Mr. David McRedmond:

First, regarding the Bobby Kerr plan, if he does not mind me calling it that, the issue we have in being able to implement it simply concerns drilling down into the detail. The reality is that there are 1,100 post offices, most of which are individual businesses. We have a real responsibility to do this job properly. Given the nature of how the industry and electronic substitution are developing, I do not think we will have a second chance at this. It must be done very seriously and very properly. It must be costed fully through. There is nothing in Mr. Kerr's report that has not been done properly but, quite simply, it will take the full team at An Post to work through all the detail. I also want to include the international best practice we can get from McKinsey. I very much hear what Mr. O'Hara from the IPU had to say. I hugely sympathise with the postmasters and postmistresses and the predicament they are in, but this only makes it all the more important that I and my team do the job properly. Considering what the services can be not just four years but ten years from now, we have one go at this and we need to do it properly. What I am saying relates to Deputy Dooley's question as to whether we will come up with an action plan as a result of the strategy work. The answer is "Yes". It is not actually a strategic plan, it will be a set of decisions, and these decisions will come forward to the An Post board. We will involve all stakeholders, including Government, employees and our customers. Everybody will be involved in this. I fully intend to bring forward some major decisions, both for the mails business and the post office network business. I do not expect, for example, with the post office network business, to stray far from some of the recommendations in the Bobby Kerr report.

The issue I was asked about regarding the integrity of An Post is probably a policy issue. It is one on which we are in discussion with the Department. I have also had discussions with Bobby Kerr about this. It simply concerns the flow of funds. It is extremely important that we do not have a semi-State company become a State company by receiving a subsidy from the State. It is very important that funds do not go into An Post from Government because that could become an open chequebook. Rather, the relationship that Government has is more properly with the postmasters, since the whole issue is whether the postmasters can provide a whole range of services outside of An Post. Our job in An Post will be to keep the network open, keep investing in the network and work with the network. The issue really comes down to the level of what might be considered a subsidy, the minimum payment, that is made to post offices that do not reach that threshold through their commercial activity. This is where the discussions are, but these discussions can be held reasonably quickly. The Department with responsibility for rural affairs has already asked us to have such discussions. I am happy to discuss that with the IPU and everybody else.

Deputy Dooley asked about Mr. Pigot's views, which are very interesting. I enjoyed his presentation greatly. He put more emphasis on price increases and services with which he is not involved than services with which he is involved, but I would certainly consider the international issues he raised. I think he also knows that An Post has very little influence in many of those agreements. I would probably come more from Mr. Pigot's view that there is more we can do about it and challenge. There are certainly elements in what he has said that we will take into account. That is very much where we can rely on working with McKinsey, which works with every post around the world, to get its views and the views of other posts. I will be in the UK next week and will meet several chief executives from different posts. That work absolutely will happen and will be accelerated.

The final question was whether the USO is sustainable, which Deputy Dooley asked. It is very clear in my mind that what we are doing with this price increase is giving An Post a two-year cashflow to be able to restructure and reshape the company. It is not a panacea for the long term. We must get our work done within those two years. For the period during which we are doing it, we certainly intend to maintain the universal service obligation, USO. It would be invidious to say we will put up prices and reduce the service, but there is a major strategic issue about what our customers want. What are the services customers need most? There are interesting examples. I was very impressed by Age Action's presentation. However, if one considers the example of pensions, of new pensioners coming into the system, fewer than 10% go to a post office to get their pensions. They get them through electronic transfer. These are the sorts of realities we must deal with. This is not to forget the 10% who probably need to come to the post office, and we need to deal with that, but these are all the issues we need to consider properly. I cannot answer the question about the USO. It is absolutely the right question because the other side of this equation is the costs of An Post, and I am absolutely clear that we need to consider our costs. An Post will be a smaller organisation, but in the immediate term we need to have the cashflow for the next two years to address these questions properly. Come May, we will have an action plan that I would like to then share with the committee.