Paul Coghlan (Fine Gael)

I welcome the Minister to the House and thank him for listening to the debate on this important subject. I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"∙condemns the Government for the imposition of a plethora of stealth taxes;

∙notes that Ireland is now one of the most expensive countries in the European Union;

∙regrets that Dublin is among the most expensive cities in the world;

∙regrets that the Government rejected Fine Gael proposals for the establishment of a consumer rights enforcer;

∙calls on the Government to desist from the imposition of increases in taxes and charges above the rate of inflation; and

∙urges the Government to set up speedily the consumer council and notes that the council is very similar in nature to the consumer rights enforcer proposals of Fine Gael."

The position in Ireland in 2005 is as follows. Two years ago the Government promised to keep down personal and business taxes in order to strengthen and maintain the competitive position of the Irish economy. In the following two years it implemented 34 stealth tax increases which cost the average family €1,800 per year. The average tax contribution per household last year was up €2,800.

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 within the euro zone, both countries being significantly more expensive than the next group of euro zone countries. Dublin is now the 21st most expensive city in the world. The capital is more expensive than 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.

Ireland has gone from fourth in 2000 to 30th this year in the World Economic Forum's global competitiveness report, due mainly to the Government's failure to control prices. The National Competitiveness Council states Irish prices rose 22% more than those in other EU countries in the years 1999-2003. Economic consultants Compecon state the lack of competition in the banking sector is costing small business €500 million. The National Competitiveness Council states in its 2004 annual report that the need to recover cost competitiveness is crucial to the country's medium-term economic future.

lreland came 14th of 15 countries in terms of broadband penetration in a survey by the European Competitive Telecommunications Association. Ireland has only 63,610 broadband telephone lines while Denmark, a country of similar size, has 839,170. It is against this background that the Fianna Fáil Members have decided to pat themselves on the back and congratulate the Minister on commissioning a report. He is not being congratulated for doing anything, just for commissioning a report. Let us get real here.

The findings of the consumer strategy group and the recent publication of the Investment Funds, Companies and Miscellaneous Provisions Bill, which will increase fines for breaches of consumer law, show that some in Government are finally listening to what Fine Gael has been saying for some time. However, it is a great shame that it has taken this long for the Government to take an interest in the plight of consumers.

In the Dáil last November, it voted down Fine Gael's Consumer Rights Enforcer Bill which the consumer strategy group now appears to be recommending. At the time, Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tony Killeen, referred to "comprehensive measures and policies already in place and envisaged, both domestically and internationally, to protect and represent consumer interests" and instructed Fianna Fáil and Progressive Democrat Deputies to vote down our proposals. Our Bill would also have increased fines for breaches of consumer law, such as failing to display proper price lists, which are far too low at present. The Government should now move to adopt Fine Gael's entire agenda to ensure consumers get the voice they need, a consumers' rights enforcer, increases in penalties across the board, consumer representation at social partnership talks, the removal of local price cartels through action by local authorities, regular price league tables to give them information needed to make an informed choice, and an end to stealth taxes that have done so much to create an image of Ireland as overly expensive. However, given the Government's reluctance to act on our Bill before Christmas, I strongly suspect the consumer strategy group's recently published report will gather dust.

I regret the decision not to appoint a representative of the Consumers Association of Ireland to the interim board of the national consumer agency. This omission implies that none of the association's good work has been recognised.

Senator Leyden referred to last week's meeting of the Joint Committee on Enterprise and Small Business. That meeting established that there is a strong feeling that the analysis by the consumer strategy group was deeply flawed. The report failed to provide any analysis of food price inflation, which undermines its conclusions. The prices of internationally branded products were incorrect because of the inclusion of products such as Bacardi rum and electric toothbrushes. Senator Leyden's annoyance in this regard was quite explosive. The price comparison in the report did not take excise duty into account.

Food prices at retail level are falling. Since 1994, inflation on goods not covered in the groceries order is 15% higher than on goods covered by the ban. The CSG report stated that France had announced that it would remove its ban on below-cost selling, but this is not the case according to what we heard last week from Mr. Ciaran Fitzgerald of IBEC. Prices are higher in Ireland because costs are higher here. Pay costs have increased at a far higher rate than equivalent rates for the rest of the European Union. These costs must be tackled if the price of goods is to fall.

The groceries order stops large retailers pricing smaller players out of the market before upping prices. Predatory pricing campaigns will lead to the closure of smaller entities. Britain, as we know, does not have a ban on below-cost selling and as a result of predatory pricing there, 42% of its villages no longer have a local shop. The abolition of the groceries order will give more power to the larger retailers and enable them to squeeze the smaller shops out of the market and put a tighter squeeze on food producers. We would not want to see our producers abused if this were to happen here. The removal of the order would threaten thousands of jobs in the food producing sector. Additional jobs in servicing the food sector and in farming would also be seriously affected. At stake is a potential €12 billion shift in the balance of payments.

There was no evidence in the report of the consumer strategy group that abolishing the ban would bring about a sustained level of lower prices. It was conceded at the committee meeting that meat, fruit and vegetable products, which are not covered by the order, are rising at a higher rate than groceries order goods. The groceries order has not prevented Aldi, Lidl, Tesco or anyone else from competing in the Irish market. Last week's committee meeting exposed the flawed thinking and analysis with regard to the conclusions reached in the CSG report.

The motion put forward tonight is somewhat arrogant. No consumers will thank the Government for commissioning a report. Neither will they thank the Senators on the Government side of the House for droning on about it. It is time to act.