Sean Barrett (Independent) | Oireachtas source

I move amendment No. 31:

In page 12, line 28, after “Commission” to insert “, the National Consumer Agency and the Competition Authority,”.

The section reads: "Irish Water may, from time to time, and shall when so directed by the Commission, prepare and submit to the Commission...". My amendment proposes the addition of "the National Consumer Agency and the Competition Authority" after the word "Commission." It must be agreed that in these matters consumers are extremely weak. In fact, the programme for Government contains a proposal to strengthen the Competition Authority and the National Consumer Agency and a merger is being contemplated by the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton.

Asking such a vital service to act at the behest of the Commission for Energy Regulation requires us to examine its track record. The aforementioned Mr. Colm McCarthy published an article in last Sunday's edition of The Sunday Independent that I did not see. On the previous Sunday he published an article on electricity prices in which the price for industry in Ireland was ranked at 141% of the EU average and the household price, 142%. I do not think the commission has done its job on behalf of the consumer. Issues have been raised here and at economic conferences up and down the country. Why is the head of the ESB paid three or four times what the Taoiseach is paid? The commission has not addressed the issue of the cost of electricity for industry in Ireland. I have great misgivings about allowing it, on its own, to do the same for the consumers of water. It owes us a lot of explanations for what it has done in the case of electricity. I wish the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, was more active on behalf of consumers. The national dependence council has drawn attention to the matter. The National Consumer Agency needs representation in this regard. As for the Competition Authority, the ESB faces weak competition.

We need somebody who knows about competition to simulate a fair competitive price for electricity and a fair competitive price for water, and not to assume that we will end up paying 41% and 42% more than the EU average. Along that index, taking the EU as 100%, we are ranked one for one and one for two for industry and households, France was ranked at 82% and households 73%, Germany was ranked at 91% and households 109%, the UK was ranked at 121% but below our ranking. Therefore, we are not getting the bang for the buck in the regulation of energy nor do we get it from the other regulators either.

The National Transport Authority increased bus fares last week. The number of bus passengers is down more than 50 million and the number of train passengers is down about 7 million or 8 million since the recession began. We have lost 250,000 people out of the health insurance sector. The Commission for Aviation Regulation, by a directive of the then Minister, Noel Dempsey, before he left office, increased airport charges so much that we drove millions of people out of Irish airports. Only now with this budget and the removal of the airport tax are they starting to come back. Badly performing regulators or regulators who are captured by the sector they are supposed to regulate have done the country serious damage. For Report Stage the Minister of State should consider measures to deal with that regulatory capture. It has definitely happened in the case of energy and everybody is paying for it. I need a far more dynamic and active person on behalf of the consumer. That is the reason I seek the insertion of those two bodies.

I have mentioned the eminent economist, Mr. Colm McCarthy. Mr. Joe Stiglitz, Nobel Prize winner, writing on this issue said that regulatory bodies are always taken over by producers. For public choice theorists, regulatory capture occurs because groups or individuals with the high stakes interest in the outcome of policy or regulatory decisions can be expected to focus their resources and energies in an attempt to gain the policy outcomes they prefer while members of the public, each with only a tiny individual stake in the outcome, will ignore it altogether. Regulatory capture refers to actions by interest groups when this imbalance of focused resources, devoted to a particular policy outcome is successful at capturing influence with the staff or commission members of the regulatory agency so that the preferred policy outcomes of special interest groups are implemented.

There are scores of examples internationally. This is a serious problem. I think it is very naive of the Government to say that a pretty ineffectual electricity regulator will determine water bills. The reason I tabled amendment No. 31 was to have consumer representation and some competition representation also.

Amendment No. 39 seeks to amendment section 20(3) which reads, "The Minister shall not give a direction under this section without first consulting the Minister for Communications, Energy and Natural Resources." I cannot figure out the reason that subsection is in the Bill. It brought back echoes of the infamous incorporeal meeting of the Cabinet in 2008 when the Minister of State's predecessor, Mr. John Gormley, was not contacted. He was in Sandymount and Deputy Willie O'Dea was coming up from Limerick. Why does the Minister or his successor have to consult with the Minister, Deputy Rabbitte, or his successor? Should that not be a Cabinet decision? Should there not be consumer agency involvement? Should there not be a competition agency involvement? It seems very strange that two Ministers should get together and issue directions on the basis of two people. That is the reason I tabled amendment No. 39.

The next amendment in this grouping is No. 50, which refers to codes of practice. It seeks to amend section 25(1) which reads, "Irish Water shall, as soon as practicable after the transfer day, prepare and submit to the Commission a code or codes of practice in accordance with this section". I compliment the Minister of State on a very fine code of practice. However, it includes issues such as: billing by Irish Water of persons in respect of water services provided; methods of payment of water charges; the provision of information to consumers of Irish Water for the purposes of enabling customers to communicate with Irish Water; and the making of complaints. Those are classic issues where the National Consumer Agency should be involved.

Amendment No. 67 refers to section 31 which deals with the advisory role of the commission. The section reads, "The Commission shall advise the Minister in relation to the development and delivery of water services." I think that should be done jointly with the National Consumer Agency. It does not get much rights in our system and it do not get them very well represented by the Commission for Energy Regulation and I would like it to be involved. That is the reason I proposed the amendment.

Amendment No. 73 refers to section 33(4) which reads:

The Minister shall, before giving a direction under this section-
(a) give a draft of the proposed direction to-
(i) the Commission, and
(ii) the Joint Committee referred to in paragraph 26 of Schedule 1 to the Electricity Regulation Act 1999. ...

My amendment seeks to insert the following at line seven, "(iii) the National Consumer Agency." Again, this has got to be a consumer friendly organisation and should have representation. What would happen is that those persons, including the National Consumer Agency, would be invited to make representations in writing in relation thereto within such period of not less than 30 days. The amendment seeks to include the National Consumer Agency.

The last amendment, No. 77, in this grouping refers to section 34(1) which reads, "The Commission may, from time to time, request Irish Water to provide the Commission with such information as the Commission may reasonably require to enable it to perform its functions under this Act." I ask that the National Consumer Agency be involved as well because it will have views. It has been neglected and not well served by some of those sectoral regulators who typically represent producers rather than consumers. There is a case for a much more rigorous regulation of this sector when we are starting. It has not applied in energy. Colm McCarthy's numbers showed how we ended up. It did not apply in banking, accounting, financial services or in credit unions. Every sector we failed to regulate properly seems to be in here seeking bailouts almost on a weekly basis and we have always sided with the Government to have stricter regulation. The regulation of the water industry by the Commission for Energy Regulation is too loose and lacking in power to speak out on behalf of the consumer. I ask the Minister of State to take some of those points on board on Report Stage. If it is like the highest priced electricity at 41% and 42% above the European average, people do not want that. We have a lot of regulatory agencies whose performance has been underwhelming, to say the least, and we do not want to add another one.

Maybe as the theory of regulatory capture says that the consumer group will become marginalised, the Competition Authority maybe has not been as strong but if they are not there they certainly will not be able to influence the cost of water in Ireland. It is such vital commodity as all the other Senators have said and we do need a stronger consumer voice.