Dara Calleary (Mayo, Fianna Fail)
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96. To ask the Minister for Jobs, Enterprise and Innovation his views on competitiveness in the economy in the view of recent inflation data which indicates that the cost of Government controlled services and utilities is rising much faster than the general prices; the actions he is taking to improve competitiveness in the economy generally, including implementing recommendations from the National Competitiveness Council; and if he will make a statement on the matter. [44526/14]

Dara Calleary (Mayo, Fianna Fail)
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The National Competitiveness Council published its annual report in April and the then chief executive for Forfás, now the chief executive of IDA Ireland, Mr. Martin Shanahan, said that we must relentlessly pursue further improvements in our cost competitiveness and that we cannot afford any slippage. What has the Minister done about that report since April? What action has he taken on it? Where does our competitiveness now lie six months later?

Richard Bruton (Dublin North Central, Fine Gael)
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That is a slightly different question from the one the Deputy asked. The position in regard to competitiveness generally is one where we have seen a very significant improvement in recent years. Ireland's international competitiveness rankings have improved from 24th to 15th in the IMD's world competitiveness yearbook report and from 29th to 25th in the WEF global competitiveness report. If one looks at the harmonised index of competitiveness, which is tracked by the Central Bank, we have shown significant improvements in our cost position and that is reflected by the surveys of the National Competitiveness Council which look at significant areas where there have been real improvements in our competitiveness in terms of individual costs. However, they underline the need for continual vigilance in the area of competitiveness. Obviously, there are always risks and it has pointed to particular sectors where risk arises.

The original question referred to utilities and Government controlled services. In regard to the cost of those services, the range of goods and services the CSO classifies as "administered" by central, regional or local government or national regulators represent a small subset of the overall CPI basket in the areas of hospital services, gas, passenger transport and postal services. Prices for most utilities, such as waste management and electricity, are market driven and, therefore, not set by Government. Alternatively, in some cases, such as the cost of public transport, prices are approved by an external independent regulator. It is, however, important that we remain vigilant in regard to future price increases. I can assure the Deputy that the competitiveness challenge is a very live one and we are very alert to the need to make continual improvements.

Dara Calleary (Mayo, Fianna Fail)
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Question No. 96 mentions the National Competitiveness Council's recommendations. I presume we are on the same question. That report showed last April that diesel prices in Ireland are 7% more expensive than in the euro area, Ireland's electricity costs are the fifth most expensive in the euro area, and landfill gate fees are the fifth most expensive of the ten countries surveyed. It is the fifth most expensive location out of 16 for industrial water costs. Our new business interest rates are higher, with loan rates 31% higher than in most of the euro area. The report tracks a big increase in the cost of business services and other inputs. Prices in the third quarter were 3.4% higher than those in 2010.

There is an absolute drift in cost management. Electricity costs are still very out of sync with those in the euro area. Even allowing for our island location, the Minister for Communications, Energy and Natural Resources is still the main shareholder in ESB so the Government has a role to play. It is the main shareholder in all the main banks and has a big role to play in respect of interest rates. There has been so much focus on domestic water in recent weeks we forget the figure for industrial water costs. This is the fifth most expensive location for industrial water. The Government has control of that too but there is no sense of an attempt to tackle those costs.

Richard Bruton (Dublin North Central, Fine Gael)
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On the harmonised index of prices across Europe, Ireland’s increase is 1.2% in the past 12 months. That is among the lowest in the EU. They are higher in Denmark, Germany, Spain, France, the Netherlands, the UK, Portugal and Finland. Ireland is controlling administrative costs more effectively than other European countries. I agree with the Deputy that there are areas where we need to continue to attend to competitiveness pressures. In the electricity area, for example, a recent restructuring programme took out cost. The focus in electricity has to be on controllable costs because some elements of electricity pricing are beyond the control of the electricity companies because they are dictated by international fuel prices. There are areas such as property, unit labour costs and professional services where we are making improvements. In the Action Plan for Jobs 2015, we will take on board several recommendations of the National Competitiveness Council.

Dara Calleary (Mayo, Fianna Fail)
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The National Competitiveness Council’s report was very straight on our costs. That was six months ago. Is the National Competitiveness Council as useful as the Fiscal Advisory Council? Is it just an expensive bauble taken out for the visitors and put back in the press when they leave? It made very clear recommendations in very direct language about our cost competitiveness. Has the decrease in oil prices over the summer been passed on in electricity costs to industrial users?

Four years into its term of office and three years since the Legal Services Regulation Bill, which aims to reduce legal costs, came before the House, there is no sense of urgency about it. I remind the Minister of a website which he was very familiar with ten years ago, ripoff.ie. It was one of his party’s websites. The message is still the same and there are areas that the Government can do something about. The National Competitiveness Council has laid out a roadmap but, unfortunately, its advice, like that of the Fiscal Council, seems irrelevant.

Richard Bruton (Dublin North Central, Fine Gael)
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The Deputy is attempting to be very selective in his quotes. We have improved compared with all our international competitors on the ease of business index and on our competitiveness rankings-----

Dara Calleary (Mayo, Fianna Fail)
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What about the Government’s National Competitiveness Council?

Richard Bruton (Dublin North Central, Fine Gael)
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We have done better than all our competitors on administrative prices, which the Deputy raised in his question. In every area the Deputy addressed we have done better when one considers the global picture. We are influenced by international prices in the electricity area and are dependent on fossil fuels, but the ESB and other electricity companies have been focusing on controllable costs and are making progress in those areas. I am not pretending that everything is correct. We must continue to be vigilant and this year we will consider further improvements that make it easier to compete and do business.