Government and Regulators Meet on Economic Recovery Strategy

The Taoiseach, Mr Enda Kenny, T.D., today convened a Cabinet level meeting with key economic Ministers and Regulators to examine ways in which Ireland’s regulation of major sectors of the economy, such as energy, financial services, transport and post and telecommunications, can contribute to stronger economic recovery.

The meeting held at Government Buildings today was attended by the Ministers for Finance; Jobs, Enterprise & Innovation and Communications, Energy & Natural Resources. Economic Regulators together with the Head of Financial Regulation at the Central Bank, the Competition Authority and the National Consumer Agency participated in the meeting (see attached).

The meeting focused on ways to promote greater efficiency in the regulated industries so as to reduce the costs of services to enterprises and consumers. It also examined the incentives and prospects for investment and innovation in key sectors and the potential for enhanced job creation.

Large-scale investments are being made, for example, by private firms and the semi-state sector to upgrade infrastructure in the energy, communications and transport sectors. The annual value of these investments currently exceeds €4 billion. These sectors also account for some 15% of GDP and directly employ over 100,000 people, many in highly skilled positions. To ensure the continuation of essential investment programmes, Ministers and Regulators at the meeting committed to maintain a stable and proportionate regulatory framework.

In view of the necessity that prices charged by regulated firms in Ireland should compare favourably with those in European and other international markets, it was agreed that regulators and relevant Departments would work together to develop and publicise appropriate benchmarks to aid international price comparisons for key utility services.

In addition, in the context of implementing its public service reform agenda, the Government has asked the Regulators to make submissions to their parent Departments in respect of the recommendations on regulatory reform (governance, accountability and structures) contained in the Programme for Government, the Report of the Review Group on State Assets & Liabilities and the 2009 EIU/Compecon review, with a view to more effective regulation, delivering operational cost efficiencies and the sharing of scarce legal and economic resources.

In relation to the Central Bank of Ireland, the Government is committed to a programme of legislation to reform the structure of the Bank and to enhance its supervisory and enforcement capacity.

The Taoiseach indicated after the meeting that

“there was a clear acceptance by all present of the need to do everything we can to stimulate investment in infrastructure and innovation in the regulated areas and in the wider economy by ensuring a relentless focus on minimising input costs for industry and households. It is also vital that people, facing tough economic conditions, have access to fairly priced utility services and the best information to empower them as consumers. We will work to ensure that the regulatory regime remains flexible and fit for purpose, and to create a climate that fosters entrepreneurship and employment.”

” In the coming weeks the regulators themselves will have the opportunity to advise Government on giving effect to the commitment in our Programme to streamline the regulatory system and strengthen the consumer interest and, in this regard, I welcome the practical steps that have already been taken to merge the Competition Authority and the National Consumer Agency. We have agreed to meet again by the end of the year to review progress on the specific measures discussed today, including on cost performance and strengthening accountability.”