Sean Barrett (Independent) | Oireachtas source

When we reported progress I was speaking on this section.

I was addressing the issue of the directions of the Minister when I ran out of time. The Bill reads in section 20:

(1) The Minister may give a direction in writing to Irish Water, in relation to the performance by Irish Water of its functions under this Act, requiring it to comply with such policies of the Government as are specified in the direction.
(2) The Minister may, by direction in writing, amend or revoke a direction under this section (including a direction under this subsection).
(3) The Minister shall not give a direction under this section without first consulting the Minister for Communications, Energy and Natural Resources.

I propose that those consultations should involve the National Consumer Agency and the Competition Authority. The Bill reads at section 20(4), "Irish Water shall comply with a direction given to it under this section", which is the matter at stake.

The Commission for Energy Regulation received directions from the then Minister, Mr. Noel Dempsey, which proved rather damaging to the sector. Economic regulation seeks to impose the same sorts of disciplines on a firm to manage its costs that a firm subject to competition might face. The reason we have regulatory bodies is that the consumer is without power, typically, and the producer can be extremely powerful, so to have a regulator is an attempt to redress the balance. If the Minister intervenes, that distorts that balance. I will come to a more substantive legal point presently. A particularly disadvantageous case which illustrates the economic point is the direction given on 27 October 2009 to the aviation regulator by the then Minister, Mr. Dempsey, which required an increase in the charge at airports by 41% and up to 50% for check-in desks. At that time, late 2009, we had lost 4 million passengers and we have lost another 4 million in the period since.

Ministers do not have all the wisdom. The Government is only now recovering from that draconian decision following the abolition of the travel tax. If a Minister gives a direction that turns out to be at variance with the interests of the consumer and the general economic interest, it can have dire consequences. Water is even more important than airports because it affects every person in the country. We cannot live without it, as the Minister said. We cannot have a regulator who can be told to do things by the Minister. We have a bad track record in this regard, an example of which is the fact, as the Minister, Deputy Noonan, told us recently, the health insurance charge has gone up by 86% in the past four years although there is a regulator for that sector as well.

I am unhappy with the idea that Ministers can give orders to the regulator. The regulator is a referee who is supposed to protect relatively powerless customers and it is wrong for a Minister to have the power, for example, to tell the referee to award two penalties to one team rather than the other. This is supposed to be a quasi-judicial function. I am unhappy about the economics of it.

One of the great fortunes I have is that, with 64 academic departments in TCD, I have access to great knowledge. My legal colleagues at TCD would be unhappy the Minister has that power to intervene in a quasi-judicial situation. They cite the Sinn Féin funds decision of the Supreme Court in 1950 which disallowed an attempt by the then Government to interfere in funds which Sinn Féin had held since the 1920s. That is only the side issue, however. The point at the very end of the judgment was as follows:

The effect of that article and of Arts. 34 to 37, inclusive, is to vest in the Courts the exclusive right to determine judiciable controversies between citizens or between a citizen or citizens, as the case may be, and the State. In bringing these proceedings the plaintiffs were exercising a constitutional right and they were, and are, entitled to have the matter in dispute determined by the judicial organ of the State. The substantial effect of the Act [which sought to gain control of the Sinn Féin funds] is that the dispute is determined by the Oireachtas and the Court is required and directed by the Oireachtas to dismiss the plaintiffs claim without any hearing and without forming any opinion as to the rights of the respective parties to the dispute. In our opinion this is clearly repugnant to the provisions of the Constitution, as being an unwarrantable interference by the Oireachtas with the operations of the Courts in a purely judicial domain.

If I have a dispute about the price of water, the fact the Minister can issue a direction with which the regulator is compelled under section 4 to comply infringes what was stated in the Sinn Féin funds case, namely, that disputes cannot be resolved by one person telling the Oireachtas what we should do, and that the Minister is always right. I do not know if the courts would accept the right to give those directives. That is why I raise the point. I do so on the basis of what has been written on the issue. One of those distinguished writers, Mr. Justice Gerard Hogan, who is now a member of the Supreme Court, pointed out that Mr. Justice Gavan Duffy held that the legislation was unconstitutional since it required the courts to dismiss a claim on its merits without a hearing, and also violated the constitutional principles regarding the separation of powers. Mr. Justice Hogan then notes that this impressive judgment was confirmed on appeal by a seminal decision of the Supreme Court.

I question on legal grounds the powers the Minister seeks, having pointed out that Ministers were not omniscient in regard to airport regulation, which had seriously unintended consequences. If there are lawyers who are unhappy with the powers the Minister is seeking, it is right that university Senators should bring that matter to the attention of the House.