In discussing this Bill we must recognise the very genuine achievement of the two companies concerned, since their inception. They have made very considerable progress in meeting financial targets. They have pulled the companies around and are providing a better service generally in that area. However, it is crucial that the Dáil be particularly vigilant in seeing that customers get a fair deal when dealing with the monopoly companies of Telecom Éireann and An Post. It is also crucial that the Dáil take a very special approach to overseeing the affairs of its State commercial companies. There must be an emphasis on performance from these companies if we are to achieve new economic opportunity in this country. I am convinced that it is in large measure the State companies and the sort of environment for costs and performance that they engender, that create the sort of economic environment we need for a thriving business economy.
It must be borne in mind by the Dáil that these are companies that are relatively immune from market pressures, holding as they do a monopoly position in the market, and that they command enormous resources. These two companies have a total expenditure and turnover of £700 million between them. There is immense scope for achievement in this area and the Dáil must be vigilant in seeing that they perform economically to the very maximum of their ability. Those two objectives have motivated this Bill — the desire to seek protection for the customer and the desire to see the best possible economic performance by these companies.
In relation to the position of customers, I am very disappointed that the approach of this Government since coming to office has been consistently to show their determination to destroy any independent agencies acting on behalf of the consumer. We have seen this approach in relation to the National Social Service Board and we have seen it to a very great degree in this area. A few months ago the Minister abolished the Users Councils, ostensibly on the grounds of achieving savings, but the Minister of State recognised in the Dáil that the total cost of running these two councils was £80,000 for a year. The Government decided that for a saving of £80,000 they would abandon the consumer watchdog that was to oversee the spending of £700 million by these companies. Those involved in serving on those councils were redeployed to other duties so that it was not a net saving to the Government at all. We can only see this as being motivated to remove from the customer the voice that had been given to him by the Dáil when that Bill was enacted.
We have seen a similar approach in the attitude to the Ombudsman who has been strangled in his operations in recent times. His investigative staff has been halved as a result of cutbacks and it was widely rumoured that the Government's intention was to withdraw the postal and telecommunications services entirely from his remit when they made those cutbacks but they were not willing to come into the Dáil to propose that. It must be borne in mind that the Ombudsman's office was one of the great protections given by the Dáil in the past ten years to consumers. We have seen both the Users Councils set up by the Dáil and the Ombudsman's Office frustrated in their approach to these two monopoly companies. That is to be regretted and it is obviously an important consideration that makes the contents of this Bill all the more important.
When this legislation was drafted in 1982-1983, the legislation fudged the issue of customer service and the rights of the consumer. It decided that these two companies would, uniquely, be exempted from the provisions of the Sale of Goods and Supply of Services Act, 1980. This meant that the ordinary consumer did not even have the right to go to court if he was not satisfied with the service he obtained from them. It also provided that there would be no requirement for the companies to have a code of practice. The Director of Consumer Affairs at the time very eloquently summed up the difficulty when he said that, in effect, the telecommunications and postal services would be judge and jury of their services as regards the consumer and that it could inspire little confidence in a consumer no matter how the companies may say they are striving to provide a good service if at the end of the day when he has complaints he does not have the right of redress to court or the right of redress to a fair code of practice. As a result of the Government's determination to wind down the independent voice that was there and as a result of the weakness of the legislation at the outset, the consumer is now being plunged back into a state of total powerlessness as regards these companies.
I recognise the progress of these companies since they were first established. I also recognise the frustrations of consumers dealing with them. There are numerous examples that could be cited to illustrate that. The highest issue of complaint going to the Ombudsman is from the users of the telecommunications services. A massive 43 per cent of his total complaints come from the users of the telecommunications services and that share has been growing over the years since the Ombudsman took on this responsibility. It is higher than all of the other Government Departments put together. This is a very serious indicator of the extent of consumer frustration with the services and particularly with the billing procedure.
We have other indicators of growing frustrations. In recent months particularly, the public have become very frustrated with the speed of delivery of post. An Post claimed recently that they are meeting 85 per cent to 90 per cent delivery on the following day. That has been disputed and the evidence of one's own eyes is that it is not being achieved in practice. It may be possible to show an 85 per cent next day delivery service between one part of Dublin and another but great frustration is being felt in other parts of the country because they are not getting that kind of service. This has become such a serious issue that many radio programmes are now carrying regular items on it and it is important that we recognise this is an indicator of frustration.
The condition of telephone boxes is another source of frustration for the public, with phone boxes persistently out of order. Obviously, vandalism is one of the major causes of this but that is little consolation for consumers who feel their rights are not being properly upheld by the company. The uncertainty of the repair service is always on people's lips. When their phones are out of order they are never sure how quickly the service will be restored. They feel they have no redress — which they do not — for undue delay on the part of the telecommunications company in restoring the service.
All of these are important elements but perhaps the greatest source of frustration is the high level of charging we have to face. The Minister has provided figures indicating that the average phone charges in Ireland are running around 60 per cent higher than those in the rest of Europe and the position in regard to postal charges is little different, with charges running at around 25 per cent higher than in other European countries. This is a source of frustration for the consumer and we are all aware of it. No one can expect the companies to solve these problems overnight and no one is suggesting it is possible to do so but it is not enough for them to say they share the aim of resolving the problems. There must be some agent independently evaluating progress on behalf of the consumer and there must be an adequate forum through which the consumer can seek redress.
At the heart of this Bill is the proposal that the balance be titled back in favour of the consumer. It contains a number of reforms which I believe would help to do this. The first is contained in sections 5 and 8 which would give back to the consumer full rights and would remove the derogation these two companies have had from the Sale of Goods and Supply of Services Act. This would mean that the consumer would at the very least have the right to go to court to seek redress in cases where there has been a failure to provide a service. Obviously, it would be tricky for a consumer to take a court action against a company so large as the postal or telecommunications service. It is only a small protection but it is very important that the consumer at the end of the day would have the right to go to court to assert his legitimate rights, in the same way as he could go to court to assert his rights in regard to any other service being provided to him or any goods being supplied to him. It is not too much to ask that these two companies who enjoy a monopoly should recognise the consumer's rights in this area.
In the consumer rights area it would also give the consumers a clear, written contract setting out their rights and this is something we have been striving to achieve in many other areas, such as the lending area. It would be moving with the tide if we were to require that this should also be available to the consumers of the services provided by these two companies.
The second major initiative to protect the consumer is to require the companies to draw up a code of practice for consumers. This proposal is outlined in sections 7 and 9 of the Bill as presented. There are many items which a code of practice could cover but obviously its main purpose would be to set out the standard of service which a consumer could expect to enjoy from these two companies. It should also set out a procedure for handling complaints and arrangements for referral to the Ombudsman if a consumer cannot resolve his dispute with the company.
It would also be important that a code of practice would look at areas where a consumer has automatic redress without having to go through any complaints procedure. There are areas where there should be automatic redress for consumers. For example, where faults persist on telephone lines for several working days, consumers should have the right of redress in respect of telephone bills. This is now a requirement in other countries. Such a right to redress would recognise the consumer's entitlement and would act as a spur on the two companies to resolve these problems.
Similarly, a consumer should have an automatic right of redress in cases where there is undue or excessive delay in delivering postal packages or letters or in cases where the telecommunications company have made a wrong entry in a directory. I am not saying that there should be unlimited liability but the company should provide in a code of practice that they are willing to accede automatically to a certain level of compensation in these cases or in cases where a wrong entry has been made in a directory they could compensate in another form.
Those are the elements which would make up a code of practice. Perhaps the most important from the telecommunications consumers' point of view is that there should be some procedure for dealing with queries in regard to bills. As the House is aware, it is a continual source of frustration for people to receive pro forma letters from Telecom Éireann saying their meter had been checked and that the charges are in order while, at the same time, not feeling there has been a real investigation of their case. By providing a code of practice Telecom Éireann would be able to clearly establish what procedure it carries out and consumers would be able to gain confidence in the system which exists for dealing with queries in regard to bills. This is the greatest source of frustration for customers.
I could not list in detail what a code of practice would contain but we have two agencies which are uniquely well placed to help the postal and telecommunications companies in drawing up such a code — they are the Director of Consumer Affairs and the Ombudsman's Office. The Director of Consumer Affairs has helped to establish similar codes of practice in other bodies and we will see in the coming years a growing number of such codes to protect the consumer. He obviously has great experience in drawing up such codes and that is why this Bill suggests that he be involved. Similarly, the Ombudsman should also be involved because he has the experience of dealing daily with consumer complaints, particularly emanating from telecommunications consumers. He knows the pitfalls, the frustrations which people feel, and the procedures which have fallen down in the past and he is uniquely well placed to help the company to establish a code of practice. The bottom line is that it would help to remove the cause of complaints. The best code of practice is one that never has to be used and that is what we must strive to achieve.
I believe the telecommunications company suffer more public opprobrium than they deserve. The bills which they send out are considerably more accurate than is suggested by the level of public feeling about them. However, the fact that they do not have a clear code of practice, that the consumer feels unprotected, that the consumer has to go through very awkward procedures, receiving what he believes to be a cavalier response, means that this has built up to a major public issue. This is a way of lancing that boil which, in time, will be proven to be to the good of these companies when the provisions of the Bill come into force.
Of course the presence of this code is not sufficient in itself. It is very important not only that there be a code of practice but that there be somebody independently evaluating and monitoring the use of that code. Without such monitoring the code could become a dead letter, another volume of paper the company produce but meaning very little. That is why I have provided, in section 11, that the Ombudsman will take on the duty of monitoring and evaluating this code. There may be a dispute as to who would be best suited for this responsibility, whether it is the Director of Consumer Affairs or the Ombudsman. In practical terms, it points to the Ombudsman because he deals with the major area of billing complaints on a regular basis. At the end of the day, he constitutes the court of arbitration to which people can appeal in respect of the implementation of such a code of practice. He is the ultimate arbiter. It is logical that he should be the person to evaluate its progress. It would be my hope that he would be gradually working himself out of a job through the implementation of this code.
It is only fair to the Ombudsman's office — recognising his existing heavy costs and also that the provisions of this Bill will involve him in extra duties — that the Minister should be given the power for which I have provided, by order, to require the levying of half of the audited costs of the Ombudsman in relation to these companies on the companies themselves. This would provide the Ombudsman with a new source of revenue. Also it would constitute an equitable way of sharing out the costs of investigation and would provide the telecommunications and postal companies with an added incentive to avoid having a high level of complaint if they knew this cost could be eliminated by reducing the level of recourse to the Ombudsman's office. This would be a very good way of allocating the costs: half being paid by the company the subject of a complaint and half by the taxpayer generally.
I know that the Ombudsman himself would have some misgivings about this. He would feel that his independence hinges on his sole and direct funding from the Dáil. I would have to say that I cannot agree with that. I cannot see how this would undermine his independence in any way because the two agencies concerned would not have discretion as to the amount they devoted to this activity. Rather it would be a question of the Ombudsman presenting his audited costs which would automatically become chargeable without the discretion of these companies. Therefore, I would contend that the Ombudsman's concern about the sort of approach to funding is misplaced. Obviously I will be interested to hear what other Members feel about it.
The virtue of this code of practice is that eventually it will mean that both the Ombudsman and the companies will be able to deal much more successfully with complaints. The introduction of Bord Telecom's new technology — that would provide the possibility of giving detailed billing, spelling out exactly what calls were made — provides another opportunity for Bord Telecom to have this issue resolved once and for all in a fair and equitable way. I contend that the combination of these things will constitute a great improvement.
Another area the provisions of this Bill tackle — in order to try to enhance consumer service and the consumer's belief that the company have his real interests at heart — is a requirement that the company should report quarterly on key elements of their service. The sort of thing I have in mind, in particular, is the speed of postal deliveries. That has become a major bone of contention, with people in the more remote, rural areas feeling they are not getting adequate service. I contend the company should be obliged to provide quarterly reports on the speed of delivery between different parts of the country. Similarly, the condition of telephone boxes should be surveyed and results presented on a quarterly basis. In that way we would know the percentage of telephone boxes in working order at a given time in different parts of the country. Also the speed with which telephone repairs are effected should be reported, the extent to which there are problems encountered in post offices with queueing, and also the extent of complaints. These are matters that any company that has an eye to its consumers at all would have at its fingertips. It is important that the company should publish details of their performance in these areas and set themselves targets for improvement. In that way the confidence of the consumer can be restored.
There are people who say that the provision of this type of information is asking too much of companies. I might add that this type of information is being demanded of monopoly companies in every country. One only has to go to the United Kingdom where there is the office of telecommunications, OFTEL, and POUNC, the body dealing with the post office, bodies with very considerable teeth doing much more than just monitoring or reporting of the type I am seeking. They actually have teeth to change what happens within these bodies. It will be seen that there is nothing onerous about asking companies to report on the quality of the service they provide.
I might now look at the overall economic performance of these companies which control enormous economic resources. They have a combined turnover of £700 million. The fact that they are monopolies means that they are, to a great extent, free from the normal market pressures a normal company would face in the marketplace. This means that the Dáil has no option but to put a different type of pressure on them to perform. The approach I favour in that respect is well summed up in the report of the National Planning Board in 1984 when they examined the whole of the semi-State sector and what it was we needed to achieve a high level of economic performance from that sector. They clearly indicated that there was a need for proxies for market forces in the key areas of borrowing, investment assessment, objectives on pricing and indices of performance, among others.
What I have sought to do by way of the provisions of this Bill is to require these companies, very major ones with a great deal of potential, to improve Ireland's position as a place for conducting business. I am requesting that they be subjected to the sorts of pressures the National Planning Board foresaw as the appropriate way for the Dáil to regulate such companies. This means they should state clearly the annual borrowing limits to which they would be expected to adhere. It means also that they should carry out clear investment assessments, providing a clear indication of what they expect to be achieved through their investment, following that up with a report on what that investment actually achieved or yielded. It is only right that in the case of companies which, at the end of the day, command a guarantee on their loans from the taxpayer or, in some cases, State bodies enjoying support direct from the Exchequer, the taxpayer, through the Dáil, should have access to them to ensure that they are carrying out the types of investment appraisals necessary and not only doing that but are seen to be living up to the assumptions that underlay those appraisals. There is no point in having an appraisal saying everything in the garden is rosy and then finding that a project runs way beyond budget and does not achieve the level of sales expected. That is not investment appraisal; that is just cooking the books. What we want to see is genuine appraisal.
In the pricing area, it is very important that these companies be set a very clear objective, and that is set out in this Bill. We expect them to move to and exceed European levels on pricing. This should be one of their major objectives. They should report regularly on their progress and set targets for what they hope to achieve each year relative to the other countries. This country has enough disadvantages and we should not have to face extra ones in relation to telecommunications and postal charges. These should be made the main activities of the board and I have set them out as new objectives for these two companies.
The planning board had a very interesting discussion on the need for indicators of performance from companies and I think this is very apt for the telecommunications and postal companies. It is important that we see that their performance in relation to meaning, efficiency of utilisation and so on matches that of foreign equivalents providing similar services. These are the ways in which we can get a handle on what the companies are doing. It is very hard to get behind the financial figures of a monopoly body because at the end of the day the market does not operate in the same way, and profits are not a simple indicator of a successful performance by a monopoly body and certainly not by a State monopoly company and therefore, we need to supplement this with these indicators. It is important also that we see transparency between the different elements of their operations. It does not do the taxpayer any good when there is cross-subsidisation and no reason being presented for it. Where cross-subsidisation is occurring this Bill requires that it should be clearly flagged and if it continues there should be adequate justification for it. Obviously in the case of the postal company there will be certain areas where there is adequate justification for it through their duty of universal service but we need to see the extent of cross-subsidisation and get a clear reason for it.
I believe it is our duty to require this sort of information and to act on the recommendations of the National Planning Board because the Oireachtas Joint Committee on State-sponsored Bodies are the only body who oversee, on behalf of the taxpayer, the performance of these companies and if this information is not available to us as members of that committee it is impossible to assess their performance. Equally it is a farce that we come into this House year in, year out, and discuss the Public Capital Programme but we never see a single project appraised; we never see what is expected from a major investment initiative that has been proposed by some of these State bodies; we never see whether an initiative has lived within budget and we never see if the rosy picture that was painted of what could be achieved was delivered a year or two down the road. It is crucial that we focus on economic performance because I am convinced the solution to our employment problem is not to be found in some packaged answer that one can take down off the shelf and say: "Here is the solution, it involves more spending", but in using the resources we have more effectively. All I am asking for in this Bill is that the monopolies who command huge resources should be required to show that they are meeting an adequate level of performance. That is what this Bill focuses on.
I know that the boards of the telecommunications and postal services have expressed a fear that this will stifle their freedom of commercial operation. I believe very sincerely that this will not be the case. There is a huge difference between the Dáil requiring them to account for their stewardship and to report on their performance and the Dáil seeking to impose new controls on them. There is no new control contained in this Bill. No one is trying through this Bill to say "We want to block the telecommunications or postal services, from doing this or that" but, as taxpayers and as people who ultimately guarantee the operation of these companies, we want to see that they achieve the highest standards of quality at a price that the customers in Ireland have a right to demand. This Bill is not an attack on these companies; rather is it a recognition that we are living in a very difficult economic climate in the late eighties and that we have to exact the very maximum from the scarce resources available to us.
We have an opportunity in this Bill to make a move in this small section of State enterprise so that we can enhance performance, create new opportunities and prove that we can do the very best with the most efficiency. The telecommunications company are at the leading end of technology. They command high resources and they must be seen to deliver on price and quality. The frustration of consumers will be very quickly lanced and cured if the new duties of the board which are contained in this Bill are adopted by the Dáil.