I move amendment No. 34:
In page 13, subsection (2) (c), line 20, to delete "or".
This is a textual amendment for the purposes of amendments Nos. 36 and 38.
SECTION 3.
Amendment agreed to.
We now come to amendment No. 35. Amendments Nos. 36 and 37 are related. I suggest that we discuss amendments Nos. 35 and 37, inclusive, together. Is that agreed? Agreed.
I move amendment No. 35:
In page 13, subsection (2), lines 21 to 23, to delete paragraphs (d).
The purpose of this amendment is to discover what forms of credit will be exempt. If any form of credit is extended the consumer should reasonably expect the protection of consumer credit law. Will organisations such as the ESB be excluded?
Yes.
May I take it that only the collection of electricity bills will be excluded as opposed to any credit arrangements the ESB may make with consumers in respect of white goods and other items?
Will the Minister of State outline the reason the ESB, which is responsible, although the position has improved, for many of the moneylending problems low income families are encountering, should be exempt under this Bill? Should we not look at the Director of Consumer Affairs to lay down a code of practice for electricity companies, gas companies and any other company which offers services and extends credit? Where people find themselves in arrears companies should pursue the collection of those arrears in accordance with this code. As we are aware, local authority rent arrears can be the source of enormous problems. Consumers should have the protection of the Director of Consumer Affairs in cases where companies are pursuing the collection of bills.
The question of a code of practice is dealt with in later amendments, including some in the name of the Deputy. Where one pays the ESB by way of staggered payments or instalments no interest is charged. Neither is there an instalment charge. Many consumers and organisations working on their behalf have told me that payment by instalments is suitable for those who are not able to pay a bill in one payment.
Few would dispute that payment by instalment is a suitable method of payment for many people. Why should we exclude, say, the ESB from the remit of consumer credit protection? Why should we not recognise that running up arrears with the ESB is a form of credit? It may involve a zero interest rate, but failure to pay a bill could jeopardise a family's electricity supply and have serious implications for their standard of living. Why does the Minister feel the need to exempt the ESB from this measure? What burden does she foresee this Bill imposing on organisations such as the ESB or Bord Gáis Eireann?
It was the Deputy who mentioned the ESB.
The Minister used the word "utility" and most people would consider that the ESB provide a utility.
The Bill deals with consumer credit. There is not an additional charge when one agrees to pay one's bill by instalment. It is not a case of it suiting the organisation or institution providing the service. This type of payment is sought by the consumer who, usually because of diminished income, cannot make the payment in a lump sum and seeks to pay it by instalments. An additional charge is not imposed for such a facility. There is no reason we should place a burden on consumers who wish to have such a facility. I am not seeking to exempt anybody under this measure, rather I am adhering to the terms of the Bill which deals with consumer credit. This arrangement suits some consumers and does not involve an additional charge.
Instalments and deferred payments appear to be similar concepts.
Instalment payments involve paying a specified amount at regular intervals until the full amount is cleared.
What distinction does the Minister draw between an instalment and a deferred payment?
Presumably one could continue to defer a deferred payment whereas in the case of instalments, one's commitments are stipulated beforehand.
In a programme of payment. In regard to amendment No. 37, will payment by means of credit card be covered under this measure? In other words, is a Switzer's credit card covered under the Bill?
The rules governing credit cards are a separate issue. Payment arrangements are stipulated by the various credit card companies. It is by choice that a person pays by credit card.
I merely want to know whether an Esso credit card would come under this definition.
It is up to individuals how they pay for their petrol. If a person's utility bill comes to £100 he or she may agree to pay instalments of £25 every two weeks over a period of eight weeks to clear the Bill. A deferred payment comes into another category and the rules governing the issue and use of credit cards would cover the matter to which the Deputy referred.
Deputy Bruton has drawn our attention to an important issue regarding public utilities. I accept what the Minister said about the ESB being excluded from the terms of the Bill.
I want to clarify this matter because this is how things take wings and people read about them in the papers the following day. I did not mention the ESB, it was Deputy Bruton who mentioned it as an example. The word I used was "utilities". I want to make that very clear.
I would consider the provision of power and electricity by a semi-State company a utility.
Exactly.
People are concerned at the way utilities can use their monopoly position, particularly the ESB in its sale of electrical goods which puts at risk the businesses of other retail outlets. While that matter may not come under the terms of this Bill, the Minister might like to examine it in the context of her departmental affairs. Will she examine how, in particular, the ESB uses a monthly billing system which gives it an advantage over its competitors? Jobs are put at risk in such monopoly positions.
While Deputy Haughey was speaking the altercation — although that might be too strong a word — of the ding-dong between the former Minister for Energy, Deputy Molloy, and the ESB came to mind. That issue involved the concern of traders that their rights in regard to the sale of electrical goods were being undermined by the ESB, but in the end it all came to nothing. I am sure most Deputies were approached at some stage on that matter. It is a matter of concern as to whether consumers are well served by a system where a utility account enables the sale of goods within what might be termed a "protected environment". The Deputy asked me to examine that matter. Under this Bill one could reach into every arm of Government in the name of consumer interests and seek to have one's say. However, protecting the consumer depends on how long one's arm is and how far one can reach before one's arm is cut off.
It is regrettable that the ESB has been singled out in this debate. It provides an excellent billing system. It is one of the few organisations in the private or public sector that does not impose a service charge on its accounts for either deferral or for those who want extended credit.
It just cuts off one's supply.
I have always paid on time, but I am aware that there are many who cannot face their liability and must seek extended credit or some type of deferral system. In general the ESB has been very forthcoming in recent years. Perhaps it has changed its attitude.
Paying by instalment involves signing legal documents and so on and there is a strong obligation on individuals to adhere to their commitments. However, a deferred payment arrangement is based mainly on a gentlemen's agreement and there must be an element of trust between the consumer and those providing the serivce. The arrangement between the consumer and the company is a welcome development.
I have taken up with the present Minister, the former Minister, Deputy Molloy, and other former Ministers the issue of the sale of electrical goods by an organisation with a monopoly. This organisation has control over the sale of such goods because of the billing system. It dominates the market in the sale of white goods, such as kitchen and household electrical equipment, rather than brown goods. It succeeds in taking business from many small retail outlets. Some change must be made to the billing system to protect those outlets. Details of electricity payments and the costs of electrical appliances appear on the one bill. Many people find it difficult to clear the balance owing on their electricity bills. Some pay the amount owing for the electrical appliance but the balance of the electricity charges, a priority payment, remains outstanding. The balance outstanding increases as people tend to buy electrical appliances which they cannot afford.
The provisions of the Bill should protect the consumers' rights in credit arrangements. A separate billing system should be instituted for electrical appliances. While the ESB provides a utility service, the consumer business of selling white goods could not be regarded as such a service. Electrical goods should not be sold in ESB offices where people pay their bills. Housewives may be tempted to buy appliances on special offer. Consumers are entitled to protection in this area. I am sure the Minister during her period in the Department of Tourism and Trade has gained a good understanding of the problems of commercial business. She should examine the ESB's monopoly in the sale of white goods.
The Minister said that the controversy between Deputy Molloy and the ESB came to nothing. That is not true because he succeeded, without much help, in getting the electrical charges and cost of goods separately itemised on the Bill.
That is correct.
He succeeded also in securing an undertaking from the ESB that people would not have their power cut off for not paying instalments on their electrical purchases. However, electricity charges and electrical purchases appear on the one bill. Amendment No. 38 in the Minister's name proposes that the provisions of the Bill will not apply to credit granted or made available without payment of interest or any other charge. That is the main concern about the ESB operation.
People are not concerned about the payment of electricity charges on a deferred or an instalment basis. They are concerned about the ESB's sale of electrical appliances. It may sell a fridge for £600 which may be purchased in an electrical outlet for £400. The ESB's billing system is not covered under the provisions of the Bill because it walks away from the liability borne by other retailers who compete with it by nominating a price for its products. The ESB may say there is no interest component in the price of its products and it allows the customer to pay for them by instalments. By nominating a price which covers the interest component the ESB charges interest.
That is in respect of goods, not services.
It has a hidden agenda.
Amendment No. 38 effectively provides that a person who sells goods to a consumer on an instalment basis and does not mention interest will not be caught by the provisions of the Act. It seems remarkable that if one sets a deferred payment price and does not make a distinction between the purchase price and the interest, one can ignore the protections in the Bill.
If a person purchases a fridge from the ESB for £600 because he or she can pay for it by monthly instalments on his or her electricity bill, that person should be entitled to the same consumer protection as the person who pays £450 for a similar fridge from a retail outlet by way of a hire purchase or a credit agreement through a financial institution.
We must be political about the ESB billing system. I fully supported the line taken by Deputy Molloy on this matter. People like to pay for their electrical goods by way of their electricity bill because they do not feel they are involved in a separate relationship with a finance house and avoid the hassle of paying another bill. The ESB is at an advantage because consumers find the method of paying for its electrical goods relatively painless. I would prefer the Bill to provide for the payment of lump sums divided into instalments. Organisations such as the ESB which sell products at a fixed price should be on the same playing field as, for exmaple, McKenna's who sell a similar product of £100 less through an agreement between the consumer and a fianancial institution. It seems ridiculous that by using a different selling technique for similar goods organisations can receive the same amount of money from the consumer over a similar period. One arrangement is regarded as a credit agreement because it contained an interest element and in the other the interest is bundled up with the purchase price, even though the product is paid for by instalments.
Deputy McDowell's point is relevant but it is not related to the amendments we are debating. That matter will be dealt with under amendment No. 38 and the Deputy should wait until that time to comment further. The exemption for utilities would not apply to the ESB's sale of goods. It seems mysterious that the provisions of the Bill will protect a person who pays for a fridge by way of instalments in that the fridge cannot be removed from their house at short notice, but it will not give the same level of protection regarding the supply of power to operate the fridge. The loss of power has more impact than the loss of a consumer durable. Will the Minister agree that section 54 gives reasonable protection to consumers of utilities — gas or electricity — so that they will not be cut off without receiving warnings and given a chance to put their affairs in order. The subsection provides that such utilities will walk away scot free from their obligations such as those in section 54 and they would not be answerable to the Director of Consumer Affairs as to the manner in which they conduct their affairs. Most utilities are in public ownershop and have a reasonable approach to credit, but that does not mean that other utilities will not pursue different policies and avoid obligations which protect consumers.
Deputy O'Keeffe mentioned that the ESB does not charge a fee. As far as I know, Dublin Gas does charge, and Telecome Éireann certainly charges. Does it mean that those companies will come under the Bill because they are setting out service charges for the facility of paying bills by instalment?
It is interesting that when the Minister defines "credit" in the Bill she mentions nothing about interest being an element of it. Credit is really a deferred payment, a cash loan or any other form of financial accommodation. On the Minister's definition it seems that the instalment collectors, telephone companies, gas companies or electricity companies, should come under the Bill. I come back to my original question. why does the Minister think that bringing them in under this Bill would be excessively burdensome for them? As far as I can see it would not as most of them should be using procedures like this as good practice and, by bringing such transactions within the remit of this Bill, they would be giving consumers a means of address by way of appeal to the Director of Consumer Affairs or through section 54 procedures.
Two issues have been raised which relate to a particular public service utility. The first is the right to pay bills by instalments without a credit charge. That has been sought by consumers and granted by the public service utility in question. At times people, through no fault of their own, are unable to pay their bills and have recourse to payment by instalment or the community welfare officer who is enabled to make resources available to people to pay their bill, sometimes paying it directly if an outstanding amount needs to be addressed.
Another question is the sale of electrical goods in the same premises where bills are paid. It is an associated question but not covered by this Bill. It relates rather to the area of monopolies in trading. The Competition Bill and competition rules are shortly to be updated and I hope maters such as that can be addressed. There were two sides to the argument that arose in that area, the question of employment from free-standing electrical traders and employment in the ESB which would have been lost if the proposed measures went ahead. The juxtaposition of payment of a bill and the vision of what could be yours if you paid the price displayed on the gleaming white machine on the floor of such premises is questionable.
Section 26 provides that an advertisement shall not describe credit as being without interest, or any other charge, if the availability of the credit is dependent on the consumer concluding a maintenance or insurance contract. People offering such an item can be caught under another section of the Bill if their advertisement is not correct. That addresses Deputy McDowell's point that anyone might display a price of, say, £600 on an item as if that were the blanket price. There is a sub-theme to what the Deputy is saying; that item can actually be bought in another store for less. However, if the advertising is incorrect, the Director of Consumer Affairs has the right to intervene and it is something in which I would expect him to have great interest.
How far can one go in spancelling consumers in the context of where they can purchase goods? They must have an element of choice. One informs, lays down regulations, gives powers to the Director of Consumer Affairs and hopes that the process of imparting information and of empowerment will eventually lead to proper choices being made. Consumers sometimes want a choice and, while trying to protect as much as possible, one cannot cut across a private requirement. This is often the dilemma in talking about consumer interests. Deputy Bruton asked why we should not bring groups such as the ESB within the ambit of this legislation. Section 38 elaborates on what we are doing now. Deputy Burton's proposal would be of no advantage to the consumer. If I discern correctly what the Deputy wants, it is protection of the rights of people who cannot pay their bills and are in danger of being cut off by the public utility because of non-payment. I have great sympathy with the Deputy and deal on a constituency basis with many people who find themselves unable to pay bills; when one deals with personnel in the accounts office of the ESB they are generally very humane in their approach to cases brought to their attention. However, that does not come within the ambit of the Bill.
I am persuaded by the Minister's argument. Essentially utility companies should have a relationship with their consumers which gives the consumer some access to protection regulations even if there is no charge for credit. The credit definition in this Bill does not specify that there must be an interest charge. The Minister is now introducing that concept. Many of the utilities have an exemption under the Sale of Goods and Supply of Services Act so that they are not amenable to normal consumer law. We should use that opportunity to give them the protection of a section such as section 54 whereby the ESB, Telecom Éireann or another company would have to give ten days' notice before cutting off service. Such provisions are not unreasonable. I must, therefore, press the amendment.
To my knowledge the ESB gives notice.
The point is not what the ESB does but what utilities might do and what the law says they should do.
The Deputy just said they do not give notice. I drafted a letter some time ago to the Minister for Transport, Communications and Energy with regard to bringing Telecom Éireann under the Sale of Goods and Supply of Services Act. We await a reply but we are determined — and in the process of — bringing Telecom Éireann under that Act.
I support what the Minister said about the ESB. Everybody in this House has constituents who experience difficulties in paying electricity bills. The ESB has a caring and compassionate approach and have become very user friendly in recent years, which is a change. When the worst comes to the worst and a person is disconnected it does not change for reconnection. I do not wish to broaden the discussion on the amendment but Deputy McDowell's remarks are relevant. An item advertised at £600 may be on sale in another shop for £450. However, it may be more attractive for a customer to buy from the ESB because of their previous record with another financial institution. There is no comparison between the ESB and Telecom Éireann. The latter company disconnects service with no approach to the customer. The ESB being singled out for unjustified criticism.
The Bill refers to utility, which could apply to a telephone company or gas company. The Deputy took umbrage about the ESB, but I mentioned any utility.
It is the intention of the consumer section of the Department of Enterprise and Employment, following its proposals on Telecom, to bring what are at present exempted services under the Sale of Goods and Supply of Services Act.
I heard that for the last six years.
Amendment put and declared lost.
I move amendment No. 36:
In page 13, subsection (2) (d), line 23, after "instalments" to insert "or deferred payments".
Amendment agreed to.
I move amendment No. 37:
In page 13, subsection (2) (d), line 23, after "instalments" to insert "other than by means of a credit card".
Will the Minister indicate her objection to this amendment?
Where a consumer chooses to make payments by means of a credit card, the arrangement would be covered by the rules governing the issue and use of the credit card. In those circumstances the consumer opts to use a credit card to make payment.
Amendment, by leave, withdrawn.
I move amendment No. 38:
In page 13, subsection (2), between lines 23 and 24, to insert the following:
"(e) credit granted or made available without payment of interest or any other charge,
(f) a credit agreement under which no interest is charged provided the consumer agrees to repay the credit in a single payment, or
(g) a credit agreement between an employer and an employee made on terms which are more favourable to the employee than terms offered generally to the public in the normal course of business.".
This is an elaboration of an earlier amendment. The additional paragraphs (e), (f) and (g) fulfil the aspirations of the directive ensuring that credit granted free of interest or any other charge shall be exempt. Paragraph (f) proposes that credit which would be provided casually, whether in respect of goods or cash repayable in a single payment, is exempt. That refers to a casual arrangement between a consumer and a supplier. These proposals are complementary to the proposed deletion of section 32 which we will deal with later.
Paragraph (g) would most commonly arise with banks and other financial institutions who provide loans at low interest rates to their employees. For that privilege employees pay benefit in kind, tax on the benefit. I do not see why such employees should not have the protection of the Act. In the case of a housing loan the person's house could be on the line if they do not have the protection of the housing mortgage section. We are inserting many of these provisions to give the consumer proper knowledge of what they are entering into, and that should apply in the case of loans payable at a lower rate. I am not entirely convinced of the merit of providing that consumers who get preferential terms do not have the protection of the consumer credit law.
This amendment proposes that credit granted or made available without payment of interest or any other change will not be the subject of this Bill. Section 32 states: "This section shall apply to any credit agreement under which credit is granted or made available".
A later amendment proposes to delete that section. The proposal to remove the apparent disparity is included in amendment No. 110.
The amendment proposes that interest free credit in instalments is not subject to the Bill. If a person buys a fridge from the ESB on deferred payments without interest, the ESB is obliged to comply with section 32 (2) to make a written agreement that the person may cancel the order within ten days. However, that protection would be eliminated by the deletion of that section.
I do not think we can deal with amendment No. 110 at this stage.
We should not be blind in what we are doing. The Minister proposes to insert paragraph (e) which provides that interest free credit in instalments will not be covered by the Bill. The effect will be that people who buy, say, a fridge in an ESB office for £600 will not have the right to return it within ten days if, for example, they see the same fridge for sale in another shop for £450. That is not a very satisfactory position.
It appears the Minister is clearly referring to an agreement between an employer and an employee, which is different from a consumer.
I am talking about paragraph (e) whereas Deputy Bruton referred to paragraph (g). Paragraph (e) proposes a radical change because it means that a person who purchases a fridge in an ESB office for £600, to be paid in monthly instalments, cannot return it if he sees the same fridge for sale for £450 in McKenna's or elsewhere. That person will not have recourse to section 32 (2) (d) which provides that the consumer has a right to determine the agreement within ten days and to return the goods. This is a rip-off as the consumer will not be able to get out of the agreement. If section 32 is deleted, the person must keep the goods; there is no protection for them under this Bill, which is a serious matter.
To answer Deputy Bruton's point, which was taken up by Deputy Fitzgerald, paragraph (g) deals with a credit agreement between an employer and an employee made on terms which are more favourable to the employee than terms offered generally to the public in the normal course of business. That is part of an employment arrangement between an employer and an employee. The workers and employers of the institutions involved requested this change and it would be very odd to take out a provision which both parties wish to have included. When one takes up employment in a bank, and perhaps a building society, one of the conditions is that the person receives more favourable rates of interest for house purchase. That is built into the employment arrangements, but since both sides wish it to be exempt, it should be so.
I cannot understand that because in relation to, say, payments on a house, we would want spouses to be informed if they were falling behind. Employees of a building society or a bank should have the same protection in law. I would like to hear the reasons advanced by the two sides as to why they feel the Oireachtas should take a different view from that set out in the Bill. I presume people can lose their employment in these institutions where they have preferential terms. Are they protected in that case? I would like to hear the Minister's response to that.
I can certainly understand Deputy McDowell's point in regard to sub-paragraph (e), particularly in reference to what he said earlier. A bloated cash price can be quoted, thereby avoiding the need for any interest element. With one leap they are free of all the trappings of the Bill.
They cannot get out of the agreement.
I wish to come back to the first point the Deputy raised. This is part of employment arrangements in those institutions. From my personal knowledge I understand that house loan payments are taken from the employee's salary by prior arrangement. We should not seek to put in what is agreed by both sides. When the Deputy refers to the dependent spouse or partner being discommoded if the payments are not made, that may not be the case if the payments are taken at source. Also, if the bank or financial institution employee leaves that institution, he or she is in a consumer credit situation. They are no longer in the employment situation which they entered when they took on that credit arrangement.
I support the Minister on this. I believe many firms, say, paint manufacturers or retailers, sell products to their employees at wholesale prices and allow them to pay for the product out of their weekly wage. Employees do not want to be given documentation or to find themselves in the position where they were not made aware of their rights. In general terms, people who work in businesses understand their employers' products, they know the prices of them and they are in a far better position to judge whether they are making a mistake. They also know what competitors charge for the product. On this issue, therefore, I support the Minister but I am very much against the Minister on the other issue.
I am concerned with what Deputy McDowell put forward on the other issue. I would ask the Deputy to leave the matter until we come back to it on Report Stage.
I thought that had been the custom and practice in many financial institutions.
We are not talking about the employer/employee matter; we are talking about the other matter.
The differential between the ESB and other retail outlets?
No, the deletion of the section.
Interest free credits — there is no cooling off period, that is my point.
Are we talking about cases where an institution makes money available to an employee at a preferential rate?
That is another section. That refers to Deputy Bruton's amendment to which I have replied and with which Deputy McDowell is in agreement.
Is Deputy McDowell looking for safeguards in the case of a termination of employment?
No.
I do not believe we have to protect employees from their employers because the vast majority of bank officials are well aware of what a good and a bad interest rate is. It would be crazy to have employers signing special agreements with employees and employees voiding agreements because their employer forgot to put them in documentary form. There must be an element of trust in all of this.
Both sides wanted this, that is the point.
The Minister has agreed to examine the matter again.
That is up to Deputy Bruton.
I realise the Minister has agreed to reconsider the matter——
Not all of it.
——in relation to sub-paragraph (e), but it is worthwhile emphasising that if it is taken in context with amendment No. 110, it means that a consumer who goes into an ESB shop and agrees to pay £600 for a product that is available for £500 down the road, the consumer cannot get out of that agreement. That is a very serious change in the law and rather than be argumentative about sub-paragraph (e) today, I am simply saying that the Minister cannot allow that. Such a measure would put McKenna's at a huge disadvantage; their employees would have a cooling off period if they signed a credit agreement while the ESB would be able to tell its customers that they cannot get out of the contract, that the Consumer Credit Act does not apply and that they must keep the product.
At what point?
Mr. McDowell
Any time.
We could take it with the proposed deletion of section 32.
If section 32 stood, anybody who bought an item in an ESB shop on an interest free deferred payment basis could come back within the period of time set out in the section and say they have seen the product on sale at a cheaper price and they want to avail of it. If we accept the Minister's amendment without considering section 32 against, people will have no protection. I am not simply talking about the ESB, to be fair. Any retailer who sells products——
The ESB has become the darling of the Dáil today.
If this amendment is made without looking at section 32 again, any retailer who sells a couch or a dining-room suite to a customer for £1,000, interest free, with monthly instalments of £50, will be completely protected from the operation of the Act. The customer could see the exact same couch or dining-room suite on sale down the road for two-thirds of the price and will be unable to go back to the original shop and complain that they were treated unfairly.
That is a cash price.
The point I am making is that if a cash price is specified and if one allows for payment by instalments, with no interest, and if these amendments are made and section 32 is deleted, the customer will have no protection. There will be no cooling off period.
The concern about this issue goes a little wider than that referred to by Deputy McDowell. I would be concerned that hire purchase agreements could actually be recouched in such a way as to be exempted.
Everyone will walk through this hole once it is open.
What I would propose, if it is acceptable, is that we would return to sub-paragraph (e) of amendment No. 38 when we are considering section 32.
Is that agreed? Agreed.
In regard to sub-paragraph (g), if someone became involved in a dispute because they had not received a valuation report, for example, are we saying that they would go to the Rights Commissioner or the Labour Court because this was a terms of employment issue?
If they were still with their employer and it had been part of their agreement, I do not think it would be a matter for the Rights Commissioner. Whilst they are terms of employment, so to speak, they are bound on an equal basis between the employer and employee. It would be stretching the issue if one were to bring the conditions on which one gets a loan to the Employment Appeals Tribunal.
I accept that.
Amendment agreed to.
Section 3, as amended, agreed.
NEW SECTION.
I move amendment No. 39:
In page 13, before section 4, to insert the following new section:
"4.—(1) Not later than 12 months following the enactment of this Act, and at the end of each subsequent 12 month period, the Director shall make a report to the Minister on the operation of the Act and on the adequacy of the resources available to him which he regards as necessary to carry out his functions.
(2) In preparing his report the Director shall consult with such persons or bodies as he regards as appropriate.
(3) A report received by the Minister under subsection (1) shall be published by him and shall be laid before each of the Houses of the Oireachtas.".
This amendment seeks to insert a new section in the Bill which would require the Director to make a report to the Minister 12 months following enactment of the Bill and at each 12 month interval thereafter setting out the Director's view of the operation of the Act, the way it functions and the adequacy of resources and staff available to him to enforce it. In addition, it would require the Director to consult with such bodies as he thought appropriate about the functioning of the Act. There are a number of organisations concerned about this legislation who made thoughtful submissions to us. It is reasonable to require the director to consult with the main organisations on the effectiveness of the Act. The report would be published and laid before the Houses of the Oireachtas by the Minister.
The amendment is reasonable and desirable. The Act will confer significant new powers on the Director in terms of the functioning and enforcement of the legislation, his responsibility for licensing moneylenders and authorising mortgage and credit intermediaries. It is important that we should be able to consider the efficacy of the Act in practice. There is not much point in conferring new powers on the Director if he does not have the wherewithal to enforce the Act as intended. Complaints about back-up and staff resources are a feature of end of year reports.
It is reasonable to require the Director to make a report. We are breaking new ground here and it is desirable that there be a review of the improvements brought about as a result of the Act. I first heard this idea mooted at the conference of the European anti-poverty network. It met with general agreement among the various groups concerned with this end of the consumer market and probably has the agreement of the Director although I do not wish to commit him to it.
There has been an extraordinary boom in consumer credit and one is excluded from participating in the kind of society we have if one does not have access to credit. The Director should be required to present to us each year his assessment of what changes might be needed, the effectiveness of the new legislation and so on.
I see the merit in this amendment. My amendment No. 56 proposes that the Director may report to the Oireachtas on any matter relating to the operation of this Act, and shall in any event report within three months of the end of the calendar year. I saw that as a way in which the Director could state whether the resources available to him were adequate to deal with his functions under the Act. In the past, bodies and institutions given powers by the Oireachtas were starved of resources to implement whatever the Oireachtas wanted them to do. The Director of Consumer Affairs and the Ombudsman will carry similar spears on behalf of consumers and perhaps we should give them similar powers. The Ombudsman has found his right to report to the Dáil a powerful tool in his armoury to get health boards or other recalcitrant agencies to change their tune. The right of the Director of Consumer Affairs to report issues of concern in relation to the operation of the Act might be a useful addition to his powers. Deputy Rabbitte's amendment is sensible and is not excessive. We will see the benefit of it in the years to come.
I agree that the amendment is sensible. I will go through it and put it in the context of what is already available to the Director in his procedures with the Minister and the Oireachtas.
In accordance with existing legislation, the Director of Consumer Affairs publishes an annual report which is presented to the Minister, the Government and then the general public. He includes a stringent paragraph in it, as is his right, stating that he could do so much more if he had greater resources. The office of Ombudsman and the Director of Consumer Affairs are paid for out of the public purse and come under the aegis of the departmental budget but they are independent and are pro bono publico.
We pass legislation and regulations and then wave goodbye. We see how implementation of the Child Care Act is causing difficulty. We had high hopes when that Act was passed but it will be some time before they are realised. This is not anyone's fault but results from not realising the resources necessary to implement it. The Director has been given awesome powers of a different nature from what he and his staff previously enjoyed. In the area of financial regulation, we are only putting our toes in the water, unlike Britain where there are statutory and voluntary bodies.
I accept that there needs to be a report on such matters, but this point could be met by requiring the Director of Consumer Affairs to include in his annual report a separate section about the implementation of the Act, the progress he has made, the shortcomings and if he needs resources. In other words, a progress report on the implementation of the Bill as it relates to his responsibilities.
I am obliged to the Minister for her spirit of co-operation. I would be agreeable to enshrining in the Bill a provision which would specifically require the Director to include in his annual report a section on the efficacy and functioning of the Act. This would meet the thrust of my amendment. I do not know the precise position on the annual report of the Director of Consumer Affairs in terms of time limits and laying it before the House——
The annual reports of the Director of Consumer Affairs are laid before the House.
Is he required by law to do this once a year?
Under the 1978 Act he is required to do it on an annual basis. Nevertheless he could be required under the Act to include in his report a separate section dealing with such matters.
Under the previous amendment Deputy McDowell raised an interesting point which I suspect relates to his experience as a practising lawyer, which may not have been evident to everybody else. I imagine this is the kind of problem which will be discovered fourfold after the Bill is enacted. This is major legislation, for which many people have been waiting, and it is important that we should have the opportunity to monitor its speedy implementation. I suspect illegal money lending is as much a problem in the Chairman's constituency as it is in mine. A significant number of people in the clutches of illegal moneylenders find it difficult to get away from them. In recent years some palliatives have been offered through the office of the Minister for Social Welfare, the St. Vincent de Paul Society and other organisations to rescue those people. However it is very difficult to get these people out of the clutches of illegal moneylenders. I am, therefore, anxious to ensure that there is some visible evidence that the implementation of this Bill is being monitored.
I do not know if the Minister intends to accept subsection (2) of my amendment which proposes to impose an obligation on the Director to consult with persons or organisations as he thinks appropriate. It is important that this obligation should be imposed on him as many poverty groups and organisations in unemployment blackspots have valuable experience and comments to make in this area. Will the Minister put down an amendment on Report Stage which will place an obligation on the Director to consult with such persons or organisations as he thinks appropriate? There is a large measure of agreement on this matter and I presume the Minister is saying she will give expression to this proposal by way of a Report Stage amendment.
Yes. The Director is aware that this legislation will require active monitoring following the enactment of the legislation he will be required to include in his first annual report a section on the strengths, shortcomings and needs in this area. In any event, he is obliged to consult with various groups — he addresses seminars and asks people for their views on such matters — and I am sure he will do the same in the context of this legislation. I welcome the spirit of the Deputy's amendment and will bring forward proposals in this regard on Report Stage.
My amendment No. 56 is closely related to this amendment. Is there not merit in enabling the Director to report directly to the Dáil on any Achilles heel he discovers in the Bill? My amendment proposes that the Director should not have to wait until his annual report to raise this matter.
When I read the Deputy's amendment last night I was struck by its similarity to this amendment.
As far as I can remember, the Ombudsman Act gives the Ombudsman a similar power — direct access to the Oireachtas. It also emphasises his independence and gives him an additional red button to press, so to speak. Does the Minister see any merit in providing a similar mechanism for the Director of Consumer Affairs?
We will deal later with the Deputy's amendment. Under the 1978 Act the Director can report directly to the Minister, Department, Government and public, in that order. Enabling the Director to by-pass the Minister and the Department and to report directly to the Dáil would require an amendment to the 1978 Act. Deputy Rabbitte's amendment is slightly different in that it seeks to ensure that the manner in which the progress report on the implementation of the legislation is carried out is ship-shape. I welcome the thrust of his amendment and I will bring forward an amendment on Report Stage.
The Director of Consumer Affairs is one of the finest public servants in terms of the conduct of his functions. He is a remarkable person with an amazing grasp of his job and thus far he has been a tremendous asset to the State in the competition area. Instead of giving enforcement powers to a member of the Competition Authority I hope these powers ware given to the Director of Consumer Affairs who has taken a solid stand on issues such as the milk and bread price wars, based not on high theory but on practicality. He needs resources to carry out his various statutory functions, and not just this one. I say that with some degree of experience of what he has done.
This is one aspect of Deputy Rabbitte's amendment which is of critical importance: he should be able to tell the Oireachtas and the public whether he has been given adequate resources to enforce his powers under this legislation. I understand Deputy Rabbitte's concern about illegal moneylending but it is not envisaged that the Director of Consumer Affairs will take charge of the hunt against illegal moneylenders.
That is a matter for the Garda Síochána.
This is why I would direct Deputy Rabbitte's attention to Deputy Quill's amendment No. 232 which proposes that the Garda should get on top of these problems and take a report every year.
I think he was just saying that inter alia.
I know he was, but it struck me that he was hoping that this annual report would deal with illegal money lending. The sad fact is that the Director of Consumer Affairs is not in a position to tackle illegal money lending. With the best will in the world his staff cannot begin hanging about Deputy Rabbitte's constituency taking on people.
May I intervene quickly? I was not so much referring to that. I was referring to whether or not——
There would be shortcomings.
——there would be shortcomings in the Bill in terms of the Director of Consumer Affairs' perception of it——
That is as I took it.
——whether it was enhancing the ability to close down on those people.
He will not be leading the charge against illegal moneylenders. It is easy for us in this committee to stand up and decry illegal money lending as a scourge, which it is, but unless it is brought home to the competent prosecuting authority, the Garda, that each year, in respect of each Garda Síochána district, they must stipulate whether there is illegal money lending in their district and whether they have prosecuted, the position will largely remain as it is, which is that very few prosecutions are ever brought. There is not really a strong downward pressure by this House, through the Minister, to ensure an active approach is taken to its curtailment. We cannot rely on the Director of Consumer Affairs to stamp out illegal money lending. It will always be a Garda function.
I understand that; in fact I was about to say that to Deputy Rabbitte but I took what he was saying in the spirit of the concerns of the Director of Consumer Affairs about the proper implementation of the provision of the Bill, that he would comment inter alia on various matters brough to his attention, or which were missing.
When the Minister is amending the reporting function of the Director of Consumer Affairs — which she will have to do to provide for what Deputy Rabbitte is seeking — perhaps, in framing the amendment she would place some time limit on the laying of the report before this House. Many reports submitted to Government Departments are published or made known a long time after their submission. I do not know what the position is in relation to the Director of Consumer Affairs but prison visiting committee reports and the like are forwarded to the relevant Ministers and then lie on shelves.
I should like the Minister to insert an outside time limit by which the report of the Director of Consumer Affairs must be acted upon. I appreciate that on occasion the Minister may want to correspond with the Director of Consumer Affairs, asking whether he would amend this part of his report, or not pursue that part, for whatever reason. But, in the last analysis, we are entitled to know the contents of his report within, say, six months of the end of the year on which he is reporting.
Amendment, by leave, withdrawn.