Vol. 723 No. 3
15 Deputy Joanna Tuffy asked the Minister for Communications, Energy and Natural Resources his views on the need to retain the universal service obligation for postal services; and if he will make a statement on the matter. [45000/10]
19 Deputy James Reilly asked the Minister for Communications, Energy and Natural Resources the protections in the Postal Services Bill to ensure that An Post does not require State subsidy or support as a consequence of cherry-picking; and if he will make a statement on the matter. [44883/10]
56 Deputy Bernard J. Durkan asked the Minister for Communications, Energy and Natural Resources the extent of any discussions he has had with An Post, management and staff, such as postal workers, post masters, sub-post masters; if he has set out his proposals at any such discussions with reference to the Postal Services Bill; if he has received submissions from the sectors; if he has agreed a formula to ensure countrywide next day delivery service and retention of the network at all levels; and if he will make a statement on the matter. [44974/10]
248 Deputy Michael McGrath asked the Minister for Communications, Energy and Natural Resources the position regarding a matter raised in correspondence (details supplied) [45089/10]
257 Deputy Bernard J. Durkan asked the Minister for Communications, Energy and Natural Resources his policy for the future of the postal sector [45336/10]
I propose to take Questions Nos. 15, 19, 56, 248 and 257 together.
The Government's core policy goal for the postal sector is to ensure that Irish customers, both business and residential, enjoy competitively priced, high quality postal services. The Communications Regulation (Postal Services) Bill 2010, which transposes the third postal services directive, has been published and Second Stage was taken in the Seanad last Wednesday. The directive provides for the final step in the gradual and controlled opening of the postal services market to competition.
In designing the new regulatory framework, the key principles are the maintenance of a universal postal service, the essential element of which is the collection and delivery of mail to every address in the State on every working day, and the development of a competitive sector providing competitively priced, high quality postal services to both business and residential customers.
The continuing provision and maintenance of the universal postal service is an explicit requirement of the directive. This key principle is enshrined in the new Bill, which designates An Post as the universal postal service provider. Designating An Post offers certainty to postal service users, An Post, the market and the EU that the universal service obligation will be met throughout the whole country, with no urban-rural divide. In addition, the Bill designates ComReg as the postal services regulator and one of its statutory functions is to ensure the provision of a universal postal service that meets the reasonable needs of users.
An Post has, to date, met the costs of providing the universal postal service from its own resources and it is my preference that it would continue to meet these costs from its commercial revenues. However, in line with the options permitted by the directive, a provision has been included in the Bill whereby any potential costs that arise in meeting the universal service obligation which are found to be an unfair burden will be met by the postal industry through a sharing mechanism.
It is right and appropriate that those postal service providers competing with An Post within the universal service contribute where the regulator verifies that an unfair burden exists. Exchequer funding of the universal service is not an option and consequently the Bill does not provide for such funding. There is a commitment to the delivery of a high quality postal service and the Bill provides that ComReg, the postal regulator, continue to set targets for and monitor the quality of service in relation to next day delivery provided by An Post, in its provision of the universal service.
Employment and service standards within the postal sector are the responsibility of the management of postal service providers. In addition, general employment legislation applies across the economy as a whole.
With regard to discussions held with An Post on the Bill, I and my officials regularly meet representatives from the company to discuss a range of matters of importance to the company, including issues relating to the liberalisation of the postal market. In addition, the issues for Ireland, arising from the directive, have been widely and comprehensively consulted upon. In 2008, a public consultation was held which elicited responses from many of the key stakeholders in the sector. These fed into an options paper, published by my Department in 2009, which examined the options for a liberalised postal market and made a number of recommendations.
I also hosted a postal forum, in November 2009, which was attended by many stakeholders in the sector, including postal service providers, the wider business community, the postal regulator, staff representation groups and users' interests groups, and in the main, there was broad support for the recommendations outlined in the options paper.
Following passage of the Bill through the Seanad I look forward to the debate in this House. It is my objective to have the legislation enacted before the end of the year.
I thank the Minister for his reply. I appreciate that the legislation flows from an EU directive but the difficulty with the universal service obligation is the context now is radically different from when the legislation was first proposed. An Post does an excellent job and it has proved to be efficient by making progress on delivery times and so on. The Minister referred to a consultation period in 2008. The volume of post declined by 10% in 2009 and it looks like it has fallen by 16% over the past 18 months. Volumes have plummeted as a result of the recession and technological advances and this will affect the capacity of An Post to deliver a universal service into the future. Will the Minister take on board that the recession is putting pressure on postal services? We all want a universal service. Does he consider that the sharing mechanism is inadequate? We have witnessed how the risk equalisation mechanism introduced for health insurance failed when it was challenged in the courts but, in regard to postal services, the position could be exacerbated by not having competitors in the market to pay for this sharing mechanism. The solution could be exacerbated for postal services by not having competitors in the market to pay for it.
I agree with the Deputy that the circumstances have changed in the last two years. The reduction in mail volumes have accelerated far quicker than anyone could have expected. Rather than being a motivation for maintaining the status quo, it reinforces the need that we will have to do something different. We will have to operate our postal services system in a different way. If we try to maintain the existing structure, operational arrangements and marketing approach in a dwindling market, it will lead to an ever-contracting service that would not be able to cope. We will have to reinvent and create new business opportunities that provide revenue and income streams for a highly skilled and committed workforce in An Post.
We raised these scenarios a year ago at a forum we held on the issue. What happens when the development of the Internet leads to a reduction in mail volume, but potential increases in other volumes? What do we need to do and how do we do it differently? The Bill going through the Oireachtas at the moment creates a better environment for an invigorated An Post that goes after new business opportunities.
Senator Quinn is a former chairman of An Post, and the speech he gave on Second Stage of the Bill in the Seanad was reflective of an attitude where we will have to look at doing things differently, allowing other providers in at various streams within the cost of business, and to give An Post a sense of new opportunities and new growth, rather than trying to maintain business as is happening at the moment.
I believe that the deadline for the transposition of the directive into Irish law is 31 December. It would appear that the Bill will not be enacted before that deadline. Can the Minister confirm this, or will he attempt to guillotine the Bill before that date? If it is not met, does the State face the possibility of having European fines imposed on it due to the Minister's tardiness in bringing it before the Oireachtas? Can the Minister assure me that he will not use this Bill as some sort of excuse to extend Green Party participation in the Government into January or February?
The Bill is going to Committee Stage in the Seanad tomorrow and I hope to bring into the Dáil as soon as we can after that, so that we can order our business to get it done before the end of the year. That is my intention. It is needed to meet the directive but also to give the workers in An Post and in the rest of this industry a sense of direction and new opportunities that I talked about earlier.
Nobody has a problem with the Minister's approach. We are talking about competition and opening up new business, and this is not an issue. The issue is about the customer and making sure that whether one lives in Falcarragh or Foxrock, one is treated equally for postal services. From experience elsewhere, we need to do something specific to protect that universal right. That may include State aid. The Minister blithely said that this is not an option, but I understand that there is no reason it cannot be in the Bill and that the commission can make a decision on it.
The Minister should stop thinking about markets and getting excited about new business, and remember that the customer will lose out badly unless the safeguards are in place to ensure that regardless of where one lives in this country, one has access to a decent and efficient postal service.
I agree and the legislation seeks to maintain that universal service provision so that someone in Falcarragh is treated in the same way as someone in Dublin 4. The question of whether there should be State support for that depends on one's perspective. I believe that the national distribution network could be an asset in a new business model that would have to develop, rather than a cost or a liability. For example, if we are looking to develop Internet parcels or other arrangements, having a guaranteed national network service with offices and skilled people is a huge resource, rather than just a cost. We do not have the State funding to provide support for that but I believe that the important thing to do is to concentrate on a new business model that will use that network to develop revenue streams that help pay for it.
16 Deputy Liz McManus asked the Minister for Communications, Energy and Natural Resources if the position of the Data Commissioner regarding the introduction of a unique identifier postcode system has changed; if he will provide an update on the postcode project; and if he will make a statement on the matter. [44976/10]
Ireland is the only country in the EU and OECD which does not have a national postcode system. In the context of the national postcode project, I and my Department have had meetings with the Data Protection Commissioner and his officials as part of our approach to the introduction of postcodes. These communications have addressed the implementation, dissemination and commercialisation of postcodes in order to ensure that all pertinent data protection legislation is adhered to. Details of these measures will be made available as part of the procurement process.
An invitation to tender was issued on 10 May 2010 for consultants to assist in selecting a body to implement and manage the delivery of a working national postcode system. These consultants have now been appointed and are working with my Department's steering group to introduce a six digit alpha numeric model that is also capable of being refined into a location based code. A process of consultation with interested parties has recently concluded. A prior information notice was published this month relating to the process and my objective is to move to the procurement phase within the coming weeks.
The Minister is great at making promises and then not delivering on them. He promised that we would have postcodes in early 2011, but there is not a chance in hell of that happening now. How do these promises come about? I plead with him to ensure that we have the most efficient postcode system possible.
We cannot afford to do anything less and he needs to ensure that we have a unique identifier system. Nothing in the reports stated that the Data Protection Commissioner was saying that we cannot have a unique identifier. He said that there needs to be a debate. The Minister has had discussions and surely common sense will tell him that he should move to a unique identifier now and save a lot of money. This is better than going the route he is talking about, which is a cluster alpha numeric system that will be costly and will need revision all the time. The Minister talks a lot about market opportunities. The market opportunities of the unique identifier system are incomparably better than what he is proposing.
We must have a unique identifier and we will have it.
Why not have it now?
We will have it now because that is exactly what we are doing. We are about to procure that service.
The Minister is not doing that.
Yes I am. That is exactly what I said.
The Minister said he would do it in the future.
I said that the procurement process will start within weeks. That will lead to the delivery of a postcode service that meets the objective of having a postcode that is easy to remember and that has a unique identifier that can be used within the proper data protection regime and which the Data Protection Commissioner has every right to insist on. In our meetings with the commission, we have outlined how exactly that can and will work.
We are ready to go with this. We consulted with about 60 different bodies and every single one of them stated that we are doing the right thing. We are finding huge savings in the public service and in the private sector, and in An Post. The further we go to getting this thing up and running, the more sense it is for us to do it and we have the right approach. It will be open in a tendering process to any company and any individual to explain how they can manage the system. We will get the least cost and the best solution, which is why there is an open procurement system. It will be done on a basis that delivers a postcode and a location code, because we need both.
We do not need both. The Minister sounds silly when he tries to sell this message. We started out with a cluster system.
I did not agree with it but it was consistent. However, it was challenged by the technology advance and Google Street View now allows one to pinpoint a house on a street at any time one wishes. However, one cannot have a postcode that pinpoints the same house and this does not make sense.
A question, Deputy.
I again plead with the Minister not to have this amalgam that no one has sought. No matter what the Minister might say, people sought a cluster system or for a unique identifier but no one sought a system that has both. This is what the Minister proposes but it will not serve the people well at a time when we need to work smarter.
Since I started this process three and a half years ago, I have stated at each step of the way that there should be a location code as well as a postcode. I stated that the Government accepted the work that had been done by the previous Administration in deciding that a postcode with an alpha numeric basis was the correct choice to make. While I agreed with this, I decided that we needed to go further by including a location code. I recognised this from the very outset and have insisted on it at each step of the way. The Deputy is correct that as the technology has improved, it has shown that the benefit of having a unique house identifier is becoming real. It must be done correctly, subject to proper data protection issues, to avoid invading people's privacy. This can be done and is being stitched into the procurement system——
It will be a secret postcode. We will have postcodes but they will be a secret.
Please. I wish to allow in Deputy Varadkar for a question.
No, it will not be a secret. One will need to know one's own postcode in order that when one is on the Internet or contacting other bodies, one may enter one's identifier. People must be able to have ease-of-use of such an identifier. Remember——
Go raibh maith agat. If the Minister will allow, a final question from Deputy Varadkar.
I agree strongly with Deputy McManus that unique identifier postcodes should be adopted and that the location code should be one's postcode. I believe this is the point we both are making. It is not just because of market opportunities, because other issues also arise, such as emergency access in particular. As someone who has done a small amount of medical work driving around the back lanes of County Kildare, the advantage of being able to pinpoint a particular house or farmstead with a postcode is huge.
Hear, hear.
This could be a matter of life and death and not simply a matter of what type of post one receives. However, again I am completely baffled by the Minister's answer. I understood him to state that we would have an alpha numeric-based postcode system that could be modified at a later stage to become a location code. He then stated that next year, which is only a few weeks away, we are going to have both. I really do not understand. Are we going to have a location code as a postcode or not? Alternatively, the Minister might clarify whether we are going to have a postcode that could be converted into a location code at some stage in the future but about which a decision has not yet been made. He might also clarify that if we are to have an alpha numeric system, although I would rather opt for a numeric system, will the alphabetic part of the alpha numeric code reflect the name of the area in Irish or English language?
Yes it will and that is one of the benefits of a postcode in order that people can remember and identify with their postcode, rather than simply a series of random numbers with which it would be more difficult to identify personally. Moreover, the identification code also allows one to adopt such a six-digit alpha numeric code into a location code as a separate field immediately, not far off into the distance but as part of the system. The Government intends to leave it open to a tendering process which will ask people to set out how they would suggest doing it and how it would work. Let all-comers come and outline how they would do it. However, we now are well placed in this regard. We have our data systems ready to go, An Post has been highly supportive and people are rowing in behind the concept in the public consultation process. It is ready to go, to be purchased and to save Ireland millions. I am keen to get on with it and this will be done.
I must stand in defence of the people——
Does the Deputy have a question?
——who are not so stupid that they cannot remember a number code. Perhaps the Minister is unaware that everyone has a PPS number.
And a telephone number.
If the Minister wishes, briefly.
Absolutely. They also would have a postcode number that would help them carry out a range of different services and would help the public and other services relate to them and achieve real efficiencies. It will be a major project, whereby our social welfare, health and education systems will begin to use these data fields to deliver services far more effectively.
The health service seeks a unique identifier.
This is what we will be able to do with the unique identifier, which will be provided for in the new system the Government is putting in place.
17 Deputy Joe Costello asked the Minister for Communications, Energy and Natural Resources his policies and those of the EU on alternative fuels; the steps he has taken to introduce a mix of fossil fuels and alternative fuels for the haulage industry; and if he will make a statement on the matter. [42720/10]
40 Deputy Brian O’Shea asked the Minister for Communications, Energy and Natural Resources the percentage of bio-fuels used here that is imported; the percentage of the 4% bio-fuel obligation that he envisages will be imported to reach that target; and if he will make a statement on the matter. [45002/10]
I propose to take Questions Nos. 17 and 40 together.
The Government's policy on renewable transport fuels is underpinned by the EU renewable energy directive of 2009, which sets a binding 2020 target of 10% renewable energy in transport for all EU member states. The most achievable and promising means of introducing renewable energy into the transport system are liquid bio-fuels and electric vehicles. In respect of renewable energy for the haulage sector, the mineral oil tax relief schemes, MOTR, and the bio-fuels obligation scheme are the most relevant measures.
The mineral oil tax relief schemes, which expire at the end of the year, were designed as an interim measure to enhance the level of bio-fuels in the fuel mix and to encourage the development of an indigenous bio-fuels industry. The objective was to establish and develop the potential of domestic bio-fuel production and to introduce early volumes of bio-fuels into the supply chain. MOTR II involved the granting of more than 660 million litres worth of excise relief to 16 companies, following an open tender competition in 2005. Prior to the introduction of the schemes, market penetration of bio-fuels in Ireland was almost non-existent. In 2007, market penetration was 0.6% and by 2009 it had increased to 2.2%, approximately 42% of which was imported.
The bio-fuel obligation scheme, which came into effect in July of this year, establishes a clear, stable and long-term framework for the delivery of the national target of 10% renewable energy in transport by 2020. The obligation delivers the best balance available in providing a stimulus to the market. It will underpin the ongoing development of an indigenous bio-fuels industry, while keeping the cost to the consumer as low as possible. The legislative basis for the obligation is provided for in the Energy (Biofuel Obligation and Miscellaneous Provisions) Act 2010. The Act is the framework for ensuring that Irish consumers have access to appropriately priced, sustainable and reliable sources of bio-fuel by creating a guaranteed market that will require in excess of 200 million litres of bio-fuel in 2011.
Domestic producers can access the market by a number of means, including sale of bio-fuel direct to obligated parties or alternatively, producers can sell into local markets or sell certificates earned to obligated parties. This trading mechanism allows the scheme to provide a stable market, protecting consumers from structural rigidities in the fuel supply market, which could result in episodic periods of high fuel prices, while also ensuring delivery of targets.
The level of obligation set for 2011, at 4%, represents almost a doubling of size of the existing bio-fuel market in Ireland. I am confident that the obligation will promote the sustainable growth of the Irish bio-fuels market, thus supporting the growth of sustainable indigenous production of bio-fuels. In the first few months of the obligation, the 4% market penetration target is already being achieved. This is early testament to the effectiveness of the obligation mechanism. The bio-fuel is primarily reaching the market blended with mineral petrol and diesel. The vast majority of Irish motorists are now using bio-fuels in their fuel mix at blends of up to 7%. A number of road haulage operators have already converted trucks to run on pure plant oil. Each litre of pure plant oil brought to market is eligible for a bio-fuel obligation certificate, which can be traded to obligated parties. This incentive will underpin further development of the sector.
I thank the Minister for his response, which in many ways indicates the point I was making. The pre-budget submission of the Irish haulage industry states that it is extremely disappointed with the amount of alternative fuel that has been made available and does not discern the provision of any viable alternative to them. At the same time, one should recall this is an industry through which 99% of all goods are transported throughout the country and for which fuel costs amount to 30% to 40% of the total. Last year, there was a 5% increase in excise duty, as well as the imposition of a further 5% carbon tax on diesel from 1 July, yet the haulage industry finds it impossible to source alternative fuels. The Minister stated that penetration was 2.2%, most of which is imported, whereas the target is 10%.
Does the Deputy have a question?
Why can one not get a viable alternative fuel source to fossil fuel at present?
The scheme is designed to develop a stable bio-fuel supply in Ireland using a market mechanism that does not lead to huge price spikes and that is consistent. As I stated, the evidence from the first few months is that it is starting to deliver the level of targets I set. I acknowledge that it is primarily blended, rather than pure plant oil or other single fuel systems. However, the critical point is to provide a stable market that will allow alternative suppliers, where they wish to contract with a haulage company or anyone else, to trade in obligation certificates. The creation of such a stable market and the placing of a value on an alternative fuel supply is the best mechanism for Ireland to try to set up that developing industry and to enable local producers here to supply to local transport providers. One must be careful with regard to the development of bio-fuels. Their purpose is to be a strategic backup reserve to try to provide some stability or security against future oil shocks but not necessarily to take off in a massive way that would have huge land use or other environmental implications globally. It must be developed sensitively. We have to monitor and review it. In particular, we have to look at the development of second generation bio-fuels that have fewer land use concerns. We have to do all of that within the EU obligation structure we have set up. I sense that it is working.
Given that no viable alternative to the carbon tax has been provided, is it not a punitive tax? Carbon emission targets have been set in the absence of a viable alternative. The haulage industry, which has experienced a drop of 40% in its activity already this year, is being penalised. Heavy fuel costs are being encountered within the industry, which is necessary for the distribution of goods throughout the country. The Government is not providing a meaningful alternative source of fuel. The Minister is sitting on his hands, in effect, in regard to the haulage industry.
One of the purposes of this approach is the security purpose I mentioned. To my mind, it is the primary purpose in terms of security of oil supply. A secondary purpose is carbon reduction. As I understand it, one of the aims of the scheme that has been designed is to cut 700,000 tonnes of carbon from our transport budget.
When will it happen?
That is the equivalent of taking approximately 200,000 cars off the road.
While we are waiting for the future, we need to do something about the present.
This year's measure is the first step in the roll-out of that scheme. The scheme is meeting its target for the first year. We have to continue to review it to make sure the planned carbon savings accrue. We need to ensure new technologies, such as those relating to second generation bio-fuels, are fed into it. It is providing a mixed fuel supply system that helps to provide a more stable, clean and secure transport fuel solution, which is what it was meant to do. That will benefit the haulage industry in the long run.
Will the Minister accept that although the carbon tax has a nice name, it is just another tax? It is nothing more than a new tax with the word "carbon" stuck in front of it. Does the Minister intend to develop a facility to make progress with the development of alternative fuels? The Government has already wrecked the sugar company facility that would have served such a purpose neatly. Does the Minister intend to commend to his Cabinet colleague, the Minister for Finance, the introduction of a landing tax for our natural resources? He should do so while he is still there. The Green Party needs to exercise influence on the capture of some of the wealth associated with our natural resources. The people of this State certainly need such wealth at this time.
The Deputy is broadening the question somewhat.
Revenues from the carbon tax have been used for the retrofitting of homes, which is an issue we discussed earlier. The fuel bills of people suffering fuel poverty have been cut. This money has been used in a range of other energy areas to create jobs and develop the new economy. It is starting to work. We have been able to get a competitive and clean energy supply, which is crucial. We have started a process that will allow this country to tap into the comparative advantage it enjoys through its renewable resources. That will facilitate real national self-sufficiency, provide for long-term income streams and create jobs. As it is the clever economic thing to do, all parties in this House should row in behind it and ensure we continue to develop it.
The record speaks for itself. We have set a short-term target of 10%, but we have achieved just 2.2%. I do not know how we will fulfil that target. We are importing half of it already. The haulage industry is simply not getting any assistance in reaching its targets. As this industry has huge fuel costs, it should be a priority for the Minister. I would like to know why it is not.
We are meeting our target. We have reached a level of 4%. We have to work on the measures that were included in legislation in this House to try to ensure these fuels are home-grown and Irish producers and farmers can benefit as a result. The legislative measures we introduced were supported on both sides of the House. We need to put them into action so that Irish farmers benefit from this as well. At the same time, we need to be careful. While bio-fuels give us security benefits, we do not want their land use effects to distort the price of food. We will have to keep an eye on both aspects of the matter. We will have to make sure the obligations system, which is working, develops sustainably.
Written Answers follow Adjournment Debate.
