Sunday, June 22, 2008

Democracy and the grip on the Public Megaphone

In the aftermath of the Irish defeat of the Lisbon Treaty ratification proposal in a referendum, it has been suggested that European politicians should respond to citizens' concerns and every other country of the EU27, should emulate Ireland and hold a referendum.

This would be democracy in action, it is argued, but interestingly it is not proposed that the votes be counted as one. If Malta was the only country to reject the Treaty, that would be the end of it. So what the best form of democracy may be, is sometimes what suits a particular agenda or argument.

Should the original Six have sought public approval for the admission of poor Ireland in 1973 and related commitment of German and Dutch taxpayers to supporting us?

If our admission had been approved, how would Ireland have voted on subsequent enlargements from 9 in 1973 to 27 today?

I have said before that it's bizarre that some of us get excited about a "democratic deficit" in Brussels, when our own "messenger boy" political system where the buck stops nowhere, is hardly something to hold up as a great template.

In Ireland, farmers and public sector unions have a firm grip on the public megaphone while the construction industry uses its money power to but influence.

As for the individual, there is always the local TD, who begins a daisy-chain of letters to get a response to what maybe a simple tax query. Government ministers have 120 people supporting this Citizens' Bureau type work but it's the collective power that matters.

As the Irish economy teeters on the brink of a recession, the Oireachtas members will be soon off on a 3-month break. The New Zealand parliament set for about 90 days annually, similar to Ireland's but it is only shuttered for one complete month in the year.

As regards connecting to citizens at a European level, the case of genetically modified (GM) food, illustrates what happens when well-fed but ignorant activists who reject science, are confused with the public interest.

So we have the well-fed in Europe with no understanding of the challenges facing agriculture beyond the rich world and in Ireland, during the Lisbon Treaty campaign, wealthy media commentators led the opposition to the Lisbon Treaty.

So responding to citizen concerns is not easy.

Gallup discovered years ago that income generally determines voter choice. It also is the prism through which people view the world.

In Ireland, people who don't have any exposure to the world of selling tradable goods and services but have comfortable incomes/levels of wealth such as politicians, may not understand the concerns citizens in other sectors of life.

Lisbon Treaty: In Perilous post-Celtic Tiger times, Ireland opts for Impotence in Europe's greatest success of past thousand years

Comment - Lisbon Treaty Aftermath: The case of European politicians confusing concerns of "people" with the anti-science opponents of Genetically Modified (GM) food

Lisbon Treaty: Thousands of Irish private sector workers will face bleak employment prospects in 2009 as No campaign leaders fight for jobs at the heart of Europe - in the European Parliament

Sunday, June 01, 2008

The useless [Expletive Deleted] at the Irish National Consumer Agency

President McAleese presents Taoiseach Brian Cowen TD with the Seal of Office of Taoiseach at Áras an Uachtaráin

Last month the new Taoiseach Brian Cowen made waves when the Dáil microphones picked up a brief conversation with Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughlan.

Fine Gael had earlier raised a report in the Sunday Business Post on the big disparity between what big British retail stores charge for the same items in Ireland and the UK.

“Bring in those people and get a handle on it,” Cowen instructed Coughlan. “You know all those fuckers.”

Coughlan soon after, met representatives of the National Consumer Agency.

The earthy language used by Cowen, may have surprised mother superior types but visitors to Ireland are often surprised by the Irish love of swear words and the common use of "Jesus Christ," not exactly in anything that might resemble a religious incantation.

When extensive transcripts of US President Richard Nixon's taped conversations in the White House Oval office were released, during the Watergate Congressional hearings, many passages, contained the term [Expletive Deleted].

One gem from 1971 when the US dollar's link with gold was broken, riled the Italians.

"Whatever about the pound," Nixon said. "I don't give a shit about the lira."

"Impeach the [Expletive Deleted]" became a popular slogan on protest posters.

Back to our own [Expletive Deleted]...

The National Consumer Agency had its genesis in the establishment of the Consumer Strategy Group in March 2004 under the chairmanship of Ann Fitzgerald who was Chief Executive of the Irish Association of Investment Managers.

It was a time when the issue of "rip-off Ireland" was getting a lot of attention.

More than four years later, the National Consumer Agency is run by Ann Fitzgerald and like many of the quangos, that have been spawned in the past decade, it has a questionable impact.

It appears to get involved in issues only after they have raised publicly elsewhere.

Its biggest failure is that it has failed to see the web as an effective tool in providing consumers with comparitive price information on key goods and services.

Finfacts said in its submission to the Consumer Strategy Group in 2004 that: The one dramatic measure to both empower the consumer and promote competition would be to set up a national web service providing consumers with comparative prices of key products and services in principal urban centres.

Dramatic measure is right. Wouldn't that be the day!!

Submission to Consumer Strategy Group July 2004: Public policy has failed consumers in two areas in recent years. Progress in deregulation has been glacial while thinking on consumer information is stuck in the mindset of the 1970’s when the display of price lists was first mandated.

Where market deregulation has been dependent on our own Government’s initiative, the preferred option has been to defer decisions, usually by using the Competition Authority to carry out a study. The deregulation of the taxi trade did not simply pose the same challenges as radical change in the legal or pharmacy sectors. Simply put, taxi drivers are not an economically powerful interest.

There has been some recent reform in the insurance sector, which has had an impact on prices and it is an illustration of what can be achieved. The Government is belatedly addressing the issue of tribunal lawyers’ fees and that may have an impact on charges generally. However, this is just a start. Reform of the system of designating development land is still awaited, three decades after the publication of the Kenny Report. There isn’t a political appetite to change the corrupt system where agricultural land can increase twenty-fold in value when zoned for development. The impact of land prices coupled with lack of effective competition in the service sector sustains high prices while global competition in manufacturing maintains a downward pressure on product prices. It’s a ridiculous situation that Dublin prime office rents are among the highest in the world (see:

Where Brussels mandated deregulation has occurred e.g. air travel and telecoms, or new entrants have entered existing cartelised markets- Bank of Scotland entry to the mortgage market and German retail groups Lidl and Aldi entry to the food retailing sector, consumers have significantly benefited.

Consumer Information
Since the mid 1970’s publicans have been required to display prices in their premises. Even if such lists were positioned to be legible, which most of them are not, they are of limited value in large urban areas. Recently in Dáil Éireann, there was a discussion on requiring dentists to display prices of various procedures in their surgeries. Why not have these lists displayed so that they would be visible from the exterior of a premises or bring the issue into the modern age and use the web where practical?

The EU measure requiring pricing to be placed on products, which was introduced last year, is also of limited benefit as consumers have lost the price benchmarks for many products. This is particularly the situation in large urban areas where it is not uncommon for prices of standard items to vary in the range of 15%-30% in similar type business establishments, even on the same street. When the practice of printing recommended retail prices (RRP’s) on products ended, retailers in areas with large transient populations were giving the opportunity to profiteer.

The one dramatic measure to both empower the consumer and promote competition would be to set up a national web service providing consumers with comparative prices of key products and services in principal urban centres.

Through requiring business operators in designated areas to provide the prices of stipulated consumer products and services and having these prices updated bi-annually on an online searchable database, the consumer would be able to conveniently check for price ranking by street and area. It should also be possible to compare prices with the manufacturer/distributor’s recommended price level, which could differ for central Dublin than for example Kiltimagh.

The goal would be to establish a nationally recognised service that with the support of a significant budget (including marketing) would become a key part of the process of setting prices. The practice of increased prices for late drinking should also be highlighted as should the application of cover charges. Business operators would be reluctant to head the price league and be significantly out-of-line with comparable competitors. A separate category of the website could provide comparison of prices of a basket of products at the main multiple retail outlets.

The online system does not have to be a big bureaucratic operation as price lists could be updated online.

The online service would also be of benefit to tourists. We are deluding ourselves if we believe that our expensive brand tag will not have an impact on our travel business.

There should also be a requirement that the prices of certain products and services be visible from the exterior of premises similar to restaurants e.g. the services at a hairdressing salon.

Irish Trade Missions and Manufacturing Good News

Given the apparent success of Irish trade missions, we should surely have lots more of them in these difficult times.

Until recently, we had the Minister for Enterprise, Trade and Employment Micheál Martin, dishing out superlatives at "signing ceremonies" for business deals that appeared to materialise when the former Cork schoolteacher dropped off at some foreign outpost.

Well that is what the great unwashed believed at home and who would blame them when the media accepted the spin without question.

This past week, it has been reported that an Enterprise Ireland backed trade mission to Latin America has seen Irish firms secure a total of €9.1 million in contracts.

Participating businesses secured €3.6 million in the latter half of the week in Mexico, having already scooped up €5.5 million worth of deals in Brazil.

Businesses from all over Ireland were reported to have enjoyed success on the trade mission. Galway group Fintrax opened a new office in Mexico and announced its selection by the Mexican Tax Authorities to implement a nationwide value-added tax refund programme for tourists.
It's a fair bet that none of the business deals that were announced had anything to do with the trade mission to Brazil and Mexico.

A trade mission needs to have "good news" and the press releases are already prepared before the leading minister leaves Dublin.

So Enterprise Ireland compiles details on past business and then the minister claims bragging rights for the spin or spoof "good news."