Leo Varadkar (Dublin West, Fine Gael)

I extend my thanks to the Oireachtas Library & Research Service for preparing a very good debate pack on this Bill and also thank the civil servants from the competition section of the Department of Enterprise, Trade and Innovation for briefing me on the contents of the Bill.

The Competition (Amendment) Bill 2010 amends section 35 of the Competition Act 2002 to permit the appointment of temporary members to the Competition Authority. This will enable the Minister to appoint temporary members to fill current and upcoming vacancies in the Competition Authority which otherwise would see its membership reduced below its statutory minimum requirement. The Bill will also allow the Minister to fill membership vacancies by temporary appointment without the requirement to hold an open Public Appointments Service competition, provided the person possesses, in the opinion of the Minister, sufficient experience and expertise in one or more of the following areas - law, economics, public administration, consumer affairs or business generally. In many ways the Bill addresses a lacuna in the 2002 Act which does not provide for the filling of casual vacancies on a temporary basis, pending competition for their permanent replacement. In that regard, the Bill is both sensible and necessary and for those reasons Fine Gael will support its passage in this House.

I express my displeasure that we must pass what is, effectively, emergency legislation in this way, in that the legislation was published only last Friday. The legislation is necessary because, if it does not go ahead, the Competition Authority will not be constituted legally and any decisions or determinations made by it may be subject to challenge in the courts. However, it would not be necessary if the vacancies had been filled when they arose and if competitions had been organised when vacancies arose. This was a failure by the Government and by this Minister or the previous Minister, to organise a competition for the vacancies when they arose. In many ways it is characteristic of the approach of this Government which is so often slow to act and react and so quick in its indecision.

In addition, it would not be necessary if a competition (amendment) Bill had been introduced before now. I believe it is three years since the review of competition law took place - it was around the time I became a Member of this House. Three years later a competition (amendment) Bill has not yet been brought to the House which is based on that public consultation. As I learned from the Minister today, the Cabinet has not even agreed the heads of that Bill. It should not take three years to review a piece of legislation and prepare an amending Bill.

Regarding the decision to merge the National Consumer Agency and the Competition Authority - which I support - that Government policy was announced in the budget of April 2009, again more than a year ago, yet we still do not have the heads of a Bill to effect that change. Government can be slow but it should not be that slow.

I wish to say something about the general principle of competition. I am a fan of competition and an advocate of strong competition authorities. Competition is good for consumers and for business in general - although perhaps not for specific businesses at any given time - and is good for the community. During periods of recession such as the one we now have, competition comes under attack from businesses and employees that are under pressure. In recessionary periods and periods of depression we always see the rise of protectionism, economic nationalism, businesses seeking subsidies or to create and protect national champions.

It is important that we, as parliamentarians and legislators, guard against this and stand up to these pressures in the interests of the community as a whole. Protectionism, economic nationalism, subsidies and monopolies might protect the few but this is done at the expense of the many. It is widely accepted that the legalisation of cartels, as part of Roosevelt's New Deal, prolonged the Great Depression of the 1930s by seven years. I reference the work of Cole and Ohanian in that regard. Roosevelt actually reversed that policy in 1938 to great effect. In Japan, it is well understood that government protectionism and the creation of cartels contributed to that country's "lost" decade. I would be concerned that some of the Government policies, for example, in regard to NAMA and banking, as well as some of its enterprise and employment subsidies risk doing something similar, however well-intentioned they may be.

It is also worth pointing out that a study by the Office of Fair Trade in the United Kingdom found that the benefits of enforcing competition law outweighed the cost, eightfold. I reference Fingleton in that regard.

In Ireland we know a lot about the difference between competition and monopolies. We know how the aviation sector worked when Aer Lingus had a monopoly that it sought to defend at all costs. We know how much things improved when competition came into the aviation market. Ryanair not only reduced the cost of travel but also opened up more routes and brought millions of tourists to Ireland. We know about the effects of monopolies in telecommunications. We all remember how difficult it was to get a telephone when Telecom Éireann had a monopoly, we remember the cost of using a telephone at that time and we know how much things improved when the mobile telephone market was opened to competition during the last rainbow Government. Things improved also when the fixed line business was opened to competition under the parties on the opposite benches. We know how the beginnings of competition in the energy market have now reduced the cost of energy by allowing Bord na Móna, Bord Gáis and Energia to enter the electricity market.

However, competition is not a god and we must ensure we do not allow it or the free market to become a secular religion. In a secular society where religion is no longer so important people sometimes turn competition and the free market, or even human rights, equality or climate change, into religions that cannot be questioned. It is important that we always question competition and do not adhere to it as if it were a principle that cannot be breached or as if it were a secular religion of the right.

Competition does not work all the time. Many of us who live in this city will know how the liberalisation - I hasten to say it was that rather than deregulation - of the taxi industry has thrown up a number of issues and problems. It certainly solved the situation whereby we had to queue for two or three hours to get a taxi but has created other problems. There is now a problem of over-supply and the incomes of taxi-drivers have been reduced to subsistence level and even below.

I am sure Members will agree with me that competition policy must serve the public interest. In many ways, the legal bar on the Government negotiating with general practitioners, pharmacists and dentists on services to be provided to the public has not worked in the public interest. Competition legislation should be amended in that regard.

For Fine Gael, our recovery will be built on growth and jobs, not on bailouts or retrenchment. To grow our economy and create jobs we need new investment and consumer demand. Restoring competitiveness will help to do both. A robust and independent competition authority has a crucial role to play in helping to restore competitiveness by breaking up cartels, preventing price fixing, market-sharing and bid rigging, breaking up monopolies, blocking undesirable mergers and through the advocacy role of competition authorities. We want a competition and consumer commission that has the powers, tools and people to do this. That means maintaining an independent executive decision-making board, taking the competition authority sector reports seriously and implementing them, or, at very least, offering a reasoned response to them.

I was interested in and did some research on the different competition authority reports into the professions and what they called "the sheltered sectors of the economy". There have been reports on liquor licensing, transport, casual trading, engineers, non-life insurance banking, architects, optometrists, solicitors, barrister, private health insurance and dentists. These reports go back as far as 1998 but few, if any, of the recommendations have been implemented. In the case of liquor licensing only one of four was implemented and in transport none was. I realise some progress is being made in the latter regard with the new Bill, but it has been slow coming and it is 11 years since the relevant report was issued. In casual trading only one of ten recommendations was implemented, for engineers one of two was. Concerning non-life insurance there were 21 recommendations but very few were implemented. Regarding architects, only three of 11 recommendations were implemented. There has as yet been no implementation of recommendations in respect of optometrists, solicitors or barristers. There were 29 recommendations concerning the latter group. In private health insurance a health insurance (amendment) Bill was promised but very little has been done on it so far. There has been no implementation of recommendations in respect of dentists.

That is not good enough. There is no point in having a competition authority that makes recommendations, publishes reports and engages in advocacy if the Government largely ignores those decisions. The Minister's predecessor made a policy announcement stating the Government would issue a reasoned response to recommendations of the Competition Authority. I call on the Minister to honour that and go back through all those reports, as far back as 1999, list all the recommendations and issue a reasoned response on each one.

He can indicate which will be implemented, how and when this will happen and the reasons others will not be implemented. It should be done retrospectively with all those reports as far back as 1999.

The new legislation should place a legal obligation so that all public and publicly-funded bodies - as opposed to Ministers - must issue a reasoned response to recommendations within a specific period of perhaps six or 12 months. This does not mean they must implement them but they will need to respond to them. That is key. The Government has been very keen in the past decade or 12 years to set up task forces, committees and inter-agency groups preparing reports and issuing recommendations but the Government never responds to them in a reasoned way. For example, it would never outline 20 recommendations, implement 12 and reject eight, while outlining how and why it would do so. That approach to Government is still not seen in Ireland but we need it. The Government should give comprehensive, reasoned responses to advocacy, reports and recommendations from public bodies of its creation.

We should also look at the possibility of lowering the threshold of proof. There has been some celebration of the fact that for the first time in Ireland we have had people convicted of breaking competition law, with one case bringing a suspended sentence. We should consider going down the civil route and having very large fines for such behaviour. The Competition Authority unfortunately often goes after the small guys rather than the big guys. If we are to go after them, deep pockets are required and we should be able to levy really expensive fines. The Competition Authority could become self-funding if it was in the position to levy the kinds of fines imposed by the European Union, which reach the millions of euro, rather than those amounting to thousands of euro.

We also need to enact some of the recommendations made by the Competition Authority in its submission to the review of the 2002 Act, particularly with regard to powers of search and seizure and information sharing with the Revenue Commissioners and the Department of Social Protection. That seems elementary. The protection of whistleblowers is very close to my heart. People either within companies or suppliers may be prepared to blow the whistle on anti-competitive practices and they should be protected if they do so. It is very important for this to be included in new legislation whenever it comes.

We will support this Bill but on Committee Stage we will propose some amendments. One will request Oireachtas scrutiny of the Minister's appointments. I will not labour the point as the House has heard my view and that of my party on the issue many times. I hope the Minister will support our amendment and not take the view that he can appoint anybody he likes to the Competition Authority without consulting the Oireachtas and asking for an opinion from its Members.

We will also put down an amendment relating to reasoned response, which I have outlined already. We will be putting down an amendment to allow the Competition Authority to grant a licence to the Government to negotiate with professional bodies such as the Irish Medical Organisation, the Irish Pharmaceutical Union and the Irish Dental Association, largely along the lines of the process in Australia, whereby the Government can go to the Competition Authority and request a licence to negotiate with these bodies in the public interest. When agreement is reached it would go to the Competition Authority for an opinion to ensure it would not be anti-competitive, and then the agreement can come into effect. We are not in favour of a blanket exemption for any trade association or business body from competition law. That would be a retrograde step.

On the question of vulnerable workers, such as freelance journalists, actors and musicians in casual employment, if the Government has a solution to this fraught issue now would be a good time to bring it forward. A commitment was made many years ago to deal with the issue and the Government should honour its commitments. I do not see why it cannot use Committee Stage of this legislation to bring forward a solution if it exists.

Nobody in this House believes freelance journalists, actors or musicians engaged in casual employment are a threat to the economy or competition. Any solution that the Government comes up with must be robust and should ensure that there are no knock-on complaints or demands from other sectoral interests which could potentially be a threat to competition if the door was opened with that option.

We will also seek an amendment to narrow the expertise field of appointees. Allowing the Minister to appoint anybody who is experienced in law, economics, public affairs, consumer affairs or business generally is a little broad; there are few people the Minister could not appoint as they would not fall into those categories. The stipulation could be a bit tighter and there could be a requirement to have experience of competition law, economics or consumer affairs. That would be a better option. We have been blessed to date in that although I am critical of many public bodies, the Competition Authority has capable and qualified people in key roles. That must be maintained and I do not see why it should not be enshrined in legislation. That would ensure the Minister and his successor would only appoint people of the highest calibre, who are not just aware of business and public affairs generally but are experts in the field of competition and consumer affairs.

We will support the Bill, although it is disappointing that it had to be brought forward. The issue could have been addressed either by holding competitions when the vacancies arose or by bringing forward the long-promised legislation to amend and improve the 2002 Act.

See this speech in context