Dáil Éireann debate -
Tuesday, 26 Feb 2002

Vol. 549 No. 3

Private Members' Business. - Sub-Post Offices: Motion.

Mr. Higgins

(Mayo): I move:

That Dáil Eireann, acknowledging the contribution of sub-post offices to the commercial and community life of the country and to sustaining the rural and urban communities which they have served for many decades, deplores the decision by the Minister for Public Enterprise to disregard the recommendations of the report of Mr. Phillip Flynn which recommended "that all necessary steps be taken by the Government to maximise the amount of business channelled through the An Post network" in favour of the interdepartmental report which will lead to the forced closure of up to 900 sub-post offices and calls on the Government to ensure the following:

– a current account system similar to the model operated by banks;

– ATM facilities at each sub-post office;

– retention of payment of social welfare entitlements at sub-post offices;

– payment of bills to public authorities on a fee per item basis;

– renewal of driving licences and motor taxation;

– the development of e-commerce facilities;

– a low interest loan scheme repayable over ten years for the modernisation and upgrading of sub-post office premises;

– a programme of retraining modules for sub-postmasters, sub-postmistresses and sub-post office staff;

– an agreed redundancy scheme for sub-postmasters and sub-post mistresses who do not wish to continue to operate, and

– the restriction of PostPoint outlets to communities where sub-post offices cease to exist.

I wish to share time with my colleagues, Deputies Browne (Carlow-Kilkenny), McGinley, Connaughton, Belton, Timmins and Sargent.

Two weeks ago An Post announced the laying off of 1,100 staff. What a retrograde step for a company which has a total monopoly of the postal service, been part of what we are for generations, a national institution and such unrealised commercial potential. Here is a company which, until a few years ago, had a full ministry all to itself, the Department of Post and Telegraphs, and which, like Eircom, was subsequently established as a company with a view to enabling it to modernise, expand and become more business-like but which has limped lamely along rather than rising to the challenge and availing of the huge market opportunities there for the taking.

The Minister for Public Enterprise, Deputy O'Rourke, is the main shareholder in An Post, yet she has allowed it to drift helplessly with huge projected losses beckoning on the horizon. Last October in a reply to a Dáil question, she stated the interdepartmental group's report, commissioned by her and published last July, forecast accumulated losses in the post office counter service over the four year period 2001-04 at nearly £80 million. She went on to state the scale of these losses is unsustainable and represents a serious threat, not only to the post office network, but the An Post group. What a gloomy prediction for a company with such enormous potential.

Instead of sketching out a positive business plan, based on the findings of the Flynn report, the Minister decided to establish yet another think tank grandiosely titled a "partnership forum". The forum was established last October, but to date we have received no report from it. All the while post office staff, both those employed directly by An Post and those in the sub-post office sector, have been left wondering and waiting what their eventual fate will be. The announcement of over 1,100 redundancies was sprung on the Communication Workers Union without consultation, let alone agreement. I spoke with its officers today who were adamant that there had been no consultation with them on this announcement. This has damaged and prejudiced the possibility of consensus.

There should be no need to lay off staff in An Post. Instead of laying off staff, An Post could retain the bulk of its existing staff, expand its range of services and become an extremely attractive alternative to the existing commercial banks. What other sector of the public service has a network of 1,916 staffed offices located strategically throughout the length and breadth of the country, penetrating right into the hearts of every urban and rural community? Never before were the market opportunities more glaringly available for an expansion of its range of services than at present.

During the years the post office service has, apart from a few relatively minor developments, shied away from building on its range of activities. Fine Gael in government would change all that. The ten point plan which we put before the Dáil this evening would transform the post office structure into a thriving and vibrant service and commercial outlet.

At the top of our agenda would be the development of An Post banking services. During the years An Post savings schemes such index linked savings, instalment savings and saving certificates have proven to be much more attractive than those on offer from the commercial banking sector. In terms of yield to the investor, it could and does beat the banks hands down. If it could do so in the savings area, then why can it not take on the banks in offering a current account facility broadly similar to the current account arrangements which the banks used to offer but which they have abandoned in their quest for so-called greater efficiency and larger profits?

No longer can one walk into a bank and simply cash a cheque – even a Government cheque. One must first lodge the cheque and then make the withdrawal from one's current account. No longer are banks prepared to offer to their customers the traditional bill paying services which millions and millions have availed of over the generations. No longer are banks prepared to see their role as having even any minor kind of social dimension. The relentless pursuit of better than last year end of year results has become the absolute imperative of all banks. The result is small branch closures, leaving both urban and rural customers having to travel miles to avail of services. In many areas the banks pull out and close their branches giving only minimal notice and do not even leave an ATM service in their wake.

The result is that thousands of loyal customers, incapable of adapting to the new methodologies and practices, are left abandoned and feeling unwanted. This vacuum left by bank closures presents a huge window of opportunity for An Post. Fine Gael will ensure An Post will allow present disenchanted bank customers to lodge money to An Post current accounts. Customers would have standard cheque books in order to enable them to make payments from their accounts. The new restrictive bank practice of lodging cheques before one can withdraw would not operate.

Post offices would have ATM machines in order that customers could withdraw from bank accounts seven days per week provided they were in credit. The An Post bank would be a customer focused institution with a business thrust, available nationwide and serving communities abandoned by the banks. Huge numbers of disillusioned bank customers would switch their business to such a consumer orientated State owned institution. Billions of euros would flow from the banks into the coffers of An Post current accounts. Not alone would it be self-financing, it would generate huge profits for the company, part of which would be used to improve, expand and augment its existing and new services.

The Minister for Public Enterprise, as the main shareholder, is incapable of seeing the obvious potential of the An Post network over which she presides. She turns a deaf ear to the sensible expansion proposals recently announced by Muintir na Tíre. An An Post banking service operating six days a week from 9.30 a.m. to 5.30 p.m. would attract enormous business, seriously challenge the banks and turn the predicted losses into substantial profits.

I am aware of the deal negotiated between the AIB and An Post in regard to the facility to cash AIB cheques in An Post offices. I put it to the Minister and the House that this is a very watered down version of what could be realised if An Post had its own current account arrangements.

One of the mainstays of the existing post office service is the payment of social welfare entitlements. It is absolutely imperative that these continue to be part and parcel of the core business of all post offices and sub-post offices. ESB bill payments are coming on-stream in the next month or so in post offices, but this represents only a fraction of the potential, in terms of the bill paying facility that An Post offices could offer, if the service was made available. An Post offices and sub-post office staff would be more than capable of taking on board a range of services such as the payment of water, sewerage and refuse collection charges on a fee per item basis. There is absolutely no reason post offices should not be used for the renewal of driving licenses and motor taxation. They could easily become one-stop-shops for central and local government information and transactions, all of which would involve payment on a fee per item basis which would generate business and profit for the company.

The An Post network must adapt to the rapidly changing demands of Irish society. The e-commerce revolution opens up a host of new possibilities which must be exploited by the unique nationwide reach of the An Post network. Post offices should have Internet services enabling their customers to use the Internet, draw down information and engage in commercial transactions.

In order to provide the expanded range of services it is obvious that training modules must be put in place. The general perception is that the bulk of sub-postmasters and sub-postmistresses are in the elderly category who would be incapable of adapting to the demands and challenges of a vastly expanded range of services. I found to my surprise that this is untrue. At the various meetings that I attended since the sub-post offices came under threat I was pleased to observe that the majority of sub-postmasters and sub-postmistresses were in the middle or younger age group. They are educated, ambitious, enthusiastic and extremely confident of their own abilities to deliver any business or service opportunity that the company would send in their direction. There is a cohort of elderly sub-postmasters and sub-postmistresses who would not see themselves as capable of meeting the challenges of the new enhanced and expanded post office. These are people who during the years have provided their local communities with the existing range of services. The least An Post could do for them is to offer them a reasonable gratuity in recognition of their service to the company during the years.

Undoubtedly, some post offices would have an accommodation problem in regard to accommodating and providing new services because of the lack of space, the structure of the building or the failure to modernise them during the years. To meet the new service requirements An Post should put in place a low interest scheme repayable over ten years for the modernisation and upgrading of sub-post office premises. I have spoken to individual sub-postmasters and sub-postmistresses and all of them, without exception, have indicated that they would welcome and avail of such a scheme.

What Fine Gael is proposing is not fanciful, but practical, pragmatic and achievable. It is a survival plan based on an evaluation of the existing national branch network, its staff and potential. It would transform and invigorate the local post office and secure the post office forever as a cornerstone of the community.

Mr. Browne

(Carlow-Kilkenny): I support the motion before the House and the proposals of Deputy Jim Higgins in trying to bring modernisation to sub-post offices, especially in rural Ireland. Every one of the almost 2,000 post offices is not viable. Some are located in very small communities without the necessary population to support them, but a balance must be struck as post offices located in isolated areas need to be maintained from a social point of view.

I was once part of a delegation to the GPO which made a great case for the preservation of post offices in rural Ireland. When we were finished the officials told us that the post office in question dealt with two old age pensioners and three children allowance books, which blew our case apart. That is the exception, but there are many post offices that can be upgraded and are in a position to save people travelling into or even to the far side of town.

Last week business at Carlow town post office was interrupted due to staff sickness, resulting in a queue out on the street for most of the afternoon. If the post office in Graiguecullen, almost a town in itself, which catered for thousands of customers, was reopened, customers from the post office at the top of Carlow town could be redirected to it to balance out the situation. Customers can pick their post office, but it would be sensible for those at the northern end of a town to deal with the post office in that area, likewise with other areas.

In the past school pupils bought special savings stamps and prizes were given to the schools which had made the best effort at encouraging saving. Many years ago Mr. Hall presented a plaque to the school in which I taught – at a time when young people saved money rather than spent it the minute they got it. Post offices have such a role to play. The saving certificates scheme they offered, a great value investment, has been stopped. The scheme introduced by the Minister for Finance is being advertised by the banks as their own. The Minister is looking puzzled. I am referring to the SSIA. Perhaps if the post offices had been left with their own saving schemes, it might have helped them. There is no end to what can be done with post offices and the need to have them located in so many parts of rural Ireland because they are a focus point which should be upgraded. It is, however, hard to defend a post office if the locals are travelling to the nearest town and leaving it with very little business. I support the motion to the full.

Mr. Belton

I welcome the opportunity to speak on this very important motion. My youth was spent around a rural post office as my late father was sub-postmaster in Kenagh. Looking back over the years I can recall the local postmen, the late Ted Brown, Sam Hall, Con Daly and Larry Kelly. They are all gone to their glory now, but they arrived at work at 7 a.m. to pack their bicycles and take off in hail or snow and did not return until 3 p.m. or 4 p.m. That was service. The only telephone in the area was to be found in the post office. My mother, who is hale and hearty at 92, was a human computer taking messages for everybody – doctors, veterinarians and those who wanted to be collected from the railway station. The post office was a major part of life. It generally doubled up as a shop or public house and was the main focus in all villages and smaller towns.

Things have changed as many of the shops attached to post offices disappeared with the advent of shopping centres and supermarkets. In some cases sub-postmasters found it difficult to survive, but the service they provide is still vital in rural areas. We have a Minister of State running the CLÁR scheme, the policy of which is to bring people back to rural areas. He did not have any funding for a while, but has found some now and has a few bob to spend. I plead with him to press home how important the post office is in a rural context.

I congratulate Deputy Jim Higgins for moving the motion. Its proposals certainly sound good and I look forward to what the Minister has to say about them. I am sure that, in terms of where she comes from, she supports what the motion outlines. Its proposals are very realistic and spell out what can and should be done. It is a fine motion which I hope is supported by all Members.

Mr. Connaughton

I am delighted to have the chance to speak on the motion. One of the important factors in this debate is the simple fact that unless we are able to attract more business to the post office system, we will not be able to save it. I say straight to the face of the Minister across the chamber that she has not been able to do so, nor has the senior management of An Post. That is disheartening. It is as plain as the nose on her face that, over the past ten to 15 years, major changes have not been made. Those on the ground knew all about it because they were not able to make a living from the business they conducted in their post offices. I will give an instance later of just how frustrated a person can become at the discovery of how little is thought of their activities when they try to take redundancy.

The postal service is highly regarded, particularly in rural areas. As Deputy Jim Higgins and others said, we must make post offices commercial. Many things will have to be done simultaneously to accomplish this. One will not attract the public into run-down premises, therefore it is important that low interest loans are made available to those who want to improve their post offices. One does not see the banks in the main streets, or the credit unions – fair play to them – situated in bad buildings. One would not want to see post offices in poor premises either.

There is a whole range of banking activities, which I do not have time to describe in the few minutes granted to me to speak, that the post offices could take on. If the credit unions could come up from nothing to be the power houses they now are, could not the post offices do the same? The credit unions were not backed by powerful financiers. Post offices have a history of banking in their own right. If one asked any person outside the House with what they associated the post offices, they would first answer "letters," and then "saving certificates". That business is transacted from one generation to another. What Deputy Jim Higgins and Fine Gael want to do is to build on this. It is not as if the post offices would be starting out afresh.

I welcome the connection with the AIB, but why did it not happen years ago? The AIB was closing its sub-offices five years ago, just as the other banks are doing now. People did not think of doing it and others did not want to do it. I remember when An Post took its first steps towards breaking with the State. I thought that there would be all sorts of new initiatives, but the management let us down. The Minister must believe that there is no future for it, because if she did not, she would have done what one would have expected the main shareholder to do, but that was not done. In the forthcoming general election, whatever else will be said about the Government, it will not be given credit for anything that has happened with our post offices.

It is absolutely vital that the franchise for the payment of social welfare entitlements is held by An Post. Among those in receipt of such payments is a cohort of persons who are elderly and not very mobile. Going to the local town or village to pick up their payment is their day out. That is an important aspect of the matter. I particularly like the Muintir na Tíre proposals which are based on a great deal of good sense. A great amount of commerce would be conducted in our post offices if they became a reality. Water charges collection, e-commerce and Internet services would form part of them. I know many postmasters and postmistresses would be only too delighted to be trained in these areas to which they would give their all because this is the business they want to be in. They would prefer not to have to get out of it, if possible.

There are some post offices in sparsely populated areas with elderly inhabitants which it would be very difficult to make economical, but how does An Post treat those who have stood behind their counters for five and a half days per week? They are about the only people who work that many days. A particular lady called me in a couple of weeks ago and told me that we politicians did not know how bad her pay was. She works for £88 for a five and a half day week. She has to be in the post office as she cannot afford to pay anyone else and is the mother of a young family. She got the post office nine and a half years ago when it came to her through her family. She rang An Post a couple of weeks ago to ask what redundancy money she would receive if she closed the door. She was told she would receive £700, in old money. What an insult to somebody who has worked for ten years and devoted herself to this service. Can the House imagine how low the morale of post office staff is?

The Minister has an opportunity which can be found in what Deputy Jim Higgins said here tonight and what Fine Gael proposes for the future of the post offices. It will not be easy and there are many problems along the road. Unless the Minister and the top brass in An Post get it into their heads that this is needed and can be supplied profitably, we will reach a point in five years where there will be fewer post offices. Deputy Belton mentioned the CLÁR programme for the disadvantaged areas. One can imagine what will happen if one Minister is hell bent on closing down services and another Minister is hell bent on opening them? Considering they are both members of the same Government, this says much about their strategic planning.

Mr. Timmins

I always wondered where Deputy Belton got his feel for politics, but now I know. I can picture him in Kenagh with the handset up to one ear, running down to the local railway station with a message for the doctor. It is certainly a training which has stood him in good stead. It is not that we ever underestimated him, but now we know the secret behind his success.

I am delighted to see the Minister here this evening because it is difficult to get a response from her or the Department on matters dealing with An Post. I have tabled many questions but she has the shield of the Ceann Comhairle's office. Maybe that is an incorrect way to put it, but my questions are always disallowed. As there are a few issues I want to raise, I am glad the Minister is in a compliant mood. She might respond to these issues in her contribution.

We are all familiar with the concept of the one-stop-shop. In every local newspaper one picks up nowadays there is a cry from the community for a one-stop-shop. In the midst of such calls, the Minister is closing down many one-stop-shops. This is a timely motion. There is tremendous scope for the development of the post offices, both in rural and urban areas.

The motion mentions ATM facilities. In recent years the major banks have developed a tendency of pulling out of communities. Over the past 15 years they have reduced their services from three days a week to one day a week and a trend evolved where many people moved to the county town to do their business. As a result we have seen towns like Letterkenny, Sligo and Kilkenny grow at the expense of the smaller towns. However, many of these smaller towns are beginning to hit back. The people are shopping locally and banking locally, and they certainly want to do their post office business locally. There is great scope for the services of An Post in such areas. In these communities anybody with a bit of common sense would ask the Minister why motor tax applications cannot be processed in the local post office. The Minister might well respond that one can process motor tax applications by post, but many people prefer to do so in person.

In my county the post offices could be useful to deal with issues such as planning. The county office is in the region of 40 miles from my home and many people throughout the country live a similar distance from their local office. The planning office in the county of the Acting Chairman, Deputy Keaveney, is in Lifford. I do not know if there is another planning office in the county but it is difficult for people to travel from the south of the county to Lifford, which is a good distance. On issues like motor tax applications and planning files, there is great scope for tying in the local authorities and the post offices for the purposes of disseminating information on these local authority matters.

In addition, the post office certainly adds to the social fabric of a community. For example, ten years ago there were six post offices, that is, one main post office and five sub-offices, in Bray which is in my constituency. As recently as this time last year, there were perhaps five and now there are three. There are queues of people, many elderly, outside the main post office on the Quinsborough Road every day of the week, not just on Thursday, and an effort is being made to divert certain facilites, which that post office does not undertake, to the sub-offices. In a period when the population of the town increased threefold from in the region of 10,000 to 30,000, the number of post offices decreased from six to three. Therefore, there has been a 200% increase in population and a 50% decrease in the number of post offices. Can the Minister throw any light on that and can she solve that problem?

The post office in Delgany closed down just before Christmas. The difficulty was that it was not economically viable because the rent on the premises was too high. It is difficult to rent property in the area, but how can these offices compete with other businesses when the scope of their involvement is limited? The Minister should open up the post offices to the services to which I referred. I am not saying the service should be run like the Simon Community or the Society of St. Vincent de Paul. They must be economically viable, but let us give them the opportunity. I would appreciate it if the Minister in her response could update me on the current position with regard to the post offices in Bray and Delgany. However, I support this motion wholeheartedly.

Mr. Sargent

I thank Fine Gael for tabling this motion which I support passionately. The maintenance of post offices within a reasonable distance is a key element in guaranteeing a reasonable quality of life for many people, particularly elderly people, in towns and rural areas. I speak as a long-standing loyal customer of An Post. I pay my telephone bill and my gas bill at the local post office and I look forward to paying my ESB bill there in the near future.

Is í oifig an phoist an t-aon ionad airgeadais inar féidir le daoine a gnó a dhéanamh tré Ghaeilge agus is rud mór é sin do dhaoine atá ag tógáil clainne le Gaeilge nó atá ag plé le gaelscolaíocht. That should not be forgotten at this time when it is difficult enough to find outlets where one can do business through Irish. Not unlike many gaelscoileanna and other schools, oifigí an phoist are key facilities in any town. The post office is similar to a library, dispensary, hospital or church. Their importance is greater for elderly people, as previous speakers have said.

The post offices in my area of north County Dublin are important, in places like the Naul where there is no bus service to the larger towns like Balbriggan and Swords – this is something which, given her responsibilities, would be of interest to the Minister, Deputy O'Rourke – and in villages like Ballyboughal where pensioners depend on them. Likewise in St. Margaret's and Oldtown everyone depends on the post office.

In larger towns like Rush, Skerries, Balbriggan, Malahide and Portmarnock the post office is not only an important facility, but also a major tourist attraction, a landmark and a key support for the traders in the area. The chambers of commerce regularly are in touch with me, the Minister and An Post in regard to postal services and other important services provided by the post offices.

It is ironic that the post office in the main street of the growing metropolis of Swords was faced with closure recently and the postmistress had to get involved in a war of words. There was a psychological battle of brinksmanship as to whether it would be possible to continue with a post office in the town, which is so huge its population is growing on a daily basis. It had got to a stage where, according to An Post, a town like Swords, the population of which has grown from 35,000 to 50,000 within a year or two, could do without a post office and the company was prepared to let that happen. It is outrageous.

The feelings of being taken for granted, which I know were felt deeply and hurtfully by the postmistress in Swords, are shared by many members of the Post Office Workers Union who I met outside the gates of Leinster House. The workers feel they are not only working as post office employees but also as local advisers and, indeed, translators because for many immigrant workers the post office is the first port of call in terms of interfacing with Irish bureaucracy. The post officer worker definitely provides a vital facility and should not be taken for granted. Indeed, remuneration should reflect that they do a valuable job, and that is not the case at present.

Not only have the post offices been the backbone of the community, but the commercial life of many villages depends on them. It must be recognised that they are part of an infrastructure without which commercial life would find it very difficult to carry on. Ba mhaith liom a mholadh do mhuintír An Post go mbeidh sé an-tábhachtach amach anseo go gcoiméadfadh siad an polasaí dhátheangach atá acu, go mbeadh an Ghaeilge agus an Béarla, ní ar foirmeacha difriúla ach ar an fhoirm chéanna i dtreo is go mbeidh eolas ar fáil go dátheangach. Is rud luachmhar é agus is rud faoi leith é a choinníonn An Post chun tosaigh, agus molaim é dá bharr sin.

Minister for Public Enterprise (Mrs. O'Rourke)

I move amendment No. 1:

To delete all words after "decades" and substitute the following:

", commends:

– the commitment of Government to the post office network which is explicitly set out in the White Paper on Rural Development;

– the undertaking by Government that there would be no forced closures of post offices;

– the automation of a significant part of the post office network which has enabled post offices to offer additional services, including:

– transfer of ESB payments to post offices from 1 March 2002;

– bill payment for all other utilities;

– joint initiative with the AIB to allow post offices to become agents for the bank from 1 July 2002;

– bill payment facilities for many local authorities, including all four Dublin local authorities, both Cork local authorities and Limerick City Council and Galway City Council; and

– business banking services for retailers;

– ongoing discussions with a number of Government Departments, including the Revenue Commissioners, the Department of the Environment and Local Government, the Department of Social, Community and Family Affairs and FÁS on the transfer of additional Government business to the network;

– the availability of Internet access points at post offices;

– the establishment of the Post Office Forum representative of all interested parties to progress restructuring of the network, including the generation of additional business;

– arising from the work of the forum, agreement in January 2002 between An Post and the Irish Postmasters Union to a revised severance package for postmasters and agreement on the introduction of postal agency arrangements in respect of 26 offices on a pilot voluntary basis;

– the equity injection of €12.7 million by Government to An Post for the post office network;

– the payment of the 12% to postmasters recommended in the Flynn report; and

– the continued commitment by Government to work with all relevant parties in the post office network to further enhance the quantity and quality of services available throughout the network."

I wish to share five minutes each with Deputies Carey and McGuinness.

Acting Chairman (Cecilia Keaveney)

Is that agreed? Agreed.

Mrs. O'Rourke

I thank the Opposition for tabling the motion. I cannot disagree with much of what has been said. All of us, whether we come from rural areas, as I do, or urban centres, would agree with many of the sentiments expressed. I was interested, as were others, in Deputy Belton's contribution. I often wondered about his knowledge of so many matters. It is clear he got it from his mother who worked as a postmistress for many years and did much good for her local community.

Deputy Timmins said he would be watching me on his monitor, but he is still present.

Mr. Timmins

Virtual reality.

Mr. Sargent

Bi-location.

Mrs. O'Rourke

He asked me about Bray where there were six post offices, but now only three. I did not come armed with information about post offices in Bray, but will write to the Deputy on the matter. I know the post office on Quinsborough Road because, many years ago, I went to school in Bray for six years as a boarder. I did not realise there were once six post offices there. I know the population of Bray has expanded hugely. I do not have the information with me, but will give it to the Deputy.

I reiterate what I stated clearly when assuming office in 1997. There will not be any forced closures of post offices. The Government has underlined this policy in the White Paper on Rural Development published more than four years ago. This commitment is unambiguous and explicit. The White Paper clearly recognised the important role the post office network plays in the lives of communities.

However, we should not fool ourselves. There are major challenges ahead, not least the growing losses which face the network. If we sit on our hands and do nothing, post office network losses will amount to a total of €100 million in two years' time. That is a huge amount of money and I did not hear anyone bring forward a proposal to subsidise An Post to the tune of that amount. Anyone who would give such a commitment in a pre-election fever or post-election euphoria would be hard-pressed to fulfil it. Those are the figures for projected losses which An Post has given. It is clear there are huge challenges.

We see advertisements every night on television for the United Kingdom postal service with its fancy new name, Consignia. There will be 100,000 job losses in that service. The United Kingdom is a huge country in comparison with Ireland, but the company is losing £11 million a day or something of that order. It appears to be advancing the deregulation to which we have all subscribed. I hope the measures I outline and which the Opposition bring forward will have a fruitful outcome for An Post, but it will be a difficult matter. We need change which must be managed in a partnership approach in order that we retain the services but perform our task in a more imaginative and modern way.

I took two important decisions with a view to ensuring the continuation of a viable and competitive post office network. I asked Phil Flynn to act as an independent chairperson to advance discussions between An Post and the Irish Postmasters Union which represents sub-postmasters and postmistresses and to devise possible options for the sustainable development of the network. I established the interdepartmental working group to assess the options for the long-term viability of the network in the light of the Flynn report.

In his report Mr. Flynn set out a wide range of options, conclusions and recommendations, not just the single recommendation set out in the motion to which I will return. These options included an increase in the remuneration of sub-postmasters, which I was glad to be able to do, the determination by Government of a financial framework to ensure the viability of the existing post office network or an agreed modified one, the progression of negotiations on the conversion of sub-post offices to an agency status, investment in the rural network as well as Government taking the necessary steps to maximise the amount of its business channelled through the network.

There was no question of disregarding the recommendations of the Flynn report. If anything, it has provided the template for what has followed. It was Mr. Flynn's urging that Government increase its role in the provision of services at post offices that led to the establishment of the interdepartmental working group to see how this could be developed. Both reports are complementary. It was never a question of choosing to adopt one report over another. The interdepartmental report published in July last year has provided the framework for the development of a viable post office network service which meets the requirements of both the customer and the operator. I am sure the Opposition is not seriously suggesting that we set about improving the range of Government services available at post offices and not involve other Departments.

The interdepartmental report recommended that An Post move to commence operating as much of its network on an agency basis rather than on a fixed cost basis and a commitment by the Government to the establishment of one-stop Government services agencies. The Government, in line with the Flynn recommendations, agreed to the introduction by An Post of postal agency arrangements and to increase the share capital of An Post by €12.7 million on the basis that this would facilitate the implementation of the overall package of reforms, especially through payment of the increase for sub-postmasters.

With the agreement of the Irish Postmasters Union, a pilot scheme for the conversion of 26 post offices to an agency basis and voluntary severance terms is being introduced by An Post. This has been worked out in agreement through the forum between An Post, the Department and the Irish Postmasters Union. The purpose of the restructuring process is to bring about a situation where the provision of postal services is perceived as an attractive business opportunity operating on a viable financial footing and meeting the needs of the community, both in rural and urban areas.

Many of the suggestions brought forward by Deputy Jim Higgins and others are being implemented and there were many fine ideas. We are all of one mind that no Government of whatever form can give €100 million over four years or accept the possibility of continuing such subsidies. We are clear we want to maintain post offices, but we cannot do so unless a viable framework is introduced to enable them to survive.

One of the main reasons many rural post offices to which two or three Opposition Members referred are not conducting much business is because the local population does not use them. In many cases they do, but in many cases they do not. People travel to neighbouring major towns for work or for medical, social or commercial reasons and conduct their business in those towns in many cases. As a result, local post offices languish because of a lack of business. Deputy Browne spoke about meeting the hierarchy of An Post in the GPO and being told that the extent of the business being done related to three old age pensions and four children's allowances, or something of that nature. He said it stopped them in their tracks. If people do not do business in their local post offices, the post offices will languish.

All parties agree that the basis for determining postmasters' income has to be restructured if we are to avoid closures and continue to provide a comprehensive high quality service. The pay increase for postmasters implemented in November 2001 is part of restructuring of the operators' income level. The increase in share capital by €12.7 million, which is subject to approval by the EU Commission, is also expected to be cleared shortly. To oversee those developments and the implementation of the other recommendations, I established the Partnership Forum in which the Irish Postmasters Union, An Post, and all the relevant Departments participated. The work of the forum concluded last month. Under its auspices the terms of agreement for the 26 postal agencies were agreed with the IPU and services which could feasibly be transferred from Departments were identified. A progress report on the ongoing consultations, which are taking place between An Post and the Departments, including local authorities, the Garda Síochána, FÁS, the Department of Social, Community and Family Affairs and the Revenue Commissioners is expected next month.

It is very easy to overlook the positive side of developments in the network in the face of the undoubtedly severe financial difficulties An Post is experiencing and which were clearly anticipated in those reports. Business has grown more than 34% in An Post since it was established separately as a commercial State company. Prudent investment in automation has equipped the company to be at the forefront of the electronic payments revolution. This progress is reflected in the interest among banks and other institutions to utilise the postal network, the agreement with the banks in 2001 in regard to bill pay facilities and the company's success in winning the contract with the ESB for counter payment services. A further positive development is the joint initiative with the AIB, giving the banks customers access to their accounts through the automated network.

This is just the beginning. I am confident more business will follow, specifically in relation to Government services as a result of the work under the forum and the implementation of the Flynn recommendations. Furthermore, An Post is developing enhanced financial delivery services under the Government's e-commerce initiative. Many of the business developments, which the Opposition motion calls on the Government to ensure, are either already in place or, following the report next month, will be in place. The Government has already directed that the social welfare payments contract with An Post should continue. In regard to the PostPoint outlets, there continues to be some misunderstanding as to the nature of this service. An Post won this contract in the face of stiff opposition from other competitors. The company should be applauded not criticised for this. As politicians, we cannot continue to urge the company to seek new business opportunities, on the one hand, and then criticise it when it does that. I am not saying Deputies did so, but it is criticism which is often made and one may then find it is the business for which it has competed and won which is successful.

Under the PostPoint contract, An Post is to install and operate 4,000 credit card terminals in the company's network of ‘Ready to Go' agents. The implementation of this service has been under way since 2000 under a legally binding contract. Let us be clear, if An Post had not been successful in winning the contract, it would have been set up and operated by competitors. Such a service is already provided by An Post through the company's 1,000 automated post offices and this was considered crucial to its winning the contract. There is no question of supplanting or by-passing the post office network as is widely perceived.

I stress that the Government recognises, as does An Post's management and unions, that the company is facing severe financial difficulties which have worsened as a result of a number of factors, including the recent downturn in the economy. However, I notice one hopeful aspect. It is being paid five times the normal cost to deliver the referendum information booklet because it was decided at a very late stage. That is a little windfall and there is no doubt the election will bring a further windfall when we will be sending out our literature.

All parties recognise the urgent necessity for cost reductions and other measures to ensure the company overcomes these difficulties. The losses forecast by An Post were anticipated. It was in this context that a transformation agreement concluded with the unions was to have resulted in savings to meet the projected losses. Unfortunately, the targets required were not achieved. I accept it was disquieting to see both on television and in the newspapers that there appeared to be a complete divergence of views in the ongoing debate between management and the unions as they sought to work through this transformation agreement. It is my wish that both sides will get together. Rushing to appear on television or to the newspapers, as happened in the beginning of the debate, was not the right thing to do. I would have thought the debate should have begun between the parties. I wish what I read in The Irish Times, The Irish Independent and heard later on television did not happen. However, I hope they will proceed to do their business in an ordered and structured fashion.

It is primarily a matter for the board of management of An Post, in negotiations with the unions, to determine how the cost savings will be made. I am confident a new agreement will be reached and that it will be in the context of the Government's commitment to the post office network and the interests of the An Post Group and its employees. I have a very firm commitment to the post office network. I am sure people from Dublin and Cork have the same commitment. However, people from rural Ireland appreciate the role and status of post offices within a community. The level of probity and very fine character of the men and women who continue as postmasters and postmistresses is extremely high. There are very few examples in post office history of anything going wrong financially. Like parish priests or teachers within local communities, postmasters and postmistresses are regarded as people of standing and sagacity who approach business in a proper fashion. I hope that will continue to be the case. I thank Deputies who attended.

Mr. P. Carey

I wish to share my time with Deputy McGuinness.

The greatest strength and weakness of the post office network is that it is a vast network of mostly small stations located throughout the country. I am speaking from a rural perspective as someone who spends most of my time in Dublin. Given the growth of credit unions which provide a vast array of services throughout the country and the commercial development of the Trustee Savings Bank movement, there is both a challenge and an opportunity for the post office network to carve out a niche for itself. I commend the Minister for tabling the amendment. There is no doubt that the post office network and the post office division of An Post are facing enormous challenges. Any division facing losses of €15.2 million in 2001 and €11.8 million in 2002 is in a difficult position and this clearly needs to be addressed. I am satisfied with the engagement of the union interests and the excellent staff in the post offices. I agree with the Minister that the services provided by sub-postmasters and sub-postmistresses throughout the country and cities are second to none.

Clearly, a new strategy is necessary so the An Post division can be restored to profitability. That strategy, as I understand it, has been largely agreed between the stakeholders. However, it involves repositioning An Post in the community as a leading service provider, providing a range of over-the-counter financial services. For example, such services would provide for bill payment, social welfare payments, savings schemes etc. Many of those are traditional services provided by An Post, but they need to be developed.

The newer developments, which include the automation of 1,000 offices, the partnership approach adopted with other financial institutions and the agreement with the Postmasters Union on the introduction of the 26 agency arrangements in the sub-post office network comprise a template for the way forward. When that basic network is in place, it will be possible for a wide variety of services to be provided using the post office network.

One of the services that could be provided is one I see in the Minister's amendment, the availability of Internet access points in post offices. Many of the commercially provided Internet access points in Internet cafes etc. are extraordinarily expensive. I am not suggesting for a minute that An Post should be asked or would be able to provide cut-price Internet access. It is one of the services that would be very appropriate to An Post.

The agreement negotiated between An Post and the post offices division in November 2001 to provide third party banking services on behalf of AIB through the Service Plus post office network is an excellent development. Services would include personal account lodgements and withdrawals, AIB credit card payments, business lodgement services etc. The payment of ESB bills, for example, which was achieved through successful public tendering, is an example of what An Post is able to offer. Those of us involved in local authorities will be aware that the rent payments and mortgage payments etc. for local authorities are, and have been for a long time, payable through the post office network.

It is incumbent upon Departments to develop their services through the post office network. That includes services provided by the Department of the Environment and Local Government. I see no reason in the world, for example, that planning fees cannot be paid through post offices. With regard to the Department of Justice, Equality and Law Reform, I cannot understand why on-the-spot fines cannot be paid through post offices. The Department of Social, Community and Family Affairs certainly has a well developed relationship with An Post. The Department of Enterprise, Trade and Employment and FÁS have a reasonably developed relationship with An Post, but it certainly has greater potential.

The working groups that have been established at interdepartmental level constitute a way forward. I do not think, for the sake of the future of An Post, that goodwill is enough. Policy decisions need to be taken. The Government's decisions regarding not having enforced closures of post offices and voluntary engagement in new technology signify the way forward. With the proposed partnership approach, sooner rather that later it will be possible for An Post to return to profitability.

With regard to letter post – I do not want to hog Deputy McGuinness's time – the competition that exists with the private sector through courier services etc. needs to be considered. I see no reason the excellent swift post service operated by An Post cannot be developed into a broader service.

Mr. McGuinness

I compliment the Minister on the work she has undertaken in respect of this issue. In the very beginning, when we met representatives of the network and the union involved, both in Leinster House and in our own constituencies, we discovered they were coming from a position of considerable misinformation and perhaps uncertainty, which were fuelled by comments by the media. Having met the representatives locally, everyone in this House will agree that they constitute a dedicated group of people who are providing a service, sometimes in family-run operations, in the provision of which they contribute far beyond the call of duty. They work many long hours to fulfil their contracts or deliver services to the public.

Many of the representatives were concerned about their own future in terms of their employment and family commitments. In some cases, family commitment included involvement with the post office network for generations. We all know the value of the post office network, particularly to the rural communities. With the advent of information and communication technologies, if handled properly, these post offices can be given a new lease of life. We have to reposition the post office network in the marketplace, review all the services it delivers and make it profitable. We are returning a greater loss in 2002 than 2001, but there is still time and goodwill on the part of both the Government and An Post to reverse that trend.

All that needs to be done to improve the lot of the post offices is look at the type of services that are currently being delivered by local government, for example, and look at the number of State agencies that are currently opening outreach centres for all sorts of services. Payment of bills, interaction with the South Eastern Health Board, completion of forms of one kind or other etc. could be done through technology by way of the local post office. Where one is remote and can gain the access one needs to a central location or database, surely that is technology working for the community.

There is an opportunity to develop these services in the post office network and the will exists on both sides to do it. Investment by the Government of €12.7 million indicates that it is not just willing to speak about the issue, but to address it by way of the forum between the different Departments. It is willing to invest money. That one can pay utility bills and ESB bills in post offices proves that post offices can be used for many functions beyond the traditional ones that we have seen up to now. It has been proven that one can access the various services in respect of social welfare and pay one's bills and that the post office is the centre of any community.

There is a very important connection between Irish life and post offices. The customer base has confidence in local post offices and supports them. We should exploit that confidence and restore a greater confidence to customers by showing that these services can be delivered and that we have a plan to expand and develop every post office. Again, I would review the matter in terms of local authorities and find out from health boards how we can best manage the delivery of their services by way of form completion and payment of bills through the post office network.

One issue in respect of our approach to the post office network concerns post office closures and post offices going out of business when someone decides, for whatever reason, not to continue the service. In an approach to An Post after such a situation there seems to be a very firm closure of the door. In County Kilkenny Clara post office was closed down and Dunbell post office closed down soon afterwards. A suitable applicant was available to reopen Clara post office, but he was not given the opportunity to make a case for replacing the post office in a community which was willing to support it. This is wrong. I ask the Minister to insist that An Post review every application of this kind.

Mr. O'Shea

Tréaslaím leis an Teachta Ó hUiginn agus le Fine Gael as ucht an ábhair tábhachtaigh seo, na fó-oifigí poist, a thoghadh mar ábhar díospóireachta anocht agus amárach. Ta áthas orm páirt a ghlacadh sa díospóireacht chéanna. I compliment Fine Gael, Deputy Jim Higgins in particular, for selecting the sub-post office network as the subject for the Private Members' motion to be debated over the next two nights.

Mr. John Hynes, the chief executive of An Post, has signalled what he considers the need to reduce the costs of An Post by €70 million over the next three years. The company also wants to shed 1,140 jobs by 2004, through redundancy and redeployment. By the end of 2002 An Post is predicting €37 million in overall losses. The forecast losses for 2001 are €7 million. Over the next three years €125 million is expected to be spent by way of capital expenditure on modernisation. The expected loss this year is some €15 million which the company is blaming on the rural post office network. An Post's cash reserves of €200 million are expected to be exhausted by 2004.

According to Mr. Hynes, there are three main factors giving rise to the present difficulties of An Post. He firsts cites the delays in securing letter tariff increases – jargon for stamps – from the Office of the Director of Telecommunications Regulation. The director, however, has defended her performance and that of her office in this matter.

Last month the director issued a consultation paper on the application by An Post to increase the price of reserved postal services. This brings me to the issue of universal delivery, an issue on which we should focus in this debate. Reserved post, that is, the post with which An Post deals and on which there can be no competition, will be reduced by 1 January 2006 to mail of 500 grammes or less or 2.5 times the basic tariff. On the one hand, we have major concerns in relation to the survival of the sub-post office network, but, on the other, there is a grave concern that predatory postal companies from outside Ireland might cherrypick the postal business and make it unviable for An Post to provide a next morning delivery throughout the country. This concern should be addressed and vigorously pursued at European level by the Minister. The postal market is gradually being liberalised. There will be a change on 1 January 2003 and a further change on 1 January 2006. The market is not standing still. The effect of liberalisation on the rural and more isolated areas of the country is a cause for great concern. An Post has applied for approval to the ODTR for an interim increase in the postal charge, pending more detailed work. This includes an increase in the price of the domestic postage stamp from 38 to 41 cent.

Second, Mr. Hynes has expressed concerns regarding the failure to achieve cost savings of €9 million each year in relation to the ESOP agreement and the programme of savings in An Post. However, the Communications Workers Union, which represents the vast majority of the staff of An Post, has stated there is no agreement between it and the company on reducing staff numbers by 1,140. The general secretary of the CWU has stated that what makes An Post's position even more difficult to understand is that the company has presented the union with written proposals to recruit in excess of 500 people.

The third main factor cited by Mr. Hynes regarding the present financial difficulties is the ongoing losses in the operation of the post office network. The Minister for Public Enterprise, Deputy O'Rourke, has stated the sub-post office network lost £4 million in 2001, is expected to lose €15 million or £12 million in 2002 and, on present trends, will have lost £100 million by 2004.

Recently the Irish Postmasters Union, notwithstanding the absence of proper reward for its members, has accepted the requirement to be sensitive to the wishes of local communities and with the two other parties involved, the Government and An Post, agreed to a trial involving 26 offices, on a purely voluntary basis, in which post office business will be transferred to an agency concept. The IPU has agreed that if the agency approach proves to be successful in the coming months, further discussions will take place between it and An Post to agree its extension to other post offices. However – this is one of the matters which concern me – the 26 sub-post offices have not yet been identified and the IPU sees this trial as a very limited experiment.

The Minister laid great emphasis on this new model. She has repeatedly stated there will be no forced closures of post offices. This commitment is fine in so far as it goes. However, sub-post offices are closing and not reopening. This natural wastage approach will continue unless meaningful interventions are made to provide a decent standard of living for sub-postmasters, subpostmistresses and sub-post office staff.

The interdepartmental group recommends a Government commitment to a safety net of a guaranteed continued Government service presence in communities in the minority of cases where a post office service would not continue under the proposed arrangements. This is seen as an important part of the proposed overall solution.

The Minister indicated that the group which is looking at what services can be transferred to the post offices is to report next month.

On the other hand, if the 26 post offices have been selected for what the IPU, the Irish Postmasters Union, sees as a limited experiment, the other issues seem to pale into insignificance. If the pilot scheme does not take place, we will not have a considered view quickly as to its effectiveness and appropriateness. I have given the figures for the projected losses for An Post and there is a great need to address the difficulties in An Post sooner rather than later. I ask the Minister to ensure that the 26 post offices that are due to take part in the pilot scheme are selected at the earliest possible date.

I propose to examine in detail the motion proposed by Fine Gael. The motion starts by recognising the important contribution, both commercially and in terms of community life, the sub-post office network has made and continues to make in rural and, indeed, urban communities. The first proposal in the motion, which is an attractive proposal, is the operation of a current account system in post offices on a model similar to that of the banks. This is described as the universal account. It can facilitate cashless payrolls. In other words, salaries, social welfare payments and so forth could be made electronically and directly into accounts. Obviously, this type of streamlining could be of great assistance to people in rural areas. I would welcome this development. I understand An Post is actively pursuing this matter and I hope it will come to fruition.

The second proposal is the provision of ATM facilities at each sub-post office. Obviously, that would be an important facility for the public. However, I have reservations with regard to how effective it would be as a cash stream for post offices. It would have to be costed and examined in the context of its effectiveness and general viability. The Irish Postmasters Union is seeking new activities that will generate income and ensure a decent standard of living for those who operate the sub-post office network.

The retention of the payment of social welfare entitlements at sub-post offices is important. In fairness, no Government would wish to remove that activity from the sub-post offices. However, there are aspects to this which could, in time, prove to be beyond the power of the Oireachtas. One is the issue of open competition within the European Union and this particular contract has already been the subject of attention in that context. The proposal regarding the renewal of driving licences and motor taxation is also attractive. My home town of Tramore is over 30 miles from Dungarvan and for a number of years I sought to have a motor taxation office located in Tramore. The greatest logistical difficulty related to files. If the renewal of driving licences and payment of motor taxation were operated through a service similar to the passport express service that is currently operated by An Post, it would be a viable approach. It would generate income for postal services and, at the same time, provide an additional service for the people of the locality.

The development of e-commerce facilities would be attractive. Indeed, the party spokespersons were happy to facilitate the Minister, Deputy O'Rourke, in the speedy passage of the e-commerce Bill. However, the roll-out of e-commerce nationally is slower than I anticipated. In regard to this proposal, which would be a welcome addition to the sub-post office services, a working group should be set up to examine how this additional facility could be applied to post offices in a viable way to generate a worthwhile income while providing a useful service for the public. The concept of a low interest loan scheme, repayable over ten years, for the modernisation and upgrading of sub-post office premises has much merit. However, I spoke to a postmaster about it this afternoon but he was more inclined towards the idea of grants than loans. Nevertheless, I agree with the principle although I am not sure to what extent An Post would be free to make grants available. There might be particular cases where grants would be appropriate while in other cases loans would be the best option.

The motion proposes a retraining programme. There is always a need for retraining in areas of economic activity, particularly in areas such as those proposed in the motion, such as the development of e-commerce facilities, where an amount of retraining would be required. Retraining is a good thing, not alone in terms of the particular skills that are required, but also because involvement in courses can broaden people's perspective and make them more effective as business people and more efficient in their jobs.

With regard to an agreed redundancy package for people who are unable to continue operating, the Minister referred to that and indicated that voluntary severance terms had been offered, although I do not think they are agreed. PostPoint is an issue which gives rise to reservations among postmasters and postmistresses. While PostPoint currently operates to top up mobile phone cards for 086 and 087 numbers, the concern is that it is adaptable, as the Minister has indicated, for other services. The postmasters would be extremely concerned that where there is a small amount of business, for example, in the case of the social welfare contract, that business could be offered to outlets such as garages, shops or supermarkets. They want to ring-fence that business. When one considers the economics of the issue we are discussing tonight and the level of income, they have a valid point in that regard. I have no problem with PostPoint being used for topping up mobile phone cards, but if social welfare payments were made through additional outlets, it would have a detrimental effect on the income of sub-post offices and could well defeat the purpose of the debate. At the end of the day, there have not been compulsory closures of post offices but a few have closed and have not reopened while many others are barely surviving.

Debate adjourned.