Deputy Flanagan is in possession and he has seven minutes left of the time which was allotted to him.
Private Members' Business. - Postal and Telecommunications Services (Amendment) Bill, 1988: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time".
Before adjourning the debate last week I referred to a survey which was carried out by the Consumers' Association of Ireland early in 1987 on the services provided by Telecom Éireann. It is significant that 32 per cent of those surveyed had cause to query their telephone bills in the previous 18 months. That is absolutely startling especially when one considers the present billing arrangements of Telecom Éireann. Fifty-three per cent claimed at the time of the survey that they had obtained no satisfaction whatsoever from Telecom Éireann and a further 20 per cent stated that they had received only a standard reply from the company.
Slightly more than this, 22 per cent, said that they had obtained some form of satisfaction and, of those who queried their bills, only 28 per cent said they were satisfied with the way in which their queries were handled.
The main criticisms were that Telecom Éireann issued standard replies and were reluctant to consider the possibility that they had made an error. Only 35 per cent of those surveyed expressed satisfaction with the way in which their telephone bills were presented. The main criticism in this respect was that STD calls were not itemised. Forty-two per cent of those surveyed listed this as a complaint which is an extraordinarily large percentage. An extraordinarily low percentage of consumers reported any form of satisfaction with the billing arrangements and I hope this matter will be addressed at the earliest opportunity.
It is fair to say that the profits accruing to An Post and Bord Telecom will increase as the years go by. I caution both of these companies against yielding to the pressure which will be put on them to pay dividends to the Government of the day with the consequent risk of not increasing the number of services being provided to the consumer. I am concerned that the companies will forget about the consumer in favour of the profit motive and it is only when the consumer is satisfied with the services being provided by those companies that extra business will be generated for them. There is a great need to examine what the future role of these companies should be and I would like to see extra services being provided to the consumer rather than the companies seeking higher profits which would yield dividends to the State.
Let me refer briefly to the need for this legislation. The Postal and Telecommunications Users Council was abolished on 3 July 1987 and this was a retrograde step. The Minister stated at that time that the ambit of the office of the Ombudsman was being extended to cover this area. In recent weeks we have had a number of opportunities to consider the latest report of the Ombudsman. I ask the Minister for Communications to accept that this decision to abolish the Postal and Telecommunications Users Council was a bad decision in the light of the findings in the Ombudsman report and given the fact that the decision appeared to be taken on the basis that there was a duplication of roles as between the office of the Ombudsman and the Postal and Telecommunications Users Council. I understand that the savings which accrued to the State amounted to £85,000 but the abolition of this council left the consumer with no way of seeking redress. When we look across the water we find that there is more than one complaints council to which the consumers of British Telecom and the British postal service can complain. I feel there is a great need for such a body here and that the bill at present before the House goes a long way towards solving the problems which exist at present.
Turning to deal with the Bill itself, it is very important in the light of what I said earlier that some code of practice is introduced to enable consumers to seek redress. I do not think we are going too far by advocating the payment of compensation to those who have grounds for complaint against the two bodies concerned. I am not advocating that we should go back to the time of the Department of Posts and Telegraphs as I feel the change which was made in the early eighties was a move in the right direction. We removed these two companies from direct political control at that time but we have now turned the wheel 360 degrees and I question the accountability of both of these bodies——
The Deputy should now bring his remarks to a close.
I will conclude by saying that we have now reached a position where deputations are not being received in Telecom Éireann, that it is impossible for the consumer to seek any form of redress and the office of the Ombudsman is being starved of cash. The users council has also been abolished. The answers to the problems lie in this Bill and I urge the Minister and the Government to allow this Bill to proceed further.
First of all, let me say that we seem to be forgetting in this debate that both An Post and Telecom Éireann are at a very early stage in their development. The Minister in his contribution last week warned against the danger of taking any action which would weaken the commercial mandate of the two companies. It should be emphasised that we do not want to take any action which would work to the economic disadvantage of the two companies. Both An Post and Telecom Éireann have been very successful to date. In the case of An Post, they have achieved profitability over a short period of three years. They made a profit of £2.776 million in 1987, an increase of £2 million over the previous year. That profit, the achievements in the volume of mail traffic — which is 16 per cent higher than when An Post took over — and the quality of service, with 90 per cent of letters being delivered on the next working day after posting, are indications that An Post are doing a good job and providing a very high quality reliable service.
An Post has given the postal service a vibrant, forward-looking image. They have been active and inventive in introducing and extending measures to develop the postal service. I am glad to note that the company are investing some £8 million a year on the improvement of post office premises, on the provision of security measures, replacement of their vehicular fleet and on the provision of general equipment.
There was one issue raised by Deputy Flanagan and indeed also by the Minister in the course of his remarks in which I am interested. That is the introduction of letter-boxes. The Minister has stolen some of my thunder because he has said already, and I was delighted to hear him say, that he is worried about the security aspect of letter-boxes and that they will be redesigned. I presume the idea of letter-boxes originated in the USA, which are a feature of the postal service there and in many European countries. I am not opposed in principle to the idea of letter-boxes. I realise that their introduction would secure savings for An Post and speed up the delivery of mail in rural areas where some people have very late deliveries. I am reassured that the Minister has said that these letter-boxes will be redesigned to ensure greater security. I might suggest to An Post that these letter-boxes be provided on the roadside outside people's property. I should not like to see the proposal implemented that was considered in some parts of County Galway that five of six letter-boxes be located at the top of a country road where perhaps five families might carry the name of Flanagan, Connolly or Burke, causing the postman enormous confusion in the course of his deliveries.
Apart from that criticism vis-a-vis proposals, since vesting day An Post have shown great imagination and energy. They have been very successful in the introduction of their special St. Patrick's Day and Valentine's Day cards and other first issue stamps. I wish them every success in the work they are undertaking.
Deputy R. Bruton spoke here last week — in relation to section 3 of the Bill before us — of the need to move toward a level of service and charges as good as the best standards prevailing in the EC. The implication was that we had much to learn from our European colleagues in terms of how they organise and charge for postal services in a manner that meets customers' needs, particularly those of their business customers. There were some problems Deputy Bruton overlooked, in particular the fact that, with the exception of Luxembourg, we have the smallest, most thinly spread population of any country in Europe. This means we cannot achieve the economies of scale, commensurate with falling marginal costs for our services, as is the case in larger economies. Diseconomies of scale account for the relatively high cost we face for virtually all internally-generated national services, including energy, telecommunications and consumer goods. As long as we, as a country, wish to retain control over such services at a national level then we must live with the problem of higher costs while striving continuously for their reduction.
Certainly there are major differences between countries in terms of management practices, legislative controls and cultural factors that render many of the comparisons that Deputy Bruton required very difficult of achievement. For example, in the United Kingdom and Holland postal financial services are run by private companies while in France and Germany those services are controlled strictly by the Government; I suppose we are somewhere in between. When Deputy Bruton refers to the level of services I presume he is concerned mainly with their price and quality.
Again, in order to put these matters in perspective, I should say we have one of the most extensive post office networks, relative to our population, in Europe. Therefore, when Deputy Bruton speaks of the current or best practices in Europe we should remember that those other European countries at present seem to drastically curtail their post office networks, closing numerous uneconomic offices in order to generate saving that can be passed on to their customers by way of reduced prices. I wonder are Deputy Bruton and the Fine Gael party allowing us to move towards Europe and European standards, or are we to have one hand tied behind our backs, representing pressure on us to cut our services without having any discretion as to the implementation of savings. We must face up to all of those issues.
I was very glad to hear the Minister say that in future there will be an itemised telephone billing system. That is a welcome announcement because we hear regularly of telephone accounts having been improperly computed with complaints being lodged with the Ombudsman. We are aware also of the waiting lists for the installation of telephones, particularly in rural areas. That waiting list has been reduced dramatically from 60,000 in January 1984 to a current 17,000. However that reduction has not received much publicity. The billings system and people's complaints are much more publicised.
In their annual report Bord Telecom stated that customer relations are the first priority of the company. I contend they still have some way to go before reaching a fully satisfactory position in this regard. People are always seeking a satisfactory response. At times the company must form judgments on a balance of prob-abilities.
Deputy Bruton also referred to the question of the publication of a code of practice. If we base our judgment on the experience of British Telecom, I wonder whether the publication of a code of practice on complaints procedures would do anything to improve customer relations on the ground. In fact, in some respects such codes can be a cause of contention. The existence of an elegant code of practice does not appear to have afforded much comfort to British Telecom customers, or to the people who comment on it in the media. Having said that, however, I agree with Telecom Éireann's view that customer relations are a continuing priority for the company. It is true to say that they have made considerable progress already. We are told that in their current staff training programme they have ensured they have more staff to deal with customer problems and indeed their training courses are oriented towards improving customer handling.
Telecom Éireann have now a centralised repair service in Dublin and Cork which puts customers directly in contact with the field staff responsible for the maintenance of services. This has been a major step forward in making for better understanding and in establishing confidence among customers that their complaints are receiving personal attention. It has been announced that calls will be itemised with the advent of detail call logging procedures and the fully computerised telecommunications information system over the next few years. This technology will greatly improve customer confidence and the availability of information to customers. This should make the response to customer queries quicker.
Customer relations are very important to Telecom Éireann. They have informed us that they intend to develop progressively a system whereby personnel will deal with the major customers' accounts and service matters, with a particular emphasis on the data network. This should improve relations and services to major businesses and industrial users. In general, I hope — and I am sure everybody in this House hopes — that the quality of service and the attention to installations will continue to improve, that the level of complaints from customers will continue to drop and that a greater proportion of staff time will be devoted to cultivating better customer relations.
When Deputy Bruton spoke on the Bill last week he said that his approach to the economic performance of the companies covered by the Bill is that recommended in the proposals of the National Planning Board published in 1984. Deputy Bruton said that investment projects should be appraised by the company and, by implication, if the appraisal did not show a sufficiently attractive yield, the investment should not be undertaken. This may seem to make sense in economic terms but when we look at the duties imposed by statute on Telecom Éireann a different picture emerges.
Telecom Éireann have an obligation to provide a national telecommunications service and to meet the industrial, commercial and household needs of the State for a comprehensive and efficient telecommunications service and so far as they consider it reasonably practical they have to satisfy all reasonable demands for such services throughout the State. Therefore, investment cannot always be considered on purely economic criteria. For example, if a telephone exchange in County Galway does not meet the economic criteria set down, the area can hardly be left without a telephone service. Scaling down the size of the exchange would in general make little difference to the overall cost. If one were to follow this line of thinking many areas of the country would be left without service if service at standard rates for all were to be maintained.
Similarly, the proposal to bring prices into line with those elsewhere in the European community, which is reasonable as an aspiration or a target, should not be legislated for. In labour intensive industries, and the telecommunications area is one, much depends on public use of the service compared with that in other countries. The level of wages is another factor which affects prices. To force the company by law to surpass the best price standard prevailing in the European Communities could only be brought about by disimproving the existing level of services. The underlying pressure to reduce charges is reasonable and Telecom Éireann have made it clear that this is an objective.
The question I raised on cross-subsidisation refers to An Post as well as Telecom Éireann. We are well aware that courier services are serving the larger towns and cities. We have to think of rural areas and, as a Deputy from a rural area, I am very concerned and worried that the services provided by An Post and Telecom Éireann would be undermined in rural areas.
The Bill if enacted would, as I understand it, lay a statutory obligation on Telecom Éireann to publish before the start of the financial year an appraisal of any major investment proposed to be undertaken during the year. This would be sensible if each investment proposed by the company were a stand alone project which could be appraised without reference to its impact on the rest of the network. However, the integrated nature of the telecommunications network makes a conventional type of capital appraisal difficult and inappropriate in many cases, as the costs and benefits of specific items of expenditure cannot readily be identified in isolation from the network as a whole. For example, for the Eircell project and, indeed, every case where costs and benefits can be allocated with reasonable accuracy, full appraisal of the capital expenditure involved forms part of the company's analysis. The telecommunications network is a single structure and while certain costs may be directly attributed to individual exchanges or to sub-networks within the network, the bulk of the company's capital expenditure relates to the provision of the main countrywide telecommunications system and the costs incurred for the various elements are for the common benefit of all users of the network.
The standard of service which the network has to achieve was set out in the report of the review group, 1978-79. These standards have been accepted as the target to which Telecom Éireann must work. Telecom Éireann are at present working towards these standards and unless one goes back again to rewrite these standards, expenditure of the network must continue until these standards are achieved. To speak of appraisal of any major expenditure proposed is not realistic in the context of the telecommunications network. However, it is true to say that there are service targets set for An Post and Telecom Éireann. Having listened to Deputy Bruton last week one would be forgiven if one were to come to the conclusion that there were no targets set. Since Telecom Éireann drew up their first corporate plan, they have set objectives and targets in the critical key results area of their activities. These are published in their annual report.
The current corporate plan which covers the period 1988 to 1993 aims to provide telephones within six weeks of application, to repair 85 per cent of telephone faults within two working days, to connect telex lines within three weeks of application, to repair 90 per cent of telex faults within two working days and that 70 per cent of all households will have a telephone by the end of the period. The company also hope to grow at the rate of 7 per cent per annum on average and to double output per head in real terms, to have a profit of at least 5 per cent on turnover in 1988-89. They also hope to be fully self-financing by 1988-89.
These are just some of the targets which the company have publicly set down. From what I have said it is very clear that those targets have been set down by the company themselves. It is another thing altogether to have targets imposed on companies. This sort of target could demand an unrealistic performance, although the target might look good on paper. Such an approach would be totally demoralising for the management and staff of the organisation so that instead of trying to achieve the targets the company would throw in the towel. In any business organisation targets are set by management and approved by the shareholders, not the other way around.
In relation to cross-subsidisation, in general terms under our present structure relating to telecommunications, large users subsidise low users, business customers subsidise residential customers, high density areas subsidise low density areas and so on. This cross-subsidisation exists as a result of a combination of uniform pricing and the historical development of charging structures and technological changes. The structure of telephone charges was inherited from the Department of Posts and Telegraphs and it has remained largely unchanged. Some degree of rebalancing has been implemented for example in international charges and more significant rebalancing is proposed for the future. For those reasons it is impossible to compare in an equitable way nominal charges in this country with charges in another.
On the face of it telephone charges in Ireland appear to be higher than in other EC countries. One must look behind the figures in investigating this. The exchange line connection fee in Ireland is £120 which is considerably lower than connection fees in Greece, Norway, Sweden, UK or Denmark where the fee is £172. The rental charge in Ireland is the same irrespective of location of subscribers. In Belgium, Denmark, Italy and Luxembourg the rental charges very according to the number of customers available at the local call rate, or the geographical location of the customer. In Ireland local calls are charged at 11.17p. The statistics show that for a three minute peak rate call the Irish charge is 11.17p and that charge is only exceeded by Italy at 15.13p and the UK at 17.84p. Local calls in Ireland are untimed and that is certainly very different from other European countries where there is a considerable second charge for long calls particularly at peak times.
We have low population density and we had a low level of telephone development until Telecom Éireann were established. The cost of distributing telecommunications services is very high.
Telecom Éireann in their corporate plan are engaged in a programme rebalancing the charge structure which they inherited in 1984, with a view to reducing international charges and so improving their competitiveness on key routes. Telecom Éireann and An Post are doing a reasonable job. There are problems, but I am certainly encouraged by what the Minister said last week. The way the companies are progressing is very encouraging.
Deputy Bruton in introducing his Bill made comparisons with other EC countries. He did not do that on a fair basis so I would ask him to reconsider and withdraw the Bill.
Deputy Bruton in introducing this Bill outlined two objectives which motivated him. One was a desire to seek protection for the customer. Nobody would dispute that the customer deserves protection. The Deputy also said that he had the desire to see the best possible economic performance by both companies. I intend to oppose this Bill as the Bill just concentrates on An Post and Telecom Éireann in isolation from other semi-State organisations. I do not see the justification for this Bill. There are other State institutions which enjoy a far greater monopoly and which are not subject to the same pressure that these two relatively young companies are subjected to, yet there is no cry for further legislation which would hamper them in any way. Since these companies were set up just four years ago, it is a bit premature to introduce this type of legislation particularly when progress has been made in both companies.
The most serious aspect of the Bill is the proposal for additional reporting procedures. This would just create another bureaucracy. It would be far more beneficial if the companies were taken from the semi-State sector and put into the State sector, making them part of the Civil Service make-up. At this stage nobody would envisage this happening. Deputies Bruton, Barnes and Flanagan did not mention or mourn the loss of the users council. It should be borne in mind that the Deputies in Fine Gael who supported the Government cuts contributed in no small way to the demise of the Ombudsman's office. We are not happy that the role of the Ombudsman has been reduced or that the users council has been abolished, saving £80,000. Fine Gael are shedding crocodile tears on the whole affair. As for the Ombudsman, the suggestion that there should be a contribution from both companies is unrealistic. To ask for a contribution from the companies would be to ask them to cut a stick to strike themselves. I doubt if any company could be charged with responsibility for funding an office which would in effect monitor their performance. It would in some ways restrict the role of the Ombudsman and take away from him the independence which he now enjoys.
Comparisons have been made with other EC countries which I do not think are very realistic. We should take into consideration the fact that the population of the greater Manchester area is equivalent to the whole population of this country and that it is far easier to provide a cheaper service in an area of high population. Both Telecom Éireann and An Post have a social role to fulfil. An Post provide daily deliveries to the most isolated parts of the country. Telecom Éireann also provide services to isolated parts of the country without any extra charge. If further pressure is applied on them at this stage it could very well upset the excellent work which they have done. As I have said already, if the proposals outlined in the Bill are adopted this would be a step backwards and would in effect create more bureaucracy.
I want to refer to the various sections in the Bill. With regard to the quality of service, the success rate of STD calls improved from 74 per cent on vesting day to 97 per cent at the end of 1987. The review group set a target of 96 per cent and already Telecom Éireann have exceeded that. That is a fair performance. Sections 2 and 3 of the Bill call for the surpassing of the best standards prevailing in Europe. It is fair to ask that we try to equal the standards which prevail in Europe but it is unrealistic to ask them to surpass them when the company are only four years old. We have a scattered rural population and we are asking them to compete with, for example, the Scandinavian countries where the bulk of the population live in urban areas. It is very easy to provide a service in these communities.
Section 4 refers to the annual report and key management performance indicators. This places the companies in a disadvantaged position because section 4 states:
Each company shall, before the start of the financial year, publish the borrowing limits that have been agreed with the Minister, and an appraisal of any major investment proposed to be undertaken during the year.
We hope that these two companies will be able to compete commercially in the market but yet they are expected to expose their plans in advance so that their competitors will know what they are doing. I do not accept, as Deputy Bruton suggested, that there is a monopoly situation here, and this is reflected by their losses in the parcel area. An Post have to compete with the courier service. I think they will have a loss of £6 million in that area this year and if they were to show their hand, as suggested in section 4 of the Bill, I believe they would have further losses. This is not a very realistic proposal. Deputy Bruton has greater experience in the business field than I have but nonetheless that is not a very realistic aspiration.
With regard to the opposition in the telecommunications area, Telecom Éireann provide a service up to the door but the profitable services, such as the installations of the PBX and internal telephone systems, are done by private companies. The competition in this area is quite keen and if we were to agree to section 4 of the Bill this would put both companies in a disadvantaged position. The quality of the service being provided has improved considerably. I am not satisfied that everything is completely satisfactory and I think I would be doing a disservice to the customers if I was to say otherwise, but nonetheless much has been achieved in the past four years. I doubt if any company in the State sector could say with any degree of satisfaction that they have performed as well.
Deputy Bruton and I were part of the Government who introduced the original Bill. Like many other people I expressed reservations about the under-financing and capitalisation of the two companies but despite that they have overcome many problems. An Post occupied probably the most derelict buildings in the State sector and most of the old post office buildings were in urgent need of repair. The van fleet was long past its best and I can say with some degree of certainty that some vans were actually dangerous. In 1979 there was a lengthy strike by the workers in the Post Office and industrial relations were not good. There was a bureaucratic set-up in the Post Office which was not conducive to commercial activity.
I have to confess that the Government did not give the Post Office an opportunity to get involved in the really profitable area of activity, the banking area. I made a plea at the time about the security of workers and the Minister responded very positively to the plea. The Post Office were anxious to expand their banking activities and complete with the commercial banks but they did not get the power to do so. I sincerely hope that the Minister, while he is in office, will give serious consideration to this because there are precedents right across the world which prove that the postal service can run a very effective banking system. It has offices in every village in the country and it has a service that would be well supported if it had State backing.
Telecom Éireann's leaselines, telex and data charges are now among the lowest in the EC and reductions in charges for international telephone calls will be introduced this autumn. That represents progress despite all the problems which were spelt out by Deputy Bruton when he introduced the Bill. Telephone charges may be high if measured against those in other countries. That is what it may seem at first glance but I think Deputy Kitt mentioned that there is no limit on local calls in this country. A local call in the Dublin area can stretch from Newtownmountkennedy up to Gormanstown and if those calls were charged at a commercial rate and the duration of the call was curtailed I have no doubt this would lead to further profits for Telecom Éireann.
Likewise, An Post are trying to compete with couriers in the parcel service area. Couriers will bring parcels to main towns only and then post them on to the remoter parts of those districts. It is very easy to be profitable if one brings parcels to the main towns as the couriers tend to do, and so siphon off business from An Post. When it comes to going up every boreen there is no house inaccessible to the postal service. This makes it extremely difficult.
Paragraph 4 seeks to compare management performance against management in similar organisations in the EC taking into account productivity, manning and efficiency in the use of equipment. This is not measuring like with like. For example, most of the organisations do not provide operator assisted service unless it is paid for; in a number of EC states the operator assisted service is shut down at 5 p.m. We provide a 24 hour STD service, something that our friends in Europe do not enjoy. Curtailing this service would lead to further profitability.
If the business side were subsidising private customers there would be further pressure for legislation to deregulate so as to avoid cross-subsidisation. There are precedents. For instance, this happened in the United States and as a result the cost of private telephones was increased.
We now come back to the new subsection (4) to which I have already referred in regard to information being made available. I do not think this would be advisable. Other commercial organisations have not been compelled to do this, so why penalise the postal service by asking them to do it?
The Postal and Telecommunications Services Act, 1983, enables the Minister for Industry and Commerce to consult with the Minister for Communications to apply this Act to telecommunications. Therefore the proposal in the new subsection (5) is unnecessary. I wonder did Deputy Bruton take this into account.
In paragraph 9 he called for a code of practice and written contracts for customers confined now to the terms which we suggest would be unfair. I would like to know what is meant by a customer. Is it somebody who posts a letter? What type of contract would be involved? This will create a further layer of bureaucracy. That they should be answerable I agree, but to suggest that there would be an independent contract for each customer is unrealistic.
The 1986 Ombudsman report has been one of the more controversial issues. It should be borne in mind that in 1986 three million bills were issued and this is quite a substantial number. The Ombudsman's office dealt with 2,400 cases of which 230 were still outstanding. The Ombudsman recommended that rebates be paid in 317 cases out of the 2,400. I am not satisfied with the response I get to representations I make, particularly to Telecom Éireann regarding the billing system. There seems to be an attitude that the company is infallible and that the machine cannot go wrong. That is why I welcome the Minister's statement that there will be capital expenditure to the extent of £20 million to overcome this problem. I do not know why at this stage, despite this assurance, we should be asking for an amendment to the existing legislation. What the Minister is doing is a very positive step in trying to overcome what is by far the most controversial side of the whole operation. Added to that there will be a computerised fault handling system. This was introduced in my own city in 1985-86 and it is now being introduced in Dublin. This will considerably improve the procedures for handling telephone fault and will also provide better information for customers. The company has also installed free telephone facilities in each district for personal queries and this is quite innovative and welcome.
Deputy Bruton referred to monopoly and to commercial freedom and said that the extensive privilege which is granted to the company under the 1983 Act is justified because of the vast amount of taxpayers' money invested in the network and the non-commercial commitments and responsibilities placed on the company. The taxpayer has made a massive investment and that must be taken into account. The number of telephone exchange lines has been increased from 600,000 in 1984 to 800,000 in 1987. The staff numbers have been reduced from 18,300 to 14,500. We now have a fully automatic telephone system. This is progress on the part of Telecom Éireann. In An Post, despite the fact that there was a 17 per cent increase in business, we have a reduction in staff of 500 and discussions on making further economies and I have no doubt that with the agreement signed between PTWU and An Post we will see further economies in this area. Discussions are ongoing and a productivity deal is now being implemented.
It is not my intention to support this Bill as I feel it is superfluous legislation dealing unfairly with companies who are making an honest effort. I have my own complaints to make, and make them regularly, regarding the major fault, which is billing. The other aspects of the service are reasonably satisfactory. With the Minister's commitment to a further investment of £20 million to ensure that the customer gets a fair deal I feel they are making an honest effort and therefore I will be opposing the Bill.
There is one aspect of this Bill that worries me more than any other. The seriousness of my reservations on this aspect is such that I wish to open my remarks by drawing attention to it and appealing to the House to reject the provisions of this Bill because the fundamental wellspring of its conception is extremely narrow. If the House were to accept this Bill as an authentic and desirable measure it would, at the same time, be passing a vote of censure on two semi-State companies, their boards and, more especially, their employees, right from the ones who perform the least paid tasks to those who lead and direct the highest professional managerial projects.
This Bill is not merely a legislative measure; it is a statement to the effect that these two companies, An Post and Telecom Éireann, are negligent of the needs of their customers and unwilling to give a level of service that is the customers' right. It is a statement to the effect that these two companies and all the personnel that comprise them are incapable of giving due service to the public unless stung by the whiplash of a substantial legislative measure that imposes this fundamental duty upon them as a matter of law. This Bill is not merely a no confidence motion in the directorate and the workforce of the companies but is a dangerous Bill that could be the forerunner and instigator of a plethora of contractual breach cases of such minimal content that the law courts would be log jammed with the resultant trivia to the detriment of pressing and substative processes of far greater importance to litigants than the sort of cases that this legislation would handsomely encourage.
Let me take the House back again to the fundamental no confidence in the workforce aspect of the Bill. If this Bill were to go through this House and become a precedent for further legislation in the area of public service or indeed any service provided by a company in either the public or private sector, I would foresee a level of trade union agitation which would be counter-productive to the very notion of improved service.
The trade union movement must view this Bill with great misgiving and, in casting their mind's eye down the road to its consequences for workers in the service sector, see all the pitfalls, all the dangers and all the potential it has for worker discomfiture. That is how I see the fundamental drift of this Bill. I contend that these measures alone should make us all so wary of it that the House should register a no to its every provision. This House has a duty to reassure the public at large that both Telecom Éireann and An Post are two companies of the highest calibre comparable with the best in Europe, or in the world, and in the most major aspects are better than any.
It would be a bad day for the public service companies if this House were to fail to recognise the service they give. In the Postal and Telecommunications Services (Amendment) Bill, 1988, there are elements which very much concern me. There is a great dichotomy between the notion of public accountability and the erroneous notion of unbounded commercial disclosure. My colleague, the Minister, Deputy Burke, has already drawn the attention of the House to the inherent fallacy of disclosing information for the laudable purpose of public accountability and the subsequent use of this or that information by competitors to undermine the competitiveness and economic viability of public companies. If this Government, or any Government, politician or political party were to introduce a similar Bill imposing such a public disclosure clause on the private sector, they would tell them where to go. It is unthinkable and an unheard concept in the world of business. Let us not forget for one moment that Telecom Éireann and An Post are as much part of the commercial milieu as any private company. To shackle them legislatively in the manner in which this Bill proposes would be to condemn them to operate at such a level of disadvantage that before long we would have a succession of Bills before this House calling for special moneys to save these important public services from extinction at the hands of world communications giants who would then hold them all to ransom. I believe this section of the Bill is only a facilitation of industrial espionage.
If we were to act in this unthinking way and overlook and overturn the basic principle of business practice and competitiveness, we would be the laughing stock of parliamentarians everywhere. We would be written into the textbooks of leading world schools of economics as a prime example of how to destroy rather than to support and foster enterprise. This is how this legislation would have its dire effect. We cannot and must not go down this particular road.
These two companies are but a few short years in existence. They have developed and improved their services at an admirable rate and to a most laudable degree. If the matters purported to be in need of rectification are so pertinent as to warrant this Bill now, I cannot see for the life of me why the Coalition Government were so remiss during their term of office that they failed to introduce the necessary legislation.
(Interruptions.)
I put it to the Deputies across the floor that they recognise the worth and the progressive development that was in train. This current Bill is a superfluous piece of window dressing. The notion of public good is not to be denied. The concept of public good can, however, lead one quickly and irrevocably into error. I have already referred to the pitfalls — or should I say the bottomless pits — that abound in this Bill in relation to disclosure of information that is gold dust to the competitors, for example, giving advance notice by way of appraisal of major investment projects for the year ahead. Look for a moment at the potential I have already referred to in the clause that would require companies to have written contracts with their customers. This would open the floodgates and create an unsolvable dilemma for the courts. It would be a supreme example of how the concept of public good could be exploited to become a mammoth public nuisance. We have written contracts for many services, we have them where necessary and useful, where the Act is a brake on bad service. Wisdom tells us that too much of a good thing is counter-productive. It might be popular, on the face of it, to make proposals such as this but a fleeting wave of public acclaim would, with hindsight, turn quickly to a clamour of public redress and redemption from the consequences of this quickly soured measure.
This Bill is unique in my opinion in one respect. It consists of two double sheets but is crammed with amendments that are a legislative timebomb, a commercial entrepreneur's joy on beholding the crevice created for An Bord Telecom and An Post to fall into and sink without trace and the incalculable cost to the nation. As I have said, this Bill in one major respect constitutes a massive vote of no confidence in and dire ingratitude to the workers in Telecom Éireann, the engineers, technicians and manual clerical workers and to all grades in An Post, both outdoor and indoor.
I would like to make it a matter of public record that I appreciate the contribution of these companies to the life and good of this country. I wish to dissociate myself from the implied criticism of them at the very core of this Bill. If there is any fault to be found in the public service companies it is not at the level of staff but rather in the procedural wrangle that typifies bureaucracy. The short name and the popular name for this procedural wrangle is red tape. This Bill is a massive spool of red tape, of indeterminate length. Its red tape potential is stretching on and on to infinity. It is an extraordinary contradiction to put forth proposals to improve service to the public and to so enshrine the methodology of the improvement in tangles of red tape. This concept of red tape bureaucracy is so abhorrent to the general public that, if they were truely aware of the provisions of this Bill, they would raise a clamour for its fortright rejection on the grounds of its being against the public good.
The final section of the Bill, in relation to the role of the Ombudsman, seems to be a duplication of the roles of the competent authorities in the area of auditing and I wonder if it is not a minimisation of the role of the Public Accounts Committee of this House. The Bill contains two substantial sections relating to the codes of practice. The same Bill empowers the Office of the Ombudsman to modify the codes of practice as he sees fit. I am dumbfounded by this confusion of parliamentary practice and public modification which the Bill seeks to have us accept. It does not make sense. It creates a dangerous precedent. It appears to give a public servant powers in excess of those possessed by a Cabinet Minister. Section 2 (4) seeks to require that the companies pay one half of the audit costs of the Office of the Ombudsman, costs which would have to be passed on. Would the next step be a charge for each member of the public, a public fee for the service of Office of the Ombudsman. In my view this is a vexatious Bill. It is not thought out. It is an outstanding example of bad drafting, shallow thinking and of misunderstood and misapplied principles.
I should like to refer to one or two comments made by Deputy Bruton and Deputy Flanagan last week. When Deputy Bruton refers to levels of services for An Post, he is probably concerned mainly with price and quality. Again, it is necessary to put these details into perspective. For example, we have one of the most extensive post office networks, relative to our population, in Europe. When we talk about best practices and so forth in Europe, Europe is drastically curtailing its post office networks, closing numerous uneconomic offices in order to generate savings that can be passed on to the consumers at reduced prices. How willing is Deputy Bruton to let us move towards European standards or are we to have one hand tied behind our backs?
Deputy Flanagan in his contribution referred to the decision of An Post to set up consumer panels. He expressed concern that the panels would be little more than talking shops. The main point to be made here is that An Post are totally committed to the highest level of consumer service and that as evidence of this the company has decided to set up consumer panels. The panels consist of groups of An Post customers and are representative of both personnel and business users. They are also regionally representative. The panels take the form of group discussions and are designed to identify areas where the required level of service is not being provided and where new services could be provided by An Post to meet the change in consumer demand.
Another matter which Deputy Bruton raised was the liability question. He was also worried about the immunity from liability enjoyed by An Post under the existing legislation in regard to delay in operating the postal service.
I should like to make two points here.
First, the immunity enjoyed by An Post is no less and no greater than that enjoyed by the former Department of Posts and Telegraphs. Indeed the immunity is not unique to Ireland. I understand that in the majority if not all EC countries, there is a similar immunity from the liability for the postal service. If Deputy Bruton is seeking to have the immunity removed from An Post and to have the company operate in an environment different from that of other EC countries this would make An Post open to claims that could add significantly to the cost of operating our postal service. If so, there would be an inevitable increase in our postal charges. How could An Post seek to reach EC levels of charges if that was the case?
Secondly, I want to refer to the speech made by our Minister for Communications, Deputy Ray Burke, in which he went to some lengths to set out the problems that would arise if it were decided to remove the existing exemption in relation to the Sale of Goods and Supply of Services Act, 1980. He added, however, that the question of removal of the exemption was currently being considered. Obviously, this area requires detailed assessment.
On the economic performance of semi-State bodies, Deputy Bruton highlighted the point that investment projects should be appraised by the company on the implication that if appraisal did not show sufficiently attractive yield the investment should not be undertaken. As Deputy Michael Kitt said, this approach seems to make sense economically but when one looks at the duty imposed by statute on BTE a different picture emerges. In everyone's constituency, including mine of Dublin North, telephone booths or boxes in certain parts are provided for social reasons only. We would like to see both our State companies maintaining that position which they were set up for.
It could be political.
It could well be indeed.
Who will get in there first?
I have listened carefully to what Deputy Bruton had to say. We have a common interest in continuing the development of the companies, ensuring that the charges are kept at a minimum rate consistent with the requirements of the legislation and seeing that the companies provide comprehensive and efficient service to their customers. There is need and scope for more improvements in both companies, but by their plans for investment in improving the services to their customers, both companies within the present mandate are capable of overcoming any problems. However, I am not satisfied that Deputy Bruton's approach to the problems he has outlined is appropriate. Therefore, I join with the Minister in asking the proposer to reconsider his proposal for a Second Reading of this Bill.
Let me at the outset, Sir, seek your permission to share 15 minutes of my time with Deputy Tomás Mac Giolla, if it is acceptable to you and the House.
It is not my right to grant that but it is my duty to put it to the House and I am sure I can anticipate the agreement of the House to that request. Is it agreed? Agreed.
I compliment Deputy Bruton for bringing the measure before the House. It is more than justified. The Deputy in his opening address presenting the Bill has given proof positive of the need for and raison d'être of the measure. Members on both sides of the House if they are genuine and honest could quote chapter and verse in relation to the need to provide consumer protection from semi-State organisations such as An Post and BTE. One presupposes that when we have semi-State or State organisations everything is right, there is fair play and everyone gets cothrom na féinne. Unfortunately, this is not so.
I disagree fundamentally with Deputy Toddy O'Sullivan who makes the point that we are in this Bill putting extra pressure on those semi-State organisations.
Far from putting additional pressure, all we are asking for is efficiency, competence and economy of scale. He goes on to make great play of the fact that if these companies expose their finances that will have an adverse effect on their viability and competitiveness. Here we are talking about two semi-State organisations of monolithic proportions who have an absolute monopoly of the postal and telecommunications services. To suggest that An Post might be under any threat whatever from the fairly recent inception of courier services is facile in the extreme.
Deputy Wright went even further and accused the Bill of having industrial espionage intent. He said that these organisations, only a few years in existence, are weak and vulnerable and would undoubtedly wilt under the competitiveness of making public exposure of their accounts. I could not accept that for a moment. They both inherited very healthy long-established State organisations under the aegis of the Department of Posts and Telegraphs. He then admitted that we have one of the most expensive postal networks in Europe. One of the reasons for the measure is to try to bring about proportion and a sense of economy and competitiveness in the postal and telecommunication charges.
I welcome the Bill. It is a measure of consumer protection and we must do everything to protect the consumer. Deputy Wright towards the conclusion of his speech mentioned the need to retain non-viable telephone booths in areas because of their social dimension. I would like to take that a stage further and give my experience from rural Ireland in relation to the post boxes and postal services. I am going to focus on that aspect alone, not from a social dimension — there is a social dimension in it — but from the point of view of where exactly An Post stand on this issue.
I agree with the principle of bringing a more efficient structure into the postal service and with the erection of post boxes where these are erected by consent, and I agree that many people if properly approached would agree voluntarily to accept them. Indeed, An Post are obliged by the Postal and Telecommunications Services Act, 1983, section 65, to do this. The section provides that the company shall not be required to deliver a postal packet to the addressee's residence or office provided the company makes acceptable alternative arrangements to make it available to the addressee. I might justifiably ask, acceptable to whom?
As public representatives, in midsummer 1987 we were approached by various consumers, and my experience was very much the same as that of other rural Deputies. In isolated rural areas post boxes were erected against the will of the consumer. In some cases people were led to believe they had absolutely no option or choice in the matter. Others were told that if they accepted them this year they could have them free gratis and for nothing but next year they must pay. Another instance was subtle intimidation when people were told, "You are the only one in the village who will not accept" and in other cases, such as a pub in Tourmakeady the consumer learned from the postman, "We are erecting a postbox at the head of the boreen next Tuesday morning".
I decided on foot of those complaints to contact An Post and find out what the position was. I was told by Mr. McCabe of the letters and postal division of An Post that roadside delivery boxes were being provided on a voluntary basis throughout the country and it was not intended to compel anyone to accept them at that stage. On 29 January 1988 Mr. McCabe reiterated: "While provision of roadside boxes is on a voluntary basis at present, we obviously could not operate on a basis of removing boxes when people changed their minds, having initially accepted them". There was supposed to be no element of compulsion. Let me quote from a letter dated 26 January 1988 sent to a consumer in Skibbereen, in a village near Leap, County Cork, and signed by B. O'Connor, head postmaster: "I have to inform you that unless you agree to the use of a roadside letter-box your letters will be left at Leap Post Office from Monday next, February 1, at an annual cost of £27.50 payable in advance."
I have a full file of letters. I will quote from another: "Concerning the postbox, when the man called at my house he said they were putting the postbox up at the end of the road and he gave us absolutely no choice in the matter." In another case: "We are objecting especially to the fact that we were not given a clear option to refuse or accept these post boxes in the first place by An Post."
In another case, a woman complained that she had two children under three years of age and that, hail, rain or snow, she had to leave her children asleep or march them a half a mile to see if there was any post at the end of the lane. A letter was sent to me from An Post stating that there is no question of compelling elderly people, the disabled or the handicapped to accept postboxes. The acting head postmaster in Claremorris post office, in a letter dated 13 November, said it was not their intention to ask old age pensioners or invalids living alone to participate in the scheme.
I also have a letter from a person which states:
I don't know who the man was who called here but I told him I was not able to walk up that hill. I have to get a car to take me to Mass on Sunday and to town as I have chronic arthritis and my husband is aged 77 years and has a heart condition. I wish to point out that An Post allegation in relation to a son living with us is not true. We have no son living with us, we are absolutely on our own.
We chronicled all these letters and sent them to An Post. They are valid complaints. They come from people who were not initially aware of their rights and who, in some cases, seem to have been compelled to accept the post box. They did not have a clear choice in the matter and, in some cases, subtle intimidation was used. Time and time again I requested An Post to notify people in advance of their entitlements, to stream-line and structure the scheme and to administer it properly. This has not happened. Those letters were published in the newspaper and the people who felt they had been deluded subsequently took the postboxes down because they had not been presented with a choice in the matter. What happened? These people — each and every one of them — now have to walk, in some cases up to a mile and a half, to a local post office on a daily basis to check if there is mail for them.
I always had a tremendous amount of respect for An Post and for their predecessor, the Department of Posts and Telegraphs. However, An Post are a massive semi-State organisation which, last year, had a turnover of £192 million and made an alleged profit of £2 million. They have now changed a traditional system without putting a notice in the newspaper or running an advertisement on radio or television. They did not send out letters in advance even through they had free post, like public representatives.
This organisation are handling tax-payers' money and administering the national lottery. My honest assessment of the situation is that this is a public relations disaster. An Post have blundered badly in relation to this matter. They have made a hamfisted job of what should have been a professionally handled innovation. They managed to mix a certain amount of slyness with thuggery and subtle intimidation. I urge the Minister to use his powers of persuasion with An Post to take that matter back to base, to start from scratch and to introduce basic administrative procedures, to notify people in advance, get them to sign a consent form and to get the goodwill of people right across the board.
In one of the letters I mentioned, a person went to a commissioner of oaths to sign an affidavit to prove what was said. An Post maintained that a number of the households accepted the postboxes. In one instance they said that children accepted it. I will quote from an affidavit, from a person of 18 years from Carramore, Killasser, Swinford, County Mayo:
On the 29th of November, 1987, I was working on my parents' farm. My mother and father were in Dublin at the time and my aunt was at the health centre in Swinford. During the day a person arrived at my parents' house and said he was from An Post. He said he was putting postboxes at the end of the road. He did not ask for permission to erect the postboxes. He further asked me were my parents at home and I informed him that my parents were in Dublin. I did not at any time, either on my own behalf or on behalf of my parents, agree to An Post erecting postboxes at the end of the road. I make this affidavit within the knowledge save or otherwise appearing and I believe same to be true.
The parents of the person who wrote that letter now have to walk to Killasser post office daily to check if there is mail.
I urge the Minister to intervene and to bring sanity to bear on this matter before it gets out of all proportion.
There is merit in having roadside boxes where there is acceptance across the board and where someone is in a position to collect the post. However, there must be ethical standards in this regard. I know that An Post are an independent organisation but the manner in which they have handled this public relations exercise augurs very badly for their future.
I wish to thank Deputy Higgins and Deputy Richard Bruton for allowing me some time to speak on this Bill. I am particularly grateful in view of the fact that I oppose it.
The first point is that public accountability in regard to An Post and Bord Telecom Éireann has been laid down in the Postal and Telecommunications Act, 1982. The existing procedures in regard to public accountability are laid down as follows: they ensure that the following role of the Government in relation to both bodies provides for these safeguards — Government appointment of the boards, Government approval of corporate plans, Government approval of capital expenditure, Government approval of prices, adherence to Government policy on pay and Government control of licensing. If one takes these key areas as an example of the degree of public accountability for a company like Bord Telecom Éireann, it is clearly the case that a bond exists between democratic control, accountability and commercial performance, which was the whole purpose of setting up An Post and Bord Telecom Éireann. They were to operate on commercial lines. One of the results is the erection of the post boxes to which Deputy Higgins referred.
The Bill consists of a whole list of complaints about An Post without any regard to the proper procedure for setting out a Bill. However, the complaint made by Deputy Higgins has not been dealt with because An Post must operate on commercial criteria. I agree with Deputy Higgins that it is totally wrong that these post boxes should be erected without people's consent. However, this was the purpose of their public accountability aspect, not to tie them up in regard to commercial operations. The Bill struck that balance but it adds nothing to the case for public accountability. There is bureaucracy down along the line and we are providing further platforms for public representatives to attack State enterprise and to downgrade it.
It is ironic that a Deputy whose party support the policy of liberalisation and deregulation — one of the big aspects of Fine Gael and the Progressive Democrats' policy — should want to increase regulation for public enterprise which is the reverse of what is proposed for the private sector, to take the State off our backs, etc. The idea is that we could do fantastic things if the State was not in our way. We are told that if there was less accountability of all kinds the public sector could do wonders. However, some people want public enterprise endeavours in the commercial field tied up with all types of red tape. The establishment of a State company for telecommunications services was by way of a desire for a more responsive and commercial orientated performance.
Debate adjourned.