Vol. 542 No. 3
12 Mr. Farrelly asked the Minister for Public Enterprise if the Government has decided to embrace a rationalisation plan which will lead to the closure of up to 900 sub-post offices; and if she will make a statement on the matter. [24079/01]
31 Mr. Howlin asked the Minister for Public Enterprise if, further to Parliamentary Question No. 249 of 3 October 2001, she will indicate when she expects a response from the EU Commission for clearance under the State aid regime of the proposed £10 million increase in the share capital of An Post; and if she will make a statement on the matter. [24219/01]
42 Mr. Howlin asked the Minister for Public Enterprise the discussions she has had with An Post and the Irish Postmasters Union regarding the delivery of a wide ranging reform package aimed at securing a long-term viable future for the post office network; and if she will make a statement on the matter. [24206/01]
I propose to answer Questions Nos. 12, 31 and 42 together.
One of the first commitments I gave when appointed concerned the post office network. I promised there would be no forced closures of post offices. The answer to this question is more or less the same as that which I gave in reply to Deputy Naughten's earlier question.
This question asks if the Government has decided to embrace a rationalisation plan which will lead to the closure of up to 900 sub-post offices. The Government has not decided to embrace a rationalisation plan. No such rationalisation plan has been put to me or to any of my colleagues in Government nor did I go to Government with a plan proposing the closure of 900 sub-post offices.
I referred to the Flynn report. In July the Government approved the following measures: that An Post needs to focus in the short-term on the introduction of pilot postal agency arrangements; and it also agreed the figure of £10 million. Where a suitable man or woman does not come to run a post office where a vacancy has occurred, a Government services outlet will be implemented.
(Mayo): The reason this issue has come to the fore, that the IPU is lobbying on this matter throughout the country and that there is an impression that the axe is about to fall on these 900 sub-post offices goes back to the fact that the performance of An Post management has been absolutely abysmal and pathetic. There has been a failure to exploit a fraction of the available commercial opportunities. Smaller post offices and sub-post offices have been effectively starved of a range of services that would make them viable. If vision and foresight had been demonstrated, we would be talking about substantial profits, not losses of £80 million.
As the main shareholder in the company, does the Minister support the concept of enabling post offices and sub-post offices to offer current accounts? Customers could lodge money, have cheque books and pay bills. Does the Minister accept that there is a huge window of opportunity as a result of the abandonment of the people when the commercial banks withdrew bill paying facilities? Customers must now lodge before they can withdraw. We do not want to ape the United Kingdom, but from time to time they do things better then we do. Does the Minister accept that the British model demonstrates how post offices can become substantial profit generating enterprises? This would be possible if the management of An Post had the foresight, determination or interest.
I do not underestimate the fact that elements within An Post have sought to close post offices during the last decade, going back to the first PricewaterhouseCoopers report when Deputy Séamus Brennan was the relevant Minister.
That was the ten point plan.
I remember vividly that the closure of many post offices was proposed and that similar proposals were made in another report in 1994 or 1995. I accept that An Post is going about its business with regard to liberalisation and that it is looking for other opportunities, but it has a long-standing agenda with regard to small rural post offices. I do not share that agenda and neither has any Government which has been in office in recent years. A forum, chaired by Phil Flynn, is bringing the IPU, An Post and the Government together and I hope sustainable ideas will emerge.
Returning to the matter of bill paying, An Post announced an arrangement whereby it would take over many bill paying activities after banks pulled out of rural areas. The Competition Authority has stepped in to stop the plans, however, and investigations are under way. I accept fully that lots of work could be done by post offices, as people feel assurance and confidence when dealing with them.
I understand the first meeting of the forum is scheduled for next Monday.
No, the forum has had two meetings.
Has the Irish Postmasters Union taken part in those meetings?
Yes.
My next question relates to the £10 million increase in the share capital of An Post to which the Minister referred. Effectively, it is being provided to pay for the 12% increase for postmasters. Can the money be paid before the forum has completed its work and before agreement has been reached? Can EU clearance take place before the package of radical reform, as the Minister described it, has been achieved within An Post?
The Irish Postmasters Union has been involved in both meetings. I attended a meeting a week ago to greet all involved. The first meeting had been held a week previously. I saw and spoke with representatives of the IPU. When I was in Brussels I addressed the matter of the £10 million, which is not regarded as State aid in the same way as other matters are. My queries received a favourable response. In the meantime, An Post has agreed to pay £10 million, pending the receipt of the money from the Government in due course. The arrangements for payment will be discussed by An Post and the IPU next Monday.
I wish to raise two matters with the Minister. She said that the board of An Post has had a long-standing agenda to close many sub-post offices. I do not think anyone would dispute that. Does the Minister agree that the board should resign, given that its views are contrary to hers and in the light of the fact that An Post is selling the PostPoint system to ensure the service provided through the sub-post office network will be provided through the PostPoint system from 1 January 2002? Does she agree that a new board which is prepared to look at the commercial viability of An Post should be appointed?
Second, can I briefly raise the matter of the Competition Authority? As I understand it, the authority is examining possible anti-competitive practices in relation to the agreement between An Post and banks. What anti-competitive practices can there be in a village like Glasson or Knockcroghery? Who will compete with post offices in such small villages throughout the country? Is it not time for the Competition Authority to concentrate on other areas where issues of competition unrelated to small villages need to be tackled?
The Competition Authority has its own remit to decide what should be done. It is not my responsibility, but that of the Minister for Enterprise, Trade and Employment. I do not agree that the board of An Post should resign as it is a good one. I accept that management in An Post has a long-standing agenda as it does not want to see its operations needing to be subsidised. My belief, which is shared by other Ministers whose files I have seen, is that another way to viability is to offer an increased level of services, as Deputy Jim Higgins argued. In that way, I hope post offices will no longer need to be subsidised. No Government, including any incoming one, can stand over a four year forecast of losses of £80 million, which is the reason there is haste to get the house in order and plans together.
Is it true that the payment by An Post of the 12% increase is contingent on An Post receiving an increase per transaction from the Department of Social, Community and Family Affairs? Does the Minister know whether her ministerial colleague, Deputy Dermot Ahern, is prepared to make such an increased payment?
The payment of the £10 million is not contingent on such a provision, but the need for an increased payment is mentioned in John Hynes's letter. I undertook to speak to the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, who is the subject of a complaint to the European Union that making payments through post offices constitutes a bias. His Department is addressing the complaint.
I wish to return to the last point made by the Minister in relation to the complaint made to the European Union regarding social payments.
The Deputy should address a query to the Minister for Social, Community and Family Affairs.
In the Minister's opinion, if An Post does not make payments, where can they be made? No other authority is cashing social welfare payments. Does the Minister agree that a redundancy scheme needs to be put in place for elderly postmasters and postmistresses? Younger staff could be retrained to ensure that a change in the ethos of An Post takes place and new services are provided. Finally, is the sole function of the board of An Post the implementation of Government policy? If so, should the board not have ensured the future viability of the sub-post office network? This has not happened to date. Will the Minister agree that the board should resign?
I do not agree that the board should resign. An Post has a great deal of flexibility and independence to do its work under the Postal and Telecommunications Services Act, 1983. I agree that redundancy payments are being sought by a number of postmasters and postmistresses who would like to retire if given a suitable redundancy package. It is one of the matters being addressed by the forum. The Department of Finance has undertaken to be part of the forum that will consider the issue.
The Deputy also asked who else would make social welfare payments and I agree with him. It is a safe, reliable and private place where people can get their social welfare entitlements. As the Deputy pithily asked, who else could do it in Glasson or Knockcroghery, although they are sizeable places? However, I doubt other outlets would be as reliable as the post office regarding social welfare payments. Nevertheless, I did not initiate the complaint in Europe. Obviously, somebody else did it.
(Mayo): Will the Minister revert to my original point regarding the attractiveness of a current account type system in the post office that would compete with the banks? My belief is that if such a system was introduced, there would be a mass withdrawal of money from the banks. People would consider such a system very attractive.
To demonstrate how outmoded the post office has become and how it has failed to move with the times, one cannot pay a bill in the post office with an Access card, a Visa card or an American Express card. Such cards are not accepted because post offices make up their accounts on a weekly basis while Access, Visa and American Express operate on a monthly basis. However, they will accept payments with a Laser card.
An Post is talking about losses but it has a war chest of £168 million. Does the Minister agree this money should be used by the company to put in place a viable, energetic and imaginative development plan instead of the type of negative vibes that are emanating at present?
The company accumulated its war chest through sound business ideas it implemented and then sold at the right time. It had two Internet businesses that it sold at just the right time. I salute its dexterity in that regard, which raised capital for the company. It intends to expend this money on large mail centres around the country. Interestingly, the amount of money it wishes to spend matches the amount it has at its disposal.
The company is right not to raid that money, but it is a matter of will in terms of An Post realising that no political party, either now or in the future, will favour the demise of post offices. If that factor was fully absorbed by the company and worked into its thinking and operations, it would realise that is the way forward.
