Seán Kyne (Galway West, Fine Gael)

I welcome the opportunity to speak to the Competition (Amendment) Bill. Its speedy introduction is proof of the commitment to overhaul sections of legislation to help to create a business environment which promotes job creation, job retention, fair competition and choice for consumers. That this legislation was the subject of a commitment in the memorandum of understanding between Ireland and the European Union and the IMF is secondary to the recognition among the new Government parties of the need for law reform in key areas.

The amendments made in the Bill will provide for valuable reform in competition law and introduce enhanced penalties and sanctions for breaches of the law. The banking and financial crisis shone a light on an area which had operated in a light touch regulatory framework. The activities that have been uncovered so far demonstrate the need for strengthened laws to combat so-called white collar crime. I dislike the euphemistic connotations associated with the phrase "white collar crime", as if such acts are less serious and dishonourable than others. The effect of what has been uncovered from the activities and practices at some financial institutions and businesses during the latter half of the last decade is criminal in terms of the damage done to Ireland and its reputation. The creative accounting, share buying schemes and so forth all flew in the face of existing competition law. When enacted, this Bill will provide for tougher fines and custodial sentences and remove the use of the Probation Act, indicating the seriousness of the criminal acts committed in this area.

The value of competition has been undermined in the recent past. Competition helps to drive efficiencies and creates benefits for everyone. It helps customers by making goods and services more affordable, accessible and of a higher standard. That is why the provisions in the Bill to increase the scope of enforcement of competition law by private citizens are so welcome. Competition also helps business. The drive to increase efficiency and research and develop new products and services or just new ways of doing things is incentivised by competition. One often hears people speak about a company's competitive advantage, in other words, the edge it has over other companies. The Bill will be a vital tool in helping not only businesses to regain competitive advantages but also the country.

Of major benefit in the Bill is the provision that will empower the courts to place a costs order against the person who has been convicted. This will make the offending person or organisation responsible for the very considerable costs associated with investigating infringements of the law. Such costs include the cost of the initial investigations, researching documents and electronic transactions, the examination of witnesses and so forth. That costs may now be awarded against the offenders will act as a solid deterrent.

Competition, however, cannot be a free-for-all. It must be regulated with effective regulation and component regulatory alternatives. We experienced the downside of competition in the recent past and are living with the consequences. One example was the intense competition between banks to lend too freely at unsustainable rates. Obviously, we once had many more banks than we have today in competition with each other, fighting for customers and offering packages without recourse to a person's ability to repay. This culminated in the offer of 100% mortgages and also higher percentages for house furnishing and a car purchase for good measure. Once the first bank went down this slippery slope, others followed, fuelled by bankers' bonuses. The subsequent effects saw several banks leave the Irish market, to the detriment of consumers.

We must acknowledge the Bill's provisions relating to the rights of citizens. These will facilitate an increase in private enforcement of competition law by way of private actions, thereby empowering citizens in enforcing their rights. I agree with Deputy Tom Hayes about the out-of-town outlets which, through below cost selling or anti-competitive behaviour, can undermine the fabric of smaller shops and retail units.

In its report, Ireland's Competitiveness Scorecard, the National Competitiveness Council highlighted that Ireland had lost 31% of its cost competitiveness between 2002 and 2008. This affected Ireland's attractiveness as a location in which to do business. Everybody knows how attractive it was at the start of that period as a destination for investment owing to it being so competitive and able to manage costs and have a low inflation rate, despite the growth achieved. Competitiveness played a huge part in the country's growth during our realistic boom period before the property boom. There are many ways to reverse the trend and the provisions included in the Bill will help to restore Ireland's competitiveness, a crucial component for its recovery, both economic and social.

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