Estimates, 1982. - Postal and Telecommunications Services Bill, 1982: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Deputy Desmond was in possession.

I will be brief in the remaining comments that I wish to make on this Bill. I already expressed my reservations about the setting up of two State-sponsored bodies. I maintained very strongly that the communications scene will in the nineties and up to the year 2000 show quite dramatic changes from the current system of communication by means of the letter, telephone and telex services of today. With the introduction of computer based message systems, the development of electronic mail and television systems of communication, the revolution in communications which we are now witnessing, the concept of two separate State-sponsored bodies will be redundant. That is the main argument against the proposals contained in the White Paper and those put forward by the review group when they presented their report to the Minister in 1979. In that regard I was disappointed with the analysis at that time of the postal service and, to give just one example, with the total failure of that group and of successive Governments to analyse the role of, to take one sector, the Post Office Savings Bank, a sector which has not been effectively developed in this country at all. I am convinced that we could have a Post Office Savings Bank operating under the general aegis of one State-sponsored body. Indeed if it had been properly operated under one Department and given an opportunity to develop, particularly by the Department of Finance, it could have developed to its full potential as a major commercial banking institution making a very significant contribution towards banking competition here. We have a nationwide distribution of over 2,000 persons at 1,500 centres. We have over 2,000 counter service centres available in the country.

There is no good reason why the national giro bank credit transfer system should not be independent from the associated banks. The State could have saved itself a great deal of money by the development of an effective post office savings bank system, if it had been given the full support of the Department of Finance and other Departments. It could have offered the Government a whole new financial banking structure which would have been of major benefit to the Exchequer. My experience in the Department of Finance led me strongly to that belief. It would also have provided an alternative banking system to the public in times of crisis. That is a classic example of the failure of successive Governments to broaden the role of the Department of Posts and Telegraphs and to foresee a role for the post office savings bank. When one examines the accounts of the post office savings bank and of the post office itself, one inevitably comes to the conclusion that a great deal of interest on the balances held in the general banking arrangements of the post office accrues to the associated banks. This point illustrates the need for a much broader national giro banking system. The need for such a system is manifest.

Inevitably I come to a personal conclusion that instead of two State-sponsored bodies we should not have yielded to the very conservative assessment of the review group and accepted their analysis of the situation, but we should have had a unified integrated State-sponsored body. I drew attention to the ESB. If we wanted to change the system we should have changed in that direction and not two separate bodies. If the Minister were to go back to the two boards tomorrow morning he might find they would say that on re-examination the system should be integrated.

The Minister must be acutely aware of the rising cost of postal and telecommunications charges. I would prefer if, as has been originally envisaged, the charges had been subject to normal price control legislation, preferably under the control and influence of the National Prices Commission. It is anomalous to say the least that the Minister sets up two State-sponsored bodies while at the same time saying he will retain the approval or otherwise for increases in postal and telecommunication charges. That is a considerable departure from the proposals set out in the White Paper of May 1981. If the Minister sets up a body while simultaneously deciding that the cabinet must retain authority over the price of the product, the question must be asked, why set up this body? If two semi-State bodies are given authority to act on a quasi-commercial basis, they should be given authority to process price increase applications, subject to normal price control legislation — the National Prices Commission. The Users' Council should be consulted by the body seeking price increases. That is only fair and reasonable. Perhaps in his reply the Minister might comment on that.

The Labour Party have expressed very grave concern about the overall intent of this Bill. We are not satisfied that sufficient confidence has been engendered, particularly on the postal side, to convince the staffs that all their normal public service entitlements and prospects will be fully protected. That was a very serious matter, and the reaction I got from postal workers was one of very considerable concern the more the debate unfolded. The Minister will have to go a very long way before these fears are allayed.

We are not satisfied with the general level of capital investment projected particularly for the postal board. We do not consider it sufficient to meet the demands of the eighties and the nineties. The post office fleet is sadly run down and dilapidated. There is a great need for a new major construction programme even on the postal side, and on the telecommunications side one could comfortably spend £700 million or £800 million tomorrow morning and one would just about meet the demands of the day.

I do not want to sound unduly parochial, but in the Dún Laoghaire borough there are about 5,000 or 6,000 telephone applicants awaiting service. They take a jaundiced view of the extent to which that sector of the Department has managed to provide a modernised, effective national telecommunications service.

I ask the Minister to consider whether it would be wise to go back to the two interim boards, to have another discussion with the unions concerned and to review the fundamental question whether we want to have two separate boards in what is a communications industry. From the technological point of view that industry is changing with enormous rapidity and the question should be asked whether we want to see the proposed structure operating for the next 30 or 40 years. I must confess I have considerable reservations about advocating a structure of that kind, and I hope my view is shared by the Minister.

The proposals envisaged in the Bill represent a major inroad into a well-tried and tested system that has endured for many years and which has given on the whole valued and reliable service to our people since the foundation of the State.

What is proposed in the Bill is a plan to alter the whole basis of the organisation of that service. I use the word "service" advisedly. When I read the Bill and studied the statement it brought to mind the words of a teacher of mine many years ago on the subject of administrative law. He was talking about the advantages from a government's point of view in conducting their business through the means of a statutory body or semi-independent body. He pointed out there were two main advantages and, in his inimitable way, he summed them up as follows: the first is jobs for the boys and the second is removing from the Minister concerned answerability and responsibility to the elected Members of a Parliament for the conduct of the affairs of that service.

Jobs for the boys certainly will be involved in what is proposed here. We have provision for two new boards, the members to be appointed by the Minister. In many of these cases appointees to such boards are people who do not have experience and expertise in the specialised fields that have been selected for them. They are given sinecure appointments on the boards, to sit there forming part of a rubber stamp operation, paid handsomely for very little effort, for little knowledge and for little, if any, expertise in the areas involved.

In the huge number of boards and agencies in existence we have enough jobs for the boys. I do not think the country can afford any more. It is time we so organised our affairs that the people who run the major services are people who work in the services themselves and who have detailed knowledge of their workings, not people who are rewarded for services to a political party. Let me hasten to add that I do not confine my remarks to a criticism of any side of the House in particular. It is only fair to say that from time to time during the years all sides have been guilty of that offence, but I say that now is not the time to open the doors afresh to a new plethora of sinecures that will mean additional cost and expense to the already over-burdened taxpayers.

It may be that the organisation of the existing Department of Posts and Telegraphs could do with some pruning, with some reorganisation and restructuring. Nobody would fault that, but to bring that about does not require us to throw out the baby with the bath water, which is what is envisaged in this legislation. We are proposing to throw away the established structures that were built up over many years. By all means let there be an examination of the structures, of the nature of the employment and the division of the employment. The unions would be very happy to co-operate in any such restructuring. At least in that way the country would know that every person involved in the control and direction of this vital service was a person of that service, not a person imported into it from some outside and alien field at great and unnecessary expense to the taxpayer.

The Minister referred to the posts and telegraphs system as a commercial venture, as though this was solely in the field of commerce. In my view a service involving our postal system, telegrams and telephones bears no relation to commercial activities. Those are matters intended to provide a service for our people, not related to the profit motive, not related to the necessity of pruning services to save some money while paying scant regard to the hardship that would be caused in many areas by such pruning. We have seen that happen before all too often. Many appalling decisions have been made with the aim of pruning in the area of the railways and in other sectors. We must provide a broad spectrum of service in the area of posts and telegraphs and the services conducted by the Department up to now that people quite rightly have come to take for granted. I shudder at the thought that some independent company with its board of directors operating as a rubber stamp operation will sit down and, with gay abandon, will prune the service, will take away a postal service from a rural area that has relied on it from the time immemorial, all for the sake of a small saving. Exercises like this would cause hardship to small communities. That is not what is required of government. What is required of government is service, and that is embodied in the word "Minister", which means to serve, not to run a business at a profit.

If more thought had gone into the pricing structures of the services that have been operating perhaps the losses — and I do not regret them because they are part and parcel of the services — would be less. The cost of the postage stamp was increased in an effort to balance the income and expenditure of the Department of Posts and Telegraphs, but there is a large number of people now who cannot afford to use that service any longer. All too often the net result of such an operation is that the revenue coming into the Department decreases instead of increasing, thereby defeating the purpose for which it was brought in in the first place. It is entirely wrong that a Department and a key central function of Government, such as is involved here, should be hived off from the responsibility of a Minister who sits in this House. That is unacceptable. That service, as the Minister's speech indicates, must be funded by vast amounts of taxpayers' money. For a start £55 million will be provided from the Exchequer for postal development and that is a drop in the ocean. The amount of taxpayers' money that has gone into those services and the building of that infrastructure represents the hard earned money of the citizens of this country. It is completely untenable that there should be no answerability in this House to the elected Members who represent the people who pay the tax. It is a very convenient method of Government from the point of view of the Government. It is very convenient from the Minister's point of view. He will not have to answer to the elected Members as to what the expenditure of that money has produced. He will not have to say where it has gone, if it was properly or well spent. If we tried to inquire into the expenditure of these large sums of money we would be fobbed off and told that it was not the Minister's field of responsibility, that it was the responsibility of an independent board of directors who would be entrusted with the expenditure of colossal sums of money provided by the taxpayers.

Let no one think that the intended balancing of the books by these companies, which appears to be envisaged in this legislation, would be achieved. Even with the decimation of the service that would inevitably take place, I have no doubt that the process of subsidisation of those services will be and will continue to be an on-going feature of fiscal arrangements of the Department for the foreseeable future. I know that has happened before in other fields. We are dealing with Bills and Estimates all the time but at least in many of these cases where the Department is involved, we can debate the subject and query what was done with the last £25 million or £50 million. This would be an on-going drain on the shrinking resources of the country into a field where we would have no control. We are adopting a very dangerous concept here. One could envisage a situation where virtually every service that is regarded as a normal service provided by the Government would be hived off to independent companies and corporations, leaving us sitting here in the House and the Minister sitting opposite as a mere shell operation. The whole process of Government would be conducted at a different level and we, as elected representatives, would have as our sole function the voting of money to be raised by taxation to pay a hierarchy of employees of companies operating on a different level altogether to us here. One could envisage that situation for every Government service.

Why should the Minister for Defence have an army? No doubt a statutory independent corporation could be brought in which would operate a mercenary army. That might be a cheaper arrangement. It is wrong that Governments should run away from the administration of the Government. It is the Government's job to govern and the job of the Minister to serve. He serves by running the service which is under his control. He is the Minister for Posts and Telegraphs and he has the obligation to run that service and to ensure that an adequate and proper service is provided for all our people, whether or not any individual or aspect of that service may be unprofitable or may run at a loss. If that is the case, so be it. That is the nature of the service which we must provide, that we have provided up to now but which I very much fear, in the event of the implementation of the concept of this Bill, will no longer be available.

An tAire Poist agus Telegrafa.

Does the Minister propose to conclude tonight?

I did not hear what the Minister said.

We will solve it as we amble along.

Deputy Harte is concerned about the time. Is it likely that you will conclude before 10.00?

It is not likely.

Tá mé buíoch de na Teachtaí go léir a labhair agus a thug smaointe dúinn a léirigh cén tuairim a bhí acu faoin Bille fíor-thábhachtach seo atá roimh an Dáil anocht agus a bhéas críochnaithe, is dócha, an chéad lá eile — b'fheidir an Mháirt; an Dara Léamh atá i gceist agam. Léirionn an suim a cuireadh sa díospóireacht anseo ar an Dara Léamh chomh tábhachtach is atá an Bille seo ó thaobh riaracháin sa tír. Is féidir liom a rá gur ócáid speisialta, thábhachtach atá i gceist againn.

Tá fhios agam go bhfuil sé tábhachtach dos na daoine atá ag obair sa Roinn Poist agus Telegrafa. Tá fhios agam go bhfuil sé tábhachtach don Teach seo agus go háirithe don Aire. Tá fhios agam freisin go bhfuil sé tábhachtach do mhuintir na tíre, mar, do réir mar a fheicimse an scéal, táimid ar tí Acht do chur i Leabhar na Reachtanna a dhéanfaidh forbairt an phoist agus na telechumarsáide i bhfad nios eascaí ná mar a bhíodh. I rith na díospóireachta agus na bhfreagraí atá mé ag dul ag tabhairt don Teach anois — agus déanfaidh mé iarracht freagra a thabhairt ar na pointí éagsúla a luaigh na Teachtaí nuair a bhí siad ag caint — feicfidh sibh sa Teach seo go bhfuil an-suim ar fad ag na Teachtaí agus ag an tír san mBille seo.

The importance of the Bill has been emphasised by the fact that so many people have contributed to this Second Reading debate. In fact the debate was so varied and interesting that I felt myself regretting there were not any more speakers. It was quite apparent that the Deputies who contributed were deeply interested in the Bill and, in particular, in the development of the postal and telecommunications service about which this Bill is engaged.

I want to thank Deputy Cooney for a very fine, helpful contribution, one that was positive and well thought out. It was of course, the kind of contribution I had expected from him seeing that he had worked so hard on the preparation of the Bill in the first instance.

I was a little surprised at some of the points made by various speakers that their respective parties, particularly the Labour Party — which seemed to adopt a completely opposite view to the one I was putting before the House — played such a large part in putting the Bill together. I might mention that the Long and Short Titles of the Bill were put on the Order Paper before Christmas 1981. Therefore, I find it very hard to understand the strong opposition of the Labour speakers, seeing that their Members in Government had accepted this Bill. I think the only provisions not included at that time were the financial ones.

Deputy Cooney made the point that the companies would be in the market, felt they should be in a position to make a profit and to make a contribution to the Exchequer from those profits. In that I am in total agreement with him. He expressed the wish that An Post would recover business which was lost to private interests. I want to make the point that it is illegal to conduct a courier service in the delivery of letters. The parcel post has always been free and open to competition but it is illegal to conduct a courier service for the delivery of letters. It is as well to put that on the record of the House, because some contributors to the debate did not seem to be quite clear in their minds on that.

I do not want to interrupt the Minister, but is he saying that the Minister for Justice acted illegally recently?

No, I am not saying any such thing. What I know to have happened in that particular case was a delivery of folders, unaddressed, to various houses. It is not the same thing at all as delivering letters addressed to a specific address. That did not take place on that occasion. That is the fact, that is the legal position as I am informed.

If one turns a letter into a small parcel.

I think, a Leas-Cheann Comhairle, you will agree that in the time you were in the Chair and also when the Ceann Comhairle himself was in the Chair I did not interrupt anybody making contributions to the debate. Consequently, I do not intend to be interrupted now and I am claiming the protection of the Chair. I know it was not Deputy Harte's intention to interrupt; I would not be quite so sure about Deputy L'Estrange.

Many people referred to the sub-offices and their importance in the postal set-up, in the structures of the postal service. I find myself endorsing the remarks made by the various speakers on the importance of the sub-offices. Deputy Cooney was the first to mention their importance in the scheme of things. I know from conversations with the executive and chairman of the postal board, An Post, that they have great plans for the use and expansion of use of the sub-post offices. The point made by Deputy Cooney that the consumers will benefit is one I endorse totally. He complained of the high charges in telecommunications and mentioned the great potential for development in that area. There is no doubt at all about it that that is the growth area under my Department, as for now, and the potential is great. As we see it now, as it develops, there cannot but be a point in the very near future when substantial profits will be made and when the possibility of a reduction in charges will arise. This point has not been reached as yet, but we assess the period until that happens as a very short one indeed.

Deputy Cooney asked me what was the rate of refusals as of the most recent period for which there are records, that is 1981. On average the rate is 20 per cent, which is not very large. There is, of course, a tendency for the refusal rate to rise in a time of recession or when charges are very high, but 20 per cent seems to have been roughly the rate of refusal that has obtained for some time.

In addressing himself to the question of whether the change to State-sponsored bodies was desirable Deputy Cooney came to the conclusion that it was the best arrangement provided, of course, that the companies were properly financed. He mentioned three main points with regard to the postal service, the first being the arrangements about superannuation. Many contributors to the debate raised this question, so I had better deal with that in some detail. Deputy Cooney also raised the proposals about financing the postal development and mentioned the grants for the first three years of the five-year plan for current expenditure. It must have been that Deputy Cooney misunderstood the implications of the arrangements proposed about superannuation. Other Members of the House seemed to misunderstand them as well, so I will explain them carefully. I want to make it quite clear that An Post and Bord Telecom are being required to make provision for superannuation only in respect of service arising after the vesting day. The appropriate amount necessary to do this was decided by an actuarial assessment which was arranged jointly by the two boards. My Department was involved and the Department of the Public Service. The actuary advised that, in order to make adequate provision in respect of post-vesting day service for the postal service, an annual amount equivalent to 16.8 per cent of payroll would be needed. This is the amount that An Post is being required to make provision for, no more and no less. It is not being asked to make any provision in respect of the pensions of former employees of the Department or in respect of the pre-vesting day service of transferred staff. It is very important to emphasise that to the House. The Exchequer will accept full liability in regard to these. The only novel aspect of the arrangement is that the Exchequer liability is being deferred until a situation is reached in which the pension fund set up by either company is not adequate to meet the outgo on pensions.

That is what confuses it.

I am making it quite clear now. At that stage the Exchequer contingent liability fund will become available to whatever extent is required. I mentioned this arrangement in my introductory speech and I indicated that this was a fair arrangement to the companies, the staff, whose interests will be protected, and the taxpayer, who would otherwise have to bear the cost of existing pensions, which would increase annually as more staff retired after the vesting day.

I want to reiterate that the companies are not taking over the State's obligations. Their financial position, in terms of current expenditure, will be exactly the same under the arrangements proposed as it would be if the Exchequer was being discharged from the vesting day.

Is trua liom go gcathfaidh mé cur isteach ort.

If the Minister wishes to have a few minutes to finish this I suggest we should allow him to have it.

I have another sentence.

With the agreement of the House and with the agreement of Deputy O'Sullivan, who is on the Adjournment, the Chair accepts that.

It is important that the Minister finishes this because there is a lot of confusion about this particular section.

With the agreement of the House, the Chair is happy to allow the Minister to proceed until he has concluded what he is reading.

I reiterate that the companies are not taking over the State's obligations. Their financial position, in terms of current expenditure, will be exactly the same under the arrangements proposed as it would be if the Exchequer liability was being discharged from the vesting day. If they were not bearing the cost of existing pensions, and so on, as from the vesting day the money saved and any income from it would have to be lodged in a pension fund to meet their future liabilities, which the Exchequer contingent liability fund will meet under the arrangements I have proposed.

Debate adjourned.