Martin Ferris (Kerry North-West Limerick, Sinn Fein)

Unlike Fine Gael, Labour and Fianna Fáil, Sinn Féin opposed the postal directive in the European Parliament and we are opposing this consequential Bill. The reason we opposed it in the European Parliament is that it clearly sets the agenda not only for liberalising the postal services, but for breaking them up and selling them off. Prior to the election, Sinn Féin opposed this Bill which was supported at that time by the then Opposition parties, Fine Gael and the Labour Party and also by Fianna Fáil. The former Minister, Deputy Éamon Ó Cuív, made valid points in his contribution, yet when he was on the other side of the House he was prepared to push the Bill through. I acknowledge he spoke very well about the consequences of the Bill, such as cherry-picking, and his arguments were quite good, yet, when he was a Minister, he was prepared to support it. I do not understand how a person can change his position overnight, like switching off a light.

Defenders of the directive claim that it can provide protection of the universal service obligation. However, in reality, that is not the case and the proof of this can already be seen in other EU states which have legislated to put the directive into domestic law. As I said when I spoke on this Bill in the previous Dáil, this is a charter for the breaking up and the ultimate privatisation of postal services throughout the EU.

When the former Labour Government in Britain first proposed the introduction of measures to put into effect the provisions of the directive, it claimed that it would actually protect against privatisation and would maintain existing levels of services. In fact, Labour had already decided to sell off 30% of Royal Mail. Of course that has not prevented Labour, now in opposition, claiming that it is opposed to privatisation. This is hypocrisy. What Labour in Britain did when in government and what it now says in opposition is very similar to what I hear in this House today. The legislation introduced by its successors in the Conservative-Liberal Democrat coalition to put in place the directive also contains provision to privatise postal services and clauses which will allow postal providers to opt out of the universal service obligation.

It is clear that those who are claiming that this Bill will protect An Post are being less than honest. The provisions of the Bill provide scope down the road for a radical dismantling and selling off of An Post and the doing away with the obligation to provide a universal service.

This Bill is a charter for cherry-picking, the process whereby market entrants provide services solely or mainly in the lucrative end of the market leaving the existing operator with most or all of the loss-making end. In postal terms we can expect the private operators to be interested in Dublin and Cork, leaving rural Ireland to the State provider. This will make the provision of rural postal services non-viable without significant price hikes or taxpayer subsidies. Cherry-picking is not a possible outcome of this proposed liberalised market; it is a certain outcome.

The Ecorys 2005 report on the development of competition in the European postal sector predicts that private providers in Ireland will seek to operate in niche markets and in certain geographical areas. In the new market, rather than establishing any genuine competition with An Post, the private companies will simply take the easy profits. This will remove the revenue streams that are necessary for An Post to cross-subsidise the price of deliveries to rural homes. As a competing business, An Post will be left with three options, which are to hike the price of stamps exorbitantly in rural post offices, to seek Exchequer funding support or to sell off key parts of the business. This seems inevitable but I hope I am proven wrong.

The so-called "sharing mechanism", contained in the Bill, is a non-runner. The Bill provides that ComReg may at an unspecified time come up with some sort of mechanism to have the new private operators compensate An Post for the burden of their universal service obligation. This reminds me of risk equalisation and the health insurance market that was liberalised in the not too distant past and we all know how that ended. The compensatory transfers necessary to ensure community rating were successfully challenged by the new insurance entrants and the cherry-picking that ensued has contributed to phenomenal price hikes like those announced recently the VHI. This is what will happen in this case. Likewise, the private postal companies will challenge the proposed sharing mechanism as a barrier under EU competition law, resulting in the inevitable outcome.

A 2006 PricewaterhouseCoopers report for the European Commission found that the member states with a more liberalised postal market for longer would be well placed to exploit the opening of postal markets elsewhere. The Ecorys report concluded that the degree of liberalisation in Germany and the UK is significantly more advanced than that of Ireland. This Government is hell-bent on handing over Irish taxes to private companies from the bigger EU players. This has to stop; we simply cannot afford it and once again, there is no benefit for the people, in particular for those living in rural Ireland.

The decision to liberalise the postal market is a purely ideological one. It is based solely on the myth, now entirely busted by the banking sector, that private businesses can do everything better, even when all the evidence points otherwise. The liberalisation of postal markets across Europe has resulted in job losses, price hikes and the scaling back of universal obligations.

The Bill gives significant powers to ComReg, but the objectives and functions are more akin to that of the Competition Authority than what would be required of a regulator entrusted to ensure that the people have equal access to the post regardless of where they live, that the highly sensitive and personal data of the citizenry is protected to the highest standard and that systemically vital functions from business communications to dole cheques are delivered with minimum disruption. It is difficult to see how ComReg can prioritise those vital issues when its priority job will be to develop competition, which is a total contradiction. This reminds me of the Commission for Energy Regulation which at a time of increasing energy poverty refused to let the ESB reduce its prices despite its willingness to do so — all in the name of competition. That is what An Post customers have to look forward to.

Another aspect, particularly for rural people, is the social consequences of what the Bill proposes. Probably the only social contact people living in isolated areas, particularly theelderly, those with disabilities and those with no transport, have outside their own homes is with the local postman. The services provided go way beyond their duties. I know postmen and postwomen who actually deliver groceries to people who live in isolated areas. They provide a fantastic service considerably beyond the call of their duty.

The only way to guarantee the universal service obligation is to reject this Bill and to reject the EU directive. The danger of privatisation has significantly increased since the adoption of the IMF-EU austerity programme. The memorandum of understanding that underpins the programme contains a clear statement of intent with regard to the selling off of State companies. The Government has already committed itself to selling off €2 billion in State assets. It claims that these will be non-strategic assets but that means very little. The only assets that private companies will be interested in buying will be profitable ones. In the case of An Post that will mean that when the company is divided up and if it is put up for sale, obviously private operators will want to buy those parts that are profitable, which will mean the off-loading and-or running down of non-profitable parts, including rural postal deliveries.

The Government has also indicated that in its assessment of which State companies or parts of State companies are to be sold off it will be guided by the report of the review group on State assets and liabilities which was chaired by Professor Colm McCarthy. That report seems to have been delayed for some reason with one suggestion that this related to the downgrading of the Bord Gáis debt rating. Clearly, therefore, the report has closely examined the financial state of State companies with a view to how and when they might be sold off. As An Post is one of the State companies that has been subject to the review, it will be interesting to see what Professor McCarthy has to recommend on it. Going by his an bord snip nua report, we may expect that this report will take a similar right-wing view on the State sector.

As I have said before and as I have requested in questions to the Minister for Finance, it is vital that the report is made publically available as soon as it is received by the Government and that we have a full debate here and engage with the workers representatives in those companies likely to be affected on its findings and recommendations before they are acted upon. Given Labour's relationship with the trade union movement, it is incumbent on Labour Ministers and Deputies to ensure that they involve the trade union representatives in any decision-making process on the proposals before us.

Given that An Post is one of the companies subject to the review by the McCarthy report, it is possible that we are debating this Bill without knowing the full picture. It is possible that this legislation if passed might be over ridden by the report if it recommends, as it might very well do, breaking up and selling An Post. That is something Deputies on all sides need to bear in mind as we debate this Bill and I would particularly ask that Members of the Labour Party do so given their commitments to the postal workers that they would protect jobs and services. Deputy Spring from my constituency is in the House. During the general election campaign in our constituency, postal workers trade union representatives lobbied all candidates in this regard. I made absolute commitments to stand by their position. I understand that other Deputies made similar commitments. It will be interesting to see how they vote on the Bill.

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