Dáil Éireann debate -
Tuesday, 27 May 1980

Vol. 321 No. 5

Private Members' Business. - Post Office Charges Increase: Motion.

Mr. Deasy

I move:

That Dáil Éireann condemns the increased postal, telephone and telex charges which will give rise to increased costs in business and industry and a general rise in the cost of living.

These charges follow swiftly on increases brought in last autumn. As early as 1 August 1979 we had increases in postal rates and as late as 1 October 1979 we had increases in telephone rates. We regard these charges as being too great and unnecessary, particularly as the services are not operated properly by the governing body, that is the Government, the Department of Posts and Telegraphs and the Minister.

I cannot let this occasion pass without protesting that these increases were not presented to the National Prices Commission for scrutiny and for a report, as is normal in such cases. I would like the Minister to explain specifically why the National Prices Commission were not asked to comment, to report and to sanction the increases in question. Increases introduced by the Coalition and previous Governments had to be scrutinised by the commission. I understand they were not even informed that these increases were being imposed, other than by the information which we and the public received last February when the Minister for Finance made his Financial Statement.

It is our intention to move that legislation be brought in to make it obligatory that such price increases be vetted by the commission and that there will be no side-stepping of the issues involved. It appears that this procedure was adopted because of the probability of severe criticism for the way these services are being managed. In recent years we heard criticism of the way these services have deteriorated while costs have risen sharply. It is time a halt was called to the continuing price rises and that the public get an improved service. These two factors are a cause of great concern.

We read of major losses by the postal and telephone services in recent years where previously a reasonable financial position was attained. What was the cause of these major losses? We can only pass the blame back to the Minister who has overall responsibility for the operation of those services.

Why do the Department not submit annual accounts to let us know where and why the losses are being incurred. As spokesman for Fine Gael I have never seen a statement of account from that Department. I do not have a break down of the losses in question. On what services are these losses incurred? As the ultimate body, in terms of responsibility, we should be entitled to that information. Again, I ask the Minister to tell us why annual accounts are not furnished by his Department. How can we examine the weak factors in the Department, or how can we pinpoint the loss-making areas if accounts are not presented?

Every semi-State body are obliged to print their annual accounts, although some of them are quite slow in doing so. We hear objections about these delays from time to time and in one case we had a delay in excess of a year. Despite this, at least their reports are published. If an annual report of the Department were published, we would be familiar with the activities and the loss-making areas in the Department.

I firmly believe that when a business is losing money, it can be put down to the management and operation of the firm, rather than any other reason, such as a basic non-profitability venture. The Department of Posts and Telegraphs should be a profit-making concern. Our commercial banks are reputed to have a licence for printing money but the Department operate three very potentially profit-making operations—the post office, the telephone service and the telex system.

These are all potential money markers. Why are they losing so much and why are the losses increasing annually? As late as 1977 the postal service was making a profit. The prediction for 1980 is that losses will be heavy. The estimate given by some sources in the Department is that it will be around £14 million. The loss in 1979 was given as £12 million. It was an extraordinary change from 1977 when the postal service made a profit to the loss making situation in 1979 where there was a loss of £12 million. I am aware that 1979 was a difficult year. The difficulties were extreme in that we had a protracted and very unnecessary postal strike. But that is not the whole story because, according to the information given out here during Question Time, the strike cost the Post Office a total of £13 million in revenue but the savings as a result of the strike due to non-payment of wages and salaries amounted to £10 million. So the nett loss appears to be £3 million but the loss was actually £12 million.

The losses have a predictable trend. In relation to the whole telecommunications system, together with the postal service, the losses ranged from £19 million in 1978 to £29 million in 1979 and it is estimated that the loss will be as high as £33 million in 1980. According to a recent report from the Government Information Services, losses are expected to continue at a higher rate in 1981 unless increases such as those at present proposed by the Minister are introduced. In relation to that point there is one thing which irks me and other Members on this side of the House although it may seem petty; that is that this press release was issued last Friday week, 16 May, and it was not at any stage on that date or since made available to Opposition Deputies. It is the least the Minister might do, as a matter of courtesy, to let us have the relevant press release immediately it is made available to the press, especially when it concerns an area in which we are spokesmen.

We condemn these increases for the reasons that I have outlined. We fail to see why services which were profit-making three years ago when we were in Government have now become heavy loss makers. We have had nothing during the past three years from successive Fiannna Fáil Ministers except promises that the service is going to be improved, that we are in for a new era in the posts and telegraphs sector. These promises have not been fulfilled. The telephone and postal service are in a worse state today than they have been at any time during the past three years. As late as last Saturday, 24 May, we read headlines such as "Post Office Workers Morale at Lowest Ebb", in the Irish Independent, and “Morale in Post Office Lowest Ever”, in The Irish Times. The outgoing president of the Post Office Staffs Association, Mr. G.W. Biddulph, at their annual conference in Wexford said that last year's Post Office strike was the inevitable result of unrealistic industrial relations in a public service which has been brought to a point of collapse by uncaring people in positions of authority. That statement is very pertinent. He said also that this reflected an attitude of political rigidity by the responsible Government Ministers of the time towards pay in the Public Sector. He said that the terms under which the dispute had been settled had done little to redress the sense of grievance and hostility nurtured by the strikers during the 19 weeks of the dispute. That statement, while it may appear to be very strong, sums up the problem within the Department in a succinct manner. It is probably the underlying reason why the loss making situation within the Depart-ment which has increased over the past two years, would, were it not for these enormous increases of 20 and 25 per cent, continue to increase more and more as the years go on. Have we any guarantees that with these increases the losses will not continue at a greater rate than has been the case over the past three years?

There is an alarming trend which was brought home to us here last week at Question Time and that trend is the reducton in revenue within the Post Office. That reduction in revenue could very well be due to the increases which were brought in in recent years, the latest on 1 August and on 1 October last. Is there consumer resistance to the charges being made by the Post Office? That may well be the case. In reply to a Dáil Question here last week we were told that the revenue from the sale of stamps in 1978 was £40.5 million and that that had been reduced in 1979 to £30.6 million, a decrease of £10 million. I know there was a strike but, with increased rates in the Post Office and the subpost offices not being directly involved, we would have felt that the decrease in revenue from stamps sales would not have been of that magnitude, 33? per cent. Is there a tendency for the public to use the postal services here at a lesser rate than was previously the case? It may well be that that is correct and if it is it is an alarming situation because up to a couple of years ago we were proud to have the best postal service in the world. But, as was admitted in recent weeks by Mr. F. Quinn, the man who was put in charge of the interim board, An Bord Phoist, to look into the operations of the postal service, the public have lost confidence in the postal service.

The drastic delays which have been evident since the postal strike have given rise to a loss of confidence and consequent reduction in the usage of these services by the public. This is a very sad situation which has arisen because of inefficiency at the top and a lack of leadership and motivation. The Minister must heed the public who are saying more and more loudly that all we have had from this Minister and his predecessor are promises. There has been no improvement in the postal, telephone and telex services and the greatest deterioration has been in the telephone sector.

I am not dealing with fools and idiots and I will not insult their intelligence by describing how bad the telephone service is. We all know it is chronic. We wish the Minister to make a clear statement of his intentions with regard to improvements and to live up to that statement. Since the manifesto was published more than three years ago we have had nothing but promises of major improvements, but the reality is that the service has gone from bad to worse. As spokesman in this area for the Fine Gael Party I receive an ever-increasing number of complaints about the poor quality of service or the complete lack of service. If the Minister looks at today's Order Paper he will see a series of questions from Deputies representing a large number of constituencies regarding unsatisfactory telephone services, inconvenience being caused to industry and the public, and business being disrupted because of the poor quality of the telephone service. Some of these questions have been put down by Deputies from the Minister's side of the House.

There is no sign of an end to the deterioration which has been occurring. The Minister should state how he intends to arrest that deterioration and improve services. We are fed up hearing about the £650 million to which the Minister refers in his amendment. We have not seen any evidence of that money being spent. People working in the Minister's Department say that they have not adequate stores and cannot even get ordinary cabling wire used to connect a telephone to an exchange. They cannot even get telephone instruments. In many cases there are delays of up to six months and then they may not receive goods they have ordered. There seems to be a work-to-rule within certain sections of the Department which further accentuates these delays. The Minister must step in and improve morale and provide the necessary funds.

The Minister of State at the Department of Posts and Telegraphs, Deputy Killilea, told me last week in the course of replies to a number of questions that in one small rural area there was a waiting list of 440. In reply to another question we were told that the average waiting time was two years.

An Leas-Cheann Comhairle

The Deputy is now getting into the area of the Estimates. The motion deals only with increased charges and the Estimate debate will be held later this week.

Mr. Deasy

The essence of the matter is that the public object to paying increases of 20 per cent for postal services and 25 per cent for telephone services while the service is still inferior. I do not believe people would be so irate and so reluctant to pay increases of this magnitude if the services were adequate. Quite obviously they are totally inadequate. If one picks up a telephone in Leinster House and endeavours to make a call there is a reasonable chance that one will find oneself listening in to a conversation between two other people. When dialling an outside number in a provincial exchange the chances are that the engaged tone will be heard before the dialling is complete. In country areas where there is a manual exchange it could take 20 or 30 minutes to get through to the operator. These inadequacies are absolutely infuriating and it is not surprising that there are complaints and condemnations of increases in charges. The public are reasonable and anybody in business knows that they will respond when a good effort is made. However, telephone subscribers have reached the end of their patience with the telephone service being provided. It is obvious that insufficient money is being spent on that service to allay their fears that things will not improve.

We do not have to back on Mr. Biddulph's statement in Wexford on Satur-day to know that the morale in the Department of Posts and Telegraphs is extremely low. The leadership must come from the Minister. From my experience those employed in the Department are a fine cross section of the Irish public and to get the best returns in terms of effort and productivity they must be treated properly. It is obvious that the staff relations section within the Department leaves a lot to be desired.

I suggest that the Minister make it his business to see that staff relations are improved. He should also see to it that working conditions are improved and that people with qualifications in the Department are properly paid. There is continuous objection from technicians and qualified people in the clerical section of the Department that they are not being paid at a rate comparable to those in other parts of the public sector. Until those injustices are rectified I do not think it will be possible to get a proper response from the personnel in the Department. The Minister has a duty to see to it that such people are properly looked after. He is not doing so at present.

Earlier I referred to the losses of the Department and the projected figures for 1980 and 1981. The Minister should tell the House what he expects the increased charges to yield in a full financial year. He should also tell us whether he expects to break even, make a profit or suffer a loss in 1981, the first full financial year when the increases will operate. The Minister has told us that the increases in the usage of telephones is expected to rise annually by 12 per cent. With such a growth rate one would expect that with proper organisation, a good state of morale and good staff relations that section would at least break even. We have given our support to the report of the review body which investigated the state of the post and telegraphs system here. We believe that report moves in the right direction and I understand that people in the Post Office are also happy with it. It suggests that two separate boards be established in the Department and that an element from the private sector be introduced so that those sections can be established on a proper business footing. That is what we fully support.

Some of the increases are unnecessarily great and I am afraid that they will represent an inhibiting factor in the growth of business in the postal service. The raising of the price of the ordinary stamp from 12p to 15p is drastic and the decision to increase the charge for parcel postage by 25 per cent is more drastic still. The increases in telephone charges are higher again. A local call will now cost 10p instead of 5p, an increase of 100 per cent. The Minister stated that the reason for this was they had found for technical reasons that it would not be possible to introduce a rate between 5p and 10p. That sounds peculiar particularly when one considers that up to now coin boxes were capable of taking 1p and 2p pieces. The Minister should give us a rational explanation as to why there are technical reasons which will prohibit any rate other than 10p.

I dislike the decision to increase the connection charge for telephones from £60 to £100, a pretty hefty charge which is well in excess of an increase of 60 per cent. The new connection charge represents a big sum for most people to pay at one time. I find it particularly objectionable in regard to the telephone subsidy scheme. Those who can pay the connection charge and who are eligible for that scheme get a subsidy towards the rental of the telephone but how many old age pensioners living alone will be able to find £100? From my experience this represents a great set back to that scheme. It will be almost impossible for these people to raise that amount of money. The Minister should have exempted such people and I implore him to have a rethink about that increase in relation to those who qualify for the rental subsidy.

The Department of Posts and Telegraphs are antiquated. For that reason I look forward to the setting up of the new boards. I ask the Minister to bring the telephone section of the Department out to meet the public face to face. I made that plea to the Minister some months ago and he made reference to it recently. How can the public operate, complain about or deal with a service that does not work satisfactorily if it is not possible for them to meet those who manage that service face to face? Commercial banks face their customers and so also do those involved in the postal service. Anybody anxious to make a complaint about the telephone service must make a telephone call and after hanging on for about 20 minutes one can expect a most impersonal reaction to that complaint. It is time that complaints about the telephone service were dealt with in the same way as other parts of the public sector. The Minister should establish telephone offices in the main towns where subscribers and potential subscribers, can communicate with the managers for the area. It is not satisfactory that people should be obliged to deal with such complaints by telephone or by post. Recently the Minister of State, Deputy Killilea, told the House that in one quarter alone there were 72,000 queries in his Department. The Minister of State is shaking his head. I should like to refer him to an answer to a Parliamentary Question on 24 April where he stated that of 72,000 queries received some 15,000 to disputed meter call charges.

It is time a more personal relationship was formed between the Minister's Department, especially in the telephone sector, and the public. We would not be bringing in this motion if a satisfactory service was provided. It is not being provided and therefore we condemn any increased charges when we have an inadequate system.

Minister for Posts and Telegraphs (Mr. Reynolds)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:—

"takes note of the commitment of the Government to spend £650 million on telephone development over the next 5 years and of the decision to increase postal and telecommunication charges from 1 July 1980, so that consistent with the principle accepted by successive Governments the services will be self-supporting and the burden of making good a deficit on the operation of the services will not have to be borne by the taxpayer."

I listened with interest to Deputy Deasy and at times I wondered whether he was trying to condem the increased charges or not because it was noticeable that quite a substantial amount of the time he used was in an attempt to criticise the telecommunications service, postal service, the staff who work under difficult conditions.

Mr. Deasy

I did not criticise the staff.

Mr. Reynolds

I abhor the statement he made where he said less than courteous replies are given by the staff in telephone exchanges.

Mr. Deasy

I never made that statement.

Mr. Reynolds

I invite Deputy Deasy to be more realistic in his approach——

Mr. Deasy

I said "an impersonal service".

Mr. Reynolds

He should do what I did when I took over as Minister for Posts and Telegraphs: go down to the central telephone exchange in Dublin and in other areas, go into the sorting offices and post offices and see at first hand the difficult working conditions that exist and try and familiarise himself with the telecommunications service and its problems. I do not deny there are problems but if the Deputy took the opportunity to familiarise himself with them he would not make many of the statements he made.

I can understand his approach to it because the working of the amendment I moved, except where we are spending £650 million over the next five years, is exactly the same as the amendment put down by his colleague, Deputy Ryan, former Minister for Finance when he introduced increased charges of a much larger proportion during their term in office. During the four-year period of the Coalition Government, post office charges were revised four times. That was an average of one a year. The present motion by Fine Gael would not appear to be consistent with the decisions of that Government, of which they were the dominant party, in regard to post office charges.

The principle has been accepted by successive Governments that post office services should pay their way and not place a burden on taxpayers. In practice, this principle has not been strictly observed each year but it has been accepted as reasonable that in the long run, taking one year with another, the principle should be maintained. It is only in the last decade that the Exchequer has subsidised the use of post office services to any substantial extent. The subsidisation which has occurred has simply been due to the effects of rapid inflation and Departmental costs.

The higher charges which are to come into effect on 1 July have been criticised on the grounds that they are too big and come too soon after last year's increases. I will deal later with the justification for them but this is only the second increase since the Coalition Government left of-fice three years ago.

Mr. Enright

On a point of order, if the Minister is reading from a prepared script could we have a copy of it?

Mr. Reynolds

I am referring to it and dealing with various points along the way.

Mr. Enright

We are not being circulated with it?

Mr. Reynolds

No. If I had a fully prepared script I would be delighted to give it to the Deputy but I will be veering in and out.

Mr. Begley

We will ask a few questions.

Mr. Killilea

Naturally. The Deputy is delaying time.

Mr. Reynolds

One would naturally expect that higher increases would be needed if there was a longer interval between revisions than there was during the period of Coalition Government when charges were revised once a year on average. How does this Government's increase compare with the last two of the previous Government? Last year we had increases averaging 20 per cent in postal and telecommunications charges. This year they average 25 per cent for postal and 20 per cent for telecommunications. On the other hand postal charges were increased by 30 per cent and telecommunications by 35 per cent from 1 January 1976. There were further increases of 13 per cent for postal and 25 per cent for telecommunications as and from 1 April 1977. These figures speak for themselves.

Mr. Begley

A stamp was only 8p then. Now it is 10p and 12p.

An Leas-Cheann Comhairle

The Minister has a limited time, Deputy.

Mr. Begley

That is a crazy argument.

An Leas-Cheann Comhairle

It does not matter two hoots. The Deputy should not interrupt.

Mr. Reynolds

It is typical of the inconsistency and unreality of my colleagues opposite. They live in a world of total unreality when they talk on the one hand about improving the service, doing this, that and the other, paying the staff and at the same time do not want to have increased charges.

Mr. Begley

Tell that to the Dublin postmen.

Mr. Reynolds

If the Deputy can find a magic formula for that for heaven's sake present it and stop the interruptions. This motion criticises the new charges because it claims they will give rise to increased costs in business and industry and a general rise in the cost of living. I regret that they will lead to some increases in the costs of business and industry. Their effect, however, will be much less than that of the bigger increases which applied from 1 January 1976 under the previous Government. All users will be affected by the new charges but not to the same extent. Moreover, for the great majority of businesses post office charges account for a very small part of their costs. I could not agree that the new charges will cause hardship to the poor or less well off sections. I am informed that the postal increases will add 0.06 per cent to the consumer price index and the telecommunications increases 0.10, making a total addition of 0.16 or one-sixth of 1 per cent.

Mr. Begley

The Minister is great for making those calculations.

Mr. Reynolds

It is a very small addi-tion when compared with the rises to the consumer price index during the last 12 months. It is ridiculous to talk about the new charges giving rise to a general rise in the cost of living.

Mr. Deasy

The Minister is contradicting the Taoiseach. He said 2 per cent.

Mr. Reynolds

Deputy Deasy raised the question why these charges were not referred to the National Prices Commission. As they have often pointed out, price increases are the symptom of inflation not the cause of it. Higher post office increases are necessary because inflation has already increased the Department's costs to such an extent that the present charges for the services it provides are uneconomic. If this happened to a business firm it would either have to increase its charges to an economic level or cease the loss-making service. We all have a fair idea of the answer we would get from firms in the private sector were we to suggest that they should continue charging uneconomic prices because any increase would give rise to increased costs in business and industry and a general rise in the cost of living. Yet the supporters of this motion should realise that this is what happened. This is what happened when those people opposite put them up through the ceiling during their period in office. Indeed, they seem to forget that we are living in the world of the eighties. I do not know what world those Deputies opposite are living in.

In the press release concerning the new charges it was explained that the postal increases were needed mainly because of pay increases but that the telephone increases were required to cover pay increases and higher interest and depreciation costs. The press release pointed out also that the accelerated telephone development programme approved last July would cost £650 million over five years and that this would give rise to heavier interest and depreciation costs estimated at £67 million in 1980 and £85 million in 1981 as against £41 million in 1978.

Deputy Deasy raised the question of his being furnished with a copy of the press release beforehand. I understand that it has not been normal practice in the House but I will be only too glad to oblige him in the future.

Mr. Deasy

I said at the same time, not before.

Mr. Reynolds

At the same time. Well, I shall be only too glad to oblige him in the future. As recently as 14 May 1980 Deputy John Kelly, speaking on the Second Stage of the Finance Bill, criticised the targets of this programme as set out in the White Paper. He considered the proposed rate of progress much too slow. He would prefer a concrete promise from the responsible Minister that all outstanding telephone applications would be met by the end of this year. To quote from what he said, at column 1637, Volume 320, No. 10 of the Official Report:

I am not asking for two months or six weeks. I want the outstanding ones dealt with, and I want them dealt with now.

Here I should like to refer to the background of the Government's decision to improve the accelerated telephone development programme. I want to emphasise the statement of policy which I delivered to the Fianna Fáil Ard-Fheis last February.

Mr. Begley

The man in the blue suit.

Mr. Reynolds

I did not have a blue suit on that day. I do not have a blue suit on this evening——

An Leas-Cheann Comhairle

It does not matter what sort of suit he was wearing. Deputy Begley should not interrupt. The Minister has only a few minutes. I will call Deputy Begley if he offers later in this debate.

Mr. Reynolds

I hope I will be given extra time because of all these interruptions. I sat patiently listening to Deputy Deasy and not once did I interrupt him.

Mr. Enright

The cameras were colour blind.

Mr. Killilea

No. Deputy Deasy was and is.

Mr. Reynolds

It would appear that Deputies opposite are not interested in hearing me re-emphasise that they are not promises I am making. Indeed, if they listened attentively to the programme referred to, or read the newspapers subsequently, they would know precisely what I said. However, in case they are under any illusions about what I said let me reiterate now for their benefit that my target for the installation of telephones in 1980 is up to 60,000 telephones; for 1981, 80,000 telephones; for 1982, 100,000 telephones——

Mr. Deasy

Will they work?

Mr. Reynolds

——and for 1983 120,000 telephones. As far as I am aware that is the first time any Minister for Posts and Telegraphs——

Mr. Enright

Will they be like Deputy O'Donoghue's jobs?

Mr. Killilea

Listen to it.

Mr. Reynolds

——produced a targeted policy for his Department and is prepared to stand up in the House, and outside it, and say: "That is the target. That is what I am working towards. That is what my Department are working towards."

Mr. Begley

The Minister sounds like Johnny Logan—just another year.

Mr. Reynolds

Despite the cold water that Deputy Deasy or anybody else likes to throw on it, that target will be achieved because every single member of my Department is fully committed to it. They are anxious to get on with the job. I would not like to think that any Deputy on the opposite side would try to upset what this country really wants—a first-class, efficient, telecommunications service.

Mr. Deasy

We will be waiting three years.

Mr. Reynolds

If the Deputy wants to listen, that is it. I heard references being made to nothing going out of the stores. I heard complaints from people to the effect that they cannot get this or that. Let me tell the House that the figure issued for the stores of Posts and Telegraphs was for £2.7 million. If that is standing idle, if that is not getting on with the job, I do not know what is. I must place on record the great co-operation forthcoming from the stores branch; they have been much maligned in the past by many Deputies opposite. They are giving full co-operation in this programme.

Mr. Begley

If the Minister is paying them.

Mr. Reynolds

Surely the Deputy does not expect people to work for nothing?

Mr. Killilea

Is the Deputy suggesting that we put an embargo on them, as they did?

Mr. Reynolds

If the Deputies opposite want to know what are the real problems of today, the real problems I encountered when I went into the Department—and Deputies seem to be very anxious to find out—I shall enumerate a few of them very briefly for their benefit. The greatest inhibiting factor I came up against when I entered the Department was that of lack of trained staff. Why? Because there was a ban on recruitment when they were in office, because there was a ban on pay increases while they were there and there was a lack of investment while they were there.

Mr. Begley

That is why we had a postal strike for nine months.

Mr. Reynolds

If anybody wants to examine the records of the Department of Posts and Telegraphs he will find clear evidence that the demand for telephones built up right up into the mid-seventies, the time when investment was needed, when staff were needed—it takes three years to train them. But nothing happened; the embargoes went on. Now Deputies opposite sit there and have the audacity to try to tell the people that they are not getting the service they want. I will tell the people, I am telling Deputies opposite—although I know they do not like to hear it—that the facts of life are there for anybody who wants to ascertain them or listen to them.

(Interruptions.)

An Leas-Cheann Comhairle

The Minister has a limited amount of time. Will Deputies please cease interrupting?

Mr. Reynolds

It takes three years to train staff. One cannot instantly take a service off the ground and put it into practice; it is a long, painstaking operation. It cannot be done instantly and I have always said publicly and elsewhere that it cannot be done instantly. But Deputies opposite will see improvements towards the end of this year.

Mr. Deasy

More promises.

Mr. Reynolds

No, a policy statement, targeted. For the very first time in this Department I set up a planning unit, a unit that is monitoring the progress not alone of the huge building programme but of the equipment and telephone installations. If Deputies opposite do not want to listen to the truth and to the facts of life I cannot help them further.

(Interruptions.)

An Leas-Cheann Comhairle

Deputies, please. Deputy Deasy was not interrupted once in 40 minutes. If Deputies cannot listen they should not remain in the House. I will call Deputy Begley if he offers later in this debate.

Mr. Killilea

The truth is bitter. It always hurts.

Mr. Reynolds

The cost of this accelerated programme was estimated at £650 million, at 1979 costs, and the review group's view was that about five years was the shortest time for carrying it out. That view was accepted.

Part of the functions of the new telecommunications body will be to develop appropriate financing arrangements for the accelerated programme. But, in the meantime, the Exchequer this year has made available £100 million—and somebody said there was no money being put into the telephone service this year.

I have spoken at some length on telephone development because I cannot let Fine Gael get away with the idea that, on the one hand, they can condemn increases in charges needed to enable the telephone service to pay its way and, on the other hand, argue that the Government should press on at an even faster pace with telephone development which is one of the heaviest users of capital in the State.

The telephone service is a very important part of our national economic infrastructure, particularly from the point of view of industrial development and foreign trade. It is vital, therefore, that its development should not be hindered by increasing financial deficits. Let me be clear on this. No Minister for Finance could reasonably be expected to provide the very large sums now needed from the Exchequer to develop the telephone service if it did not pay its way. In recent years a substantial amount has been borrowed from the European Investment Bank, and grants have been obtained also from the European Regional Development Fund for telephone projects. In future we could not rely on these sources of funds unless we took steps to avoid the substantial deficits which are now facing us.

In my view it is vital that there should be no let up in our efforts to improve and extend our telecommunications service. Therefore, it is important that charges be increased to a level which will bring income for that service into line with expenditure.

Mr. Begley

More to come.

Mr. Reynolds

The Deputy accepted the principle. Therefore, I cannot see how he can try realistically to argue the opposite. I know the problem he had in trying to argue the opposite.

Mr. Killilea

Deputy Begley should go back down to Kerry County Council.

Mr. Begley

The Minister was invited down and he was afraid to come.

Mr. Reynolds

Deputies will realise that 1978 and 1979 were abnormal years for the Department because of industrial disputes. These disputes inflated the overall deficits in both years, by about £7 million in 1978 and about £4 million in 1979. The fact remains, however, that there was an overall deficit of about £19 million in 1978, of which all but £3 million was on the telecommunications side. The overall deficit for 1979 is estimated at about £29 million, including a deficit of about £17 million on telecommunications.

The increases of 20 per cent in charges, which applied from 1 August 1979 in the case of postal services and from 1 October 1979 in the case of telecommunications, were interim increases. When it was decided to bring them in, it was realised that they would not be high enough to wipe out the deficits that were forecast for 1979 and 1980, but the Government were reluctant to introduce higher increases at that time while the services being provided for the public were still suffering from the effects of the industrial disputes.

Since then costs have continued to rise with the result that in the early part of this year it became apparent that, on the basis of existing pay and other costs, the overall deficit for 1980 would be about £33 million, of which £14 million would be on the postal side and the balance on telecommunications. It was clear that the overall deficit for 1981 would be still higher if no increases in pay were granted in the meantime. In the circumstances it was decided that increases, averaging 25 per cent for postal services and 20 per cent for telecommunications services, should be introduced. The original intention was that the revised postal charges should apply from 1 May and other charges from 1 July but, as the standard of service on the postal side still left much to be desired, it was decided to defer introduction of the revised postal charges until 1 July.

So far as the postal service is concerned, the hard financial fact is that it faces very high deficits both this year and next year. The last year in which a surplus on the postal service was recorded was 1977, when it amounted to £1.2 million. In 1978, there was a deficit of £2.9 million. For last year the provisional figures we have indicate that income fell short of expenditure by £11.8 million. Without allowing for any further wage increases, the forecast deficit for the current year was about £14 million, or slighly over 25 per cent of expected postal revenue at the existing charges. The outlook for 1981 was even worse. Clearly, this seriously deteriorating trend could not be allowed to continue. I want to make it clear that we are not attempting to recover past deficits. Even with the higher charges there will be a substantial postal deficit this year, and next year the deficit is likely to be sizeable, though I hope by much reduced proportions.

I could not agree that these deficits should be borne by the taxpayer. As I said at the outset, it has been accepted policy over the years that the cost of Post Office services should be met by users of these services. This policy seems to be to be very well founded. I can see no justification for asking taxpayers at large, who use the Post Office services in varying degrees, to accept the additional burden of meeting the loss on either the postal services or the telecommunications services.

Moreover, if services were provided below cost, the demand for them would be distorted, stimulated by the maintenance of artificially low charges. Apart from the general case for pricing on a realistic basis, there is the serious objection to artificially low prices, that they cause a diversion of capital and labour resources to meet an artificial demand. In the case of the telecommunications services particularly this would be very serious because of the huge amounts of capital involved. It is hard enough to find the capital required to meet the general needs for telecommunications services and it would be an entirely unjustifiable waste if scarce moneys were to be diverted to meeting artificially stimulated demands.

Apart from this, in a situation in which there is serious difficulty in meeting the demand for telephones it would be impossible to justify encouraging further demand by offering services well below cost. The argument does not apply with the same force to the postal services, but it cannot be realistic to abandon commercial principles in a business where over 70 per cent of demand comes from the business and administrative sectors.

As every Deputy knows, preparations are being pressed ahead to set up the postal and telecommunications services as separate organisations outside the civil service, as recommended by the Posts and Telegraphs Review Group. The new State-sponsored bodies must be set up on a basis which gives them a fair chance of success. This requires that charges for the postal and telecommunications services should be fixed at levels which enable these services to pay their way.

When we look at the charge of 15p for the ordinary letter here with what is charged by some of our partners in the EEC we compare very favourably.

Mr. Deasy

We must also look at their cost of living.

Mr. Reynolds

When we consider that our population is so sparse, so diverse and so scattered is it unreasonable to charge 15p to post a letter in Kerry tonight and have it delivered in Donegal tomorrow? That is good value in relation to 16p for a Kitkat or 20p for a daily newspaper. It is time we began to be realistic.

Mr. Begley

It takes two weeks not one day.

Mr. Reynolds

That is the business we are in. Deputy Deasy referred to the Postal and Telecommunications Board. We cannot start them off on a wrong footing. It is my duty and responsibility to ensure that they are set up on a proper commercial basis. Deputies opposite should be realistic. They should come clean with the public and they will be seen as a party of reality, not a party of unreality and inconsistency.

The suggestion has been made that increases in postal charges could be avoided by economising in expenditure. I am satisfied there is no scope for the scale of savings which would be needed to bring deficits down to manageable proportions unless drastic reductions in services were made. I do not believe the public or the business community in particular, would stand for the type of service reductions which would be needed to make a sizeable impression on the deficits now facing the postal service. The importance of an efficient postal service to industry, tourism and the export trade was underlined by last year's postal strike. Reductions in services of the order needed to produce substantial savings would materially curtail facilities for the user and they could not be made quickly because of the detailed re-organisation work which would be in-volved. Moreover, it would be essential to lay off large numbers of employees. Is that what Deputies are advocating here tonight?

I am all in favour of saving expenditure where this can be done reasonably. Considering the financial difficulties of the postal services, commonsense dictates that there should be a strong emphasis on making them as cost-effective as possible. The savings that are possible on this basis can be secured only in the long term. As one example, I may mention our motorisation policy with regard to rural delivery services, started in 1963, which is now producing economies in the order of £1 million a year.

I am sure that the people opposite are not seriously suggesting that we can keep charges at the levels they have been. They have asked me to provide leadership in the Department of Posts and Telegraphs. I am providing that leadership.

Mr. Begley

Give us a service.

Mr. Reynolds

I will continue to provide that leadership. Deputies over there have said that during their term in office these services paid their way. I refer Deputy Deasy to a little white booklet and if he cares to look it up he will find that money was lost during the four years of the Coalition Government. I will not give the figures because I do not want to embarrass them. They put up the charges 100 per cent but they still lost money. My business is to get the service back to normal. That is what the public want. I am providing the leadership. I will provide the capital. I am getting the response from the staff. Let Deputies opposite not try to drag the staff into the mud. Do not let them make the abhorrent statement they have made that the staff in the Department are not courteous——

Mr. Deasy

Only the Minister said that. It was not said by anybody here.

Mr. Reynolds

Do not make statements that the staff are not interested. They are efficient, able and have the capacity to do the job. I will defend them and their ability.

Mr. Begley

The Minister is bubbling.

An Leas-Cheann Comhairle

Will you go home to Kerry out of that and let the debate proceed. Deputy Tully.

Mr. Begley

I was elected by the people to be here, the same as yourself.

An Leas-Cheann Comhairle

If you want to be here you will have to stay quiet as long as you are here. Deputy Tully is in possession and nobody else. There is a golden rule in this House that one Member will speak at a time and nobody else. Deputy Tully. From now, the Deputy has 30 minutes.

Mr. Tully

It is the usual practice that a Deputy who has not been interrupting will not be interrupted. Nobody more than I wishes the Department of Posts and Telegraphs more luck in their efforts to get on the straight and narrow. However, always during debates here on matters affecting that Department we seem to get into a political muddle and instead of trying seriously to debate the matters which affect the Department we finish up trying to score political points against each other. This having been begun by other speakers tonight, I am afraid there is not any way in which the debate can be continued without certain comments already made being referred to.

Before the Minister came here and while the Minister of State, Deputy Killilea, was in the other House, many matters were discussed here, and because the party those two Deputies represent were on this side then, it is a pity they were not here to hear the things that were said when increased charges were proposed. If they had been here then they would be a bit more careful with quotations in the House.

As far as these increases are concerned, one of the things I cannot accept is that the Minister left it so long after the budget to announce the increases. I am quite satisfied that during the debate in Cabinet on the budget the prospect of these increases came up for discussion. It must have been well known on budget day that it was proposed to introduce this mini-budget at a later stage which would cause gasps of astonishment from people when they read in the newspapers that these increases were being imposed. I will not criticise the staff. I do not believe the staff should be criticised, and I want to be fair to my colleague on this side and say that I do not agree that Deputy Deasy said what the Minister alleged he said.

Mr. Deasy

I certainly did not.

Mr. Tully

He did not say it. Perhaps he was misunderstood, but he did not say it. Let us put it on record that the word he used is not the word attributed to him by the Minister.

Mr. Reynolds

He used the word "discourteous".

Mr. Tully

That is not the word he used.

Mr. Reynolds

I will defend the staff in my Department.

An Leas-Cheann Comhairle

Deputy Tully, without interruption.

Mr. Reynolds

I heard with my own ears what he said.

Mr. Tully

The Minister does not have to defend the staff against me because for many years I represented the interests of the staff in this House. I want to be fair and say that the word which was attributed to Deputy Deasy was not used by him. The record will prove what was said and let us leave it at that.

Mr. Killilea

What did he say?

An Leas-Cheann Comhairle

Deputy Tully without interruption.

Mr. Donnellan

There is not anybody better able to interrupt than the Minister or his side-kick.

An Leas-Cheann Comhairle

The Chair does not know of any side-kick in this House. That is enough of that, Deputy Donnellan. They may have them over in Galway but not here.

(Interruptions.)

Mr. Tully

The Minister referred to increases imposed by the previous Government. As Fianna Fáil speakers so frequently say when they refer to increases imposed in previous years, the Minister spoke as if increases imposed in previous years had been wiped out by Fianna Fáil. I should like to point out that the increases now imposed are on top of anything imposed in previous years. That should be remembered because people try to gloss it over. The big trouble in this country as far as I know—I have been a long time in the House and I have been watching Department of Posts and Telegraphs debates here—is that there was not enough money made available to Ministers for Posts and Telegraphs for many years under Fianna Fáil administration. During the four years of the Coalition Government substantial increases in finance were given to the Department but they were not nearly enough to bring the Department back on an even keel.

If I have time I always view on television the political parties at their Ard Fheiseanna. Sometimes I am impressed by what they do and say—sometimes I am amazed by what they say. Without being disrespectful to the Minister, the figures he has been using remind me of having gone to a bingo session once—I do not like bingo—where somebody was picking up a ball and calling out a number. The Minister has been doing that. He used a series of numbers at the Ard Fheis and again tonight which did not bear any relation to what production in this country will be. If we are all alive we can debate this matter again at the end of the year and see whether the Minister is right or I am right.

Mr. Reynolds

I will be delighted to debate it.

Mr. Tully

We have been told that at the end of the year there will be 60,000 additional phones, all of them working. Perhaps the Minister does not know but he should know it, that apart from the vandalised phones throughout towns and cities and in rural areas many telephones have never worked from the day they were installed. Perhaps to the surprise of some Deputies, I read the Evening Press. In that newspaper we get numerous complaints every evening and at least two or three of them are about telephones. The people who make those complaints must have cause for making them. Such complaints have been made about four times in the past fortnight. The telephones had never worked. There is something wrong with the telephones or with the persons who instal them.

I will come to the phones that have been installed during the years. Reference was made this evening to the telephones in Leinster House. In the room which I occupy with other Deputies the number has to be dialled ten times to get calls, even local calls. As I have said, I have nothing against the people who make the repairs, but this is where the catch comes in. We have in-stalled phones—Fianna Fáil did it and we did it—but there has not been service because the necessary equipment was not there.

Mr. Reynolds

It will be there shortly.

Mr. Tully

It will not be there. The Minister spoke about providing an extra 60,000 telephones but the necessary equipment is not available to service them. If a person using a private telephone dials a number he is entitled to get that number and to carry on a conversation without being interrupted. As I said earlier, it is very common to find a conversation going on when one dials a number or else to have some other person come in on the line. Worse than that, it is not unusual to hear somebody clicking in on the line; it could be somebody who wants to hear a conversation, it could be accidental or it could be a tap on the line. The Minister need not wave his hands at me because I know what I am talking about. At one time I was in a section where I learned enough about telephones to know when somebody is trying to be smart. An effort is being made to overhear telephone conversations and that should not be allowed to continue. Complaints were made recently and, as a result, a telephone that was subject to those interruptions is now quite clear. The Minister can work that out for himself.

People are paying for a service and they are entitled to it. As of now they are not getting that service. In my opinion telephone operators are subjected to a lot of abuse. I accept that people may lose their temper if they are cut off when making a telephone call or if they have to wait a long time but it is unfair to abuse telephone operators who are doing their best. The responsibility lies with the present Government and the previous Government because they did not supply the equipment yet here we are talking about additional lines while we are not providing a service for the people who have telephones.

The Minister of State said that complaints from people about delay in providing a service were holding up the provision of such a service. I agree with him. However, can we blame a person who has waited seven years for a telephone if he asks a public representative to find out what is happening? I cannot understand when it is said to people in certain areas that phones cannot be provided. I know of one case which I brought to the notice of the Department where a number of people could not get telephones but neighbours who had not even moved into their new houses got telephones installed before they took up occupation. Within a few months phones were provided for practically everybody in the area but I do not think it is right that this kind of thing should happen. It is a grand idea to say that we must make the telephone service pay but the cost to industry in particular and also to private individuals will be great. I do not think it right that the increases should be imposed until such time as the Minister provides a decent service. That has not been the case.

I ran an office for a considerable period and I found that when postal charges increased by one or two pennies in the old currency, after a very short time I noticed a considerable difference in costings. On one occasion, as a public representative I was asked to make representations to the then Fianna Fáil Minister on behalf of a charitable organisation who found that their expenses had risen very considerably. Here we have what can be described as a substantial increase in the postal charges. The Minister spoke about posting a letter in Dublin today and having it delivered tomorrow in Donegal. I can give him an instance of letters posted last Wednesday in Navan that were delivered yesterday to their destination six miles away. The postal service is not perfect—there is a lot of work to be done yet. I understand the Minister drives around the country posting letters to himself and I am sure the exercise does him good.

When the British were put out of the country we took over the postal service where the employees were a contented group. However, they dropped behind in wages and conditions and last year the Minister's predecessor, a personal friend of mine, allowed a situation to develop that should not have happened. He allowed a strike to take place that caused untold misery throughout the country and at the end he offered the people concerned terms that would have prevented the strike taking place if they had been offered originally to the employees. However, he let the strike drag on. It is all right for the Taoiseach to talk about the former Government as though he had nothing to do with them. They were still a Fianna Fáil Government. The Minister was told by the Government to keep his fist in the hole, like the boy at the dyke. He was told that if he allowed increases for the postal service there would be a wave of increases throughout the country. Eventually such increases were claimed and the postal service came in last. As a result, there was a breakdown in trust on the part of the employees in the postal service and it will take a long time to build it up again. I hope the Minister will make an effort to remedy this situation but it does not look as if that is happening. As of now, the makings of a dispute are simmering. None of us wants to see this but it is likely to happen. My colleagues on the left referred to the way industrial labour matters are dealt with in the Department.

Debate adjourned.

The Dáil adjourned at 8.30 p.m. until 10.30 a.m. on Wednesday, 28 May 1980.