Seán Kyne (Galway West, Fine Gael) | Oireachtas source

ComReg still has a role under section 28(5). It is simply not appropriate to ask it to adjudge that An Post may fail. Deputy Stanley's amendments were ruled out of order. As outlined on Second Stage, the repeal of the price cap mechanism has been identified as the most viable option for supporting An Post in the short term while the restructuring plan arising from the McKinsey review is implemented. This decision was not taken lightly by the Government. An in-depth review of the company took place in recent months on behalf of the shareholding Minister. It confirmed the seriousness of the situation facing An Post.

While I understand where Deputy Stanley is coming from, the fundamental problem is the profound structural change in the mail business in Ireland and internationally. Electronic substitution has had a significant impact on that business. This is particularly apparent in respect of large volume postal customers such as banks and utility providers. This business is becoming increasingly unstable, with volumes fluctuating on a month-to-month basis, making it difficult for An Post to plan. In such circumstances, it is impossible to predict with certainty what the future holds in terms of volume decline. As this information is central to determining the cap for pricing, current market conditions make it difficult to implement an effective and appropriate price cap mechanism. In drafting the Bill, the Minister has considered whether an alternative regulatory structure around pricing could be provided for but, given the urgent need to address the challenges facing An Post, this was not possible in the time available.

The Minister is cognisant of the impact that this measure might have on consumers in the SME sector. For this reason, the Bill provides that ComReg will undertake a review of the repeal of the price cap mechanism after a two-year period. He has issued a policy direction to An Post instructing that price increases introduced following the repeal must be subjected to prior consultation with ComReg and have due regard to the tariff principles set out in section 28 of the 2011 Act and the interests of personal and SME users of postal services. This will ensure that An Post does not abuse its position. Following the repeal, the Minister will continue to monitor closely the activities of An Post in terms of stamp prices, but he does not have the final say.

The Bill's purpose is to repeal the price cap, but Deputy Stanley's amendment was to reintroduce it in another way. There was no time to reintroduce regulation. If we wanted to do that, it would require consultation on the matters in question, but there is no time to do so at the moment.