Olivia Mitchell (Dublin South, Fine Gael)

I welcome this legislation. Along with giving a role to ComReg, its two main objectives are the liberalisation of the letter market and the introduction of postcodes. I understand that change always causes concern. People either suspect the legislation is somehow aimed at undermining the role of the incumbent operator, or they fear the legislation will have unintended consequences.

The opening up of the only remaining regulated market, which is associated with the 50 g letter, is causing concern on two fronts. An Post employees are concerned that their jobs are at risk and rural users of the postal service are concerned they will lose their daily service. Employees worry that cherry-picking could occur, particularly in the urban markets and other densely populated areas, and that An Post would thus lose the profitable routes. I do not believe this will be the case because An Post has huge advantages in the market. It is the incumbent and is well placed to withstand even sustained attempts to undermine it through underselling. It has a network in place, expertise and experience, and it also has the ability to see off all newcomers to the market. There will, however, be a continuing loss of business in the letter market. I will return to this point.

A related fear felt by those living in more remote areas and expressed by many Deputies is that, by virtue of a more competitive environment, they will lose a daily service. I do not think this will happen. The legislation provides for An Post as the designated universal service provider for the next seven years, during which there seems to be very little to worry about. Concern is being expressed about what will happen after this, but to be honest in legislative terms and with regard to communications seven years is like a millennium. Given the rate of change in the communications sector, we cannot possibly anticipate what will be the problems in seven or eight years time and we certainly could not anticipate how we might deal with them at that stage. If there were threats to the daily service and the network, they should be addressed at that time, but it should be left to the Government of the day which would know what it was dealing with.

The major concern being expressed is with regard to the possible loss of rural post offices. This is not a new trend and efforts have been made to provide new more profitable ancillary roles for post offices such as providing banking services. Unfortunately, these efforts failed with the collapse of the banking system.

It is a major challenge for An Post to reinvent itself and find new roles. I can greatly sympathise with the concern people have, given the social role post offices fill in rural areas. However, I must question whether a vital business service which is fundamental to our competitiveness should fund the social service. I am not saying that social service should not be funded - it should - but I wonder whether the business community should be asked to fund it. It is a tribute to An Post that it has managed to remain profitable while providing both a social and business service on the basis of a 55 cent stamp.

The purpose of this market liberalising Bill is to increase efficiency and reduce the costs of competition. If it is successful in doing this, it is possible that the cost of a stamp will fall to a point where it cannot support uneconomic post offices. This is a genuine concern and one which cannot be ignored. It is right to raise it and point out that it is something we may have to tackle in the coming years.

A more immediate eventuality is the huge drop in the volume of letters which everybody has mentioned. The most significant change that has taken place in social and business communications is the switch to electronic communications, whether it be Twitter, Facebook, blogging, e-mailing or e-billing. When I was first elected to the Dáil and first became a public representative, almost all of my contact with the public was through letters. Now, it is almost entirely through e-mail. The only post items we now receive are the annual reports of State bodies, although thankfully some of them are changing to sending us their annual reports on disk, and letters from voluntary bodies sending us expensively produced material in lobbying us for more State funds. I wish they would understand this is not likely to endear them to us.

There is no doubt that the volume of letters is falling and that even traditional users of the service for large-scale deliveries are switching to e-billing. This will be a huge and growing loss to An Post. Recently, when watching UTV, I saw an item on encouraging people to return their census forms with pictures of people putting them into post boxes. I wondered why we did not use the postal system to at least send out the census forms, whatever about collecting them. There is an onus on the State to support An Post; if we are asking it to step up to the mark in terms of modernising, we should give it a little help, where possible, by using the postal service. During the week I was heartened to receive a card from An Post inviting me to avail of its new commission free service in purchasing dollars and sterling; obviously, therefore, it is entering the foreign exchange market which is welcome.

As one door closes for An Post another is opening to a bright new world and an area of huge growth - parcel delivery. The Internet killed off letter post, but it has facilitated a new growth market for on-line shopping which definitely seems to be the way of the future. It is extensively used, particularly by young people. At Christmas time I was struck by how the young people in my family did not go near a shop but did all of their Christmas present shopping on-line. I find it a rather joyless activity myself but clearly it is the new big thing and the way of the future. It is a huge challenge for An Post to rise to this and become a dominant player in the market because I realise it is one in which there is already competition and giants such as DHL. However, it is a natural growth market for An Post which has certain advantages because it is already delivering nationwide.

I am concerned about an existing practice of An Post when dealing with the wider postal market and downstream postal service providers which are licensed to provide postal services such as processing, sorting, printing and packaging material and which buy the services of An Post to deliver the material. This market involves many jobs and there could be many more were it not for the practice of An Post to offer cheaper rates to foreign providers of delivery services than it does to those operating at home. The result of this is that large-scale regular users of postal services have to send all of their material to England, Switzerland or France to have it processed, sorted, printed, packaged and posted. This creates jobs in France, Switzerland and England and supports their postal services, but it does very little for job creation at home. In legislation dealing with extended competition this is totally anti-competitive. It segments the market and is anti-jobs. From no perspective does it make sense and I intend to submit amendments on this issue, unless the Minister can tell me the reason An Post does this. I hope he will take notice of my amendments. Support for An Post must be a two-way street; if we support it, it should support Irish jobs.

Another source of concern is the concept of burden sharing. This is also an anti-competitive move. The idea is that if competition is so effective that An Post cannot fulfil its universal service obligation, other service providers must subvent it. The irony is that this is a directive to increase competition; it is not intended that any competitive edge should be removed by ensuring the successful competitor subvents the unsuccessful competitors. I appreciate it is unlikely that a new entrant will outperform An Post; nevertheless, if costs are involved in ensuring the universal provision of services, it is a cost that should be borne not by other businesses and the business community but by the general taxpayer. My real objection to this provision is the guarantee of a subvention being provided in legislation. A guarantee such as this reduces the stimulus to provide competition and allows the incumbent to take its foot off the pedal in striving for efficiency safe in the knowledge that somebody will pick up the bill if it fails to provide. The danger is that a cushion of comfort will be provided that will become nothing more than a subsidy for inefficiency and, therefore, will negate the entire purpose of the legislation. I do not think that could be in anyone's interests.

I want to deal with the issue of postcodes, the introduction of which I very much welcome and support. Their introduction has been postponed - excuse the pun - for a number of years because people feared them. This does not make sense to me other than there being a natural resistance to change. Postcodes can bring enormous advantages in terms of efficiencies in the delivery of post and a reduction in costs. They will also bring huge benefits to emergency services, provided the correct system of postcodes is used.

It is particularly important for providing parcel post, which will be a growth area for An Post.

Whatever about a postman wandering up and down country lanes seeking the correct Michael Murphy, one cannot have delivery vans doing the same. It is hugely inefficient. A precise system is vital. People fear they will be targeted for marketing purposes, but they are targeted for those purposes in any event and I would prefer to be targeted with something that is relevant to my demographic than to receive all types of rubbish in the post.

The system of coding used is vital. I favour use of a GPS system. I understand An Post favours an alternative system which is based on or informed by the machinery it has for reading letter addresses. That is a very short-sighted approach. To choose a system simply because it is suitable for the incumbent does not represent clear, efficiency-driven, long-term thinking. We must choose a system that stands the test of time, regardless of the equipment used by An Post. GPS is based on latitude and longitude and is a foolproof system. Importantly, it will endure and not die when roads or lines on a map change, which does occur. It is a timeless system. We are choosing a system for use in the long term. There are also huge benefits for the rescue services as it will be possible to track somebody in the middle of a lake or at the top of a mountain, which one cannot do if one is depending on roads. Under the proposed system, that is not possible.

It is also a value free system. As I am aware from what happened in my constituency, the current system caused huge anxiety when people were moved from one post code to another. I believe this also occurred in the Minister's constituency. In fact, they were not moved. The An Post system has them located in areas where they do not think they are and when they discover that under the new system, if An Post has its way, they are not living where they think, there will be war. It will cause huge difficulty in introducing the system. The beauty of GPS is that it is value free. One can have any address one wishes provided one has these value-free letters, as nobody aside from An Post will know what they mean. A system that stands the test of time is essential.

I welcome the legislation and appreciate the opportunity to speak on it.

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