Seanad debates

Wednesday, 29 June 2005

National Consumer Agency: Motion.

 

6:00 am

Photo of Brendan RyanBrendan Ryan (Labour)

I live in the real world and socialists are the ones who must deal with the realities and cruelties of that competitive world. That does not mean one can deny what happens. There is a fair amount of evidence now that many people got rich in Britain during the Second World War by ripping off both the state and their neighbours. They charged what the market would stand for goods and services even though it was supposed to be regulated and controlled. The account of this profiteering was omitted from the record of the glorious sense of common purpose which people recall from the Blitz.

The State's role in the area of pricing is to ensure that consumers know before they reach the point from which they cannot retreat what something will cost them. We do not publicise prices adequately. The new agency could usefully produce at regular intervals a table of the best and worst prices in every town and city, and estimates of the margins operating on various products.

One can easily work out where the high margins are because one sees what proliferates. Margins on wine in off-licences must be high because every shop in the country seems to be getting a wine licence. This is in part a response to demand but that demand is for a product on which there is a substantial margin. If my local small shop is making a substantial margin on a bottle of wine it is hard to imagine what a restaurant is making on the same bottle. That is not to say we should control the price. We should empower consumers by giving them the maximum possible information.

The Internet is a flexible and easy way to provide that information. The lead price on many products can be extremely misleading. I am not complaining but recently I booked for myself and my family to fly to London in August. The lead price was €9 each way or €18 return. I ended up paying €350 for five of us. There were additional charges of €55 but nowhere on the Aer Lingus website could I find a breakdown of those extras.

I am not complaining because €70 for a return flight to London with Aer Lingus is not a bad price. However, the difference between the price of €18 return and the €70 I paid is difficult to explain. It does not empower consumers when they do not know for what they are paying and so cannot evaluate choices.

My view of this matter was considerably altered many years ago. I may have mentioned this before. I was in a restaurant with a national reputation in the west where the owner proclaimed loudly to some friends that it was hard to make a living in his business. It is true, running a restaurant is a tough business in principle and many do so only for love of the job.

This restaurant, however, which is in a tourist area, closed from October to May, and the owner made it clear because we all heard him, that he took off to the Canaries for those months while his children attended the most expensive boarding school in Ireland. That is not my definition of just making a living.

Many high quality restaurants provide a service and often just because people like the business. Restaurant reviews, however, suggest that there are more high price restaurants than high quality ones. It seems to be easy, particularly in this city, to get away with sloppy productions at outrageously high prices. I know this from reviews because I do not often eat out in Dublin for various reasons.

Let us by all means have competition and let that competition be based on consumer choice but let us remember that competition is not enough on its own. If one leaves pricing to competition in the marketplace gaps will appear. The groceries order, and surrounding arguments, is an example of this. I sympathise with Senator Quinn's position that it is unenforceable. We could deal with that by a proper licensing procedure, according to which multinationals wanting to operate in Ireland must sign a licensing agreement to the effect that they will operate the spirit and the letter of Irish legislation or they cannot enter the market. That might solve Senator Quinn's problem.

Until recently the Common Agricultural Policy was the most anti-consumer concept ever imposed on any section of suffering society. I recall being enlightened at a meeting of the Oireachtas Joint Committee on European Affairs some years ago at which a prominent member of the Irish Farmers Association familiar to Members of the Oireachtas, gave an erudite 45-minute description of the problem of food and agriculture without ever mentioning consumers or customers. According to him, agriculture did not involve customers, it involved producers.

If we allow producers, whether of agricultural products, banking services, or food in the retail area, dominate, the customer will be the victim. We must create a climate of information, fairness, proper regulation and reasonable local authority charges. These charges have run out of control because we have decided to reduce corporate, personal and capital taxes. The State's revenue has been reduced and has left it to its customers, particularly in the areas of water services, refuse services, etc., to make up the gap between what the State provides and the customer needs. This imposes large charges in the same way as the insurance industry because the State allowed the unregulated legal profession to charge whatever it wanted. There was a cosy arrangement in place whereby there would be no complicated legal work and lawyers and any debt would be paid off while the consumer paid the overall price. There was no competition once this became the case. Hopefully, we are now turning this situation around.

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