Michael Kitt (Galway East, Fianna Fail)
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I thank the Minister for coming to the Chamber for this debate. As the Minister probably is aware, there is concern about the threat to the post office network nationwide. There is a particular threat in County Galway, where three centres have been the subject of public meetings recently, namely, Barnaderg, Caherlistrane and Cappataggle. I attended two of those meetings, which were well attended, at which the reason An Post moved so quickly to talk about the possibility of closure was raised. In two of the cases, the postmaster had died, as in Barnaderg, Sean Fahy had passed away, while in Cappataggle, the postmistress, Christina Dooley, had died. The consultation notice posted in the village stated clearly that one option would be to close the post office. It also mentioned service provision needs and other criteria that would be considered. However, what I found interesting was that at the public meetings, reference was made to 28 services that are available in the post office. Reference also was made to services that could be available at local post offices and that was the reason I tabled this question. Particular reference was made to matters such as motor tax and driving licences, both for new applications and renewals. This certainly is the subject of much debate in Galway at present, where people are unable to find the driving licence centre. Reference also was made to business customer services, buying dollars and sterling, as well as hospital charges, property tax and other Government payment services.

Post offices were one of the issues considered by the Joint Committee on Transport and Communications when it examined the issues of accessibility and rural isolation. Rural communities will suffer socially and economically if post office closures continue. Disadvantaged urban areas will also be affected. Rural isolation describes the reduced services and opportunities available in areas with a low population density. Cappataggle is located halfway between Ballinasloe and Loughrea and the loss of its post office will require local people to travel much more. It is interesting that rural transport is often discussed in the context of mobility and accessibility to services. The post office is of particular importance in rural communities, notably among older people, as a number of commentators and organisations, including Age Action, have noted.

I note media reports indicating that An Post has threatened to terminate the contracts of postmasters for providing services outside their remit. Newsagents regard it as unfair to be described as postmasters running other businesses on their premises. The Irish Independenthas seen a copy of a letter from An Post in which it promotes a new service, PostPack. I understand the letter detailing ways in which customers can avoid visiting a post office was received by 3,000 shop owners who operate the post point outlets. Instead of encouraging people to avoid using their local post offices, the company should offer people every incentive to continue to do business in post offices. New business could be done in rural post offices, which also provide an important social outlet.

Pat Rabbitte (Dublin South West, Labour)
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I thank Deputy Kitt for raising this important issue. I assure him that the Government is committed to a strong and viable An Post and supports the maintenance of the maximum number of economically viable post offices providing high quality services on a nationwide basis.

The commercial operation of An Post's post office network is a matter for the board and management of the company. In much of rural Ireland, commercial business is moving away from smaller towns towards larger urban centres. This is marginalising the rural economy, drawing employment away from the countryside and reducing economic services, including banking and retail services, outside regional centres. In urban areas, increased broadband penetration, reduced mail volumes and the availability of alternative payment services is reducing post office business. The post office network needs to place itself to rise to these challenges over the medium term.

In the face of these changes, earlier this year I committed to taking the issue of the provision of additional public sector business to the Cabinet committee on social policy. The committee had its initial consideration of the paper I put to it at its meeting on 28 April and agreed to my proposal for a whole-of-Government review of the scope for locating additional public services in post offices. The review is being undertaken with the aim of a final report, based on the responses made by Departments being made to the Cabinet committee in September. While it is not possible at this stage to pre-empt the outcome of the report, all potential avenues for new public sector business opportunities will be fully explored by my Department. Where new business is identified, the caveat of compliance with public procurement requirements will need to be respected.

It is acknowledged that the migration from cash to electronic payments by the Department of Social Protection is one that will have a significant impact on the post office network. However, having invested in the computerisation of all post offices, the network is well positioned to handle the change and become the front office provider of choice for government and financial services and is ideally configured for over-the-counter transactions. Any such developments would need to be subject to competition and public procurement requirements, as appropriate.

Progress towards diversification within the financial services sector is under way, with the enhanced arrangement with AIB and the agreement with Aviva for the transfer of their branch offices personal insurance business to One Direct.

On the issue raised by the Deputy regarding a review of direct debit services at post offices, a number of aspects need to be taken into account. First, it is a matter for An Post and the contracting party for a service to decide what payment channels are made available to customers. These can range from cash transactions to electronic transactions. Second, the availability of choice is something which customers seek as it gives them greater options for conducting their monetary transactional business. Expansion rather than limitation of choice is a common feature of customer service today.

I understand the concern of the Deputy about the future of the post office network. An Post faces many challenges not only financial in nature, but also from the development of communications technologies. Any decisions it may take must be considered in the context of maintaining a sustainable post office network. As shareholder, I have a strong concern regarding the ongoing commercial position of the company and regularly liaise with it in this regard. I acknowledge the pivotal role post offices play in local communities in both financial and social terms.

An Post has many strengths and the largest retail presence in the country. Ireland has one of the most extensive post office networks per head of population in the 28 member states of the European Union. I have impressed on the company the need to further exploit its unique position in this regard and have been supportive of its attempts to diversify its income streams and win a wider range of commercial contracts offering higher margins.

I envisage a strong future for the post office network by using its existing strengths to remain a significant player in the provision of government, financial and other services. Securing the future viability of the post office network in the longer term will entail the network continuing to modernise to provide the services that its customers require. It has been long-standing policy that An Post remains in a position to compete in a liberalised market and continue to provide wide-ranging services to urban and rural communities.

Michael Kitt (Galway East, Fianna Fail)
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I thank the Minister for his response. It is good to have an opportunity to discuss this issue in the Chamber as Deputies may not table parliamentary questions on individual post offices. I have listened to the views of people attending public meetings in the west, a region the Minister knows well. People are tired of An Post's argument that it is not its policy to close down post offices and want instead to hear that it is the company's policy to keep post offices open.

The Minister addressed the issue of direct debits and alternative means of making payments. This issue needs to be reviewed and I hope the Minister will do so. I wrote to him recently indicating that a constituent of mine who tried to pay an ESB at her local post office, as her late mother had done for many years, was treated as a new customer and asked to pay a deposit of €300 if she wished to pay directly at the post office. Those who pay by direct debit, however, do not incur an additional charge. This type of approach suggests An Post would be pleased if people avoided visiting post offices in person. I brought this matter to the attention of the Commission for Communications Regulation on 5 June and have not yet received a reply, although I understand the commission is considering the issue. There is, however, no reason to change existing arrangements, for example, it should be possible to transfer an ESB bill from a mother to her daughter. I ask the Minister to examine this issue.

New uses and types of business must be considered for post offices.

I am confident that, if given the opportunity, post offices will develop new business and will be a viable alternative, particularly for those in rural areas.

Pat Rabbitte (Dublin South West, Labour)
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I am entirely in agreement with Deputy Kitt about the affection with which the post office network is regarded, especially by small communities in provincial areas.

The problem for An Post is that it is a commercial State company, the core business of which has been diminishing at a fairly serious rate because traditional letter-writing has been replaced by electronic substitution and it and the postal network has had to develop and market new services. That is what it has been doing and, hopefully, we can accelerate that. It did win the social welfare contract. It is important to say that amidst all of the discussions and public meetings to which Deputy Kitt referred.

I take issue with one remark of Deputy Kitt when he stated that, as far as he can see, An Post would like to avoid customers going to the post office. That is not fair. Deputy Kitt is correct about An Post believing that more of its services will have to go online. The fact of the matter is that it is not merely an efficiency measure for An Post. A lot of customers want to be able to transact their business online. Customers who do not want that option or those who do not have basic digital literacy are entitled to do their business over the counter in the traditional way.

As I stated in the House previously, between 2006 and 2010 some 197 post offices closed, but since 2010 only 17 have closed. I visited the most unusual post office on Thursday last on Arranmore Island which, I am happy to say, is thriving, and I would not throw in the towel on Cappataggle, known for its production of hurlers, in south Galway. Caherlistrane, I must admit, I did not know about.

Seán Kenny (Dublin North East, Labour)
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The Minister must conclude.

Pat Rabbitte (Dublin South West, Labour)
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I was merely going for a wander down memory lane.

Leo Varadkar (Dublin West, Fine Gael)
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The Minister knows the post offices.

Kevin Humphreys (Dublin South East, Labour)
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The Minister should not go too far down that lane.

Michael Kitt (Galway East, Fianna Fail)
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The Minister might as well mention Barnaderg now; I did not.

Pat Rabbitte (Dublin South West, Labour)
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I understand the concern of the residents of Barnaderg and elsewhere, but I point out again that it is only in the exceptional case that An Post has gone ahead and closed post offices in the past three years.