Phil Hogan (Carlow-Kilkenny, Fine Gael)

I thank Deputies Connaughton and Perry for sharing their time with me and apologise for being slightly delayed at the beginning of proceedings. I thank Deputy Connaughton for filling in so eloquently on the Fine Gael proposal before the House.

It is a sad indictment of the Government that rip-off Ireland has become the number one topic of conversation among ordinary people throughout the country. The level of the Government's failure in this area has been so monumental, deep-rooted and obvious that it has been left to the Opposition to come up with some answers as the coalition slips further into a state of total denial on the matter.

For the benefit of Government Deputies, following are a number of realities of life in Ireland today. Between 2001 and 2002, Ireland overtook the UK and Sweden to become the third most expensive country in the EU for consumer goods and services. By 2003, Ireland was almost on a par with Finland as the most expensive country in the eurozone, both countries being significantly more expensive than the next group of eurozone countries. Dublin is now the 21st most expensive city in the world ahead of Los Angeles, Paris, Miami, Singapore, Honolulu, Vienna, Helsinki and Abu Dhabi. Dublin is the fourth most expensive capital in the EU behind only London, Paris and Copenhagen and Ireland is by far the most expensive country in the EU in which to live. A basket of food costing €100 here, for example, costs just €82 in Britain. All this is delivered by a Government that inherited the lowest rate of inflation in Europe in 1997 at just 1.5%.

Lest the Government think that Fine Gael is making this up, the World Economic Forum has confirmed that Ireland has fallen from fourth to 30th place in the global competitiveness league. Recently, the National Competitiveness Council stated that Irish prices rose 22% more than those in other EU countries in the years 1999 to 2003. The economic consultants Compecon say that the lack of competition in the banking sector is costing small businesses €500 million annually. Mr. Jim Power, chief economist with Friends First, says: "Irish competitiveness has been seriously eroded by a sharp increase in the overall cost base, which will not be reversible".

If the Government thinks we and the best economic brains in the country are making it up, I can refer to quotes from Fine Gael's consumer website www.ripoff.ie, such as: "€2 for a dollop of whipped cream in a café in Donegal", "€18 for an organic chicken in Dublin", " €70 for the installation of a doorbell in a new house", "€14 for a two mile cab journey that the driver insisted be shared with another passenger" and "Irish whiskey cheaper in Boston Airport than in Shannon". Web surfers have been disconnected from "no limit" subscriptions because they were deemed to have "used it too much". These are just some of the examples ordinary people have sent to the website. Economists, politicians and punters are united in their belief that something needs to be done. However, the Government has no consumer policy, telling consumers to "shop around", in the words of the Tánaiste, Deputy Harney, and accuses the Opposition of being unpatriotic.

The Minister for Arts, Sport and Tourism, Deputy O'Donoghue, said in the Brehon Hotel, Killarney, on 4 November 2004: "One of the great myths is there is in existence a rip-off Ireland mentality. That myth must be laid to rest for the sake of Irish tourism and the Irish economy". I will quote an e-mail received at www.ripoff.ie this week from an Irish American:

Much has been made of the American fear of travelling abroad in our post-9/11 world. This is nonsense. If Ireland has experienced a slowdown in the number of tourists, it is likely because of the exorbitant costs. Why would anyone spend large sums of money to visit Ireland, when they could fly to Spain, and stay there in a 4 or 5 star hotel and eat in great restaurants for a fraction of the cost?

This gentleman, living so far away, clearly did not hear the Minister's words of wisdom on the "myth" of rip-off Ireland. The Minister clearly has much work to do in convincing the American public of his cause, let alone the Irish electorate. Of course, this is the Minister who used the term "zero tolerance". I hope he will not succeed with zero tourism. Figures released by the CSO yesterday show the first reduction in the number of trips to Ireland for the month of September in three years. Fine Gael and I take no satisfaction in warning the Government that our tourism industry remains at risk.

The personification of the Government's inability to get to grips with this problem comes in the form of Senator Leyden, the Government spokesperson in the Seanad on enterprise, trade and employment and a former Minister of State with responsibility for trade and marketing. Last May he said:

Power is in the hands of the consumer. [I will endeavour] to empower consumers to take action to reduce prices and encourage competition. [I am today] launching a "name and shame" consumer price busting campaign.

He continued:

Consumers should now say enough is enough. I am hoping that this campaign will make consumers realise that they have the power to make a difference and through the Seanad I will make their voices heard.

Compare those sentiments with the ones he expressed in the Seanad just last week:

Fine Gael is trying to jeopardise employment and tourism by discouraging people from visiting Ireland. I have travelled in different parts of Europe and, irrespective of the costs, Ireland is relatively competitive in many areas. This has not been recognised on the Fine Gael Party's website.

Senator Leyden's words are Government policy writ large — no vision, no coherence and no grasp of reality. The Senator might be in denial about the access foreign visitors have to his pronouncements in the Seanad — which are just as accessible as anything on our website — but he cannot be in denial about the fact that rip-off Ireland is alive and well. We need to act.

The previous Minister for Enterprise, Trade and Employment, Deputy Harney, was consistently one report away from action. In March 2000 she said: "the Government is determined to tackle inflation by exposing previously sheltered sectors to competition". In September of that year she said: "in an environment where we have 20% tax on capital gains and 12.5% on corporation profits, we cannot have the situation where the only people that pay taxes above 40% and 20% are those who work". Absolutely nothing has been done on that agenda.

Deputy Harney was good at commissioning reports and the Competition Authority was duly charged with investigating anti-competitive practices in the professions. This was done in May 2001. We are still waiting. Furthermore, the Competition Authority has indicated that the order in which professions will be dealt with shall be engineers, architects, dentists, optometrists, veterinary surgeons, medical practitioners, solicitors and barristers. That means the legal profession, which has been shown to constitute a massive drain on taxpayers' money, shall be the last profession to be subjected to regulatory reform.

The current regulatory framework shows how hopelessly prepared Ireland was to deal with the post-Celtic tiger rip off. The bulk of the Irish law on consumer protection dates from the late 1970s and the 1980s. It is worth looking at how archaic some of that legislation is in order to contextualise the changes we are proposing. The Office of the Director of Consumer Affairs was established in 1978 following the enactment of the Consumer Information Act 1978. Consumer law was strengthened in 1980 with the enactment of the Sale of Goods and Supply of Services Act, which guaranteed consumers certain basic rights in the purchase and supply of services and goods. In 1996, the director was also given power to control consumer credit laws and has been given responsibility to enforce EU labelling, pricing and advertising requirements on a number of occasions since then.

However, the Office of the Director of Consumer Affairs is structurally compromised by its status as an agency established under the Department of Enterprise, Trade and Employment. The ODCA receives its budget allocation through that Department and the director is answerable to the Minister in the performance of his or her functions. In recent years, there has been an increasing tendency to remove some of the more substantive powers and responsibilities from the ODCA. In 1991, the director's responsibility to monitor and tackle fair trade and restrictive practices was passed to the Competition Authority. It took another decade to see an increase in the level of activity. In 2001, the powers of the ODCA under the Consumer Credit Act were transferred to the new financial services regulator, the Irish Financial Services Regulatory Authority, which appointed a new consumer director.

Irish society was significantly different in 1978 when the ODCA was established. Technological changes that have revolutionised the world of commerce had not happened. The Internet had not been developed and e-commerce had not evolved as a means of doing business. Scanning had not been developed and most products carried individual prices. Retail formats had not evolved and consumers had less choice of products, goods and services. Credit cards were in their infancy. Most utility services had not been liberalised or opened to competition and there were fewer foreign operators in the market. Consumers were less assertive and a culture of respecting consumer rights had not developed.

By 2004, the legal regime for the protection of consumers and the promotion of their interests has become dated, disparate and ineffective. Instead of a single independent and resourced watchdog, there is the ODCA, which is structurally linked to the Department and which has been denuded of many of its original powers and much of its impetus. In addition, there are up to five sectoral regulators with differing degrees of focus on the rights and entitlements of consumers who avail of those services that are being regulated. It is time for a streamlined and effective system that will ensure competition is allowed to flourish and that consumers get the fair deal they deserve. It is time consumers had a single, powerful champion of their rights and entitlements. Fine Gael policies, and this Bill, will make these aims a reality.

The Bill will replace the ODCA with an independent consumer rights enforcer who would have strengthened powers. The enforcer will be charged with developing a code of conduct for service providers, a quality mark for those service providers who best adhere to that code and a review of the jurisdiction of the Small Claims Court to ensure that it best meets the needs of consumers seeking redress. The consumer rights enforcer will name and shame those service providers it believes are failing to provide consumers with an adequate standard of service. Further, the consumer rights enforcer will have a seat at partnership level to ensure national agreements do not impact too disproportionately on consumers. The Bill will allow for increases in fines and penalties to discourage breaches of legislation designed to protect consumers.

The Bill contains a number of important provisions. Section 4 provides a new mechanism to ensure that the appointment of the consumer rights enforcer will be wholly independent. In the same manner as an ombudsman, the enforcer will be recommended by the Dáil and Seanad and will be appointed by the President.

Section 5 confers a series of powers we believe are necessary to ensure that the rights of the consumer are upheld and, where necessary, enforced. These new powers are in addition to those already in existence. The Bill will enable the consumer rights enforcer to name and shame those found to be charging excessive prices. While some of these powers may have been given to the ODCA, which it may or may not use, under our Bill, there would be an explicit function.

The consumer rights enforcer would also be responsible for maintaining a website showing price league tables. A further key feature of the enforcer's role would be in the development of codes of conduct for specific service providers and retailers so as to ensure that when the price of a product or service decreases, that reduction will be passed on to the consumer in a systematic and transparent way. The new consumer rights enforcer would establish a scheme for attributing a quality mark to suppliers of goods and services who consistently deliver a high standard of service. With this heightened consumer-driven focus, the consumer rights enforcer would work with local authorities throughout the country to ensure that the interests of the consumer are addressed at local level. In addition to monitoring and acting at national level, the consumer rights enforcer would have a specific role in working jointly with local authorities to drive a pro-consumer agenda at local level.

Local authorities could do a great deal more to drive such an agenda. It has come to our notice that many of the licences issues in respect of waste management should be, constantly reviewed by local authorities to ensure better value for money and lower costs to consumers. A more regular review of licences for waste management operators is essential to ensure that costs are driven down and that those who avail of the services these operators offer can rest assured that they are obtaining them at the most competitive price.

The Small Claims Court can only hear claims involving up to a maximum of €1,270. This level is set by ministerial regulation. Under section 4 of the Bill, the consumer rights enforcer will have a role in reviewing the jurisdiction of the Small Claims Court to see whether it is affording consumers adequate opportunity of redress.

In recent years unions, employers and the State have negotiated a series of pay deals through national partnership agreements. Perhaps one of the most serious failings of this process and other comparable processes is that the specific needs of the consumer have not been represented. We propose to remedy this by giving the consumer rights enforcer a place at the negotiation table to ensure that the voice of the consumer will be heard and not ignored. In addition, the consumer rights enforcer would have a right to be consulted on legislation which impacts on consumers.

Section 6 proposes to increase the penalties for breach of the Consumer Information Act 1978. The outdated £500 fine will be replaced with a fine of €3,000 and the £10,000 penalty will be replaced with the more severe €100,000 penalty. The Director of Consumer Affairs has said she favours tougher fines.

Section 7 would allow the consumer rights enforcer to impose an administrative fine in lieu of proceeding with a summary prosecution. In the consumer rights area, there has traditionally been a relatively low level of prosecutions. This gives the defendant the option of paying the fine and avoiding a court case and possible conviction. The application of a provision such as this should have the effect of saving time and expense where people do not dispute their guilt or where there is strong evidence that would be likely to secure a conviction in court. The wording of this section is modelled on similar provisions relating to the imposition of fines in respect of offences under the Litter Acts, the Road Traffic Acts and the Company Law Enforcement Act 2001.

The annual report of the Office of Director of Consumer Affairs for last year shows that only 13 prosecutions were taken. This is due to a number of factors, including the burden of gathering evidence sufficient to sustain a summary conviction and the cost of seeing the prosecution process through from beginning to end. Nobody could, in all seriousness, suggest that only 13 breaches of the law occurred in this area last year. It is time to grapple with this serious issue.

Section 8 proposes that the consumer rights enforcer may be called to appear before any committee of the Houses of the Oireachtas to account for the general administration of the office. Accountability is key to this body and the Bill ensures full accountability to the people via the Oireachtas.

I commend the Joint Committee on Enterprise and Small Business which, under the chairmanship of Deputy Cassidy, investigated a number of consumer issues in the past year. In particular, its inquiry into the insurance industry yielded considerable results and support for the Government insurance reform programme. In the latter, the Tánaiste indicated that she wanted to see certain legislative provisions enacted to reduce the cost of processing claims and provide better competitive choice, thereby reducing costs to insurance companies which would otherwise be obliged to make larger pay-outs on claims from consumers. In the past year, the Civil Liability Bill, which outlaws and makes a criminal offence of the exaggeration of claims, and the Personal Injuries Assessment Board Bill were enacted. Regrettably, on the first day of the law term, a case was taken against the full establishment of the PIAB. I hope that, with the help of the Oireachtas, the cost of processing insurance claims will be reduced and that insurance companies, which made profits of up to €700 million in 2003, will come clean and reduce, in a meaningful way, the cost of insurance, particularly as it relates to employers and public liability, for small businesses and consumers in general.

Section 9 of the Bill proposes to amend the penalty provisions in the Prices Act 1958 to increase the penalties applicable for failure to display a price list as required by law. The £100 penalty would be increased to €3,000. The daily continuing offence penalty would be raised from £10 to €300 and the penalty on indictment, from £500 to €100,000, while the continuing offence element would be raised from £50 to €1,000.

The proof that the Fine Gael policy can and will work can be seen in a survey undertaken by my party last year and again last week. In December 2003, we reported that various public houses in the centre of Dublin were charging €4.70 for sparkling water and lime. The Metropolitan Bar on Eden Quay was charging €3.60 and Maguire's of Baggot Street was charging €3.45. Those are some examples of what the survey yielded. Since the publicity created by our website and survey, those establishments have ended their policy of charging for lime and reduced their prices by up to €2. That is the result of just one survey on one product. I ask the House to imagine the customer service and savings that would accrue from a continuous survey taking place with the help of an independent consumer rights enforcer, the power of a State-funded, independent advocate with the resources, drive and power to investigate the economy and root out bad value. For those Government Deputies who hear stories on the doorsteps of rip-off Ireland and who promise their constituents that something will be done, I am offering an opportunity in the context of this Bill to vote with Fine Gael. They can raise whatever problems they may have with the Bill on Committee Stage. On Second Stage they are merely asked to support the broad thrust of Fine Gael's proposals. They can show their spirit and support and show that they are in favour of a meaningful vehicle to represent consumers.

See this speech in context