Richard Bruton (Dublin North Central, Fine Gael)

I thank Senators for very interesting contributions. I agree entirely with Senator Barrett that we need to achieve much more competition in the Irish economy. We have had a real problem with competition in the economy for a number of years but the problem has not been the lack of power in the hands of the Competition Authority to analyse nor the lack of power to publish outcomes of cases. The problem has been a lack of willingness to act on recommendations which have been brought forward by the authority. As the Senator knows, the Competition Authority reported on a number of sectors over the years, but the changes it sought were not implemented.

There is no doubt that since the IMF, the EU and ECB came to town there has been a new impetus, but the main new impetus has been to implement recommendations from the Competition Authority which were outstanding. It has not been hammering on the door demanding new studies. The truth is the Competition Authority has a free hand to undertake any study it chooses and to analyse competition in any sector where it believes there are problems. Indeed, under the action plan for jobs, which I recently published, one of the actions to be delivered by the second quarter is that a selection of new sectors in which it is believed there are sheltered activities which are damaging competition will be investigated. The Competition Authority will put forward proposals as to areas which should be analysed and I will commission such an analysis. There is no lack of power to analyse the problems. The problem has been the willingness to act on the recommendations.

Clearly, one is now seeing action on the recommendations in reforming the legal and medical professions and so on. The troika has created timelines for the implementation of various changes and the publication of various Bills, including this Bill to strengthen the enforcement powers.

That brings us to what other things are needed to make competition much stronger. That is the purpose of this Bill. The reason there are not amendments on more powers of analysis is that there is no defect in the Competition Authority's power to analyse. There is a desire - this is the whole theme of this Bill - to strengthen the incentive to comply and to make it a bigger risk for people who are engaged in anti-competitive activity. That is why we are strengthening the penalties and bringing in other changes, which Senators have seen in the Bill, to show there are greater consequences for failure to comply with the requirements. That is the focus of this Bill.

The Competition Authority also has an additional power which is rigorously applied, namely, it has a free right to comment on any legislation being initiated by the Government. That comment goes directly to the Minister who cannot amend it or say he or she does not really like it. It goes to the sponsoring Minister and it is put on record as the authority's comment - a free and independent comment on the legislation. That is a very important power.

Competition is not the entire gamut of public policy. Senator Barrett said it was wrong that there were subsidies for those generating electricity from wind and asked whether that was anti-competitive. We are giving people generating from renewable sources a bigger payback than others. However, there is another dimension of public policy which says we need to reduce our dependency on fossil fuels and become more self-reliant and exploit our renewable resources. The consequence of that is that one develops a refit price that gives a higher subsidy to people who generate power from wind than those who generate it from gas or oil. That is a perfectly acceptable public policy to pursue. Competition, while it is very important, is not the sum total of the debate.

We discussed the issue of out-of-town malls versus town centres on Second Stage. The competition view would be to let everyone flourish and let people set up wherever they like. However, there is a different dimension to public policy. Some Senators expressed the view that we need to protect our town centres and that there is a value in having a town centre. Obviously, I am an advocate of competition, but it must be recognised that there are limits to which the competition mandate runs. It must be recognised that there are limits to which the competition mandate runs. That is not to say it justifies much of what has happened. Much of it is unjustifiable.

The other aspect is enforcement activity. Senator Barrett stated that the cartels are not scared. We have made a decision, which is on foot of the second quarter, that we will be putting ten additional enforcement staff into the Competition Authority. The authority has been given the clearance to recruit to strengthen its capacity in the area of enforcement. The Competition Authority is a relatively small agency which employs approximately 50 staff. This is effectively a 20% increase in its scale, but it is focused very much in the enforcement area to ensure the authority has the enforcement capacity when investigating an issue of anti-competitive practice, whether it be cartel activity or abuse of dominance. That is the real issue.

The twin approach we need to achieve is to act on recommendations of public policy where regulatory problems are protected by an existing system, and to take enforcement action when problems are found and investigation reveals anti-competitive practices. We are strengthening the Competition Authority's enforcement capacity, providing stronger penalties and adding further disincentives to anti-competitive behaviour. Clearly, the Government is determined to implement changes that have been recommended and is committed to the undertaking of new studies by the Competition Authority into areas where there are potential problems that need to be addressed.

That brings me back to the amendment, which I do not support because I do not believe it is necessary. First, there is no restraint under paragraph (h) on the Competition Authority investigating a sector in which a public body is involved. It can investigate any sector without fear or favour and can analyse any sector that is regulated. The only aspect of which one must be aware is that a regulator is not an undertaking within the meaning of the Act and the authority cannot investigate a regulator for an offence. The authority has the power, however, to analyse the way in which a regulator is regulating a certain sector and state that in its view, the regulation of the sector is not a competitive approach.

We recognise there is an increasing fear the regulatory regime we have established over the years has too little focus on the need for competitiveness in the current particularly strained nature of the economy. Under the action plan for jobs, we are reviewing the operation of the regulators. The Competition Authority can analyse them at any time, but we are reviewing whether the regulators, as a class, are working to the correct criteria and whether our competitiveness, benchmarked against other players with which we must trade, is sufficiently important in their consideration. That work is being undertaken by Forfás. The Taoiseach, in particular, is interested to see whether we can sharpen the focus of our regulatory environment across the board by way of public policy. There is no constraint, however, on the ability of the Competition Authority to investigate any regulated sector, and it has done so. It has spoken about retail planning guidelines when everyone might not agree with its view. It has spoken about waste management and various professions. It has analysed these at quite considerable length.

Paragraph (j) raises the issue of whether the authority the capacity to publish. Section 30(1)(g) of the Competition Act 2002 gives the authority the function of carrying out such activities as it considers appropriate to inform the public about competition issues. In this context, the authority publishes its economic and legal reasoning concerning selected investigations it has decided to close, either because it has found no breach of the Competition Act or it has settled the case with the undertaking concerned. These publications are referred to as enforcement decisions. The authority selects investigations for its enforcement decisions that demonstrate its approach to a particular competition issue on which it has not previously offered an opinion, or where the investigation is in the public domain and the issue has been subject to such considerable public debate that the decision would be of public interest, or where the matters involved raise broad issues of interest or complexity. In the context of the proposed paragraph (j), I would refer the Senators to the authority's website, tca.ie, on which the authority publishes non-commercially sensitive findings on foot of enforcement actions and examinations it has carried out.

Senator Barrett and Senator Quinn propose, in paragraph (k), that the authority report to me annually on practices that limit or restrain competition such that they constitute a violation of Part 1 of the 2002 Act. A breach of section 4 or 5 is an offence which the authority can investigate and pursue in the courts, either as a criminal or a civil matter. The authority is independent in the performance of its functions and a requirement for it to report to me on breaches of the law and on proposed remedies is not in keeping with this statutory independence. The authority includes in its annual report details of past investigations, and I am of the view that this is the appropriate course of action for the authority.

As the Senators can see, the authority has powers to publish as it sees fit. That is unconstrained by the Minister, and that is appropriate. We need to do it in a way that protects the authority's power to investigate independently and not be answerable or give the impression it is under some obligation to the Minister in terms of what it does and its freedom to report independently. The existing balance is correctly struck.

I would share Senator Keane's views on subsection (2). The IMF, EU and ECB, which are operating a memorandum of understanding to the end of 2013, should not be enshrined in law in such a way. They are a party which is here because they are committing to fund and, as a consequence, the Government must be accountable to them. They put forward proposals and negotiate with Government about what is the next phase of activity in a programme, and that is as it should be. The Competition Authority has, correctly, an entire freedom to analyse anything it likes and I, as Minister, have the power to ask it to investigate an area about which I have concern, but it is not appropriate to give a new status in law. to an international body which is here as a result of temporary difficulties we are experiencing,

I applaud the sentiments behind the amendment. We need to become much more effective in managing and delivering competition in our economy. The process that will deliver for us involves acting on recommendations, giving strong enforcement powers, strengthening the Bill, as we are doing here, and commissioning reports where they are needed on sheltered sectors of the economy which need further action. While I commend the motivation of the Senators in tabling this amendment, I assure the House it is not the extent of the ability of the authority to analyse or to publish that acts a constraint on the delivery of more effective competition policy, rather it is many of the other issues. The battle must be won on many fronts to deliver effective competition.