Thursday, 20 January 2011
Dáil Éireann Debate
Deputy Olivia Mitchell: In these dying days of the 30th Dáil, I welcome the opportunity to contribute to the debate on this Bill because the issue it addresses has been on the agenda for as long as I have been a Member, which is 13 and a half years. I welcome the Bill. It has two main parts, which are the deregulation of the remaining protected segment of the postal market and the provision for the introduction of postal codes. Both measures are long overdue and are welcome.
Most people recognise that they were coming, although Members in both Houses have expressed various concerns, one of which is the belief that there is a hidden agenda behind the introduction of competition into the remaining closed sector of the market, which relates to the 50 g letter. Others expressed concern that even if no harm is intended to the existing role of An Post, there may be unintended consequences. In remote parts of the country, as a result of the introduction of competition, there is concern people will not get post. This will be dealt with by designating An Post as a universal service provider for seven years following enactment of the legislation. ComReg has been nominated as regulator and it is up to its staff to ensure the seven year term is enforced.
Following that period, the service is not guaranteed. Perhaps there is justification for people’s concerns because one would wonder why a provision for what will happen after the seven year term is needed as nobody knows how the postal market will evolve over the next while, given communications are changing at such an enormous rate. However, if the regulator does its job, there should not be concern about this matter.
The closure of post offices is an issue and people are worried that the social service role they play, particularly in remote areas, may be lost. This is probably an unnecessary concern because the deregulation of the 50 g letter service will not result in the introduction of competition and, therefore, the Bill will not have an immediate impact on the number of post offices. However, it is possible that competition in the future could result in greater efficiencies, which could result in the reduction in the price of a stamp, which is the purpose of the legislation on the one hand. It would be good for the economy and for jobs but it might preclude the subsidisation of uneconomic post offices, which are being subsidised currently by the stamp regime.
There will not be a significant increase in competition in this sector but post offices play an important social services role in rural areas. It is a tribute to An Post that it has succeeded in being a profit making organisation and a postal service provided on the strength of a regime based on the 55 cent stamp. I question whether it is the role of a post office to provide a social service but, as there is no alternative, I understand people’s concern that this role could be lost without an alternative being put in place.
There is concern among An Post workers and those operating in the wider postal services market that snail mail is being replaced by electronic mail. That has been going on for a number of years and alternative roles such as the provision of banking facilities have been sought for An Post in an attempt to maintain the post office network throughout the State. Letters will not disappear but they will become less common.
In the past ten years we have seen a significant drop in the number of letters. As a public representative it is amazing to see the difference in the amount of post coming in the door compared to what it was ten or 12 years ago. Nevertheless, as one door closes for An Post and postal services, another one opens. I refer to parcel mail which is a significant growth area. An opportunity is generated for An Post by the growth in online shopping, which is definitely the next big thing in the retail business. In fact, it is here already. I was amazed speaking to young people over the Christmas who scarcely visited a shop to buy their Christmas presents. I am not sure the shops would be too happy about that. Every present was bought online and delivered by DHL, An Post or whoever. There is an opportunity for An Post to get involved in that area. If An Post is to survive and prosper it must capitalise on the opportunities the growth in parcel post present. It must gear up to compete with the other providers that are already in the parcel market. There are considerable giants in the market already. Nevertheless, it is a natural job for An Post and it is well placed to step up to the mark in that regard.
It is crucial that An Post remains competitive from the point of view of its survival, ability to prosper and for it to continue as the major player in the market. There will be fewer letters but they will remain a significant and important part of the market. Post also has an important jobs element which is sometimes forgotten. One thinks only of the postman but there is so much else involved in delivering a letter once it has been posted.
I wish to comment on the wider postal market, the downstream services, postal providers who are licensed to provide postal services in the processing, printing and packing of letters which they then buy the services of An Post to deliver. That is a significant jobs market. It is important that those jobs are not lost to this country. There is a practice in An Post at the moment which I am sure other speakers have raised, namely, of charging less to overseas providers of the service than it does to Irish providers. The result is that batches of letters that originate in this country are bulk dispatched overseas to be processed, printed, packed and sent back to be delivered by An Post because An Post is offering a cheaper rate to Royal Mail, Swiss Post or the French postal service than they offer to Irish providers of the service. It is madness to allow a semi-State organisation to do that. It is losing jobs to this country and it is inefficient from an environmental perspective. I invite the Minister, Deputy Eamon Ryan, to pay attention. The two Green Party members do not appear to be desperately interested in the debate. The situation is highly undesirable from an environmental point of view. As well as that An Post maintains it loses money on providing the service to overseas providers. It is difficult to understand why it pursues such a policy. I will submit an amendment on the matter.  Jobs are being lost to this country and the matter must be rectified. This is a highly anti-competitive measure from the point of view of a Bill that is concerned with introducing competition into the market. I refer to the segmentation of the market and charging a different price to local providers than others. The competition issue must be examined. I urge the Minister to consider the amendment favourably.
Another concern relates to the provision for burden sharing. This is the mechanism whereby in the event of the universal postal service provider designation becoming unsustainable from An Post’s perspective, other providers in the market would in some way subsidise it. I understand the thinking behind the measure but the reality is that, first, the opening up of the market to the 50 g letter will not result in new entrants but, nevertheless, An Post is well able to compete as it has the network, expertise and experience of the market which nobody else has and has had a long-standing monopoly and, therefore, it should be able to outperform any newcomers into the market.
The fear of cherrypicking in urban areas has been mentioned by others. The suggestion is that a provider would move into a discrete market, for example, Athlone town, and that it would seek to do the easy job where housing density is concentrated. The reality is that such activity should not be a threat to An Post which has had a long-standing monopoly and has all the expertise and experience and would be well able to undercut new entrants into a small part of the market and see off competition. That fear is not justified.
As a commercial semi-State company offering universal service provision An Post has succeeded in meeting all of its costs to date from its own resources based on the 55 cent stamp. I do not see why that would change in the future. My worry is that the insertion of the provision for burden sharing, should An Post find itself unable to continue in its role, could cause the foot to be taken off the pedal in terms of ensuring efficiency within the company. That is a natural human reaction. If one feels someone will pay one for losses incurred, one will not be fully motivated to achieve all efficiencies possible. The reality is that instead of burden sharing it becomes just a subsidy for inefficiency. I do not say that will happen but there is a danger attached in having the cushion as offered in the provision outlined.
I am also conscious of what happened in the health insurance area where there was an attempt to introduce burden sharing. The measure was challenged in the courts and the challenger won the case. I wonder why it was necessary to put it into the legislation. If An Post were to find itself under such intense competition that it could not continue to provide a service, the Government of the day would have to consider what could be done to ensure there was a service. The point of introducing competition is that there would be competition, not that individual firms would be supported by other firms. While I understand the reason the measure is in the Bill, it is not in the public interest and probably not in An Post’s interests either in the longer term.
My final point relates to the introduction of postcodes. We have been talking about them for a long time. I am delighted to hear that it is happening. I believe the scheme is due to go out to tender soon. I fully support the concept. It is absolutely essential, in particular for parcel post, which is the next big thing. Whatever about having a postman wandering around trying to deliver a letter, who might have local knowledge, it is not acceptable to have vans driving up and down laneways looking for the correct Mrs. Murphy for the delivery. I welcome postcodes. People seem to have a fear of them on the basis that they might be targeted for marketing purposes. We are targeted for marketing purposes anyway so we might as well be targeted for something in which we might have an interest.
I favour the use of a global positioning system, GPS, for the postcode system. The GPS uses latitude and longitude. I refer to it because I understand it is not the system An Post favours and it may not be what the committee has recommended either. However, whatever system we use must stand the test of time. To choose one that happens to suit the incumbent does not represent good, long-term thinking. I call on the Minister to consider something that will stand the test of time. The Minister must recognise that technological advances are ongoing and that technology has changed dramatically since the system An Post favours was first recommended and since the committee’s recommendation, which is relatively recent.
I realise the An Post choice may suit its current system but I do not believe it is the best system in terms of international best practice. We should not base any system on arbitrary lines on a map, which constitutes the postal system at present, because lines on a map may change. Presumably, at some stage, we will begin building more roads and there will be changes. The topography and the face of any mapping area may change but latitude and longitude will never change. The system is fool-proof as well. It is of great benefit to the emergency services, which are able to find a caravan on the side of a mountain or anywhere. It is always fool-proof and never changes. Also, it is value-free, which is not the case with the current postal service. Having Dublin 4 after one’s address may add several million euro to the value, although no longer billions. However, it adds value to one’s property.
When An Post moves to a postal system based on the current lettering, which is apparently what it plans to do, there will be war because in many cases people do not live where they believe they live. In my constituency, some people believe they live in Dublin 16 but, in fact, according to the An Post sorting system they are living somewhere else.
The introduction of a system which is completely valueless and whereby it does not matter or people do not know whether one lives in L, X or Y78, would be far better. It would break away from the system which makes one area more desirable than another. We should consider using a GPS based on latitude and longitude from this point of view as well.
I welcome the Bill and I am pleased to have had the opportunity to speak on it. I will submit an amendment related to the possibility under the current system that we are losing jobs to other postal services and countries. This matter must be examined.
Deputy Mary O’Rourke: I apologise because I had thought the rírá in the Dáil would continue for a good deal longer. I realised I was due to speak next but, thankfully, by the time I came from the bowels of the LH 2000 building, my colleague, Deputy Mitchell, was here to speak. I am pleased to speak on the Bill. I am looking at the Minister and I wonder will he get this through? Will it go anywhere? Will there be Committee Stage? Is anyone interested in Committee Stage?
Deputy Mary O’Rourke: Deputy Mitchell already has an amendment. Much will depend on what I hear from the Minister at the end of the Second Stage debate. Does the Acting Chairman know whether Second Stage will finish today?
Acting Chairman (Deputy Charlie O’Connor): No. If I were to follow the schedule before me, it will not be today. It appears this debate will continue beyond 3.30 p.m. Since the debate will adjourn today, it will be held again another day. I trust that is helpful.
Deputy Mary O’Rourke: Then it will have to go to Committee Stage. I understand this is the last stage of liberalisation. In my day as the Minister for Public Enterprise, I introduced the original liberalisation from Europe. I understand there have been two stages along the way.
I was interested in the information we received, which is knowledgeable and concise. It states that since 2002 there has been no drop in domestic mail, which amazed me. The Minister is shaking his head but that is what is written in front of me.
Deputy Eamon Ryan: In the past three years there has been a significant drop. This was probably compensated by the rise in earlier years. Unfortunately, however, in the past three years there has been a drop of approximately 20%.
Deputy Mary O’Rourke: It has stabilised somewhat. We were informed that once liberalisation started and technological changes were introduced, it would mean that the people would no longer write or post letters. I wish to speak on this point. Naturally, we all receive e-mails, sometimes up to 20, 30 or 40 per day. People should try answering those. Previously at least, one had the luxury of opening a letter, reading it and thinking about how one would reply to it. Now, correspondence comes by e-mail and within one hour one receives a call seeking a reply to the e-mail or one receives a second e-mail in which the strident demands are made again. Somehow, people who send e-mails believe that the person to whom the e-mail is addressed has all the time in the world to examine and reply to it in depth and at length. None of the technological advances, including facsimile, e-mail, text messaging or telephones, will ever take away the need for letters by mail and, I plead, they never should. There should always be room in a person’s life and in his or her daily communications with people to sit down with a sheet of paper and pen and write a letter.
I recall when I was teaching in secondary school in Athlone. The formation, writing and addressing of a letter was always a fine thing which one taught one’s pupils. However, there is a mystery to the written letter. Naturally, I will appear hopelessly old-fashioned and, no doubt, the Minister will ask where I have come from. I come from a large town in which there is a good mail service. There is a mystery and intimacy to the written word. How can an e-mail be intimate? I am unsure whether it comes through cyberspace or elsewhere. However, it is there, naked for everyone to ponder upon. However, a letter is sealed, has a stamp on it and it has an address.
Deputy Mary O’Rourke: Yes, perhaps. However, the Deputy should be aware that it all depends from whom it comes. No doubt in the months ahead, Deputy Michael D. Higgins will be sealing many such letters with a great many kisses. I recall when my sons were in college and the pleas for money would be made. I used to sit down and write a letter agreeing to send money but asking what it was being spent on and whether they could give an account of themselves. The romance of the post is significant. I do not mean romance in a love sense but rather the work of the post.
Generally speaking, I am aware of where the Minister, Deputy Ryan, lives. Clearly, it is in Dublin South. However, I am unsure if he noticed, as have those of us in rural Ireland, that during the time of the severe snow and frost, there was not one day when the postman did not come to my door. He would ring the doorbell if there was a large package that would not fit.  He talked to me and I to him. I realise this may sound fey and silly but it is not. It is an intrinsic part of people’s lives to receive and send mail. I realise the universal service obligation is being underpinned for seven years to allow it to continue if it is not paying its way. What will happen after that? For example, I have no doubt we will not be able to deliver to Valentia Island. The competition will not deliver up to the Geevagh Mountains in County Sligo. They will take the new smart postcodes and deliver to those areas at a manageable rate. What, however is to happen, to rural Ireland? Seven years is a long time. What will happen after 2018 if An Post finds it cannot sustain the costs of delivering to rural areas? It used to be An Post’s proud boast that up to 76% of all letters were delivered within 24 hours.
Deputy Mary O’Rourke: That is excellent. I recall the great chief executive of An Post, Mr. John Hynes, telling me when I was Minister with responsibility for the postal service that the rate was over 90%. Something in my head always told me it was not. It was probably the nice thing to say to the Minister as it would keep her quiet for a while.
There is still a great degree of certainty that if one posts a letter in Dublin, as I had to do today to a constituent in Castletown-Finea, County Westmeath, it will be received tomorrow morning. It is powerful that a letter from the capital can still be delivered to the heart of rural Westmeath personally, cheerfully and with one-to-one interaction.
The Minister knows An Post union members are concerned that the universal service obligation will go the same way as those in other countries that liberalised their postal services. Will the Minister publish an itemised table of those EU member states which have liberalised or are in the process of liberalising their services and the number of job losses in their respective companies? An Post workers’ unions have informed us that they are determined there should be no job losses. They claim the job losses in other countries have been horrendous with a decline in services and standards.
I must admit I like the new uniforms for An Post workers. I saw their show of them with the new Bermudas and lengths. In Athlone they have not started to wear them yet, however. I assume they are waiting for this legislation to be passed. My main concern is that after the seven year introductory time passes, it will be decided that Valentia Island, for example as I go there on my holidays, will get its delivery only every second or third day. Will there be a decline in delivery times in isolated rural areas?
While I accept we cannot keep technological advances in communication at bay — like King Canute keeping back the waves — I do not want to see a watering down of the universal service obligation that ensures a modern, sophisticated and useful postal service making daily deliveries. I assume every other member state has its equivalent of ComReg funding the maintenance of the universal service obligation.
Deputy Mary O’Rourke: I sometimes buy books through Amazon and it is a powerful service. Deputy Olivia Mitchell referred to other online stores that deliver to homes. More and more people use online shopping which provides a business opportunity for An Post if it is smart and snappy about taking it up. I am sure it will as there is a good strategic management team in An Post. Before the Minister, Deputy Ryan, departs this hallowed Chamber soon, will he provide the information on the liberalisation experience in other EU member sates, particularly those with similar topographies and geographical spread to that of Ireland?
I thank the Minister for attending the Chamber on a day of great turmoil. No one has copped that it was on 20 January 1987 that the Labour Party pulled out of the then coalition Government. On the same day 24 years later here we are again. I was always intrigued because Gemma Hussey, for a brief period, held three ministries. Ministers in this Government will be doing the same double-up job. I was also glad the Taoiseach said they will get no extra money or entitlements for doing this. However, I am sure they would prefer to be in their constituencies and not dripping with ministries to which they will have to give a measure of attention. I noted the events of this date recently when I was researching materials for my book. It must be an affliction date that has lingered on since 1987.
Deputy Michael D. Higgins: I wish Deputy O’Rourke every success with her book. I have no doubt there will be an entire chapter that will cover the day on which she hit the bell and announced the privatisation of Eircom and the disastrous consequences which flowed from this.
I wish first to put a question of an administrative nature to the Minister, Deputy Ryan, regarding whether he has permission from the Cabinet to accept amendments to this legislation. The issue of whether he has such permission has an impact in the context of whether Second Stage will be agreed. The Labour Party’s spokesperson, Deputy McManus, has already indicated her position in respect of Second Stage and stated we will be tabling amendments on Committee Stage. It is important, therefore, that we should be aware of whether the Minister is open to accepting such amendments.
Deputy Eamon Ryan: I accepted a number of significant amendments in the Seanad. I am always open to accepting amendments. However, I will not be in a position to answer the Deputy’s question until certain of the amendments to which he refers have been tabled. Our actions in this regard obviously will be also subject to time limits relating to Dáil business.
Deputy Michael D. Higgins: I appreciate that. However, the Minister will appreciate that there are some Ministers who have set their faces against ever accepting amendments while there are others who have accepted them. I was merely seeking clarification in respect of this matter.
I wish to comment on a number of the principles underlying the Bill. The Minister is aware that I have great respect for him. I do not say that just for the sake of being polite. I previously served as Minister for Arts, Culture and the Gaeltacht and I had responsibility for broadcasting. I also worked in the area of communications. On foot of my experience in these areas, I wish, therefore, to make a few points.
My first point relates to the background to the legislation, which involves the implementation of the third phase of liberalisation in respect of postal services. In many ways, the legislation makes it possible for the Minister to introduce a system of regulation which may or may not defend certain principles. We must deal with such matters in general on Second Stage before discussing them in detail on Committee Stage.
In the background to the legislation there is a suggestion in respect of the balance between a liberalised market and the principle of universality. I wish to comment on this matter in the context of the concept of the universal service obligation. I agree with the sentiment expressed by Deputy O’Rourke to the effect that it is every citizen’s right to receive post. This is important in a number of different ways. It is certainly important in a European sense. The discourse engaged in during the evolution and adoption of the various European treaties has frequently returned to the concept of social cohesion, that is, the ideal to emerge would be a Europe of the citizens which would be inclusive and so forth. The greatest failure of the European Union — in the various statements made by Jacques Delors and his successors — has been its lack of success in making contact, in the context of a genuine sense of inclusion, with all of its citizens.
Social cohesion is important. If an unrestrained, liberalised version of the market is created in the absence of such cohesion, an underclass is created and this is added to the existing levels of poverty. In turn, this breaks down into different social categories which include the aged and the poor in particular. As a result, a kind of exclusion that is dangerous in the context of the entire project relating to Europe is created. The notion, therefore, that every system should have the right to communicate through the postal system is neither sentimental nor old fashioned. It is, rather, practical, particularly in respect of building a Europe that includes all of its citizens.
What we are about here is also illustrative of the failure of citizenship to be delivered as a concept within Europe. We must consider, with extreme care, how we implement directives. I will develop my point in this regard further in a moment. I was not merely seeking to score points when I referred to the disastrous decisions taken by Deputy O’Rourke, when serving as a Minister, in respect of our telephone system. The Deputy cleared the way to allow gangsters to sell a company that was providing a State service over and over again in a way that scandalised everyone. Media commentators at the time suggested that the thing to do was to get in and get out quickly. Those who came in first after the flotation of Eircom were gone again after a few weeks and they made a killing. Many of them are very well known. I am merely highlighting what happens when one takes a State resource or network, transfers it to the market and invites citizens to purchase shares. In the case of Eircom and in the terms utilised in the highly greedy period in this country’s history which is just now coming to an end, everybody “got a piece of the action”.
Let us look to the future and respond to the circumstances I have just described. I will not make many more contributions in this House. However, I recall that at the beginning of my political career I often referred to the effect of the closure of the railways on society. In the area in which I was reared in County Clare there was a small railway station. When this was closed, the elderly people who used to sell daffodils and eggs in the markets in Ennis and Limerick — the kind of activity in which members of the Green Party would be interested and I applaud them for that — were suddenly confined to their homes. They were informed that they could travel a couple of miles in order to catch the bus. However, the bus service in question eventually fell into disuse. As a result of the closure of many of our railways, many elderly people in rural areas — particularly elderly females — found themselves increasingly isolated. Those are the facts.
In the context of seeking to get matters right, there are areas in which it is appropriate that the market should provide choice and cost-effective services — by means of encouraging competition — to the citizens of Europe. If Europe is to be meaningful, citizens must be capable of being connected through every means of communication. The Minister noted that the provision of broadband is a matter for the private sector. When the issue of connectivity was discussed in Denmark, the authorities there decided to do it the other way around. The Danes chose a model whereby citizens would be connected in a general sense in the first instance in the context of schools and basic essential services. It was only thereafter that the market entry point was created. That is the way Denmark proceeded. It created a right of communication and instead of opening up a new divide in respect of information technology, proceeded in the direction of inclusivity.
I oppose the notion that State services are somehow inferior to those provided by the private sector. Previous speakers referred to the points made by the Communications Workers Union, which represents 10,000 people who are employed in the postal service. The points to which I refer are not unreasonable. I agree with Deputy O’Rourke that there is a need to be specific in respect of the universal service obligation. I will not delay the House in rehearsing examples — such as those relating to the VHI, etc. — of what has happened to the health service. How is the universal service obligation to be funded? It has been suggested that the entry of people into certain parts of the market will generate a form of income which will, in turn, make the universal service obligation practical. Does this suggestion constitute plan B? It has been also suggested that An Post will carry this obligation — in the absence of specificity in respect of funding — for seven years and that a review will take place at the end of this period to discover if another entity can be considered in the context of assuming responsibility for it. I am not requiring the Minister to agree with me and I am quite used to being in a minority for most of my life in regard to this thinking. There is not the slightest evidence that markets are rational or inclusive, and practically no evidence in regard to the communications area that markets are necessarily efficient.
Deputy Eamon Ryan: If I may intervene, I saw an interesting comment recently in a book on rational optimism which made a distinction in regard to what the Deputy is saying, namely, while markets in assets are inherently irrational and unstable, markets in goods and services tend to be reasonably stable and reasonably rational. I do not know if the Deputy would agree with that distinction regarding his general comment.
Deputy Michael D. Higgins: I agree, and I wish this kind of dialogue could happen more often. I am well aware of the difference between the irrationality of markets in assets. We could have added the total irrationality of markets in virtual assets such as those which have brought the banking system to its knees and brought our economy to the point at which we have lost economic sovereignty. Equally, this is quite disputable in regard to services.
I have examined that literature. We had this argument before. For example, the Minister knows I have a view that agrees with him in regard to the importance of public service broadcasting. I served as Minister in Europe where I saw that concept of the universal right to tell one’s own story under attack from one Minister after another. It was led by people who had a right-wing ideological position. These are important words. There are people who say not everyone is important. Deputy Mary O’Rourke gave the example of the lady waiting for the postman to deliver a letter up a country road. That is important. If one says the delivery of letters is something to be judged primarily by market viability, one is rejecting the fundamental principle that the citizen’s right to be in contact with one’s society is the most important principle.
In so far as we have become a little academic about the issue, I want to make two points. Mr. Jürgen Habermas, to whom I have referred, has written a new book, Europe: The Faltering Project. He makes the point that again and again people in Europe are being asked to be bound by decisions promoted in a discourse in which they have no part. This is the whole point about majoritarianism in society, about which one would think the Green Party was sensitive. It is isolated, elderly people in remote rural areas and so forth who, while they do not have the same social power, should have the same communicative power. One either has a theory of citizenship guaranteeing the right of every citizen to be in touch with their society or one does not.
I have written about this issue elsewhere. I noted that some people in advocacy groups involving the elderly think they have won when they have come as far as the point of legislation. If one wants to make a real change, one has to look also at the point of administration and how the decision is in fact implemented. These citizenship ideals are particularly important in a State that calls itself a republic. Therefore, we need to hear very clearly that while we are implementing the third phase of the directive, we are doing so because we want to have regulation and want to be able to protect certain values, including the values people like myself identify in regard to citizenship.
We should also undertake social impact surveys, not only in regard to what happens if the service changes for those who depend on it but also for those who deliver the service. It is important, for example, that the people who have developed an ethos as the postmen and postwomen who have been trusted over generations will not be replaced by casual workers who do not come from the same ethos. Therefore, the Minister must give the guarantee on the universality of the service, show the funding mechanism, show the human content of how it will be delivered and then develop a contingency plan in case the competitive model does not produce the resources for the provision of a universal application.
I wish the Minister well if he decides to do all of that. I do not only agree with Habermas, by the way, in that I also believe there is a real discourse issue in the European Union as well as in this country in regard to people who want to be or who must be included in regard to understanding everything we do. There is an assumption, for example, that if people are allowed to vote, as they will on 11 March, and if they do so once every five years, this is the exercise of democracy. Democracy is frustrated every day if there is a bad administrative decision. The fact is there is a State service at present, which has a distinguished record by dedicated workers who have a good relationship with the public in city and rural areas. While I am not antediluvian or arguing against a market principle, I am suggesting we need to give guarantees that cherry-picking will not take place and an unfair obligation will not be imposed on what is left of An Post’s service and its workers. We need security in regard to funding and employment and, ultimately, as far as the public is concerned, in regard to what one would call the consumption of the service or what I would call the exercise of the citizen’s right of communication.
It is important to address these issues as from time to time there is a conflict between what is regarded as the view of the union and the view of the management. We went through a phase of that in Ireland, where managers began dressing differently to look like people in the private sector who they assumed had a kind of monopoly on efficiency and so forth. We know where that led. There were many well dressed people running our banks, wearing very broad stripes. Hopefully, we know where they will be shortly — in our courts.
The truth of the matter is that the service is efficient. An Post has the eighth lowest postage costs and is the seventh most efficient operator out of the 27 countries of the EU. All of that is brought about by the dedicated staff. How can one put a price or a value on such a person spending a certain amount of time with an older person at the door? They are the major source of information on the welfare, health and concerns of many a person in a scattered rural community. The service is invaluable and I like it. One need only consider where we were with the imposition of efficiency without a social impact evaluation, for example, when we decided that those providing the home help service would have so many minutes to get the person up out of bed, so many minutes to clean the person, so many minutes to boil a kettle and then the home help was out the door. We need State-led services based on an acceptance of the citizenship obligation, which is the bedrock upon which we should go forward in all services, including the postal service.
I urge the Minister to accept the amendments we will put down. They are positive amendments and do not ask for a rejection of the directive or its implications. However, they suggest how the assurances I have mentioned might be delivered into the legislation. They are very reasonable amendments. What the Communication Workers Union has asked for is very reasonable and it has my support.
Deputy Johnny Brady: As we now know the date of the election, I would like to wish Deputy Michael D. Higgins well. It was a pleasure to be in his company on many an occasion and it was always a pleasure to listen to him speak in the Dáil. Whatever the future holds for him, whether he will end up down on the farm or in the Phoenix Park, if I am still in the House, I might call in to him for a cup of tea.
Deputy Johnny Brady: I also take this opportunity to voice my appreciation of my great colleague and friend, the former Minister for Transport, Deputy Dempsey, and of the former Minister of State, Deputy Wallace. I wish both of them and their families many years of happiness in their retirement. I also wish all outgoing Deputies who are seeking re-election the best of luck.
This Bill will shape the future of the postal market for generations. The changes it proposes must be carefully considered to ensure we do not make the mistakes made by other European countries in liberalising their postal markets, mistakes which led to job losses, higher costs and lower service levels. Postal delivery is a vital public service that must be considered as a basic right which connects every household and business to a communications and economic infrastructure that is essential to the social and economic well-being of the country.
In the absence of a proven method of financing there are serious questions to be addressed in regard to how the universal service obligation, USO, will be financed. Liberalisation will remove the restricted monopoly that appears to favour the establishment of a sharing mechanism. However, the Communications Workers Union, CWU, would prefer that all funding options are included in the legislation, including State aid. Nothing should be ruled out until we know what a liberalised market in Ireland looks like. We must take on board the lessons learned in other countries such as the United Kingdom where the USO is under serious threat as a result of regulatory choices that were made.
The experience of the Royal Mail indicates how important it is to get downstream access right. If it is handled poorly it could spell the end of An Post and the 10,000 jobs it provides. Access to An Post’s network must be on a commercial basis. In addition, access to the network must not be below the mail centre level as this would render useless much of the investment in technology which An Post has made in recent years and would require the entire delivery network to be reconfigured. An issue of particular concern is the possibility of cherry-picking — also known as cream-skimming — whereby new entrants to the postal market would compete for business only on profitable routes. The effect of that would be twofold. It would reduce vital revenues for An Post, leaving it only with loss-making routes, which are of substantial number, and this in turn would threaten the viability of the USO.
Unfortunately, job losses and liberalisation go hand in hand. This has been the experience in almost every case where a postal market has been opened to competition, as shown by the comprehensive studies conducted by Union Network International across several liberalised markets. Another issue of concern is social dumping whereby decent jobs with reasonable terms and conditions are replaced by low-paid temporary jobs which force employees to maintain a dependence on social welfare, as in the case of Germany.
The social value of the postal service is widely acknowledged by people throughout the State, especially in rural communities. This becomes particularly clear when weather conditions are poor, as we have witnessed in the past 12 months. It is striking that there is no reference in the legislation to the postal network’s role as a vital part of the fabric of our communities. Any decisions of a regulator must take into account the unique value the postal service has in Ireland. With a substantial rural population, particular care should be taken to ensure the interests of a competitive market will not take precedence over or put at risk this social function. It is a vital public service that is part of the fabric of our communities and provides a sense of national cohesion.
Deputy John Browne: I thank Deputy Brady for sharing time. In recent months we have had a great deal of representations from the CWU, including a booklet entitled “Protect your Post”. We have met the representatives in Buswells Hotel, in our offices and in our homes. Most of us meet our postman on a daily basis. These workers have serious concerns about some of the provisions in this Bill. They are concerned about their futures and about how the legislation will impinge on their working conditions and on how they operate the postal service for the future.
We are fortunate to have a strong postal service in this country. We may criticise it from time to time if a letter or parcel does not arrive within the indicated timeframe, but in general the service has been of a high standard. Postal workers are usually very helpful and co-operative. The postman is very much at the heart of the social fabric, particularly in rural areas. In the case of elderly people living alone, for example, their only contact with the outside world may be with their postman. None of us wants to see that change dramatically. There will and must be changes under liberalisation, but those changes must be managed in a way that ensures new entrants to the market do not cherry-pick the cream of the routes while leaving less profitable services to An Post. Such an outcome would have devastating effects.
An Post currently employs some 10,000 staff. On a daily basis it is responsible for delivering 2.5 million items of mail to 2.2 million business and residential addresses using a fleet of 2,680 vehicles and 1,645 bicycles. Every week it serves 1.7 million customers through its unique national network. All of this for the price of a stamp. These workers are providing a vital service. Moreover, the purchase and servicing of vehicles, purchase of uniforms and so on provides spin-off benefits to local suppliers throughout the State.
There was a great deal of criticism of An Post some years ago in respect of its operational losses, with a consequent imperative on the company to bring its operations in line with current Government spending. For example, there has been a reduction in staff numbers, the introduction of efficiency programmes, new collection and delivery programmes, investment in technology and so on. In 2007 the figure for next-day delivery was 77%, increasing to between 87% and 91% in 2010. There are 32 authorisations to companies to the postal market, with 60% of the market already fully open to competition. The post office network has a huge social value and represents an excellent delivery channel of various State services.
It is important the Minister reflects on some of the issues that have been raised during the debate last week and this week. There is serious concern within the postal service that if the Bill is not managed in a proper way, it could spell the death knell of the postal service that we know. The postal service has already been hit by declining mail volumes and is down 16% from 2009. Each 1% decline represents a loss of €5 million. We have the Internet, e-billing and all these modern methods of communication. Even within our own offices, we are inclined to send e-mails and use other forms of modern technology. This is having an effect on the postal service as well. Its representatives met us in Buswells Hotel and they said that their key concern was how the USO would be funded in future. They pointed out that compensation funds have not worked in other countries. They claim that they need State aid as an option in the future. We do not know what the market will look like in five years, so we should have a plan B in the form of State aid if the market needs it. I would like the Minister or the Minister of State to give their views on that.
Deputy Brady spoke about cherry-picking and this is one of the major concerns in the postal service at the moment. There is a need to ensure that An Post has commercial freedom to compete with new market entrants in profitable areas. There is a danger that companies will cherry-pick Dublin, Cork, Limerick, Galway and Waterford, but when it comes to going to Curracloe in Wexford or Ballindaggin in the hills of north Enniscorthy, they just will not want to know. They will leave it to one side and say that the An Post postman will do those jobs. It is important that all the An Post operations be protected in the area of cherry-picking.
Downstream access below the mail centre level will signal the end of An Post, so this should be provided for in legislation. Is that the Minister’s intention? How does he intend to deal with the downstream access area? The Communication Workers Union will tell us that this is an area that will have a serious effect on services if it is not included in the legislation and dealt with accordingly.
This Bill is very important in many ways, but it could do serious damage to the postal services as we know them. It is very important that the legislation would be as it should be. Liberalisation is essential under EU legislation, but it is also important that we protect our own An Post services, which are so valuable to this country. They have served us well down through the years. We criticise it from time to time, but An Post has generally provided a tremendous service. The postman is a very important part of rural Ireland. Maybe he should not be doing so, but the postman often brings the newspaper and messages to old people. During the bad weather period over the winter, postmen provided a tremendous service in parts of rural Wexford and across the country. They helped old people and brought to the attention of the local authorities and health services people who were suffering and isolated.
I welcome this Bill and the opportunity provided to me to contribute on it. At the end of the day, it is important that the Bill reflects the views we have outlined today. The CWU campaign slogan is “Protect your Post”, and that is a very important message. I am sure the Minister will take on board some of the suggestions that are being put forward here.
I wish to begin my contribution with a personal childhood anecdote, which is not in any way unique. We had the privilege of having our postal service delivered by a very strong supporter of the party opposite, who was affectionately known locally as “An Taoiseach”, may the Lord have mercy on him. In return for delivering the newspaper to my father and mother every day, he had his tea in our house. I am glad to say that is a tradition which continues to this day, notwithstanding the fact that since my childhood, many different postmen have come and gone. It is a tradition that continues and it is not a unique thing in rural Ireland.
There is a distinct perspective which needs to be brought to the debate, to which previous speakers have alluded, which is the rural perspective. In the context of the universal service obligation, everybody will want to compete for postal services on Patrick Street or O’Connell Street, but not everybody will want to deliver post to the Muskerry Gaeltacht, to Sliabh Luachra, or to the more remote parts of rural Ireland, because it is not a profitable service. We have to establish first principles in the context of this debate. As citizens of the country, regardless of where we reside, we expect the same level of service provision. It is to the great credit of An Post that for many years since the foundation of the State — indeed even before the foundation of the State — that equality of treatment of citizens has been a cornerstone of the postal service in this country. What most people fear is that this is something which could be lost in our headlong rush to embrace new directives from Europe without adequate scrutiny of the proposals.
In wrapping up the Second Stage debate, I would like to hear the Minister of State outline his vision on how we can re-assure people in my constituency, who are probably reflective of the urban-rural mix but many of whom live in remote areas and who would have real fears due to their recent experiences with An Post’s administration of other non-postal services. I am referring in particular to the services of the local post office. That goes to the kernel of the debate.
I acknowledge that the financial position in which An Post finds itself is quite precarious. Any company that turns over €800 million but makes a profit of only €5 million is not in a comfortable position. The volume of mail being delivered is falling year on year, due to the downturn and due to new technologies and changing human behaviour, and due to cost and competitiveness issues. An Post needs to take stock at management level of the kind of service delivery to which it aspires in the years ahead. A critical component of that must be that the universal service obligation is key. We must acknowledge that this comes at a cost. It is not free and it is not cheap. This Bill is about facilitating competition. We must ensure that competition is fair.
As a representative in a rural constituency I have seen the consequences of the privatisation of Eircom. That debacle has led to great difficulty in terms of broadband provision, for example, in the more rural areas of my constituency. The attempts by the Minister, Deputy Ryan, in the national broadband scheme to reach out to all areas have not been entirely successful. If one contacts Eircom today about any matter, from the provision of a new land line to moving a pole, one will wait months on end for a response because there is no competition. That was a mistake in the manner in which we structured that privatisation. We must make sure that in facilitating competition, as proposed in this Bill, that we do not emasculate An Post in terms of the obligations we want it to deliver.
An Post must think outside the box and look at new technologies. It must consider what is happening in terms of best practice in other countries and how to embrace new technologies. Deputy Mitchell made reference in her contribution to shopping trends, Internet shopping and a parcel delivery service. Parcel delivery is one of the areas where An Post has competition but An Post has a unique network that could enable it outflank many of its competitors by virtue of its post office network. In terms of someone buying something on-line, if An Post were to put in place a series of parcel delivery post boxes for individuals where they can deliver a parcel and access it by virtue of a code that is emailed to them that would be unique to them, we could use the effective post office network we have throughout the country to grow business for An Post and to tackle head-on that aspect of its business which has been haemorrhaging in recent years to private parcel and service delivery people in the private sector.
I met recently with the Minister, Deputy Ryan, and a number of his Cabinet colleagues, unusually, in the context of the closure of a rural post office in my constituency in Béal Atha an Ghaorthaidh. I attended a public meeting in the village some weeks ago where several hundred people committed to retaining that service met and formulated a campaign which, regrettably to date, and notwithstanding platitudes from the Minister and from other Ministers and meetings with An Post, has not borne fruit. We need to hear from An Post on the level of post office provision throughout the country it proposes because with regard to the post office in Ballingeary, for example, the view of An Post is that there is a post office in Inchigeela and in Renaniree and that those are adequate for people’s requirements. However, it is likely that in the foreseeable future those post offices may have their contract relinquished and An Post will say it is withdrawing those services. There will then be a vast swathe of countryside with no access to a postal service.
Rather than being reactive and tied into contractual arrangements, which I understand and appreciate, An Post must present a picture of what is the sustainable level of post office service it can maintain and the business opportunities it has identified that it can grow out of its network of post offices and sub post offices throughout the country. Otherwise, vast swathes of the rural countryside will have no post office network. Notwithstanding An Post’s anxiety to promote the postal agency service, large part of the countryside will not have banking, registered post or parcel facilities in their local post offices. An Post must examine its national remit in terms of post offices and indicate the level of service it can sustain, where it would like to have those post offices located if it were starting with a blank canvass, and how it can grow that business rather than accepting that it is doing a terminally declining volume of business in those post offices and sub post offices.
There is opportunity, and part of that opportunity is embracing the new technologies head-on including Internet shopping, the parcel delivery service and the opportunities that network of local post offices — in excess of 1,000 throughout the country — offers to it in that it can deliver one’s parcel to a local community more effectively and efficiently than any of its competitors. I have no difficulty with competition in principle. Unfair competition, which is the critical point in this debate, poses serious risks to the constituency and the people I represent in rural Ireland.
I will be interested in hearing the Minister’s response. It is time for new thinking. An Post is in a precarious financial position. People will point to the fact that it made a profit of €5 million but €5 million on a turnover of €800 million is not a strong financial position. It is less than 1% of turnover, which in any business would be a worrying signal, and it is declining. This is an opportunity but it will not last forever. The Minister must reassure us in terms of universal service.
Deputy Alan Shatter: I welcome the fact that this Bill is being discussed in the House. There are aspects of the Bill that deserve support and there are other aspects that deserve to be teased out, and many of my colleagues on this side of the House have already referred to them. I am aware within my own constituency the issue of the post code structure is a particular concern in terms of the loss of identity. Whether one’s post is addressed to Dublin 16 or Dublin 14 is something people have grown used to and there is a concern about the lack of clarity derived from the legislation as to the exact direction in which this is heading.
I want to begin by saying that on this day of all days there is something surreal about dealing with this measure which is sponsored by the Minister for Communications, Energy and Natural Resources, Deputy Ryan, and we have the Minister of State, Deputy Cuffe, present in the Chamber. I saw the Minister, Deputy Ryan, in the Chamber at some stage today. I do not know for how long he was here because like other Members I was engaged, as one is on occasion, in other matters while this Chamber was sitting.
It is surreal, in the context of the events of earlier today, that not a single word has been uttered in this Chamber by the Minister, Deputy Ryan, the Minister, Deputy Gormley, or indeed the Minister of State, Deputy Cuffe, as to the current position of those Ministers. This Bill is under the remit of the Minister for Communications, Energy and Natural Resources, Deputy Ryan. What is his position with regard to the events that happened earlier today in the rearranging of the chairs on the Titanic of the Cabinet boat? It is extraordinary.
I would have thought, as a minimum, that as leader of the Green Party, the Minister, Deputy Gormley, or if he is not available the Minister, Deputy Ryan, would have used the sitting of this House today to clarify what is going on within the Government. In the context of this Bill it is of direct relevance. Are we seriously progressing it? Does this Bill have any prospect of completing not simply Second Stage but Committee and Report Stages? That is a legitimate question to ask. Are we simply engaging in a game of political charades in this House?
Deputy Alan Shatter: Before this adjourns today the Minister, Deputy Gormley, should come in here and put on the record of this House the events of the past 24 hours, his discussions with the Taoiseach and whether, for example, in the context of the Green Party, the Minister for Communications, Energy and Natural Resources, Deputy Ryan, sought that perhaps he would act simultaneously with his current brief and that of Minister for Transport. What is the view of the Minister, Deputy Ryan, and of the Minister, Deputy Gormley, of the capacity of the Government to continue to function where all of the Fianna Fáil Ministers have doubled up their briefs?
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