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Examiner1

So Bertie had no responsibility for regulation - there's a puzzle for Katie

I was discussing one of the mysteries of life with my grand-daughter Katie. She's wise beyond her age (which is four), and spends a lot of time thinking about stuff. But some things confound her, like the different ways her brothers behave. She explained how her older brother does things one way, and her younger brother is entirely different. Then she spread her hands wide, gazed up at me with her huge green eyes, and said "what's that all about, grandad"? - Fergus Finlay

Sometimes, of course, life is just a puzzle, and grandads never have all the answers. I used to pretend I did, because when my eldest grandson was a littler lad, he had a sweater (I won't tell you who gave it to him) that said "Daddy knows a lot, but grandad knows everything". Sadly, there are things that this grandad will never understand.

One of them is Bertie. I hadn't intended to write about Bertie again, because I have other things on my mind. But I listened to his interview with Miriam O'Callaghan on RTE radio 1 on Sunday morning, and I really began to think he must believe all that guff he goes on with. No responsibility for regulation, even though he and his government set up an entirely new system of financial regulation in Ireland.

He must have entirely forgotten the famous speech made by his Tanaiste, Mary Harney, when she said, among a lot of other things, "In Ireland, we must press the case for an open, liberal Europe that has a low burden of tax and regulation on enterprise because that is the best way to secure employment and prosperity. That is what we are implementing in Ireland." He must have entirely forgotten the budget after budget that encouraged speculation and gave it tax break after tax break. In one of the Celtic Finance Bills alone, he and his government gave £1.2 billion in tax reductions, a significant proportion of which went to reduce the top tax rate. They cut indirect taxation, and gave new and very substantial tax breaks for share options. They extended tax relief for third level fees, for health insurance and for medical fees.

There were tax breaks for landlords, for people who invested in private hospitals, and for people who bought insurance to cover long-term care. They introduced the SSIA, which was to cost billions. They revoked an anti-speculative tax introduced only the previous summer, and they relaxed the rules relating to tax returns.

What kind of speculation regime did Bertie think he was building? How could he not have seen the kind of forces he was choosing to unleash, and the direction he was pointing the economy - not just that year, but year after year? Does he really think we believe that if any regulator had tried to shout stop that regulator would have survived?

Does he really expect us to believe that he wasn't fully aware of the unhealthy relationship he built between developers and the banking industry - especially when his government systematically set out to ensure that the state had no role whatever in the provision of public housing?

The thing about Bertie's legacy (and that of his tanaiste at the time) is that the low burden of regulation still exists - and we're all still being screwed because of it.

Don't get me wrong - we have endless regulators. In fact there's a regulation industry - in water, in gas and electricity, in insurance and health insurance, in financial services, in telecommunications, in aviation, and probably in dozens of other areas. I haven't a clue to whom any of these regulators are accountable. The one thing that seems clear to me is that they are not accountable to the customers of all these services.

Or to put it another way, with a couple of exceptions they don't see it as their job - and they're certainly not mandated by the legislation setting them up - to ensure that utility and service customers are always getting a fair shake.

Let me give you a couple of examples. I've been a VHI member for 30 years, and I've always found their service impeccable. But their premiums have gone through the roof. You can ask their advice about different packages at the time of renewal, and I did last year. The best they could offer was a very small reduction. So I went to the Health Insurance Authority's website (that's the regulator) to be presented with an absolutely baffling set of choices and options. Try it if you don't believe me - but be prepared to take a week off to do your navigating and calculating.

I'd heard Dermot Goode on the radio talking about different health insurance options, so I contacted him instead through his website (totalhealthcover.ie). He charges a very modest fee for comprehensive advice, and in a few minutes he had the answer. "Tell them to switch you to Corporate Plan PMI3713", he said.

I'd never heard of it, but I rang the VHI and asked. It was done in a flash, and saved more than €1,000. The only question they asked me was how had I found about this plan. When I told them it was Dermot Goode, they sighed heavily.

A month ago I tried a similar exercise to try to find a cheaper option for gas and electricity. Again I went to the regulator (cer.ie). They encourage you to shop around, but oddly enough, they don't offer any comparisons themselves. Instead they direct you to a couple of commercial websites.

I tried one of them, bonkers.ie. In a few minutes they suggested a variety of cheaper options. Amazingly, the first two cheaper options were different packages operated by my existing supplier, Electric Ireland. Bonkers.ie did all the paperwork in helping to make the transition - an entirely painless operation.

Here's the point though. Under our system of regulation, there is no obligation whatsoever on either of the two providers - both of them major state companies-to tell their customers that they are paying over the odds. In the case of the VHI, they carefully hide the better options from their customers, and in the case of Electric Ireland they simply don't bother telling their customers there are better options.

And the regulators have neither the power to force the suppliers to offer the best deals, nor the interest to tell customers that there is nearly always a better deal. If you go looking, you'll find it, but not without a lot of effort.

That's not real regulation - at least, it's not total regulation. It might work, after a fashion, to help ensure a better regulated market, but it's not a market that has a fair deal for the customer at its heart. And that is the case despite the fact that all these regulators are themselves substantial entities. The Commission for Energy Regulation, for instance, costs around €17 million a year to run (largely raised from levies on different energy providers).

It's called light touch regulation. That's what we thought we wanted in the Bertie years, and that's what he gave us. I don't believe it ever served our interests, and it certainly doesn't any more. As Katie might say, "what's that all about, Bertie?"

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