Michael Finucane (Fine Gael)

I welcome the Minister of State to the House. If the Minister of State had sat in on yesterday's meeting on the postal structure, what he would have said today would have been considerably different. To quote Shakespeare's Hamlet, "Something is rotten in the state of Denmark". Yesterday I learned that something was seriously wrong when a trade union official described management as a pack of marauding animals. I would never have anticipated hearing that type of statement in 2005, with the type of industrial relations machinery we now have. This statement was symptomatic of the frustration experienced by the unions in their discussions with management. While I do not know the backdrop to this, I know that something is seriously wrong in discussions between management and unions when a leading union official states that his discussions with top management have been negligible.

In January 2004, the chief executive of An Post, Mr. Curtin, outlined the survival plan to the Oireachtas Joint Committee on Communications, Marine and Natural Resources. He pointed out the importance of the plan in addressing the type of losses which An Post had incurred in recent times. He spoke of the rationalisation and redundancies that would be necessary to move on. As he had discussed the plan with the then Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, in October 2003, the Minister would have been aware of the survival plan. While I recognise that management needs to prepare, in doing so it should have some discussions with the union when at least drawing up the framework of a survival plan. If such discussions take place there is at least a chance of embodying in the plan what is achievable and realisable.

Some members of senior management at An Post have come from another semi-State organisation under the umbrella of the Minister for Communications, Marine and Natural Resources, namely, the ESB. While I have no doubt these people were very successful in the ESB, this must be considered in context. The ESB is a very wealthy organisation with a long history. The electricity generating sector had a turnover of €250 million last year and was able to pay a dividend to the Government. It is well recognised that the staff in the ESB are well paid and deservedly so. However, it is also recognised that the staff in An Post are not well paid. Sometimes when trying to give the impression that workers at An Post are well paid, figures are given including excessive overtime. While this pitches the figure fairly high, it is very much a distortion.

When management is framing a policy for An Post it is not possible to expect the same principles to be adopted in An Post as were adopted in the ESB. When changes in the ESB are negotiated, employees are compensated accordingly. One can understand the distrust in An Post. In January 2003 the previous chief executive, John Hynes, told the Oireachtas Joint Committee on Communications, Marine and Natural Resources that he expected a profit of €1 million in that year. We all know that in that year An Post lost €46 million. It is possible to understand how An Post workers would feel in such circumstances given that in the previous years An Post was in profit. What is wrong with its financial forecasting and audits that it could get it so completely wrong? This is mainly down to poor management.

The Minister for Communications, Marine and Natural Resources, as the chief stakeholder, has a major responsibility and it is up to him to provide political leadership. In the past ten years, regulators have been appointed in various sectors and Ministers can claim to have nothing to do with matters which are the responsibility of the regulator. In the past four years electricity charges have increased by 40% because any time the ESB seeks an increase, the regulator, Mr. Reeves, agrees automatically. In recent times it got an increase of 9% just like that.

ESB bills now reflect a "PSO" charge, which is a deduction for a public service obligation. The ESB is a very successful company and everybody sees ESB bills increasing dramatically. On the other side we have ComReg and An Post. An Post applied to increase the price of a stamp for a local letter from 48 cent in May 2004 and ComReg is still deliberating. That is the type of contrast: 9% awarded just like that to the ESB and nothing done for An Post. The liberation of the energy market affecting ESB will have no impact on the domestic consumer because we will not be able to shop around for an alternative.

I was surprised by a recent statement about An Post, which is the nub of the issue. I invite those who recently claimed to be socialists to prove they are. The chief executive of An Post recently said that the company is a commercial operation and should operate as such, without any social obligations to rural communities. That is the nub of the issue. The problems faced by An Post — its universal obligation to deliver mail and the fact that many people live in rural locations — will have to be recognised. This country's demographic structures are different from those of England. There are approximately 140 people per square mile in this country.

If we examine the successful British model, we will see that it receives a great deal of support from the British Government. The Royal Mail has given various commitments. It has guaranteed that no post offices will be closed down and it intends to proceed with the total automation of all post offices in England. Almost 1,000 post offices were included in this country's automation programme, but the other 450 post offices were excluded. Those post offices have to use the old system because, according to An Post, it is not commercially viable to automate them. People who pay their ESB or Eircom bill at a post office may be threatened with being cut off because their payment may be late as a consequence of the slowness of the old system, as opposed to the computerised system.

Approximately 600 rural post offices have closed in recent years. There are six post offices in an area of west Cork that is the same size as County Meath. People in areas with certain demographic problems have to travel long distances to get to a post office. The post office network has a tremendous advantage because, unlike the banking institutions, it has never been tainted by any impropriety or financial scandal. It warrants further development and help. When An Post had losses of €46 million in 2003, the Government committed over €13 million for capital investment in the post office structure. It behoves the Government to offer leadership to An Post and to provide equity funding for the automation of all post offices, if such moneys are required. Many of those who work in smaller post offices are doing well to make a profit of €3,000 per year, after they have paid for rent, heating and light, etc. The postmasters' union made a valid point when it said a commitment should be made to give a postmaster or postmistress a minimum wage.

All politicians should be concerned about the current evolution of An Post. We have to decide whether to seek a commitment at European level. Can we examine every semi-State organisation in a parallel fashion? Can we examine the ESB as we would examine An Post? If we recognise An Post's universal obligation and demographic challenges, should we not consider its social dimension? I think the ESB has a public service obligation to sustain peat stations in various parts of the country. Surely there is justification for building into the system some support for An Post as it deals with various social challenges.

We all know about the industrial relations developments at An Post over the past two years. An Post is becoming dubious about the postal system as a result of the industrial relations malaise within the company. In a competitive era such as this, it is to be expected that the company will move in other directions and it may be difficult to get it to refocus on its core operations. I am conscious that the Government will have to examine and recognise An Post's social dimension. I know every semi-State company is trying to return to profitability, but one has to recognise the factors which lie within that.

The exchange on this issue yesterday was healthy, but worrying. I have never seen union members so bitter and hostile to management. When we discuss Northern Ireland, we often say that those involved are making progress if they are talking to each other. That is not happening in the case of An Post, however. Every time a problem is encountered, labour relations mechanisms are invoked to try to tease out the matter. One has to sit down and talk to people. Management cannot implement its policies if proper discussions do not take place with workers.

We understand the importance of the postman in rural Ireland. The House debated some years ago attempts that were made to place post boxes outside the main gates of houses, for example on laneways, to speed up the mail delivery process. Mr. Hines intended to introduce such a system. An Post ordered the boxes in advance. It reminds me of the €50 million that was spent on electronic voting machines, which is being discussed by the Committee of Public Accounts today. After An Post had ordered all the post boxes, it was told by ComReg that it could not introduce the new system. We said at the time that the proposal was unfair on elderly people in isolated areas who might not see anybody over the course of the day other then the postman who came to deliver their letters and have a chat. We were pleased that the proposal was not accepted. It is obvious that An Post favoured the change in the interests of cost economics.

The management of An Post will have to cop themselves on. I will tell them that when they return to the joint committee in a few weeks. If they want even part of their survival plan to be implemented, they will have to talk to the unions. If they do not engage in such discussions, we will see the return of the industrial relations difficulties of the past. In this day and age, one would not expect to encounter some of the rhetoric that has been used by those involved in the current difficulties, such as "a pack of marauding animals". The use of such a phrase is symptomatic of a malaise. As the sole shareholder, the Minister will have to bang heads together if that is what needs to be done. One cannot allow a stand-off to continue while the whole thing tumbles asunder.