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Communications Regulation (Postal Services) (Amendment) Bill 2016: Second Stage (Continued)

Wednesday, 18 January 2017

Dáil Éireann Debate
Vol. 935 No. 1

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(Speaker Continuing)

[Deputy Thomas Pringle: Information on Thomas Pringle Zoom on Thomas Pringle] If that is included in the strategic review, we will have to see the roll out of it; therefore, that is a further delay. What we see here and what we have seen constantly is ongoing delay in actually dealing with the issues. The Kerr report could have been implemented last year and we could start to see the effects of the roll out of that at this stage. It could be helping to boost An Post, make the network more sustainable and assist the company in remaining sustainable, but we have lost that with the delay and the strategic review will be further delayed. We will be in a constant spiral, which will be almost like a death spiral for An Post, where there will be pressure to increase prices to fund it in the future. That increase in prices will reduce revenue. We are not getting any delivery of the recommendations that could help sustain the network and company and it will come to a point where the whole thing could collapse and come down like a house of cards. That is wrong. We should be taking a decision to recognise the social responsibility An Post has and the social role it plays and ensure that the price of stamps can be kept as low as is feasible to ensure that people can have a service they can continue to afford to use and the people who use that service are not subsidising the banks and utilities that are moving away from that service and are not paying an additional cost through that. The company has serious problems and we need to get a grip on them and accept the Government's and people's role in ensuring this service stays open because it is worth more than just the price of a stamp and the increase in stamp prices.

Deputy Joan Collins: Information on Joan Collins Zoom on Joan Collins 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.

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