Joan Collins (Dublin South Central, Independent) | Oireachtas source

It is welcome that I can speak in this debate because I must declare an interest. I was a post office clerk for 33 years and I am on secondment in respect of my job here.

Following on from the point made by Deputy Pringle, An Post is a necessary service like electricity or gas. They are things people need. The history of An Post and other services involves deregulation led by the European Union - first of all with regard to packages and now in respect of the letter service. This has been coupled with the huge rise in technology. Most people would say that their sons or daughters probably would not even know what a letter is because they are all using email or texts. This is coupled with the fact that the banks and utilities are encouraging people to use electronic billing and e-mail to pay their bills and enticing them to do so with special offers and reductions. We mentioned this before in respect of the Department of Social Protection under a Labour Party Minister allowing the encouragement of the payment of social welfare payments through the banks. Elderly people are subsidising those deals because they do not use e-mail or computers as much as younger and middle-aged people.

I will give a brief summary of the background to this situation. I am a member of the Communications Workers' Union and have been contact with my union about this. It is a dilemma. We are talking about increasing the price of a stamp by about 30%. Does that then have the spiralling effect of fewer people using the postal service such that we are back in the same situation very quickly? Unless we see the Government linking something like this as a short-term measure to implementing the Kerr report within about two or three months to try to revitalise those services, this will not work in the longer term and we will be back where we started. It will impact on community groups and older people. On the other hand, if this decision is not made, we could see An Post not being able to pay its workers in the next few months, which would be a disaster. We should look at this in the context of the impact of deregulation on our services. Everyone thought that the PSO would protect the idea of a social service to communities but we see now that it does not. We see the pressures on Bus Éireann in respect of how it will deliver on those PSO obligations when it is not possible to put money into the companies.

Funding of the universal service obligation, USO, and An Post's financial strategy have been and remain a major concern for my union, not least because both are inextricably linked and have a consequential major impact on pay and conditions of employment for workers in An Post. Prior to the introduction of the Communications Regulation (Postal Services) Act 2011, the small monopoly An Post had in the reserve area was used to fund the USO. The union outlined at the time that unless steps were taken to fund the USO properly, it would be unsustainable in the medium to long term. Equally, the failure by successive Governments and the reckless failure of ComReg to require legitimate price increases have starved the company of much needed finance. This has resulted in the company spending its significant cash reserves to fund the day-to-day operations of the main business, which necessitated the recent sale of Cardiff Lane to subsidise the USO. In respect of price cap control, in April 2014 ComReg announced a revised pricing mechanism enabling An Post to apply for price increases over a five-year period based on the consumer price index. The CWU argued that the pricing structure was inadequate to fund the USO properly, most particularly in circumstances where mail volumes continue to decline leading to per unit costs rising. In its decision document, ComReg stated that the new pricing model would provide adequate funding for the USO assuming a further efficiency improvement of 10% by An Post over the five years, which included no provision for pay increases to An Post staff. The regulator's office operated in cloud cuckoo land by ignoring the reality that there is an obligation on An Post management to make adequate provision to make fair pay for staff. The adopted approach resulted in low paid postal workers subsidising the mail business while ComReg continues to award itself pay increases, including bonuses, the payment of which is largely financed by An Post and other communications operators. This is the madness of the world we are living in. Workers in companies are subsidising ComReg, NTA and all these groups.

I will address the issue of the pay increase because I am concerned about the point made about every 1% increase leading to a €4.5 million increase in costs for An Post. Workers have been looking for that pay increase since 2008. It has gone to the Labour Court every year. This year, the union went to the Labour Court regarding the 6% pay claim. In issuing its recommendations, the court stated "an effective pay freeze has applied in the company since 2008. In these circumstances it is understandable that the trade union group are now seeking a pay increase." The court stated the financial projections made by the company in relation to its core business do not suggest any amelioration of the current position in the short term and that there was a need for engagement between the company, its shareholders and the regulator, where appropriate, on the contribution of pricing and growth to the future financial stability of the core business. It said that the continuance of the pay freeze proposed by An Post was no longer a viable proposition. That was a Labour Court recommendation. The recommendation was to pay the 2.5% increase on 1 July 2016 and a 3.5% increase in 1 July 2017. A total of 50% of that will be made up of savings by the workers. I can tell the Minister that there are many angry workers in An Post who realise that they are going to get a 6% pay increase but will have to pay for it by giving a 50% saving. Again, it is a stark reminder of the proposition that is being put to Bus Éireann workers who are told they must take a 25% cut in their general pay for an increase of 2% offered by the company.

It does not add up from the workers' point of view.

The union welcomes the price cap decision and acknowledges that this significant and positive development has materialised relatively early in the tenure of the new CEO. However, in tandem with this change comes the increase in the price of the stamp. An Post must also review its overall pricing strategy which, in the union's view, is not coherent. It has displayed little or no joined-up thinking in the area over which it already has direct control in respect of the various products and service offerings which have also resulted in revenue loss.

The union fully supports the Minister's actions for the following reasons. An Post's quality of service is one of the best in Europe. Postal workers should not be expected to subsidise the national postal service. An Post has never received any State subvention. The Labour Court has stated there is a requirement on the company shareholder and regulator to engage in the pricing issue to ensure financial viability. Notwithstanding major ongoing cost reductions coupled with an eight-year pay freeze, the company is in a very precarious financial position. Crucially, 40% of the company's losses come from inbound international mail amounting to €15 million. Half of these losses arise from an international mail agreement entered into by the State and imposed on An Post.

We are seeing huge changes because of historical events and progress. If we want to provide services in this country, we have to be prepared to stand up to the European Union and say that at some point we cannot deliver the services we are obliged to deliver under the PSO and the universal service obligation to our community. It is a social service which also has to be productive.

I support my union's position. We have raised the issue of the rural post offices and the post office network in general in the Dáil since I became a Member and I am sure it was raised by Fine Gael in opposition before 2011. It has to be linked with a quick implementation of what can be a viable injection into the post office. I make a point also made by a previous speaker. Rialto post office was closed down overnight and it is happening everywhere with 1,000 post offices closed down under Fine Gael and Fianna Fáil-led governments.

Unless there is a change in Government thinking and unless the Government wants to keep the service viable, it will not happen. I do not expect much from the Government. I urge the people to put pressure on the Government to deliver from that point of view. It has to be the case.

See this speech in context