LRC criticises lack of competition in key economic areas

Lack of competition in key sectors of the economy has been criticised by the Labour Relations Commission, which says consumers…

Lack of competition in key sectors of the economy has been criticised by the Labour Relations Commission, which says consumers are paying the price, writes Chris Dooley, Industry and Employment Correspondent.

In a hard-hitting editorial in the latest LRC Review, the commission says the benefits of deregulation have emerged in only a limited number of sectors.

"Key areas like education, the legal profession, auctioneering and indeed the insurance sector, to name but a few, lack an apparent market dynamism or a consumer-driven approach.

"The electricity, gas and telecom sectors - while exhibiting the architecture of deregulation - have yet to display the fruits of real and full competition to consumers." Lack of both price competition and consumer awareness is not confined to the private sector, it adds.

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"Large public utilities have sometimes failed to demonstrate that they have moved out of the 'monopoly mentality', which for many years was the hallmark of much of the semi-State sector."

In general, lack of competition has been a factor in the Republic's higher-than-average inflation, the editorial says.

"How much of average domestic expenditure or the outgoings of the average business or enterprise arise in sectors of the economy where full competition has yet to flourish?" it asks.

In a separate article in the review, LRC chief executive Mr Kieran Mulvey says the threat of industrial action is used "too willingly" in the public sector and in public enterprises.

The commission is concerned, he said, at the degree to which the health services have increased their use of its facilities.

"Effectively the IMO, the INO and the Health Service Alliance have been involved in industrial action or threats of industrial action for some time now.

"It is the second largest category of dispute activity involving the commission, at around 15 per cent. In some cases disputes arise from union frustration over resource delivery."

The threat of industrial action was used less in the private sector than the public sector. This was probably due to "a collection of economic factors".

"It also possibly reflects to some degree the frustration which employees and unions feel at a certain stage of negotiations, when management may not be listening to the case being presented." The new partnership agreement, Sustaining Progress, would encourage greater efforts at local bargaining, he said.

Just over half the disputes referred to the LRC last year were over pay, and a fifth, the next biggest category, about restructuring or rationalisation.

Nearly half the cases completed were in the manufacturing area and 27 per cent were in the public sector.