Communications Regulation (Postal Services) Bill 2010: Second Stage

Wednesday, 24 November 2010

Seanad Eireann Debate
Vol. 205 No. 16
Unrevised

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Question proposed: “That the Bill be now read a Second Time.”

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan): Information on Eamon Ryan  Zoom on Eamon Ryan  I am pleased to present the Communications Regulation (Postal Services) Bill 2010 for the consideration of this House. This Bill is an important milestone for the postal service. Transposing the third postal service directive represents the last step of the liberalisation process of this important market. All mail in excess of 50 grammes is currently open to competitors and the directive now provides for the removal of the remaining area reserved to incumbent postal service providers. Transposition of the directive will mean there are no legal or regulatory barriers to new entrants in the postal sector.

[913]The Bill sets out the regulatory framework for a liberalised postal market having regard to balancing the protection of the universal service, and the development of a competitive postal sector providing high quality postal services. The objective in liberalising any market is the promotion of effective competition and the encouragement of innovation, with a view to improving choice and ensuring access to high quality, competitively priced and innovative products. Postal services can play a key part in the development of Ireland as a smart economy, but that will require a sharper focus on innovation and satisfying the current and future needs of consumers.

An important consideration to be taken on board is that the postal sector is now largely a means for business communications, with 90% of mail volumes either being sent by or to businesses. It is, in essence, only one of many media that businesses use to communicate with customers.

Technological developments in the communications sector and the increasing penetration of information technology in every day lives mean that the nature of how businesses can communicate with their customers is rapidly evolving. There is a generation of people in this country who do not use landline telephony, let alone send letters.

These changes will continue to have a dramatic impact on shaping the development of the postal sector. That sector continues to undergo structural change worldwide with the move to electronic communications accelerating as the senders of mail increasingly try to reduce the cost of communicating with their consumers. All postal operators are facing the challenge of very significant fall-off in mail volumes. The economic downturn facing the country is only going to add impetus to this migration.

An Post must adapt to this new reality. Fighting liberalisation will not be a valid strategy and to do so would be a futile and expensive waste of time. The Bill contains no surprises. Indeed, the liberalisation of the postal sector has been signalled for a very long time. Postal reform began in the EU in 1988 with a review of policy to bring the sector into line with the European Single Market. In 1992, the Commission published its Green Paper on the subject and in 1997 the first postal directive was published. Since then there has been a gradual and managed phasing in of competition to the sector giving all players the appropriate amount of time to adapt to the changes and implement strategies suitable for the new environment. The final step is the transposition of this third directive which is required by 31 December 2010. Stakeholders have been widely and comprehensively consulted on the general approach.

An Post has many strengths, such as its trusted brand and its strong presence in every community in Ireland on every working day of the year, a presence that very few, if any, competitors will be in a position to replicate. Indeed, my Department has met a number of competitors to An Post who wish to expand the range of services they offer when the market is liberalised, but none has the infrastructure to rival that of An Post and all see the need for a successful An Post.

The Government is committed to a strong and vibrant An Post. I believe a commercially focused An Post, offering high quality, competitively priced services is a must for the development of the postal sector. This was also the very strong message I received at the Department’s forum last year. The view was shared by all stakeholders, including competitors and potential competitors to An Post.

The company and its staff must play to their strengths and ensure the company’s resources are aligned with the needs of its users. To do so will involve significant change. This should be under way. The new environment must be accepted and the company must adapt to this, re-assessing its relationships with its customers and its competitors. The Bill provides for wholesale arrangements between An Post and its competitors to be negotiated commercially, with a role [914]for the regulator only where agreement cannot be reached. An Post must explore the potential offered through competitive partnerships with rival postal service providers and ensure An Post remains the postal delivery company of choice for the foreseeable future.

An Post currently wins a significant amount of business from Departments, both for postal services and financial services delivered through the post office network. While Government will continue to support An Post strongly, relying on Government contracts in the future is not a valid or robust strategy for An Post to take to address the challenges it faces. It must fundamentally reinvent itself and I am confident the management and staff are capable of this.

The Bill represents a sensible and pragmatic approach to the liberalisation of the sector. It sets out the high level principles underpinning the regulatory framework, striking a balance between ensuring the provision of the universal service, enabling the development of competition and putting in place provisions around consumer protection. At its heart, the Bill recognises the fundamental difference between An Post and other postal service providers. As the incumbent and the largest operator, An Post will be subject to the greatest amount of regulation. The most significant obligation imposed on An Post is that it will be designated as the universal postal service provider for a period of seven years. The universal service, the essential element of which is the collection and delivery of mail to every address in the State on every working day, is an explicit requirement of the directive. Designating An Post offers certainty to An Post, postal service users, the market and the EU that the universal service obligation will be met. This designation does not, however, prevent the development of competition and ComReg is charged with the objective of enabling the development of competition in postal services.

An Post has, to date, met the costs of providing the universal service from its own resources. It is my strong preference that An Post will continue to meet this from its commercial revenues. In line with the options permitted by the directive, however, I have included a provision in the Bill whereby any potential costs that arise in meeting this obligation which are found to be an unfair burden will be met by the postal industry through a sharing mechanism. It is right and appropriate that those postal service providers competing with An Post within the universal service contribute where the regulator verifies that an unfair burden exists. Other member states have also provided for sharing mechanisms. Exchequer funding of the universal service is not an option and consequently the draft Bill does not provide for it.

An Post’s legal monopoly on the final reserved area of items weighing up to 50 grammes is being removed and the designation of An Post does not in any way preclude other postal service providers from entering the market providing postal services in competition to An Post. ComReg will continue to have the responsibility to ensure the availability of the universal postal service. ComReg will be required to review the designation of An Post, and provision is made for other postal service providers to be designated for universal services after the seven-year period has expired, or for no designation to be made, as the case may be.

Another central theme of the directive and the Bill is the protection of the interests of users. As well as ensuring the universal postal service throughout the country, the Bill also provides for complaints procedures to apply to all postal service providers. The imposition of a price cap will also afford protection against significant price increases for those users who do not have the bargaining power to negotiate a better deal for their postal services, these being individuals and small and medium-sized enterprises.

The Bill contains no new legal or regulatory principles and is not attempting to break new legal ground. The framework being put in place has many similarities to that for the communications sector and other regulated sectors. The detail of the regulation will be the responsibility [915]of the independent regulator, the Commission for Communications Regulation. The regulator has all the resources and powers necessary to do so and I am confident the many lessons learned in the regulation of that sector will be put to good use when regulating the postal sector.

Key to the development of the postal sector and the knowledge society will be the introduction of a location-based code throughout the country. The Bill contains a basic provision to enable the State to establish a national postcode system. Deputies will be aware that in October 2009, I announced my intention to implement such a postcode system with a target implementation date of December 2011. This system will be based on the baseline design recommendation of the national postcode project board with the added capability of being further refined into a location-based code. It will be developed, implemented and maintained by a supplier which will fulfil the role of the postcode management licence holder. This supplier will be procured during 2011.

  12 o’clock

The Bill is divided into three Parts. Part 1 contains standard preliminary provisions and amendments to other enactments. The main part of the Bill, the regulation of postal services, is set out in Part 2. This part addresses ComReg’s role and powers. It defines a universal postal service and provides for the designation of a universal postal service provider, price regulation, authorisation procedures and conditions, and the regulation of the terms and conditions around the provision of free postage to electoral candidates. It also addresses enforcement and offences in relation to postal services. Part 3 provides that the Minister for Communications, Energy and Natural Resources may establish, maintain and operate a national postcode system.

The Bill, when enacted, will be included in the collective citation “Communications Regulation Acts 2002 to 2010”, and be read together as one Act. The intention is for the Bill to come into operation on 1 January 2011, with the exception of section 43 which relates to the referral of postal packets to the Revenue Commissioners and Part 3 which provides for postcodes.

Some key postal legislation has been updated by this Bill in order that it is compatible with a liberalised market. Some of this legislation dates back to before the founding of the State and repeals and revocations are provided for in Part 1.

Part 2 is the essence of the directive. ComReg is designated as the national regulatory authority for the directive and its functions, objectives and powers as set out in the principal Act of 2002 are amended accordingly. ComReg is charged with ensuring the provision of the universal postal service, promoting competition and innovation, and ensuring compliance by postal service providers with their obligations.

Part 2 addresses ComReg’s enforcement and information gathering powers in relation to postal operators, mainly in chapters 1, 2, 3, 9 and some of chapter 10. The design of the enforcement element of the postal framework must be proportionate. In this regard, the power to summon witnesses and examine them under oath, which represents a very strong enforcement option, is not appropriate for the postal sector at this time. Similarly, I am confident the enforcement powers available to ComReg for pricing and access will allow it to discharge its competition functions without extending co-competition powers to the postal sector.

ComReg’s enforcement powers will result in improved services and more choice for the consumer, safeguard the provision of the universal postal service and provide regulatory certainty to encourage more players to enter the market. The individual consumer, the business sector and the wider economy will benefit from increased competition and a broader range of services, which is the ultimate aim of this important Bill.

The essential element of the universal postal service is the collection and delivery of mail to every home and premises in every corner of the State on every working day. This is enshrined [916]in chapter 3. Chapter 4 designates An Post as the universal postal service provider for a period of seven years. ComReg is to review this designation before the end of the period and may designate An Post again, designate another postal service provider or decide that no such designation is required. ComReg is also required to ensure the reasonable needs of users are met and will specify by regulations the services to be provided by a universal postal service provider.

Chapter 4 also provides for oversight by ComReg of a universal postal service provider’s terms and conditions. This replaces An Post’s power to set out its terms and conditions in schemes under the Postal and Telecommunications Services Act 1983, under which it was established. This is more appropriate in a liberalised market.

ComReg will also have a role in price regulation. In the interests of protecting consumers in those products or market segments in which An Post, as the dominant postal service provider, is not likely to face competition at least in the immediate term, the Bill enables ComReg to impose a price cap, providing certainty to both An Post and its customers.

A central theme of the directive is the protection of the interests of users. In this regard, the Bill sets out in section 23 the tariff principles with which the services of a universal service provider must comply, including affordability and cost orientation.

A Leas-Chathaoirligh, I am slightly concerned about the vote in the Dáil. I have two pages left and I am unsure about the procedure to be followed.

An Leas-Chathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  The Minister, when he comes into the House, is usually paired.

Deputy Eamon Ryan: Information on Eamon Ryan  Zoom on Eamon Ryan  In that case I will happily finish. I thank the Leas-Chathaoirleach for his reassurance. I was thinking that as soon as the bell stopped I would have to run.

Section 27 provides for the setting and monitoring by ComReg of quality of service targets for the designated universal service providers, while section 37 provides that prior notice be given to users where a postal service provider intends to withdraw a postal service that is within the scope of the universal postal service. In addition, under section 38, every postal service provider is required to draw up and implement a code of practice for dealing with complaints from postal service users. ComReg will resolve disputes that remain unresolved after the procedures in the code of practice have been followed.

Chapter 6 sets out the obligations with which postal service providers must comply, distinguishing, as does the directive, between postal service providers depending on whether they offer services within or outside the scope of the universal service. All postal service providers are required to register with ComReg, and section 32 is fundamental to the regulation of postal services in that ComReg is required to publish guidelines to enable providers to declare whether the postal services they supply are within or outside the scope of universal service.

Section 40 extends protection for whistleblowers who disclose appropriate information regarding the postal sector to ComReg. Chapter 7 contains a series of technical provisions associated with the provision of postal services, while chapter 10 provides for offences, including the opening of postal packets and mail bags, the sending of certain items by mail, the obstruction of a universal postal service provider, malicious interference with post boxes, and the secretion of postal packets. Chapter 11 amends the regulation of the provision of free postage to electoral candidates, although this is not a requirement of the directive. In keeping with the spirit of electoral legislation, the principle of free postage for electoral candidates remains unaltered. The provisions in the Bill reflect the fact that An Post will no longer make statutory schemes under which its terms and conditions in this regard are set, and provision is [917]made for the Minister for Finance to designate An Post or another postal service provider to provide free election post.

Part 3 provides that the Minister for Communications, Energy and Natural Resources may establish, maintain and operate a national postcodes system. This provision, as I said, will be commenced during 2011.

In addition to these provisions, I will be introducing a number of amendments to the Bill on Committee Stage. These amendments are being examined in conjunction with the Office of the Attorney General and will provide for an appeals mechanism for affected persons to appeal decisions made by ComReg, as well as enabling the Minister for Communications, Energy and Natural Resources to issue directions to all postal service providers for the purpose of provisions under the Interception of Postal Packets and Telecommunications Messages (Regulation) Act 1993.

As Members know, the directive has a transposition deadline of 31 December 2010. I look forward to hearing the views of the Members of this House on this important Bill and their assistance in facilitating its early passage into law. I commend the Bill to the House and I am pleased to be able to bring it first to the Seanad where we have successfully debated a number of Bills in recent years to good effect.

Senator Joe O’Reilly: Information on Joe O'Reilly  Zoom on Joe O'Reilly  I welcome the Minister and acknowledge the fact that he has initiated a number of Bills in the House and has engaged fully with the House on all occasions.

As we are debating the postal services Bill, it is worth acknowledging the current success of An Post in terms of delivery speed. The recent ComReg report is heartening in that respect. A total of 87% of mail is delivered throughout the State within one working day while the equivalent proportion in Dublin is 86%. The delivery service is excellent. In addition, An Post is operating based on postage costs. It is not being subsidised by the State. It is self-financing in that regard, which is a major achievement. Acknowledging that success is a good backdrop to our discussion of the legislation. The Bill seeks to transpose Directive 2008/6/EC, the third postal directive, which provides for the final phase of opening the postal services market through the removal of the reserved area, that is, the delivery of letters weighing less than 50g.

The first issue that merits discussion in the House, now and on Committee Stage, is the universal service obligation, which is vital. No one in this House is more acutely aware of its implications and social importance than I am because of the area I am from. It is a vital service. I will not labour the point other than to say that all citizens of the State are equal under the Constitution. They must receive equal service and they must get their deliveries. It is critical.

Under the legislation, An Post will be the sole universal provider for seven years. What is disturbing is that after seven years, ComReg is not obliged to appoint another universal service provider. It may do so and it may appoint any company, but it is not legislatively obliged to do so. In an Irish context, that is disturbing. I am not convinced we will be in a position to dispense with a universal service provider in seven years. This is something we need to keep an eye on. We have removed many aspects of rural living and affected the lives of those beyond the Pale, in all senses of the word, it is vital we do not remove from these people the last vestige of dignity, which is access to postal services.

ComReg has the power to designate different postal service providers to provide different aspects of the universal service obligation. For example, An Post could be responsible for Dublin, while some other company could be responsible for Cork and yet another responsible for the region around Athlone or Galway, where my colleagues present come from. In that case, what would happen in the border regions between these areas? Would there be different standards of delivery within each? What about the cost? It could be a nightmare scenario. I [918]am not happy that this is dealt with sufficiently. My basic contention is that we should observe European law which essentially I accept. We will not vote against the Bill as it is a legislative imperative that we follow the directive, but my fundamental contention is that we should do so to the minimum possible degree, with the greatest focus on the needs of the country, and that we should use our discretion in its implementation to the benefit of the people.

I am concerned about different standards in different areas. It could prove difficult for some postal operators to deliver the service in the proper way. We run a real risk of having deregulation in the most obscene sense to the extent of having an uneven standard of service and problems in Border areas. There could well be different prices in different areas, different delivery times and an entirely different approach which ultimately would be a nightmare. I am not saying benign administrations in the future would wish to do so, but we should build in legislative constraints to prevent anyone getting this wrong.

An objective empirical study of European postal services established that Ireland was not able to accommodate two national providers of postal services as we did not have the critical mass or a sufficiently developed economy to withstand that level of competition. This is a disturbing finding. We need to be concerned about this if we want to maintain nationwide delivery. If the universal service obligation is abolished, studies, including the one by PricewaterhouseCoopers, suggest Ireland will not be a Mecca for competition in that major private operators are not likely to want to come and operate throughout the entire country, but they may want to cherry-pick, wherein lies the difficulty. We must protect consumers in that scenario. A number of objective consultancy studies have been carried out in that regard.

There is an issue with prices, which are reasonable. The great mantra in opening up competition is that costs will be reduced. We all accept that to increase trade and employment, we need to reduce costs. However, the cost reductions to be realised here will benefit large industries and services; in other words, small and medium-sized enterprises, ordinary consumers and those at the lower end of the service face increased costs and will almost be providing a compensatory mechanism. SMEs, individual consumers and small organisations, including local NGOs and voluntary organisations, will be subventing large corporations. This is a very sinister aspect.

Most of us, particularly those of us who come from rural areas, will have attended public meetings about the closure of a local post office — I have sat through such meetings for hours. They are disturbing and traumatic events because a postmaster, postmistress, his or her family and other local people might be losing work.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  Real people.

Senator Joe O’Reilly: Information on Joe O'Reilly  Zoom on Joe O'Reilly  A community is losing another vital service following the amalgamation of schools and the closure of the Garda station, which is all very depressing and brings back memories of the 1950s. There is a risk that this legislation will lead to the closure of small local postal outlets as a consequence of opening up to competition. While this is happening already to an extent, at least there is control and a democratic input. I am very concerned about that prospect. The Minister should consider introducing amendments on Committee State to offer protection in the legislation. In Germany 21,000 full-time jobs and 12,000 part-time jobs were lost following the introduction of competition, while 11,000 jobs were lost in Japan. This means we will suffer job losses at possibly the worst time. All of us would gladly spend every waking hour trying to encourage job creation and the risk to jobs represents another difficulty with the legislation. While we have no alternative but to accept the directive, we need to build in as many safeguards as we can and — to use that awful expression — have [919]something of an Irish solution to the problem. If we do not, we run the risk of losing small post offices and jobs and increasing the cost of postal services.

Through a levy, private operators will, rightly, subvent the universal service provider. I ask the Minister to clarify if European law precludes State subvention at all times. If it does not prevent us availing of the option of State subsidisation, we should not rule it out. If the levy does not suffice and there is a risk posed to a good quality universal service, we should have that option, even though it is the last thing we would want to avail of. Just as we frequently talk about job creation and cost competitiveness, we also talk about the need to reduce the cost of public services. Subvention would be the last option, but I would not be opposed to providing for such an option in the legislation.

The legislation will give the green light to the introduction of postal codes, to which I have no objection. While modern reasoning suggests they are more efficient, I would like to be assured that they will in no way diminish, confuse or make it difficult to deliver post efficiently.

Regarding postal codes, I am concerned about the complexities of addresses and local idioms in isolated rural areas that might prevent the efficient delivery of post. Some years ago we used to complain about the speed of An Post deliveries. However, An Post has upped its game and been an unqualified success. The great work it has done in increasing the speed of delivery and ensuring next day delivery should be acknowledged. I am concerned, however, that its success could be damaged in certain areas by the introduction of postal codes. I would like the Minister to outline his Department’s approach to the issue. I could spend the last three minutes of my time by asking how complex addresses, including Gaelic versions, local idioms and distinctions, will be dealt with. I am concerned that issues such as holiday homes could turn into an administrative nightmare. I hope we can return to these points on Committee Stage when we will discuss any amendments the Government or we will table in keeping with our role in Parliament. First, I am concerned about the universal service provision, that it will be maintained evenly across the country and at no extra cost to consumers. It should not place a burden on the ordinary consumer and on small and medium enterprise as a result of cherry-picking and so forth. Second, I am concerned that we do not lose local postal outlets through their random closure as a consequence of this. There is a risk of unevenness of service in certain areas and a disparity between regions due to different service providers in different regions. I am anxious to maintain evenness in that regard.

I am also concerned about jobs. All the empirical findings from Germany, Japan and other states show that no state has achieved this objective without a loss of jobs. That is horrendous, frightening and a great concern. There is also the issue of the general quality of service and its cost. While I acknowledge there has been a move to information technology, there is still a core number of people who use the traditional way of communicating by letter or parcel. They have that right, regardless of where they live, their means or their level of education. If we can protect that, I have no difficulty with the legislation.

Senator Martin Brady: Information on Martin Brady  Zoom on Martin Brady  I welcome the Minister. There are some key issues which I wish to discuss with regard to this Bill. They include the reliability of the service and job losses. There is also the connection with people in rural areas who are disabled and whose only contact with others for much of the time is the postman or postwoman.

An Post is the last national postal operator. It receives no subvention from the Government. If one posts a letter to Donegal or Enniskillen from Dublin, it costs 55 cent. The service is delivered to any part of the country for the price of a stamp. What does liberalisation mean? To liberate something means one gives it its freedom, and to liberate a market simply means that one makes it a free market. A free market is one in which anybody can compete to provide services, with products and prices determined by what the market will pay. I am concerned, [920]like Senator O’Reilly, that where there is a free market, like in transport and other areas, competition is sometimes not on a level playing pitch. Operators cherry-pick the best areas and do not bother with rural areas where the service is vital. I was born in a rural area and I remember that the postman would bring a pound of butter and other messages from the shop for people living alone. The postman was the only person they might meet for a week. That is very important.

What have been the effects of liberalisation in other countries? As Members were briefed on this issue I will not go through all the statistics. The effects were a decline in the quality of service and very significant job losses. New jobs were created, of course, but at low pay. In other words, the companies got rid of people and brought in others on lower wages. We do not want that to happen here, particularly in our current situation. An Post employs 10,000 people. If it were liberalised under the route we are taking now, it would mean very significant job losses, not just for postmen, postwomen and sorters but also for clerical staff, and fewer promotional outlets. It would demotivate people and morale in the service would drop to an all-time low.

The Communications Workers Union, CWU, of which I was a member, and our MEPs are seeking a moratorium on this. In other words, they want it put on ice for a while until there is a further study to evaluate the effects it will have on the Irish postal market and on other issues, such as jobs and so forth. The viability of the universal service obligation in a liberalised market is another serious issue. Senator O’Reilly referred to this. Consider the experience with the Royal Mail in the UK, which I have studied. One can see how important it is to get downstream access right. If this is handled badly, it could spell the end of An Post and the 10,000 jobs. Access to the An Post network must be on a commercial basis, not based on a price imposed on it by the regulator. In addition, access to the network must not be below the mail centre level as this would render useless much of the investment An Post has made in technology in recent years. It would require the entire delivery network to be reconfigured, which is another issue.

Senator O’Reilly spoke briefly about cherry-picking, a commonly used word. What does it mean? It describes the process where competitors of An Post will, after liberalisation, enter the Irish market and pick only the postal routes which they believe will generate significant profits, that is, Dublin, Cork, Limerick and other cities. They will provide postal services in these areas and extract a profit. However, this is the profit that An Post currently uses to fulfil its USO on rural routes, which are not profitable, and subsidise them. Removing this revenue from An Post in the form of profit taking by other operators would present a significant and grave threat to the postal service currently provided in this country. Furthermore, this approach also does nothing to guarantee the social benefits the postal services currently yield, which are particularly important in Ireland’s dispersed rural community.

Overall, we should consider this carefully for the reasons I have outlined. Many unions and MEPs across Europe, as well as concerned citizens’ representative groups, are calling for a moratorium on the liberalisation of postal services. Why are they demanding this? Such a moratorium would simply pause the process where it stands at present, not stop it, and provide the necessary time to evaluate it.

Senator Feargal Quinn: Information on Fergal Quinn  Zoom on Fergal Quinn  The Minister appears to be getting fond of us as he has been visiting the Seanad quite regularly, although this is the first time he has come to discuss this topic. He is welcome.

I am delighted to speak on this Bill. I was chairman of An Bord Poist for four years and chairman of An Post for six years and I made it my policy when I became a Member of the [921]Seanad not to speak on postal matters. One does a job and one steps out of it and it did not appear right to come back to it afterwards. To a certain extent, after all these years I am breaking that promise I made myself. I recall when we came up with the name of An Post, the then Minister responsible at its launch said, “And in English it will be known as——”. I had to run over to him to explain it does not need a translation. “Post” is the term in both languages; tourists, for example, would understand it immediately. The name has worked very well on that basis.

Back in the 1980s I was impressed with the workforce’s talent in the postal service and their concentration and dedication to service. This was a talent that was to a certain extent strangled when the service was run as a Department. When the service was given its freedom, it was a joy to see this talent emerge.

The then Department of Posts and Telegraphs was divided between An Bord Poist and An Bord Telecom. There was a bit of competition between myself and Michael Smurfit, chairman of the latter. It seemed to have plenty of money, taking four-minute radio advertisements, while An Bord Poist had no money to launch An Post. I remember inviting half a dozen top marketing people to dinner one night to see how we could handle a launch without the money. The idea came up to charge only for a one penny stamp for all handwritten letters on the day of An Post’s launch on 1 January 1984. The handwritten letter clause was to avoid banks and commercial companies using it and resulting in a drop of income. The campaign went very well. It was assumed at the time that it would cost us money. One in four who received a penny letter felt obliged to reply and four days later there was a huge boost in business with the full postage cost being paid.

I have great memories of the people in An Post and their enthusiasm. I am concerned as to how we will hold on to that same measure of enthusiasm. I accept that nothing stays the same in any business. Like many other forms of retailing, the postal service is a high volume, low margin business. In 1983, I first saw a fax machine which I thought would threaten An Post’s future. We do not see any of them now. The Internet and e-mail had yet to be invented. In the 1980s we referred to the public users of the postal service. Only when we changed to referring to “customers”, were we able to make changes. Mail volumes have fallen a massive 16% since the start of 2009, with each 1% drop accounting for a loss of €5 million, as traditional letter writing dies out and consumers turn to e-billing. An Post has indicated it will have to cut staff numbers by more than 400 by the end of the year.

The postal service is not just any business that is being knocked to one side because of the Internet. It is a public good. Post offices unite communities and the postal service connects remote regions to the centre. In the context of the future Common Agricultural Policy and stimulating rural areas, it is necessary to increase the attractiveness of rural areas by ensuring access to different public services and infrastructure, such as education, health, broadband Internet, transport and postal services.

However, one of the constant problems in the background in this country is that of dispersal in rural areas which results in increased costs in many areas such as energy, transportation, etc. I visit France regularly. There I have noted in some towns and villages the post is no longer delivered to one’s door. Instead post boxes are located at the front of estates and so on. This idea must apply in so many other ways such that the concept of bungalow blight does not make sense.

Expanding on this point, with physical addresses changing so quickly, very often an e-mail address remains the only constant. SendSocial, a start-up company in the UK, has seized upon this idea and allows consumers to send packages to people even if they do not have their postal address by providing an e-mail address, for instance.

[922]SmartPost is a similar new innovation from Estonia. Given that the postal service there is poor with no nationwide courier services, SmartPost has developed a system of lockers and tied them together with sophisticated software. Online and catalogue shoppers can have goods delivered to one of 36 locations. To open the lockers, the firm sends users a text message with a code. The concept means the collection points are near to where people are, meaning mostly in supermarkets. The French postal service has a similar locker system with lockers on avenues or major transport hubs. It could be near home, office, holiday location or train station. For the sender, it is very simple — one address, one e-mail. The recipient stays in control of where the item goes and they do not have to be there to wait for the package to be delivered.

These types of systems would seem to make sense in Ireland with its dispersed population. Can post vans in rural areas do more than deliver letters? In Scotland, they act as minibuses too. Does An Post consider buying minibuses instead of vans for this purpose? Surely, they would not be much more expensive than a van. We experimented with this in the 1980s in An Post. It is a business idea worth examining.

As we look at falling demand for postal services, should we be scared of private operators coming into the market? The unions in An Post have some concerns about this. There is the argument that private sector companies will be purely in it for profit. Some postal service experts, however, believe that private postal operators are, by and large, better positioned to cope with falling demand than State-owned operators.

For example, Deutsche Post and the Netherlands TNT Post, both privatised, have diversified into parcels and express deliveries and are as efficient as postal services get. Deutsche Post, TNT Post and Belgian Post have invested for the long term. Deutsche Post has invested in acquisitions at home and abroad, TNT in foreign expansion and Belgian Post in automation. Since Sweden’s Posten AB was privatised in 1993, prices for business customers have fallen by around 30%, although they have risen for consumers. I recall when working with An Post any suggestion of different prices for different customer types was almost a heresy. If we could get a postman delivering six letters to the door rather than one, then more business, and accordingly profit, could be developed at a lower price. In other words, one would bring the price of a stamp down. Direct marketing had not been used until then and was in its infancy. At the time 500 letters per capita per year were posted in the United States; the figure in Britain was 200. In Ireland, however, it was only 100 because we had traditionally charged a high price. In the budget the price would go up again to see if more money could be taken in. In those days it was not a business but a service that was being run by the State. Being able to generate far more business and make more profit from it at a lower price is called price elasticity, but it would only work if customers responded to it. In those days customers were not — they still are not — the ones receiving mail. Nowadays I see a lot of “No junk mail” signs outside houses. We did not call it junk mail at the time, rather we called it direct marketing, although the recipients are often not so polite about it.

Maintaining services in rural areas is going to be difficult, but we must strive to do so. In addition, we should not necessarily have undue fear at the thought of private companies entering the market. As has been seen in neighbouring European countries, they often provide an even more efficient service. I welcome this debate, therefore, as one which is aiming towards achieving a better deal for customers.

It is interesting to see the changes taking place, not just in the postal service but also in every aspect of our lives. The postal service is one that has certainly changed dramatically in the last 20 years because of new technology. We must ensure we retain the ability, talent and dedication of individuals in An Post. I remember being in the post office in Ballinasloe when, after clean[923]ing up after the day’s work, it was discovered that one letter had been left behind. It would have killed the postmen to think they had not delivered it. They remembered that there was someone next door who lived close to the addressee and the letter was delivered that night. It will not be easy to maintain such dedication.

On the very first day An Post introduced the one penny stamp. In order to achieve this, we issued a load of stamps to every post office in the country. One postmaster told me that we were moving in the wrong direction. People had no idea we were going to issue stamps for one penny to mark the start of An Post, of which I was chairman. One postmaster, whom I know, ran out of stamps. However, he showed initiative by cutting two penny stamps diagonally to create a one penny stamp. I gather the few hundred stamps he cut are now highly valuable for collectors.

I could recount many more such stories from the time An Post began and it is sad to see the tradition changing. It is one that dates back to the Royal Mail’s penny post in 1840. However, things change and the developments envisaged under the Bill are the right way to go. Can we take these steps, while at the same time holding onto the dedication customers enjoyed in the past, and still remain profitable?

I congratulate the Minister on the legislation, although some of it has been foisted on him by European and other international rules. However, we do not have a choice. It is the correct way to go for customers who are citizens of Ireland.

Senator John Hanafin: Information on John Gerard Hanafin  Zoom on John Gerard Hanafin  I am conscious that we have one universal provider of postal services in the country. There are dangers inherent in the changes that take place in implementing an EU directive and these should be flagged. An Post’s services have been profitable and successful. It has a 90% next-day delivery rate and provides banking and bill payment services. We must ensure such services will continue to be provided, as An Post is an integral part of the community. Members of the House are grateful for the postal service provided, particularly at Christmas time when there is a large volume of mail each day. It requires extra effort to handle such volumes and it is always made.

We should recognise the social aspect of the service provided by An Post. We all know our local postman. An Post has become an integral part of the lives of older people in particular in that postmen maintain social interaction through mail delivery, while local post office staff provide various services. At a time of insecurity such as the current banking crisis people may be worried when listening to the media but they know An Post provides a safe haven.

The main focus of An Post is on the provision of postal services. If it is to have a universal service obligation, there must be a level playing field for any other company which wants to enter the market. Such a company might not want to deliver in certain areas such as remote rural parts, while cherry-picking profitable services in urban areas. That is one concern I have. Post offices should be fully paid for the volume of work they will undertake, including the handling and sorting of mail, as well as delivery services.

We are making decisions now that will affect us in the future. In other European countries new providers are paying low wages while in competition with others which are offering very good terms and conditions of employment. The matter is in our own hands, on the basis of EU regulations. I am conscious of the EU directive “Recycle 16” which places an obligation on new providers to grant proper terms and conditions of employment. Given that we have a social economy, one of those terms and conditions should place emphasis on workers becoming members of a trade union to protect their interests. In that way we could avoid the practice that prevails in other countries in which union membership is frowned upon.

[924]There should be no job losses as a result of this legislation. The opening up of the sector should not be at the expense of existing postal services. It should mark an improvement in services, while ensuring current service levels are maintained. This can only be done by maintaining jobs. In providing a universal postal system during the years An Post has managed to remain profitable. However, its profit amounts to less than 1% of turnover.

We may lose two things as a result of these changes: first, the universal provision of services, and, second, a profitable service. In addition, stamps are cheap to buy. How, therefore, will the Minister maintain these if we do not impose a strong levy on any non-universal service provider establishing in this country? It is well known that there will be cherry-picking, but this should not be encouraged. It is of no benefit to the State to have low paid jobs, while profits are being removed from the country and a proper social service is not being provided.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  I wish to share my time with Senator McFadden.

An Cathaoirleach: Information on Pat Moylan  Zoom on Pat Moylan  Is that agreed? Agreed.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  I thank the Minister for attending this debate. I support liberalisation only on the basis that the same rules that apply to An Post will apply to all new providers. The main rule is the universal service obligation. Otherwise, something intended to bring more competition into the market will be blatantly uncompetitive if there is not a level playing field for all providers. The universal service obligation means that An Post delivers the same item of mail at the same cost to rural customers, which is less attractive to providers who wish to cherry-pick the best business, as to urban areas that are more profitable. The same rules must apply to all providers.

I have met many of the workers at An Post and they are quite happy to open up the service on that basis. Otherwise, the legislation will be blatantly unfair. That is the main amendment that must be included in the Bill. If there is to be liberalisation of the postal service, the same rules must apply to all providers. Currently, a letter delivered to Clifden, County Galway costs 55 cent, the same price as a letter delivered in Dublin city or Galway city. Politicians sometimes use publicity mail. I have not used it but I have checked prices. I can get 1,000 leaflets delivered in Galway city for €50 but in rural areas it will cost €90. Why should An Post have to meet the universal service obligation and lose money and jobs if other providers are allowed to cherry pick with downstream access to the An Post network? It is blatantly unfair. The purpose of this Bill is to bring about more competition and a better deal for the consumer but it could be a far worse deal for the consumer.

The great thing about our friendly postman or postwoman is that we know them. They are safe and secure and they have a badge with which we identify. Many people right across Ireland leave their homes open, irrespective of whether it is recommended. I have done it. The postman will open the door and drop in the post. I know my postman but if we open it up to every type of provider, while they might have the right to provide a service, we will not have the same security in our homes. There can be a downside to this in other ways and we must examine the social impact.

If the universal service obligation is not to be imposed on all providers, the legislation must find a way to provide State aid in a worst case scenario in order that An Post can afford to deliver in the areas no one else wants. The only way to open up the market and fund the universal service obligation is to impose the same obligation on all operators to deliver everywhere at the same price as An Post does. This is what has happened in Finland and it is the [925]only place it is working. The legislation must oppose cherry picking and adopt the Finnish
model.

Downstream access is a key point. Competitors may compete for customers posting at a lower rate than An Post and then insert it into the An Post network for delivery. The downside is that An Post could end up receiving mail at the delivery office level, having lost out at the postage level and be forced to operate at a loss. That is absolutely ridiculous. The legislation must prevent downstream access below mail centre level. Otherwise there will be no remuneration to An Post.

The Minister has great experience of regulators and that will be an issue here. The legislation gives ComReg unfettered powers to decide on almost every matter regardless of social implications. Experience shows regulators have facilitated competition by curbing the previous monopoly providers’ market share, by allowing cherry-picking and downstream access and price caps. Let us consider the experience in the UK. Royal Mail is in great trouble because this is what happened. The UK example shows that regulatory policy has been a contributory factor in this precarious situation and, in the Hooper report of September 2010, the UK Government is considering how to address it. The legislation should ensure the regulator is answerable to the Minister and the Oireachtas on key matters such as the universal service obligation, which has national implications. The role of the regulator in regard to electricity supply is worrying. The price has been kept up to attract competition but we should bear in mind what happened to the consumer. The Minister understands this point.

Employment is not to be scoffed at. An Post has hired 10,000 people nationally and 500 people in the constituency in which I live, Galway West. They are good people and committed to the universal service obligation. They understand the social implications and the duties of it. The legislation should look to protect jobs. I thank the Minister for listening.

Senator Nicky McFadden: Information on Nicky McFadden  Zoom on Nicky McFadden  I thank the Minister for his insightful speech. I am a little breathless because I ran in all the way from the gate. I appreciate that the Minister’s intentions are worthwhile and Fine Gael does not oppose Second Stage of the Bill. However, I have serious concerns, as my colleagues have stated, in regard to jobs, sounding the death knell for rural post offices and what this might mean for rural areas. As Senator Brady said, the postman is the only person an older person will see in some rural areas.

The universal service obligation must be considered in terms of An Post. Other speakers mentioned cherry-picking. Profitable routes in urban areas heretofore subsidised remote rural areas. We cannot lose the value these people bring to the rural areas. That 87% of post is delivered on time is phenomenal. We take this for granted. A price of 55 cent is extremely good value and is one of the lowest prices in Europe. Why are we breaking something that is not broken?

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  Hear, hear.

Senator Nicky McFadden: Information on Nicky McFadden  Zoom on Nicky McFadden  I have serious concerns about ComReg. This has nothing to do with the regulator but our experience of regulators in this country has been shabby. The Minister should be ultimately responsible and should have control. He should be able to see where things are going wrong and put a stop to it. Quangos such as the HSE and the NRA are very bad in this country. I refer to the Recycle 16 directive, which provides for social protection. I ask the Minister to ensure this is included in the legislation.

Senator Quinn referred to Germany but he did not mention the massive number of people who lost their jobs. Some 21,000 full-time jobs were lost and 12,000 part-time jobs were lost. I come from Athlone, that has one of the four main postal centres. It provides the best service [926]and they are amazing people. I do not want to lose any jobs in the Athlone area. In Athlone we had our very own Minister for Posts and Telegraphs, Paddy Cooney. At that time he was in control. He ensured the service was run efficiently. More people were using the service then. The art of letter writing will come back. Times have changed. Children will start to write letters again. We must keep a connection with people throughout the country. I urge the Minister to bear the role of the regulator in mind. The Minister should keep control and ensure we do not give power to a regulator who is not caring or who is asleep, as has happened.

Senator Niall Ó Brolcháin: Information on Niall Ó Brolcháin  Zoom on Niall Ó Brolcháin  I welcome the Minister, Deputy Eamon Ryan, to the House. I note that he tends to listen to people and to take views onboard. He generally gets his Bills through with the minimum of opposition as a result.

This has been a good debate. It is great to take part in a relatively normal debate given all that is going on around us. It was great to hear Senator Quinn’s anecdotes about the postal service in the past. I am afraid I was one of the nerds who collected stamps.

Senator Michael McCarthy: Information on Michael McCarthy  Zoom on Michael McCarthy  Does the Senator still have them? Stampaí coigiltis.

Senator Niall Ó Brolcháin: Information on Niall Ó Brolcháin  Zoom on Niall Ó Brolcháin  Yes, I still have them but I do not collect them any longer. I remember when I got my first Penny Black. It was a major event to get my hands on the first stamp in the world. It was extraordinary to see it. I also collected Penny Reds and other British stamps. The first Irish stamps were overprints. It is quite interesting that instead of printing our own stamps we put an overprint on British stamps. Times have moved on. The favourite television programme of one of my children, and perhaps mine as well, is “Postman Pat”. The notion of it being changed to “Special Delivery Service Man Pat” makes it clear that times are moving on. It is quite extraordinary that in the British Empire one could literally get a letter delivered to London the next day by the great British postal system. The logistics of that are extraordinary when one considers the times that were in it. We can knock the British all we like but the reality is some of the things they did in their great days of empire were extraordinary. The postal service was one of them.

  1 o’clock

Senator McFadden spoke about the postal service in Athlone. The reality is we very much copied the British system. We must recognise that over the years we have had a great postal service in this country. As Senator Quinn said, we must recognise that times are changing. A 16% drop in the volume of post is significant. There is a change in the way people communicate. People can communicate instantly by telephone or computer. For example, within seconds of the events happening last night in South Korea, someone could capture an image on a mobile telephone and send it to me as I was sitting in the Seanad Chamber. A postal system based on letters cannot keep up with that kind of thing. I accept that letters were not used in that way but it was impossible to do that in the past. The level of communication we have now is extraordinary. I refer, for example, to Twitter and various text services, e-mail and the electronic transfer of funds. People use electronic banking now to a much greater extent.

Nevertheless, there is a need for a postal service. Internet shopping is an interesting development. People buy goods from other countries on the Internet that are delivered by the postal service instead of going to shops as was previously the case. It is not simply the case that there is a diminution in the need for postal deliveries to one’s door. There is an increase in demand in some areas. The Minister is taking on a rapidly changing situation. He is trying to improve it enormously.

The introduction of postcodes is very important. I lived in London for a number of years. People referred to the area where I lived, Wimbledon, as SW19. The postcode was written on [927]the names of the roads in the area. It is quite extraordinary that people very much identified with their postcode. That is still the case in the United Kingdom. Postcodes are very handy because they speed up the delivery of post and provide for a more modern postal service. I understand they can speed up the sorting time within the postal service. If we are going to maintain what Senator McFadden referred to as a proper postal service in this country, we need to modernise it to the maximum extent to ensure we can save jobs which are under enormous pressure.

A number of speakers rightly made the point about the universal service obligation. I do not know how we are going to protect the rural postal service to the extent we would all like. I have seen the closure of post offices throughout the country. However, it is not as simple as that. Senator Quinn rightly pointed out that in many parts of France people must collect their post from a central location. I would not like to see that system introduced here. At present, farmhouses up long country lanes get personal deliveries to their door. That is obviously very inefficient but we must consider whether we expect old people to walk or drive perhaps up to 20 miles in some cases to pick up their post. One can ask whether that is what we want or whether it is economically sustainable that for the sake of the delivery of one letter to a person’s door, a postman in a van must travel 20 miles. I do not know whether it is realistic for that to be sustained. We need to be imaginative and to ensure we do the best we can.

It is true that while the liberalisation of the postal system is important, it will work much better in cities than in rural areas. It will work perfectly well in cities but it will be difficult in rural areas. I urge the Minister to examine what has happened to the deregulation of the waste system in this country. The privatisation of waste collection has worked in some areas but the reality is that large areas of this country have no waste collection service. I have spoken to people on Galway County Council which now has no waste collection service of its own. It relies purely on private operators. Many people do not get their waste collected at all. Some people bury waste while others burn it. That has led to enormous problems in parts of the country.

I am a member of the same party as the Minister who is trying to cope with this issue. I accept there is a downside to such matters. The reality is that if we do not have the postman coming to the door every day, as Senator McFadden rightly pointed out, there is a social effect. The issue is not purely to do with the efficiency of the postal service. The postal service is part of the fabric of rural Ireland. Unfortunately, we are not living in the days of Postman Pat, his lovely black and white cat, Mrs. Goggins, and their lovely cakes and tea. Perhaps that is a reality in some parts of the country but those days are numbered. Significant challenges face the Minister and future Ministers in terms of the postal service because of the enormous pressure from electronic mail and other methods of communication. The reality is that the art of letter writing has somewhat died away. It was prevalent in the early years of the 20th century. It provided a considerable record of what went on around the time of the foundation of the State. The sad thing about electronic mail is that while it may be recorded currently, it disappears. Recently, I was told that the cost of data storage in terms of energy emissions has surpassed the cost of motor vehicles. This is extraordinary. Data storage on Internet sites like Facebook is unsustainable, in that we cannot keep using massive amounts of energy to store these volumes of information indefinitely. We have seen what happens with housing bubbles and an Internet bubble might be building.

The integrity of the postal system is important and considerable challenges face us. That the Minister is examining the matter creatively is important and necessary. As various Senators mentioned, the manner of the Bill’s implementation is as important as the Bill itself.

[928]Senator Michael McCarthy: Information on Michael McCarthy  Zoom on Michael McCarthy  I welcome the Minister, Deputy Ryan, and his officials to our Second Stage debate. I thank the departmental officials who offered advice and a briefing on the legislation. It is a helpful service, although it is not provided universally. As people are under time pressures, I appreciate their help.

The debate on rural areas and their service providers is not always a question of economics. I have made this point in respect of the closure of rural creameries and of the role rural pubs play in terms of rural isolation, community and how people congregate, socialise and interact. The local primary school also plays a significant role in this regard. From this point of view, we must be careful not to scale back what is on offer in rural Ireland on a purely economic basis. For various reasons, it has been under considerable pressure in recent years, and we must preserve what fibre is left of it. Recently, I had this argument with someone who claimed a particular creamery should be closed. Having visited the creamery and given my understanding of the interaction that takes place, I know the creamery issue was about more than just the buying and selling of goods. It is a place where people meet and interact. This is somewhat like the rural transport initiative. Were one to apply an economic or accounting argument to the creamery, one would have got rid of it long ago. However, it is not just a question of economics, given factors such as significant social interaction in rural areas, combating rural isolation and preserving the remaining social fabric. I hope we never take an axe to that type of service.

I understand that the universal service obligation, USO, addresses my concerns. I acknowledge the lobbying done by people throughout the country, particularly those in my area, who have a vested interest in post offices. I also acknowledge the worthwhile and detailed information sent to us by the Communications Workers Union, CWU. We are discussing the delivery of letters to rural and urban areas. Historically, the provision of postal services has been based on the USO and the same-price-goes-anywhere principle. This was supported by a monopoly or a reserved area wherein An Post was the only operator that could carry out the delivery and collection of mail below a certain weight. This enabled An Post to cross-subsidise by utilising profitable urban routes to carry the burden of loss-making in rural areas. This is an important point.

Senator Healy Eames discussed cherry-picking or cream-skimming, therefore, I will only touch on the issue briefly, as I might be repetitious. Competitors will enter the market and undercut An Post on the profitable routes. The delivery of telephone books has been taken out of the hands of An Post by private commercial interests. I am making an observation, not a criticism. One enters an estate or passes a street where there is clearly a derelict house or a house that is no longer in use but in front of which a telephone book wrapped in plastic has been thrown. This constitutes littering, but there is also an issue about the quality and delivery of service. How sure are we that the service being provided is of the same standard as that of An Post? This is not entirely the case.

Competitors will not compete in loss-making routes, but An Post will still be required to service those routes under the USO. If it loses market share on profitable routes, it cannot cross-subsidise and, in a short time, will go to the wall. The only way to open up the market and fund the USO is to impose the same obligation on all operators to deliver everywhere at the same price as An Post. This would maintain the status quo following the entry of private operators. This occurred in Finland and in countries with similar urban and rural population dispersal patterns. Our population is no different from those of the countries in which this has been done successfully.

Our legislation must be clear. The Minister, Deputy Ryan, is amiable and has been good in amending legislation where he has agreed with points made by the Opposition. We should [929]examine the Finnish model as a means of opposing cherrypicking. I hope the Minister can understand my point about maintaining the status quo and adopting the Finnish model.

In the current climate, the word “regulation” has various connotations that depend on the context. We complain about a lack of regulation in our banking system and over-regulation in other areas, but we must be clear where ComReg’s role is concerned. For example, in what respect has the Taxi Regulator been successful and why has it not been successful in other respects? We must ensure that we not over-regulate the industry. The service being received by the customer, Joe and Mary Soap, must be of the same standard. We must examine the matter from this aspect and not purely in terms of the administration of regulation.

The Minister might have experience in this regard, but he certainly knows better than I do that, in recent years, there has been a proliferation of regulators. We need to ensure the regulator is responsible to the Minister, irrespective of who the Minister is and whether there has been a change of Government. There must be accountability and transparency. As public representatives, we all offer ourselves to the electorate from time to time. It is right that we are held accountable and thoroughly scrutinised. I do not like the new tier of administration, be it in the form of a quango or another body set up by the Government to administer a particular service and from which there is no accountability or transparency. When discharging our functions as public representatives, it is good to know with whom one is dealing and the level of interaction allowable by the organisation. Accountability is paramount in the delivery of a service. I urge the Minister to ensure the regulator is answerable not only to him, but also to the Oireachtas on key issues like the USO, which has national implications. It is important that we reserve our right to bring someone before an Oireachtas committee for questioning on key issues.

A strong employment issue is attached to the legislation. I do not need to explain to anyone how important the preservation of jobs in rural areas is. Sadly, jobs are the only game in town because of the lack of them. We must prevent the further loss of jobs in rural Ireland. West County Cork has lost jobs in the construction, manufacturing and pharmaceutical industries, for example, in the company for which I worked before becoming a full-time public representative, Schering-Plough in Innishannon, which had a significant workforce in a rural area. We must be mindful that the preservation of jobs in rural areas is paramount. As I have often stated in the House, each lost job costs the State approximately €20,000 in lost taxation and social welfare payments. We do not need to spend too much time on these figures to know we are much better off maintaining as many jobs as possible.

Senator Ó Brolcháin broached the matter of postal codes. He stated that he lived in SW19 in Wimbledon. I lived in SW14 in west Kensington, then the less popular address of NW2 in Willesden. I would be mindful of introducing postal codes. I have particular views on any initiative in this regard, but whatever we do must be efficient and effective and provide good value for money. A number of years ago, the Department of Health and Children and the HSE allocated approximately €1.9 million for a family resource centre for Dunmanway in west County Cork, but it never went ahead for a number of reasons. Planning was one possible reason, as was, perhaps, the location of the proposed building. In recent times, however, Teagasc was rationalised and put its building on the market. The HSE purchased it for €180,000 to locate the family resource centre in it, effectively at less than a tenth of the price it was willing to pay during the boom. We must be very mindful of value for money. Whatever scheme the Department proposes to introduce or whatever change it makes, we need to be clear that value for money is at the heart of it, the taxpayer is getting a good deal and the service to be provided is good, effective and efficient.

[930]It is essential that employment standards are protected. I refer in particular to some of the information provided for us on the European postal directive which states that social considerations should be taken into account when preparing the opening up of the postal market. That goes back to my earlier contribution and we need to be very clear about this. The actual service being provided is never down to economics, audits or finance. We must be mindful of social considerations. To give another example, in recent times the TUPE provision was removed from a contract for a ferry service for Cape Clear Island off the west Cork coast. The idea of the TUPE clause, involving a transfer of undertakings, was to protect the rights, conditions and employment standards of the people moving from one employer to another. Not only are there employment standards, there are also social considerations to be considered. We need to be sure about that and if we do not do it this time, we can guess what will happen next time. It happened in the case to which I referred.

There are many more points I wish to make, but some of them have been discussed in detail by Senator Healy Eames who obviously used some of the same lobbying information as I have. I wish to make this point in terms of An Post. It has never needed State aid or taxpayers’ support. The price of the stamp funds the universal service obligation which ensures delivery to every single door. With the removal of the postal monopoly from An Post, it is unclear how the universal service obligation will fare. I ask the Minister to be especially mindful of that.

I acknowledge the support and help offered by the Minister’s officials. I hope the Minister will carry forward the same degree of flexibility he has shown in other legislation he has steered through this House.

One other concern is downstream access. Senator Healy Eames also referred to this issue. I will not be in the Chamber for the Minister’s reply but I will listen to it on the monitor. I hope he takes these points on board because they were meant to be taken in a constructive fashion, and that we will see our way towards amending the legislation on later Stages, assuming we are still here.

Senator Cecilia Keaveney: Information on Cecilia Keaveney  Zoom on Cecilia Keaveney  I thank the Minister for listening to our contributions on what I believe to be a very important issue. The first indication I got about this legislation was from some of the union representatives who wanted it stopped at any cost. On investigation, I informed the people who contacted me that the legislation would provide whatever protection it could and that it was effectively the roll-out of a directive which had been in existence for a number of years and only now seemed to be causing concern as it sought to deal with the common envelope postage size, to which it attached relevance. I made the point to those who were concerned about the protection of the social service as well as the excellent door-to-door service we enjoy that if we did not legislate, full liberalisation would be introduced in January 2011. Therefore, the fact we are enacting legislation is very significant. It is important Ireland recognises the value of the unique situation it enjoys while bearing in mind the changes taking place within postal delivery services nationally and internationally.

Incidentally, the people who contacted me used e-mail, not post, and that leads one to ask why they used this form of communication. Was it for reasons of cost or speed or did they believe their overtures would be taken more seriously? That comes back to one of the points in the Minister’s speech, which surprised me, namely, that 90% of postal mail is devoted to business delivery. I had not realised everything else only amounted to 10%. Some of the people contacting me would not consider it business, perhaps, and would view politics as being different as well.

It is important to find the balance between having a very efficient service, as we have, and being able to liberalise and have competition, given what Members have said in this debate. [931] As representatives of the people, we are not immune from the situation around us. My region is the size of County Louth with a population equivalent to County Leitrim. My colleague, Senator Mooney, will be able to vouch for the fact that some counties have very few big towns. In my area, with 32,000 people, there is one town of about 4,500 and two with about 1,500 in each. Everything else is rural. I could name the postmen in the area because we all know them. We know the postmen for the different regions. When one is looking for someone it is normal to find the postman and he will tell one where everyone is. Normally he is the only point of contact for the elderly. I know that is not a good enough reason to keep the postal service, but it is something we must bear in mind. Postal staff are able to keep a handle on what is going on socially in the countryside, and in some instances they alone are in a position to get help, when needed, for someone in a particular region who may not have an alternative source of contact.

I am not aware of anywhere where people have to drive 20 miles to deliver a letter, but in much of my area one might drive that distance and come across only a handful of people. No on drives 20 miles just for the sake of it. We have fought the battle for the retention of post offices. This was an issue for a number of years, with post offices closing because they could not compete with the banks. It is ironic that we now have campaigns aimed at getting people to use their post offices while it is the banks that are causing the most grief.

I thank all those involved in installing computers and new facilities in post offices which have enabled them to increase the services they can provide. The campaign for retaining post offices was very particular about emphasising the need for people to use the service. In some respects, I would use the same argument now to those using e-mail or texting rather than sending a hand-written letter. There is an onus on people to use a service if they want to maintain it. A popular bone of contention for us is when a bus service ceases and one receives 50 letters of complaint. One contacts the bus company only to be told that no more than three of those who signed the letters actually used the bus to prevent the service from being suspended. There is a circular argument about the use of the services that may be in place at a particular time.

I want to highlight my complete abhorrence of the attacks that have taken place on post offices, such as the one in Carrigans. There has been a long story to that. The post mistress was taken out of her job there and, while I will not go into the details, I am sure the Minster is aware of the case. It is deplorable, however, that people can attack our post offices which represent such a vibrant part of our communities and which we have fought hard to maintain. We have given the post offices extra services and responsibilities and they are regarded as an integral part of our communities, especially along the Border. Now those working in the service believe themselves to be the target for opportunistic criminals from across the Border.

The issue of integrity of the post is something I want to touch on as well. Many people talk about the postal code they might have had in London. I lived in Nigeria for a while and in terms of the communal post boxes there, one could be guaranteed one would never get any money or valuables that might have been sent to one. The integrity of the postal system is of the utmost importance.

I have raised the issue of the phone book with the Minister before. There was consultation and I am interested to hear what evolved. I took three telephone books in three years and the font size in the directories has become increasingly small, so small now as to be actually wrapping around into where the book folds. There were certain numbers I looked up from year to year, but it has got to the stage now that even I, with relatively good sight courtesy of laser treatment, cannot read the number. Telephone books are mostly used by elderly people who may not know how to obtain a number from a website or how to use the directory exchange facility.

[932]As stated by Senator McCarthy there are oceans of books lying around apartment complexes. I would prefer if An Post printed half the amount of telephone books it prints and that in those printed a reasonable sized font which people can read was used. Also, rather than deliver telephone books people could collect them from a designated place in a town or village. If owing to cost and the need to reduce the amount of paper used a smaller font is being used I suggest it would be better for An Post to print half the amount of telephone books it currently prints and for it to be more careful in terms of distribution. I made a contribution on this matter to the public consultation forum. It is an important matter to groups such as Age Action Ireland and so on. We are inhibiting people from using services. It is important we try to minimise the negative and maximise the positive.

To return to the issues outlined in regard to the unions, the universal services obligation and the legislation needing to make provision for what will happen in a worse case scenario, I am concerned about the possibility of cherry picking of what is profitable.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  Hear, hear.

Senator Cecilia Keaveney: Information on Cecilia Keaveney  Zoom on Cecilia Keaveney  This links into what I term the social advantage. The employment issues speak for themselves. As far as I am aware, everybody currently employed in the postal service is engaged in the delivery of mail. I do not believe there is anybody hiding in a hedge waiting for time to pass. All the postmen I know are out from early morning until late at night delivering mail because of the increase in volume at this time. This and the fact that everybody wants to stop and talk to the postman results in delays.

This legislation should ensure that the regulator is answerable to the Minister and the Oireachtas on key matters such as the USO, which has national implications. Other legislation has been enacted which provides for outside interference or ministerial control. The National Roads Authority and Health Service Executive are not answerable to anybody and despite our having regulation of the credit union sector, credit unions are unable to appeal decisions to anybody. It is important we maintain some control in this area, even it is by way of committee scrutiny.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  I welcome the Minister, Deputy Ryan. However, I do not welcome this legislation. These are utilities which should provide maximise service to the public. I do not believe this will happen under this legislation. We have had the example of Eircom in respect of which we had forelock-tugging to abstract notions of privatisation and of competition. Where has competition got us in that context? Eircom was flung onto the market and taken over by one of the moguls, was asset stripped and thrown back like a herring bone picked clean. We have the lowest investment in broadband thanks to the competition to which we are paying such marked attention here. I do not believe in it.

We are talking about services to the community. Competition in this area will weaken rural services. There is no provision to protect people against the cherry picking that will take place. There is often no Garda presence in rural areas. There may be in a local town a button one can push to speak to a machine. This legislation will result in a weakening of the personal contact which many people in isolated rural areas depend on in terms of the social fabric. I do not like that aspect of the legislation. I disregard the references in the Minister’s speech to effective competition. I do not bow down to these shibboleths, rather I look underneath them to see if they serve the people. In my opinion, most of the time they do not. The same is true of the markets and other notions to which we have allowed people to give absurd deference.

[933]I accept there is a shifting pattern and that people use electronic communication. It may well be that the Minister has a point when he says the postal service needs to reassess itself. I am glad that it has been given some degree of security for seven years. I will not be supporting this Bill unless it is substantially amended. I welcome that at least the Minister has provided that there will be Exchequer support if an unfair burden is created on An Post. However, this indicates to me that the Minister knows well that there will be an unfair burden on it. We all know that. I do not accept that this legislation should be supported or that it is necessary.

I am not aware of what other speakers said as I was attending a meeting. The historical base of our postal service under the universal service obligation is important in that it obliges the State services to deliver and collect mail for the same price, regardless of location. This is akin to the provision of social bus services in the country. The USO was supported and ensured An Post had exclusive rights to anything under 50 grammes. I do not believe it is good to abolish this and will be opposing this aspect of the legislation. It is important that we continue to regard this country as composed of a society of people and not as a market with competition and so on. I will be strongly supporting the principle of universal service obligation.

Senator Keaveney referred to cherry-picking. We all know this is what is going to happen. This is what happens in a commercial market. A company would be wrong not to do so. That is the ethos, not of An Post, but of commercial firms. They will take the profitable routes and undercut An Post, which will be hamstrung because it will have to try to continue the unprofitable routes. This is unfair competition. If An Post loses its market share, it will be in serious financial trouble. If one is to open up the market and fund the universal service obligation one has to impose on all operators the same obligation to deliver everywhere at the same price and in the same way. In other words, we must have market equalisation. Let us have a fair playing field as between An Post and these possible new entrants. These new entrants will also have downstream access whereby they can enter at a lower rate than An Post. The implications of this, in terms of employment, are stark. Royal Mail in Britain is losing money because it is delivering mail for competitors at a rate set by the regulator. It was the regulator that insisted on increases in gas and electricity, which was directly against the interest of the public and utility companies. The regulator has facilitated cherry-picking. Some 21,000 full time and 12,000 part time jobs have been lost in Germany. I could go on and give more figures but I am sure other Members have already done so.

I am deeply suspicious of this legislation. I will be seeking to amend it. If it survives unamended, I will be opposing it.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  I wish to share time with Senator MacSharry.

An Cathaoirleach: Information on Pat Moylan  Zoom on Pat Moylan  Is that agreed? Agreed.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Senator Norris has stolen our thunder. However, it is an indication of the efficiency of the Communications Workers Union that the points raised by Senator Norris were emailed to all of us. I am grateful to Senator Norris in the sense that I do not have to reiterate everything he has said. What Senator Norris has articulated is reflective of our thinking——

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  Let the Minister take note that we are a united House for once.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  ——in terms of the concerns expressed by the CWO. There are one or two other issues I would like to raise. Instinctively, I am in favour of competition. Competition has been good for us. The European Single Market has been particularly good for Ireland. In these troubled times, our exports are booming and our low corporation tax rate [934]has helped not only multinationals but also indigenous companies and this indicates we are doing well in that regard. I have no difficulty with this measure from an ideological point of view. However, we should look across the pond at our neighbours in the UK. Our postal service was originally set up as part of the British and Irish postal service in the 1840s and the similarities, therefore, are stark, much more so than they are with continental Europe. There are many question marks about the effectiveness and fairness of liberalisation in bus and rail transport on the Continent.

What impact will this legislation have on local post offices? In the past few months, I have received representations from the post office in my home area and from other postmen because of the rationalisation that has been carried out in the name of efficiency by An Post, which has impacted not only on delivery of services and also on delivery times. I come from a small town of 800 people with a hinterland comprising 1,500 people in a county with a population of only 28,000 that stretches along the north-west coast. Liberalisation will have a particularly dramatic effect, as reflected by my colleague and friend, Senator Keaveney, regarding Inishowen. The representations I received relate to a reorganisation of the postal service. This has not impacted adversely so far but I understand it has resulted in a loss of employment. The loss of even one or two jobs in my area is equivalent to the loss of several dozen in an urban environment. What impact will liberalisation have on my local post office? The postmaster currently has a contract with An Post for the delivery of services. If there is competition in my area, what impact will this have on the existence of the post office and the services it provides? Does this mean the post office will be taken over by a competitor?

Mr. John Tansey and the CWU have raised the issue of the same price goes anywhere concept that has been developed and established by An Post whereby a letter posted in the GPO for 55 cent and delivered in Ballsbridge makes money but a letter posted in the GPO and delivered in Clifden or Drumshanbo loses money. What will happen in that context? Does this raise the spectre of cherry-picking, which has been referred to by all sides of the House, whereby competitors could decide they will only compete for services in large urban areas and ComReg could permit this? There is a clear rural-urban divide and I am not confident that, because we have inevitably to transpose this directive, the proposals in the Bill give reassurance to rural Ireland that the efficient postal service to which we have become accustomed will continue. I am sure with the entrance of competitors to the sector it will be efficient because it will be much more money driven than to date. I do not reflect adversely on An Post, which is an efficient organisation and which has rationalised drastically over the past few decades since liberalisation was first introduced. The bottom line for competitors entering the market will be profit and the question about cherry picking remains. I do not want to over elaborate but I wish to emphasise there is concern at local level.

The CWU referred to the Finnish model. I have not had the opportunity to look into the model in detail but it is relevant because Finland has a similar urban-rural divide to Ireland. It is working there and I would be grateful if the Minister of State referred in his reply to whether consideration has been given to adapting that model to Ireland.

Senator Marc MacSharry: Information on Marc MacSharry  Zoom on Marc MacSharry  I thank Senator Mooney for sharing time.

I share many of the concerns of others. If we learn anything from the economic crisis, it is that one size does not fit all. While it is idealistically admirable that we should seek to replicate laws throughout the EU and that has many positives, the transposition of this directive in different countries has proven one size does not suit all. I hope that with this among the few Bills that remain to be enacted in the lifetime of the Government, given the announcement of an imminent election following the budget, instead of the normal set piece scenario, the Mini[935]ster will take on board the legitimate cross-party concerns mentioned throughout the debate relating to the universal service obligation, cherry-picking or cream skimming of services and downstream access. All these issues have to be addressed.

Senator Mooney and others mentioned the Finnish model and how it has managed to secure the protection of jobs while, at the same time, providing a universal service and ensuring the same price is applied to send mail to all parts of the country. Cherry-picking should not be encouraged and, for that reason, I am hopeful the Minister will ensure amendments are made to be the Bill to protect the public by ensuring services are maintained or improved with the same professionalism as is currently the case and ensuring the many jobs in the postal service are also protected. It is possible to make improvements to the current system and I am sure the legislation will seek to do that but many legitimate issues have been raised about ensuring companies cannot come in and cherry pick post offices and delivery routes in order that for example, they can choose the Ballsbridge run because it is easy while ignoring routes in which Senator Mooney and I would have an interest in counties Sligo and Leitrim. I hope the Minister will take on board these concerns between now and Committee Stage when the meat of the Bill will be debated and will focus on the fact that one size does not fit all. It is appropriate to examine this legislation in an Irish context. The mistakes made in transposing the directive in Germany and the UK resulted in significant unemployment in the postal sector. We must learn from that while also recognising the many benefits that accrued from the implementation of the Finnish model. I hope that can be done.

Despite the fact that the media choose to ignore this House on a consistent basis, as referred to on the Order of Business earlier, many postal workers are looking at this debate live on the Internet. I thank them for doing so and I hope their concerns, as reflected by us, will be embraced and the directive will be transposed in a uniquely Irish context, which protects jobs while improving service, and which does not provide an opportunity for cherry picking and the other dangers experienced in other countries.

Senator Paul Bradford: Information on Paul Bradford  Zoom on Paul Bradford  I wish to share time with Senators Buttimer and Phelan.

An Cathaoirleach: Information on Pat Moylan  Zoom on Pat Moylan  Is that agreed? Agreed.

Senator Terry Leyden: Information on Terry Leyden  Zoom on Terry Leyden  Could the debate be extended by a few minutes?

An Cathaoirleach: Information on Pat Moylan  Zoom on Pat Moylan  No, the business was ordered and agreed earlier and I am obliged to call the Minister at 2.05 p.m. I have to stick to the Order of the House and there will be four minutes available for the Senator.

Senator Terry Leyden: Information on Terry Leyden  Zoom on Terry Leyden  That is not enough for the former Minister.

Senator Paul Bradford: Information on Paul Bradford  Zoom on Paul Bradford  I will not delay in order to facilitate all my colleagues.

I welcome the Minister to discuss this important legislation. It has been well flagged to Members through the representations we have received from postmen throughout the country. I appreciate their concern as this new departure in postal regulation takes place. We need to transpose a European directive into Irish law but we must do that with caution. We must reflect on the fact that the postal service we have enjoyed for more than a century has been one of the mainstays of the social and economic development of the country. The Irish postman and postwoman has a unique presence in the community, especially in rural parishes and smaller villages. For many people the only knock on the door they will hear every second or third day is the postman’s knock. That is something we must try to preserve in so far as it is possible.

[936]We must recognise that economic changes in Ireland and Europe bring about a new sense of policy direction and policy directive but in the changing Ireland, we do not have to throw out the baby with the bath water. We must proceed with a degree of caution. The universal service obligation which applies to An Post has created a unique, effective service for every household in this country. When this regulation is transposed into law we must ensure, in so far as is possible, certainty of service to every citizen. The universal service obligation is at the core of the legislation.

I am not an expert on the full content of the Bill. I am sure we will tease it out in greater detail on Committee Stage but I listened to what our colleagues said about the need to ensure fair and balanced competition and the need to avoid cherry-picking. That is the consensus on both sides of the House and I hope the Minister, Deputy Ryan, will take that on board.

In this changing world our postal service is unique. It has been efficient and cost effective and we must try to maintain it in so far as is possible. The liberalisation of services and the introduction of competition has been the mantra of most of us, and that has worked well in most areas of life, but we must have a degree of balance between the market side and the social service side of that philosophy. The objective in this legislation will be to create that balance.

I look forward to the more substantive Committee Stage debate but I want to record my admiration for all those men and women down the generations who delivered either on foot or by bike, van or car tens of millions of items of postal correspondence to the citizens of this country. We live in a changed world but that ethos and that service must survive, and we must try to do whatever possible to ensure it does.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  I thank Senator Bradford for sharing time. This legislation has been well flagged and we have received a great deal of correspondence on it. We have had genuine concerns expressed to us by the postal workers but it is important we proceed with care and are clear on what we are doing. We must not in any circumstances undermine the postal service and its employees. They do a great job. This Bill will reshape our postal system. It will change the way our postal service is run and will create different employment conditions for our postal workers. We must not do anything to undermine them.

We had a postman in Bishopstown, Vincent O’Brien, who was the epitome of a good postman. It was not just about the collection and delivery of mail but, as Senator Bradford said, the interaction with the people and the delivery of the post with a smile. I am concerned that with increased competition will come cherry-picking and a threat to the services in rural Ireland. The Government has done a great deal of damage to rural life and it is important we examine that. Equally, it is important the regulator is held accountable to the Houses of the Oireachtas. There must be protection of what is in place.

Why is this legislation necessary? An Post is not broken. It is working well. We have the eighth lowest postage cost in the eurozone, which is extraordinary. We must not do anything to undermine what we have already. We must protect and enhance the service, and I am not afraid of competition. We have all received e-mails from the Communications Workers Union and while I will not detail what they say, it is important the issues concerning the universal service obligation and cherry-picking are addressed by the Government on Committee Stage. All of us as legislators have a duty to look after the delivery of the service.

I was canvassing in Donegal at the weekend and, apart from the person delivering the post, we were the only people some residents had met. It is important we debate this Bill on Committee Stage, address the concerns expressed, bring it back to this House and make it a better Bill that will address the genuine concerns raised.

[937]Senator John Paul Phelan: Information on John Paul Phelan  Zoom on John Paul Phelan  I thank Senator Bradford and Senator Buttimer for sharing their time. I want to highlight some points about this legislation. In the past ten years we have seen a decimation in many rural areas of the service provided by rural post offices because many of them have closed. I know that from personal experience. My cousins ran the local post office, Phelan’s post office in Tullogher, County Kilkenny, which has been closed for four or five years. Sadly, many of those post offices have closed with the changes that have taken place in the past ten years.

As previous speakers mentioned, the role of An Post and of the postman, particularly in isolated rural communities, is significant and should not be underestimated. In whatever changes that must be implemented as a result of the European directive, and we acknowledge the directive is inoperative in Ireland and we must transpose it into Irish law, we must protect the provision of the service for every house in the State.

I note with interest the comments of Senator MacSharry and others about the Finnish proposals introduced some years ago where they managed to succeed in keeping that universal delivery service operative in Finland. I do not understand the reason we cannot ensure, in any changes we make under this legislation, that universal coverage would be continued. Before the Bill is passed by the Dáil and the Seanad I hope we will have guaranteed that the universal coverage that operates currently will be safeguarded into the future. I will conclude as I do not want to repeat what other speakers have said. I thank the Senators for sharing their time with me.

Senator Terry Leyden: Information on Terry Leyden  Zoom on Terry Leyden  I wish to share two minutes of my time with my colleague, Senator O’Sullivan, and one minute of my time with Senator Burke. I regret we do not have more time for this debate but I will be brief.

I welcome the Minister of State, Deputy Cuffe. I commend the Minister, Deputy Ryan. I am sorry they are leaving Government because the Minister has been excellent, as has the Minister of State although he has been only recently appointed.

As a former Minister of State in the then Department of Posts and Telegraphs in 1982 I have a great deal of experience in this particular field. It was a marvellous Department in which to work. We were in charge of postal and telecommunications services. At that time Feargal Quinn, now Senator Quinn, was appointed chairman of the interim board for posts, An Bord Poist. There is a great deal of experience in this House which will be shared during the debate on the Bill.

I have been approached by Jim Higgins of the Communications Workers Union in Roscommon, John Tansey of the CWU national executive, and Pat Compton of the CWU in Roscommon who put important points to most Members of the Oireachtas which I intend to present to the top officials from the Department who are present, although I will not outline the details. The most important point concerns the universal service obligation, USO. They state that the funding of the USO in a liberalised market is a major issue which has not been resolved in this Bill. They state that the legislation suggests a compensation fund which licensed operators will pay into to fund the USO. They state further that it has not worked in any other country. It has also caused many redundancies in other countries. We are transposing a European directive but we have been too active in following the directives to the letter where other countries are far more relaxed in that regard.

The fact that An Post has been designated as the universal service provider for the next seven years and ComReg as the national regulatory authority for postal services in chapters 4 and 3, respectively, is welcome. When the Commissioner was in Ireland some weeks ago, I made that point to him. He is from a rural area in Germany and is well aware of the position. [938] We must have the same postal services in Dublin 4 and the Aran Islands, with a five-day working week and daily deliveries. There should be a universal service. That is vital.

I commend all those who work for An Post. They do a wonderful job in all weather conditions in delivering the post throughout the country. I was privileged to work with them in the Department and helped and supported them in various developments in my period of office.

  2 o’clock

The Bill is necessary because it stems from European legislation. I hope on Committee Stage the Minister will listen to the concerns of the CWU which represents workers in the postal service and that we will solve any problems. An Post must be protected at all costs, particularly during these difficult times in employment. We must ensure we maintain the maximum number of jobs in An Post to give people every encouragement and support and not to allow vultures to come into the country to cream off services in Dublin, Waterford, Cork and Limerick, while leaving rural areas isolated. That is vital and as a former Minister, I will fight for this on Committee Stage. I hope the Minister will ensure the Bill will be a monument to his work in the Department, not a millstone around his neck in the future.

Senator Ned O’Sullivan: Information on Ned O'Sullivan  Zoom on Ned O'Sullivan  I concur with everything Senator Leyden said. The concerns of the union have been well articulated on both sides of the House. The figure about which I am most concerned is the one which indicates liberalisation in Germany led to the loss of 21,000 full-time and 12,000 part-time jobs. Something similar happened in Holland. We are now in an environment where jobs are critical if we are ever to escape the economic crisis.

The cherry-picking argument has been well made. We can all see how convenient it is to post letters to Dublin 4 but not so easy to post them to Knocknagoshel, County Kerry and that the profit levels for the two are totally different. There must be a mix. No one opposes liberalisation; it sounds like a free word in a free republic, but who is being liberalised? Those who have given service in An Post throughout the years feel their jobs are on the line and are concerned. Work remains to be done on this issue and we will all make our voices heard on Committee and Report Stages.

Senator Paddy Burke: Information on Paddy Burke  Zoom on Paddy Burke  As previous speakers said, this process will cost jobs and lead to extra delivery costs. Even if we are to provide for competition, there is no way to bring down costs. The country has a population per square kilometre of 58, while the EU average is 178.2. If we are to provide the same service across the country as in the main population centres, there will be a cost in jobs, postage charges and post office numbers. This will lead to the closure of post offices and a diminution in services.

The Royal Mail in Britain is losing money because it delivers mail for competitors at a cost set by the regulator. Where does the Minister stand on this issue? If the Royal Mail is delivering for competitors brought on board at a cost set by the regulator, it makes no sense. There is a lot of work to be done here. I hope we will have more time to go into the matter in detail on Committee Stage because the last paragraph on page 8 of the article of associations sums it up. There will be cost increases and a diminution of services.

Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Ciarán Cuffe): Information on Ciaran Cuffe  Zoom on Ciaran Cuffe  I thank Senators for their contributions and welcome the opportunity to respond to their comments and observations. I echo the sentiments and expressions of thanks to postmen and women around the country who go all out to ensure post arrives every day. I grew up in a rural part of south County Dublin and our house was the last on a rural mail route. I remember the postman arriving in all weather conditions by foot, bicycle, car and, [939]occasionally, horse. In Manhattan the main New York City post office has an inscription that “neither snow, nor rain, nor heat nor gloom of night shall stay these couriers from the swift completion of their appointed rounds”. That is the unofficial motto of the US Postal Service. We do not need such a motto; we simply pay tribute to the postmen and women who work tirelessly to deliver mail in all weather conditions.

The Communications Regulation (Postal Services) Bill marks an important milestone for the postal sector. As my colleague outlined, it represents a pragmatic approach to the liberalisation of the sector, a process that began 20 years ago. It sets out the high level principles underpinning the regulatory framework and strikes a balance between ensuring the provision of the universal service, enabling the development of competition and putting in place provisions around consumer protection. That the sector is facing challenges can be acknowledged and all operators will need to focus on consumers’ needs to remain relevant and be the service provider of choice for the future. The aim is for the individual consumer, the business sector and the wider economy to benefit from increased competition and a broader range of services.

I thank all Senators for their contributions and the many interesting points made. The Bill aims to balance continuity of basic postal services with new and innovative services. Universal service will continue if An Post can demonstrate to the regulator that it represents a cost, but the Bill provides for a funding dimension. It sets out first principles; detailed implementation is the job of the regulator. In doing its job ComReg is accountable to the Oireachtas and the Bill will provide for an appeals mechanism for those affected by ComReg’s decisions.

The Government is fully committed to employment protection; there is already a significant body of legislation protecting employment rights. The uniform tariff will remain, but if it is to be changed, the consent of the relevant Minister must be obtained.

The Bill does not deal with the post office network. Under the Postal and Telecommunications Services Act 1983, An Post is obliged to provide nationwide counter services and that will continue.

I thank Senators Quinn and Ó Brolcháin, among others, for the points made on the Bill and the issue of competition. Competition and liberalisation have been long signalled and the Bill puts in place the framework to manage the final step in the process to ensure competition emerges in a controlled and fair manner. The emergence of competition can bring monetary benefits, among many others, and increases the focus on innovation and meeting the needs of all users. At its centre, the Bill envisages and provides for a strong and vibrant An Post that will play a central role in the development of the sector. The designation of An Post recognises its important role and ensures, side by side with competition, universal service in both urban and rural areas.

Postcodes will play an important role in developing the sector, not just in developing postal services but also in developing and providing for the improvement of many other services. One day last summer, I spent three quarters of an hour on a side road in Kerry awaiting the arrival of an ambulance for a small child. In order to provide certainty in such a situation, the neighbours must be sent out on the road to make sure the ambulance can find the house, and much other information must be provided to make sure the emergency services arrive. Postcodes bring benefits not only for the postal service but also for the emergency services. I experienced that at first hand last summer. This will assist Ireland in developing an information-based society. It is happening; private operators of GPS systems have already provided postcodes, and it makes sense to continue their development. This ties into many other aspects of special infrastructure that will be established by the end of next year. In practical terms, it will enable us to encode CSO data to provide far more meaningful statistical information at a local level.

[940]The prior information notice has been issued by the Department of Communications, Energy and Natural Resources, and I assure Senator McCarthy that value for money is at the centre of all procurement processes. As for the accountability of the independent regulator, the directive provides that all member states designate a regulator independent of postal operators. The Communications Regulation Act 2002 provides that ComReg is accountable to the Oireachtas, and this will continue into the future.

I thank the Senators for their contributions and their interest in the Bill. I note that many Senators brought to the debate their first-hand experience of the great work the existing postal service does and will continue to do. I welcome the support of the House for the Bill and look forward to its early consideration on Committee and Report Stages with the overall objective of placing it on the Statute Book as soon as possible.

Question put and agreed to.

An Cathaoirleach: Information on Pat Moylan  Zoom on Pat Moylan  When is it proposed to take Committee Stage?

Senator Ned O’Sullivan: Information on Ned O'Sullivan  Zoom on Ned O'Sullivan  Next Tuesday.

Committee Stage ordered for Tuesday, 30 November 2010.

Sitting suspended at 2.15 p.m. and resumed at 4 p.m.


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