Finian McGrath (Dublin North Central, Independent)

I thank the Acting Chairman for the opportunity to speak on this new legislation. I support the principle of a universal postal service. I also support the 18,000 people employed in the communications sector. I commend the Communication Workers Union, CWU, and its members on their dedication and professionalism in providing this service. My late father was a postman and a committed public sector worker. The significant community service provided by postal workers, particularly to senior citizens and people who live on their own, has been mentioned. Many of us remember the joy when the local postman delivered a parcel from America. It is important to remember such community contacts because they are relevant to the debate.

This legislation also relates to quality public services. It is important to recognise the great work done by CWU members. It seems not to be fashionable to stand up for public sector workers and trade union members but I support the public service, the teachers, nurses, civil servants, council staff, postal staff and health care staff. Most of them do a great job but are often blamed by certain political and other sections of society. From the lack of informed debate, one would think public servants caused the economic crisis. Politicians, bankers, developers, sections of the media, the regulator and a greedy section of society caused this economic mess. Any other view is inaccurate and unacceptable.

The legislation will shape the future of the Irish postal market for generations. The changes that will be introduced under the legislation must be carefully considered to ensure we do not make the mistakes other European countries have made when liberalising their postal markets, which led to job losses, higher costs and lower service levels. At stake is a vital public service that must be considered a basic right as it connects every household and business to a communications and economic infrastructure that is essential to the social and economic well-being of the country.

I have major concerns about the liberalisation of the postal service. The viability of the universal service obligation would be under threat in a liberalised market. In the absence of a proven method of financing, there are serious questions about the USO. Liberalisation will remove the restrictive monopoly that An Post uses to fund the loss making parts of the USO. The Government view appears to favour the establishment of a sharing mechanism but the CWU would prefer all funding options to be included in the legislation, including state aid. Nothing should be ruled out until we know what a liberalised market looks like. We must learn the lessons from other countries, such as Britain, where the USO is now under serious threat due to the regulatory choices made there.

Looking at the experience of the Royal Mail in Britain, we can see how important downstream access is. If it is handled badly, it could spell the end of An Post and the loss of 10,000 jobs. Access to the network must be on a commercial basis and must not fall below mail centre level as this would render useless much of the technology in which An Post has invested in recent years and would require the reconfiguration of the entire network. Cherry picking occurs when An Post's competitors compete for business on profitable postal routes only. The effect is to reduce vital revenues for An Post, leaving it only with the loss making routes, which are substantial in Ireland, thereby threatening the viability of the USO.

Unfortunately job losses and liberalisation go hand in hand. This has been the experience in every postal market that has been opened to competition as shown in a comprehensive study by the UNI across a number of liberalised markets. Social dumping is also a concern, where decent jobs with reasonable terms and conditions are replaced by low paid temporary posts that force employees to maintain dependence on social welfare, as has happened in Germany.

The social value of the postal service is widely acknowledged, particularly in rural communities and especially in bad weather conditions like those we saw recently. It is striking that the legislation does not refer to the fact that the postal network is a vital part of the fabric of our communities. It should be the case that decisions of the regulator must take into account the unique value of the postal service in Ireland, with its substantial rural population, and care should be taken to ensure the interests of a competitive market do not take precedence over or put at risk this vital public service, which is part of the fabric of our communities and provides a sense of national cohesion.

We must also address the positive side of An Post and its services. Postage costs in Ireland are the eighth lowest of the 29 European countries according to a 2010 survey, while it is the seventh most efficient postal operator. In 20 years, prices have increased on only three occasions and it has lagged behind inflation for the same period. It operates with no State subvention or taxpayer support. It is important to remember that An Post made €5.7 million in operational profit in 2009 on a turnover of €805.2 million, down 5.4% from €850 million in 2008. We have also seen the decline in mail volumes due to modern technology, down 16% since the start of 2009. Each 1% decline represents €5 million. We also have e-billing becoming more common and grave concern has been expressed by An Post about companies imposing such billing on customers.

The greatest challenge is the funding of the USO in the future. A compensation fund has not worked anywhere else in the world. We need state aid as an option for the future because we do not know how the market will look in five years. We need a plan B in case the market needs it. A lack of planning led to many of our current problems so we must ensure An Post has commercial freedom to compete with new market entrants in profitable areas. Access below mail centre level will signal the end of An Post and must therefore be covered in the legislation.

The main purpose of this Bill is to transpose the third postal services directive, providing for the final phase in the opening of postal services to competition. The Bill sets out a regulatory framework the main purpose of which is to safeguard the permanent provision of a universal postal service while encouraging competition in the market. We must ensure financial support for the provision of universal postal services. I am concerned, however, about the influence of the former Minister for Finance, Charlie McCreevy, on this directive. We have learned that the direction in which such people brought the country was part of the problem that led to the current crisis. We must learn those lessons when looking at this legislation. I commend the staff on doing an excellent job. They have a fantastic record for delivering the services, including a day-after postal service.

I urge the Minister to listen to my concerns about this legislation.

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