than those available to the remainder of the trade. The obtaining of more favourable terms than one's competitors can be facilitated by the power to delist one or all of the products of the supplier or manufacturer. Even without delisting, particular products can be given a smaller amount of shelf space or unfavourable locations which will reduce the sales of the product.

Such malpractice is widespread. We heard the Minister on a number of occasions speaking about gross interference in the marketplace by the "hello money" concept. In the milk sector I see this problem increasing in many supermarket chains with various co-operatives and various people involved in the milk sector introducing incentives to supermarket owners or paying substantial amounts of money in order to occupy the premier space on a particular shelf or in a particular supermarket chain. This is the activity which this Bill addresses in an effort to stamp it out, and I hope it succeeds in that area.

Many speakers referred to the restrictive practice which is gathering momentum in the petrol retail area. Senator Mooney and many other speakers referred to it and it is causing increased concern to the consumers. The extent of the gimmickry on offer by petrol outlets is not in the best interests of the consumer and the Minister should impose a ban on this activity immediately. The consumer wants a lower energy price, not inducements to buy from one company over another. The overriding condition and overriding factor in any of this activity should be the best value for money for the consumer, not the best value for money for the company.

Another area which has been the subject of scrutiny by the Restrictive Practices Commission has been building societies area. The new regulations introduced by the former Minister for the Environment, Deputy John Boland, are not working satisfactorily. The spirit of the regulations is not being implemented by the societies. Recently I came across a number of instances of a client wishing to change insurance cover from the building society's insurer to another insurance company, or an insurance intermediary of his or her choice, and the building societies in question are seeking unnecessary valuations and surveyors' reports to ensure that the market value of the property is maintained for their own purposes. That is a classic example of the spirit of the regulations not being compiled with and building societies using every opportunity to satisfy the age old maxim of "what we have we hold". The insistence on surveyors' reports and unnecessary valuers' reports is an extra tax, an extra cost on the consumers who have suffered badly under these regulations for a number of years.

All to often we hear about the financial institutions and the way they are exploiting the consumer. It is probably easy for Members of the Oireachtas and easier for the various consumer interests to "have a go" at a financial institution if you want to get some pressure off your chest, so to speak, but the insurance companies, banks and financial institutions have been levied for years by various Governments to attract a significant amount of finance into the Exchequer. I regret to say that it is a malpractice of the highest order that this levy imposed on a bank or insurance company finds its way back to the consumer. For example, the levy put on insurance companies of 2 per cent for the PMPA compensation fund and 1 per cent on the insurance premiums of all premium holders originally was intended by the Government of the day to be extracted from the insurance company themselves, and the Government should insist on that. After all, the companies are making sufficient profits for the Government to extract this money from the insurance company. It is unfortunate that the consumer and the general public have to pick up the tab for whatever levy is imposed on the consumer in the budget each year. I ask the Minister to examine ways in which he can control financial institutions and prohibit them from passing this levy to the consumer, to whom it was never intended to be passed in the first instance.

I also welcome the recent announcement by the Minister that the Restrictive Practices Commission examine the legal profession. Without pre-empting what is in the report I know that many people are concerned about the regulatory nature of the legal profession and for example, the practice of solicitors not releasing papers to other solicitors if so requested by a client. This is leading to tremendous problems and to the client being tied up in enormous bureaucratic knots between various solicitors and not getting anywhere at the end of the day with the matter in hand. I regret that this restrictive practice is not being tackled by the legal profession who have a regulatory body under the Law Society.

The drink trade is another area where varying levels of prices apply between Dublin and the rest of the country, between bars and lounges and between city and country areas. The failure of the enforcement of the prices order and of the other various practices need to be examined in depth.

Finally, I welcome the powers being extended to the Fair Trade Commission to take their own initiative on instituting restrictive practices proceedings. I welcome also the power that the Fair Trade Commission will have to enforce compliance of these procedures. Only in that way will consumer interests and responsibility for consumer interests be protected. Taken out of the political arena and given to a full time director of consumer affairs who will ensure that the present irregularities in the case of restrictive practices will cease to exist. The Bill is to be welcomed. It is the exact copy of the Bill which was introduced by the previous Minister. It is worthy legislation and very timely.

Mr. Harte

I, too, welcome the Bill particularly in view of the fact that its main purpose is to streamline the operation and extend the scope of competition and consumer protection legislation to include banks, communications and electricity services.

For many years a considerable amount of legislation for consumer protection has been in existence. Unfortunately, it took the form of a multiplicity of Acts. It is good that so many sections of other Acts are being brought under the scope of this Bill. The problem was that consumer problems, in particular, were dealt with by different Departments. It might be said that if one had a problem with regard to agriculture some form of administration by the Department of Agriculture was necessary to process the grievance but overall the direction and effectiveness of that legislation was not in accord with current ideas on consumer protection. Under previous legislation designed to help the ordinary consumer, any complaint had to be pursued by the consumer alone. This deterred people from making complaints. However, I am pleased that the Ombudsman deals with the whole question of consumer protection. This has been a great advantage.

I am not sure if the Bill will cover sufficiently the question of misrepresentation and high pressure selling. Will it be more informative and responsible in creating the right attitude among traders? Certainly it will go far enough to enforce the law and to make it more effective. An imbalance always existed between the powers of the consumer and those of manufacturers and suppliers, with the consumer being on the wrong end for a number of reasons. The spread of technology and the development of the consumer society with its concentration on mass production etc. did not help the consumer to a great extent. Instead it contributed to widening the gap.

In both manufacturing and retailing outlets the emphasis has been on larger units. This has not been good for the consumer but I am confident that the legislation before us will be of great assistance in making less acute the problems experienced by consumers over the years. It is understandable that manufacturers have to encourage people to buy. It is also understandable that they would want to buy in ever increasing numbers so they can get the full plant value and there is higher productivity. An element of that was the full scale advertising which was carried out. There was a period when even this hyped up advertising to get people to buy goods did not satisfy many manufacturers. They tried to ensure that people would have to continue to replace goods at frequent intervals. This is evidenced by the number of products you can buy nowadays but which, instead of being usable for some years, have to be thrown away in a year's time.

These are inevitable trends in today's society and I do not want to get ideological about it. There will be need for greater advertising campaigns and for people to design advertisements in such a way that there will be some dissatisfaction with the goods in existence and more products will be sold. This will probably in some cases lead to the production of goods of a lower quality which will become unsatisfactory quickly and, consequently, have to be replaced much earlier than would otherwise be the case Mass producers do not make products that have to be serviced fairly regularly; they want the consumer to replace a product rather than have it repaired. I am not suggesting that this is a great plot on behalf of manufacturers. These are the inevitable consequences of mass production. From the point of view of the manufacturers it does not make a great deal of sense to spend a lot of money on servicing. Nevertheless, the consumers are the victims of that hyped up campaign. The producers try not to put too many goods on the market which would need servicing. They want people to buy their products, throw them away and then buy more. This is part of the system. It is encouraging to see consumer protection being introduced and I am sure the Minister is doing everything in his power to further this end. I do not believe this will be the end of it. I believe we will see the pace change, necessitating another look at this area in the not too distant future.

I do not know what powers the local authorities have regarding consumer protection, or if there is scope for local government to provide different types of advisory services so that the people could take advantage of the provisions in this legislation. I do not know how the weights and measures will be affected by this Bill. This is another area of consumer protection which can be added to the local government advisory services. I am not talking about the setting up of bureaux or anything else like that. I am talking about the extension of the terms of this Bill. We were talking about the devolution of power and this is an area where we might think seriously about that. We have to bear in mind that there is a desire among people who are in competition to reconcile their antagonistic interests and to make competition less aggressive but that does not take care of the consumer. In my view, the Bill goes a long way in this direction and I welcome it.

Minister of State at the Department of Industry and Commerce (Mr. S. Brennan)

I thank Senators for a very fine debate and for their very fine contribution on Second Stage. As always with the Seanad, the debate was constructive although in my time here I am not so sure that it was so constructive— perhaps because of my interventions.

I am glad the House has accepted the general approach in this Bill and that they agree the general thrust of it is correct. I am happy that through the efficient operation of competition policy, which is in line with EC thinking at the moment. I am also happy that the consumer will be protected to a greater extent as a result of the measures proposed in the Bill before the House today.

I recognise that there are elements in this Bill which can be improved and I am grateful to Senators for the detailed points they raised. I have taken on board the points which they raised today and, to the extent that I feel they can improve the Bill, we will certainly look very closely at them. A small number of points, mainly of a technical nature, have come to light since this Bill was published. We will be introducing amendments in relation to these on the Committee Stage which, I understand, has been set for next week.

Senators raised a number of points of detail which I will try to deal with as quickly as possible. Senator Reynolds inquired in what part of the Bill the exclusions being removed were laid out. At present, they are contained in the Second Schedule, but I will be proposing an amendment on Committee Stage to bring them into the body of the Bill, so that the body of the Bill will be crisp and clear as to the removal of the exclusions.

Senator Robinson dealt with a number of issues. She asked how many requests to the examiner had been made under the legislation. In that regard I can tell the Senator that there were seven notifications since 1982. Of these, two were subsequently withdrawn, four were allowed to proceed, and one order was made relating to the Irish Civil Service Building Society and the Bank of Ireland. I hope that is the information Senator Robinson was seeking. She asked if I would outline whether the director or the commission would be responsible for Regulation 16.72 meetings. Normally the Fair Trade Commission will be represented in view of their primary function in relation to mergers and monopolies. Senator Robinson also raised a point about the resources available to the director. The number of persons involved has been increased from a total of nine in 1983 to a figure of 19 at present. The director will also have a further six people from the examiner's office. The estimate for 1987 is £321,000, and the outturn for 1986 was £192,000.

Senator Robinson was anxious about the reconciliation of Bord Telecom as a monopoly with the new provisions in the legislation. An Bord Telecom maintain their monopoly, but if the director is investigating a particular activity of An Bord Telecom, where, for example, competition is involved, he will be able to look at all of Bord Telecom's activities in this context. That is something into which we can go in greater detail on Committee Stage. In that regard, Senator Robinson spoke about section 8 of the Bill. She was concerned that the powers in section 8 were too wide. It is envisaged that those powers will be used only in very urgent circumstances where time does not permit the ordinary procedure to be applied. An inquiry by the commission could take a very significant amount of time and that time may not be available in a particular set of urgent circumstances where the public interest might be involved.

I should also point out that the legislation makes it clear that, even where an order like that is made by the Minister, subsequent confirmation orders — that is, subsequent Acts of this House and the Dáil — will have to be passed. That is a safeguard and a protection to what Senator Robinson regards as the wide powers in section 8. She also dealt with the time available for debating the measure, and so on. Obviously that is a feeling most legislators have in regard to all legislation. The Bill was published in November 1986. While it lapsed with the Dáil, it has been around for some time and there has been a considerable amount of time to study it.

I have been asked whether price control legislation is in operation. That legislation is still in operation in the sense that prices are being monitored and the legislation can be used if necessary. From a general point of view, a number of other issues arose. Senator Cregan asked if the National Prices Commission were still in existence. The Senator will recall that the National Prices Commission have been abolished, but all the prices legislation is being retained, with the powers to control prices therein and these can be used if necessary. While the National Prices Commission are not actually in existence, the legislation and the powers are there to be used if necessary.

I want to comment on some points Senator Cregan made in regard to the banking system. I have no brief whatsoever, nor does any member of Government, to defend the banking institutions but one should not let those remarks pass without putting on the record some little piece of the other side of the story. I can understand how Senator Cregan and other Senators might feel that financial institutions were — some of the words he used were "intimidatory" and "exorbitant" and so on — and I can understand how any business person would feel that on a daily basis in regard to their own bank but we have to keep the matter in perspective.

A substantial amount of money has been coming back to this country in recent months. One of the reasons for that is that we have worked, through successive Governments, to maintain a sound, solvent banking system. I would like to point out to Senator Cregan that the return on investment for the major banks, the return on shareholders' funds, is running at 10 per cent to 12 per cent. It is easy to quote millions of pounds per day in profits, but if you are dealing with figures of that order you have got to keep them to a percentage to get a feel for their size. The banks are talking about 10 per cent to 12 per cent return on shareholders' funds.

When Senator Cregan or other Senators make remarks like that about the banks they must be very careful to consider whether we want our banks to earn less than 10 per cent on shareholders' funds. If we do, then that is fine. There are steps available to do that through the taxation system and through various arms of Government but I do not believe anybody is seriously suggesting that our banks should be forced down below that particular level. If you do that, you damage the banking system and the credibility of the financial structures of the State. If they were not earning at least that type of return on shareholders' funds we might be faced with a lot more difficult legislation in the House of the Oireachtas and we might not have many of the funds which have been attracted in recent months back to this country.

It is not a question of giving banks a free ride or a free rein but of sensibly controlling and monitoring their activities and, at the same time, allowing them to earn sensible returns on shareholders' funds. I do not regard that kind of figure as exorbitant. I disgressed to put those comments on the record because of the remarks made by a number of Senators in regard to the financial institutions lest my silence in that regard should be interpreted as some form of agreement.

Senator Hogan spoke about below cost selling. While it was interesting and I accepted some points he made, that calls for separate legislation and is being dealt with by a different route. He also spoke about restrictive practices by the building societies and he said that the new regulations were not working. The Bill will ensure that these activities can now be investigated by the director whereas up to now any investigation by the examiner or by the Restrictive Practices Commission was stymied by the exclusions in the Restrictive Practices Act, 1972. The Senator is quite right to be concerned about that.

Senator Kennedy spoke about the EC and we are all conscious of our EC obligations in relation to competition and consumer protection. This Bill is a step towards what Senator Kennedy wants to achieve, which is greater competition in a regime of genuine consumer protection.

I want to thank Senator Harte also for his very comprehensive analysis in regard to the manufacturing area and his welcome for the advance in consumer protection. I will certainly take his remarks on board to see if any advances can be implemented.

Senator Mooney spoke about petrol prices. The Minister for Industry and Commerce is keenly aware of the question of petrol pump prices charged by individual retailers. I want to thank all the Senators who contributed to this constructive debate. This Bill is complicated and detailed and I look forward to joining Senators on Committee Stage next week.

Question put and agreed to.

Committee Stage ordered for Wednesday, 22 July 1987.