Harney fights price rises with rip-off watchdog

vinnyfitz

Anyone notice this article in the Sunday Times the other day?

Full text:


MARY HARNEY, the tanaiste, is to set up a new consumer watchdog to counter Ireland’s rising prices. The minister for enterprise, trade and employment has told senior officials she is planning the new agency to combat. over-charging and substandard merchandise. The body will complement the work of Carmel Foley, the director of consumer affairs, who enforces consumer rights and legislation.

It will produce regular pricing bulletins and studies of product standards. The research will be widely publicised to heighten consumer awareness of the price variations for basic goods and services.

It is hoped the publicity will embarrass offending retailers into correcting extortionate prices or slipshod services. The agency will report to Harney and Foley.

“Information is power and it helps to change things more than anything else. Research here might include looking at why prices in some sectors are particular high,” said one senior source in the tanaiste’s department.

“We want consumers that are vigilant, aware and sensitive to prices and making their voices heard. We need those that sell products to consumers to be aware that prices and standards are being observed. The idea here is to do something fairly radical to help to kick-start a consumer lobby emerging in Ireland.”

Ireland topped the list of the most expensive countries in the eurozone last month, along with Finland. The latest report from the National Competitiveness Council warned that huge price hikes were damaging the country’s competitiveness. It urged the government to avoid increasing Vat and other inflation-fuelling taxes to help Ireland keep its competitive edge.

The arrival of the new consumer watchdog will shake-up existing consumer associations. The Consumer Advisory Council will be abolished to make way for the new watchdog.

The council, an unwieldy 36-member committee of policy makers, industry regulators, consumer groups and retailers, has met just once since it was set up in 2001.

The watchdog is also expected to overlap with the work of the Consumer Association of Ireland (CAI), an independent group headed by Dermott Jewell. He welcomed the tanaiste’s plan, but said the CAI would be seeking a role in the new body.

“The involvement of an independent group like the CAI is important in delivering public trust and confidence in any survey of prices,” said said Jewell. “But it sounds like an interesting idea. It would be the perfect body for us to feed into or to assist in extending the remit that we have.”

The tanaiste decided there was a need for a new agency after her meeting last month with the European umbrella body for consumer watchdogs, BEUC, run by Jim Murray, a former director of consumer affairs in Ireland.

The group presented Harney with a wishlist of measures it wanted Ireland to implement during its presidency of the EU, including the strengthening of references to consumer policy and protection in the draft EU constitution.

BEUC’s lobbying targets mainly the policy makers in the European commission. The CAI is the Irish member of BEUC. The group has mounted campaigns on food safety, unfair commercial practices, financial service regulation and common agricultural policy reform.

A department source said: “We are hoping to do some studies together with Forfas (the enterprise advisory board) to look at one or two sectors that seem to be way out of synch with other European countries and it can’t all be accounted for in terms of higher wages or insurance cost.

Sounds a bit like a kneejerk reaction to the Fine Gael campaign. Will it be a fig leaf or a useful initiative?

Sarky

Isn't there at least one other consumer watchdog out there already? Why not actually give that some powers, instead of creating another half arsed ineffectual organisation?

sovtek

The CAI is a compl-EEET joke. While everyone in Germany, Italy, Greece were protesting (with some measure of success) the bonehead leader of the CAI was saying that "it will punish the innocent". What a cop out. Who's passing the brown envelopes here?
Anyway...it's a welcomed initiative even if a campaign ploy. As long as it's got teeth and just isn't going to start a comparison website. It's pretty obvious that "shopping around" is largely ineffective in most industries. Only legislation and action breaking up cartels and allowing competition will make the "shopping around" path work.
That includes withdrawing illegal taxes such as the import duty on cars from other EU countries.

Ripwave

Originally posted by sovtek
That includes withdrawing illegal taxes such as the import duty on cars from other EU countries.

It's not an illegal tax.

It's illegal to impose a tax on imports that doesn't apply to domestic products, as that would cause market distortion. As long as the tax is the same for all suppliers, then there's no distortion.

You can make the case that VRT is a bad thing, but it's not illegal.

sovtek

Originally posted by Ripwave
You can make the case that VRT is a bad thing, but it's not illegal.

Actually it is...http://www.unison.ie/irish_independent/frontpagepdfs/2002/8042.pdf

star gazer

This watchdog will be like the PD watchdog in government...a lapdog. It'll never get off the ground because people aren't going to be fooled all the time. The next thing will be the announcement of a 'major' study into prices or a new strategic enterpricse committee(oh wait they already did that one). Do everything except give the competition authority teeth. Harney will be leaving the post soon, so we'll be expected to wait another twelve months at least while a new minister gets into the portfolio. :rolleyes:

Ripwave

Originally posted by sovtek
Actually it is...http://www.unison.ie/irish_independent/frontpagepdfs/2002/8042.pdf

I'll be charitable, and assume that English isn't your first language, and you just can't understand the page you quoted. There's nothing on the URL that says that VRT is illegal. The only reference to a legal issue on that page is exactly the issue that I described - a different, discriminatory rate of tax applied to imports versus "local" products.

A Finnish consumer won his case against the Helsinki government over higher taxes being levied on imported second-hand cars than on used cars bought locally.

This doesn't apply here, because VRT applies to all cars on import, so "local" cars already have the cost of VRT built in to their second hand price.

sovtek

Originally posted by Ripwave
I'll be charitable, and assume that English isn't your first language, and you just can't understand the page you quoted. There's nothing on the URL that says that VRT is illegal. The only reference to a legal issue on that page is exactly the issue that I described - a different, discriminatory rate of tax applied to imports versus "local" products. This doesn't apply here, because VRT applies to all cars on import, so "local" cars already have the cost of VRT built in to their second hand price.

Not only did I interprit it that way, but I have the EU Commision it's reporting on as well as the AA also interpreting it the same way. Being that VRT DOES have a different tax on "imported" cars.
I'm going to be charitable and assume you aren't an arrogant bastard like this post suggests.

sceptre

Why doesn't she just give Carmel Foley more money to hire extra people?


Oh yeah, you don't a get a press release, photo and segment on the nine o'clock news then

Ripwave

Originally posted by sovtek
Not only did I interprit it that way, but I have the EU Commision it's reporting on

What, you have a reference to the EU commissions opinion on this, yet you point to an article in the Irish Independent that does not, in any way support your contention that VRT is illegal?

Do yourself a favour, and quote whatever part of that Independent article you think supports your contention that VRT is illegal. Note that illegal means "against the law". It doesn't mean something that the Commission wants done away with.

In another development, EU Commission pressure has forced Denmark to begin refunding VRT on used car exports. This is seen as a major breakthrough.

Note that the Commission didn't (couldn't) stop Denmark from charging VRT - it just made them refund it once the car was exported back out of Denmark. The Commission couldn't stop Denmark charging VRT because VRT is not illegal.

sovtek

OK I'll back up and say that's it's a loophole, that's recommended to be closed. It was imposed because the EU abolished excise on "imports" amongst EU member states. So in it IS an excise on a vehicle. Therefore it goes against EU law, at least in spirit, even though it has been allowed.

RainyDay

Originally posted by sovtek
The CAI is a compl-EEET joke. While everyone in Germany, Italy, Greece were protesting (with some measure of success) the bonehead leader of the CAI was saying that "it will punish the innocent". What a cop out. Who's passing the brown envelopes here?

You really should produce some evidence to back up your allegation of bribery or withdraw it. You may have valid concerns about the effectiveness of CAI, but you really can't just lash out and accuse a named organisation/individual of bribery without some evidence.

star gazer

Speaking in Davos to the Irish times, Harney suggested that the new consumer 'watchdog' would be appointed in two weeks. This latest Placebo is not going to change anything. We have a consumer affairs body already and the Competition Authority has the industry competition side of things. If there was a serious attempt being made the Competition Authority would be beefed up with funding and stronger competition laws like Britain. The Director of consumer affairs office could also get more funding.
Another quango, why?

Ripwave

Originally posted by star gazer
Another quango, why?

Presumably someone is retiring soon, and needs a nice fat sinecure to keep them busy.

spongebob

The Social Opprobium that comes from being raided by the Criminal Assets Bureau would be nice.

More Criminal Assets staff would be a good idea.

M

Cork

That includes withdrawing illegal taxes such as the import duty on cars from other EU countries.

Yes - It should be taken off cars and put on fuel.

Any shortfall in VRT has to be made up in other areas.

Capt'n Midnight

Originally posted by star gazer
Speaking in Davos to the Irish times, Harney suggested that the new consumer 'watchdog' would be appointed in two weeks.

Good - finally the competition athority will no longer have it's monopoly position and hopefully this will change it's positions on molopolies.