Eamon Ryan (Dublin South, Green Party)

We have seen a huge reduction in electricity prices in the last two years. There are several reasons for this, but one of them is that a competitive market arrangement is working. The ability to allow other competitors, such as Bord Gáis and Airtricity, to underprice the ESB in electricity supply has created a competitive retail market as well as in the business sector. In February or March, when it goes above 40%, the ESB will then be free to change. That good regulation is in place and the price cap did what is was meant to do, allowing competition to develop, bringing prices down and improving services for everyone. It is important to recognise that because there is an alternative campaign which says our electricity companies are not working for us, we must break them up and sell them. I do not think that is in the public interest, however, and it is based on a campaign which is inaccurate. The question is whether our regulatory system and semi-State utilities are working effectively within a competitive functioning market, and to my mind they are. They provide a good example of how one can create a competitive market and have companies that provide a real public service. On a point of principle, I contend the Senator's argument in that regard.

I cannot accept the five amendments concerning the proposed price cap. This is a similar example where we are looking to create a market that does not underpin or undermine An Post. It may give it a measure of certainty rather than looking case by case, as it currently does, for a price increase in particular product areas. At the same time, it recognises for An Post that the response to a declining market and declining volumes cannot just be to see if it can get an increased price on the remaining volumes. That would just be a never-ending downward spiral as a business model. That is why we put a five-year cap period in section 25. It is also critical because it affords protection against price increases for users who do not have market power. It is for small businesses and individuals who cannot negotiate their postal pricing arrangements with An Post. That particular category is the only one where we are seeking to put a cap in place.

I do not believe that the annual review proposed in the amendment would work as effectively. One would be in a constant state of uncertainty if one had an annual review. It would not provide the sort of business environment that would help either An Post, consumers or other market operators.

Section 25(5) includes a provision for a review after three years. If people think five years is too long, there is a mechanism to amend the component parts if the assumptions under the cap are no longer true. It is not setting five years in stone, but is providing for a five-year period with a review clause after three years. That is an appropriate measure which allows the flexibility to make adjustments. There is such a need for certainty, however. Examples in other areas where we have opened up markets to competition - I will take electricity as the example because it has been raised - show that this can work both for An Post and the consumer.