Consumers pay for barriers to careers

The Tánaiste Ms Harney has against strongly criticised the professions, saying there are too many barriers to entry and that ultimately such impediments are costing the consumer.

She also said it was "not appropriate that those who regulate professional standards should also regulate and control entry."

"Everyone knows we are paying far too much for services and that the barriers to entry into the professions are unreasonable," Ms Harney said yesterday.

"What we need to do in Ireland and in Europe is to create fair markets for consumers. In an environment where business is protected and where there are barriers to entry, consumers always suffer."

Ms Harney said she very much looked forward to the outcome of the study being undertaken by the Competition Authority into the professions as well as studies into the insurance and banking sectors. Among the professions being investigated by the authority are architecture, law and medicine.

Speaking at a conference in Dublin Castle, Promoting Competition for the Benefit of Consumers, Ms Harney said in the areas where there had been genuine competition, everyone had benefited.

The conference was attended by a range of figures interested in competition policy in the EU, including the European Commissioner for Competition Policy, Mr Mario Monti. Yesterday was European Competition Day.

Ms Harney said there could not be a single EU labour market if the barriers against professionals working in different countries were maintained.

The improved finances of Aer Lingus showed that the benefits of competition could be introduced without privatising State companies, the chairman of the Competition Authority, Dr John Fingleton, told the conference.

Dr Fingleton, who later contrasted the experience of Aer Lingus with that of Eircom, said that in the past the issue of ownership and competition had been confused.

Dr Fingleton said that the benefits of competition were greater than just lower prices for the consumer. Competition could lead to greater productivity and improve the ability of companies to compete abroad.

He said that in the two years following the ending of State aid to EU airlines Aer Lingus, rather than go bust, had cut costs by 30 per cent, become profitable, and had expanded its route offering.

"The fact that Aer Lingus achieved these cost reductions while publicly owned shows that competition can be introduced independently of any decision on privatisation and that competition, not ownership, may be the more fundamental source of productivity."

Dr Fingleton said reforms that would increase productivity and benefit consumers were often blocked by vested interests. He cited food-sector companies and the Groceries Order, which bans below-cost selling and which, he said, not only worked against the interests of consumers but also damaged the long-term productivity of Irish food companies and their ability to compete internationally.

Mr Monti said the EU's new regulatory framework on competition, which is coming into effect on May 1st, is more efficient and sensible. The decentralised enforcement of the antitrust rules will allow consumers to address their grievances to national competition authorities, which will be fully involved in the application of the EU competition rules.