Seanad Éireann debate -
Wednesday, 29 Jun 1983

Vol. 101 No. 3

Postal and Telecommunications Services Bill, 1982: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Posts and Telegraphs (Mr. J. Mitchell)

The Bill provides for the setting up of two separate State-owned companies, An Post and Bord Telecom Éireann, to take over the operation of the national postal and telecommunications services from the Department of Posts and Telegraphs. The basic purpose of this reorganisation is to give the public better postal and telecommunications services nationwide.

The Bill is by far the most significant reform of the public service to be undertaken since the foundation of the State. It involves the transfer of almost 30,000 staff — one-half of the civil service — to the State-sponsored sector. The reorganisation of the Department has been on the stocks now for a considerable time. The Posts and Telegraphs Review Group, who recommended the change, reported as long ago as May 1979. The original text of the present Bill was initiated in Dáil Éireann over a year ago. Unfortunately, successive changes of Government delayed the legislation.

The Bill is designed to implement the 1981 White Paper Reorganisation of Postal and Telecommunications Services which was published after the Government had considered comments on proposals in a Green Paper published in 1980. As a detailed explanatory memorandum has been published, and as the House's time is limited, I do not propose to comment in detail on each section. Many of the Bill's provisions are, of course, standard provisions which feature in legislation for State-sponsored bodies generally. I propose to concentrate my comments on the most significant areas of the Bill and, in particular, on the amended provisions inserted by Dáil Éireann on Committee and Report Stages on my recommendation.

In considering the details of the legislation and of the reorganisation it entails, important as they are, I suggest that we need to keep constantly in mind the basic purpose of the whole exercise. This is to improve and develop the national communications services. There is no hint in these proposals of pessimism about the future, or any question of opting out. The thrust is in precisely the other direction. What we are about is the reshaping of the organisation of a major part of our public sector so as to facilitate growth and development, to take advantage of new opportunities and, in general, to meet public needs better.

The postal and telecommunications services are major businesses in their own right. After full and careful consideration, what the review group concluded was that the civil service environment was no longer the most suitable for two such commercially oriented businesses and that a change to State-sponsored status would enable them better to develop and to overcome the challenges facing them in the future. Those conclusions gained widespread acceptance. Since my own appointment as Minister, I have become even more convinced that the change will bring significant benefits. In saying this, I should emphasise that I have nothing but appreciation for the past achievements of the Department. I do not think there is a Senator on any side of the House who would question the contribution which the services and the staff operating them have made to the national life over a long period. By showing openess to change and by thereby taking advantage of the opportunities which the reorganisation will offer, services and staff can maintain and strengthen that contribution in the future.

The choice of form of organisation for a State-sponsored body is between the statutory corporation such as the ESB and CIE on the one hand and the statutory company such as Aer Lingus and Irish Shipping Ltd. on the other. The Posts and Telegraphs Review Group in their report dealt with this matter, and came down in favour of statutory companies. The basic argument in favour of the statutory company is that potentially it offers scope for greater flexibility. This is important in the case of the two new bodies. They will be expected to operate along commercial lines. The more flexibility they have, the greater prospect there is of their achieving maximum efficiency.

It should be stressed that the postal and telecommunications services will remain firmly within the public sector and there is no possibility of privatisation of the companies without further legislation. In this respect then there is no difference between the statutory company and statutory corporation form of organisation for the new bodies.

So far as the legislative provisions affecting staff are concerned, the decision to set up companies rather than corporations makes no difference because the provisions being made to protect the interests of staff are the same as would have been made if corporations were being established. Indeed, many of these provisions are taken from legislation establishing statutory corporations.

The objects and responsibilities of An Post are set out in sections 12 and 13 and the exclusive privilege, or monopoly, is set out in section 63. In essence An Post will be required to provide a national postal service to meet the business and household needs of the State, and also money remittance and counter services. The company's financial duties are set out in section 13, the fundamental requirement being that they shall operate on commercial lines. The exclusive privilege which is provided for under section 63 is granted explicitly in recognition of the obligation to provide a national postal service and of the general financial duty imposed by section 13, and because a viable national postal system involves subsidisation of some loss-making services by profit-making services.

The objects and responsibilities of Bord Telecom Éireann are set out in sections 14 and 15 and the exclusive privilege at section 87. They are on the same basis as for An Post except that, in accordance with a recommendation of the review group, the telecommunications monopoly will apply up to a connecting point in the subscriber's premises. In essence BTE will be required to provide a national telecommunications service to meet the business and household needs of the State. The exclusive privilege is granted on the same general basis as that of An Post.

In effect, therefore, both companies are being granted very extensive monopolies for explicit reasons of general public interest. The ultimate justification for the monopolies will be the performance of the companies in meeting their operating objectives and their general financial duties.

The Bill contains many important safeguards for the staff who will be transferred to An Post and Bord Telecom Éireann. Section 45 protects their position in regard to pay and conditions and continuity and security of employment. Section 46 protects the staff fully in regard to the superannuation benefits which they will have earned up to vesting day, and it also provides that payment of benefits, whether earned before or after the vesting day, will have the same security as applies to payment of civil service pensions. Section 16 requires that each company set up machinery, in consultation and agreement with recognised trade unions and staff associations, for the purposes of negotiations concerned with the pay and conditions of service of their staff. An Post are required to set up similar machinery for postmasters at sub-post offices. Section 34 provides for election of employee directors to the boards of An Post and Bord Telecom Éireann and section 81 provides for the election of a postmaster director to the board of An Post. I would hope that the provisions in the Bill affecting staff will be seen as comprehensively reassuring to the staff who are faced with this major change of status. I am most anxious that the companies should commence operations with staff who believe that they have been fairly treated and who will, consequently, give their full co-operation to both companies from the outset in the difficult tasks facing them.

I propose to comment briefly on the proposed financial arrangements for the two companies. Taking the postal company first, it is proposed that the assets appropriate to the service which are valued at about £32.5 million will be assigned to the company in exchange for shares. As provided for in section 18, the initial capital structure of the company will accordingly consist of 100 per cent equity capital. This does not involve a draw on the Exchequer because investment in the postal services was met from the Vote of the Department of Posts and Telegraphs and the assets are, therefore, debt-free. Under section 31 of the Bill, it is also proposed to provide working capital not exceeding £10 million for the company in exchange for shares. This is the estimated working capital required by the postal service in 1983.

Section 29 provides enabling power for the Minister for Finance to make an amount not exceeding £20 million available from the Exchequer as current expenditure grants over a period of three years. This is in recognition of the potentially difficult financial situation which the company will face in their early years.

Section 29 also contains enabling power to make available not more than £50 million from the Exchequer for postal development, either in exchange for shares or by loan or a combination of these. In this connection, it is likely that the position set out in the 1981 White Paper will obtain in the years immediately ahead, that is that there is need for relatively heavy capital investment in the postal service during the next five years, that the scale of the programme is large by reference to the fixed assets appropriate to the service, and that it is likely to be some time before the financial position of the company would enable them to contribute in any significant way towards financing a development programme.

To sum up, the Government recognise that there is a strong case for providing assistance for the postal service during its initial development period. The enabling provision in section 29 of the Bill will be activated in the light of the development plan produced by the company.

In contrast with the postal service, telecommunications is a highly capital-intensive service. By the end of 1983 the current value of the fixed assets is expected to reach about £1,500 million. About £275 million of the assets will be debt-free. Of the remaining £1,225 million, £725 million represents Exchequer loans and £500 million represents assets financed by leasing arrangements with Irish Telecommunications Investments Limited. If the debt-free assets only were assigned to Bord Telecom Éireann in exchange for shares in the company, the debt-equity ratio at the end of this year would be over 4: 1.

Continued heavy capital investment will be needed for development of telecommunications services within the foreseeable future and charges on the £1,225 million loan capital would be a continuing heavy drain on current income. Having considered the position, it was decided that it would be undesirable to set up the company under such arrangements. It is accordingly proposed to transfer £355 million worth of assets covered by Exchequer loans plus a further amount, estimated at about £80 million, in respect of leasing charges outstanding to ITI Ltd., in exchange for shares in the company. This is dealt with in sections 10 and 18 of the Bill. The debt-free assets will also be transferred in exchange for shares. This will give Bord Telecom Éireann a debt-equity ratio of about 1: 1.1 at the end of 1983. This is considered to be a satisfactory debt-equity ratio for a public sector company providing, in the main, services which are protected by a statutory monopoly. Bord Telecom Éireann will be making their own arrangements for the financing of their investment programme in the future.

As in the case of An Post, working capital will be provided under section 31 of the Bill for Bord Telecom Éireann in exchange for shares. The value of the net current assets of the telecommunications service at vesting date will be made available to the company as working capital in exchange for shares up to a maximum amount of £150 million, which represents the estimated working capital requirements in 1983.

The Bill sets out in some detail the powers and functions of the Minister in regard to public policy related to postal and telecommunications services. It provides for the setting of financial targets for the two companies by the Minister following consultation with the companies and the Minister for Finance and for the publishing by the companies of particulars of the cost-effectiveness of their operations as determined by criteria to be settled by the Minister.

Broadly, the principle that has been followed has been to allow the companies the maximum freedoms and flexibilities to operate and develop the services while reserving to the Minister the necessary powers of monitoring and control in the public interest.

I would like to direct Senators' attention to the amendments which have been made to the Bill as initiated. In all, the Dáil made nearly 150 amendments on my recommendation. In a debate that went on before this Bill I was interested to hear Senator McGuinness talk about the reluctance sometimes of Ministers to accept amendments. In tabling the 150 amendments I took very fully into account the views expressed by the trade unions and by Deputies in the Dáil, particularly Deputy O'Sullivan who has contributed massively to this Bill, and also to proposals by Members in the House. Indeed, I have been criticised for being so open in that respect.

Since taking office, I have undertaken extensive consultations about the legislation with various concerned Members of the Oireachtas, with the recognised staff organisations and with the two Interim Boards for Posts and Telecommunications. In the course of these consultations, a large number of points were put to me in regard to possible amendments to the Bill. As I think Senators will appreciate from the number of amendments I moved in the Dáil, the approach I adopted was to do everything that was possible and reasonable to meet the legitimate concerns of Deputies and Senators and of the staff and the interim boards. However, I would stress that the basic form and purpose of the Bill remains unchanged and I am very glad to note that the principle of reorganisation and the legislation generally continues to enjoy bipartisan support.

The amendments which have been incorporated in the Bill as passed by the Dáil fall fairly naturally into a small number of categories. An important category comprises those amendments which are designed to meet staff concerns by improving and copperfastening the guarantees and protections for staff who will be transferring to the new bodies. I will be returning to this subject later but perhaps it suffices for me to say at this stage that I have done everything humanly possible to meet fully and fairly the reasonable concerns and entitlements of staff.

A second group of amendments is concerned with strengthening the exclusive privileges of the new companies in the provision of postal and telecommunications services. In particular, there was general agreement that the penalties for breaches of the exclusive privileges, which date back to the 1869 Telegraph Act and the 1908 Post Office Act, were badly in need of review. Another set of amendments is designed to underline the point that, while the new companies will be given the necessary powers and flexibilities to operate and develop the services to best advantage, the postal and telecommunications services will remain, under the reorganisation, firmly within the public sector. Amendments have been incorporated to provide that shares in the new companies could not be disposed of by the Ministers concerned without fresh legislation and that the essential reserve powers of the Minister to issue licences for the provision of services within the exclusive privileges of the new companies could only be activated by statutory order and in accordance with specified standards. Before I came into the House this afternoon my attention was drawn to omissions in two other sections of the Bill which I will be correcting on Committee Stage.

Finally, I took the opportunity to propose amendments to the Bill designed to further the interests of consumers, for example, by including an enabling provision to permit me to assign additional functions to the new statutory users' councils. I am also proposing to protect users of the postal and telecommunications services from interference with their mail and their telephone communications. Two new sections have been incorporated, one to prohibit the unauthorised opening etc. of postal packets, the other to prohibit the unauthorised interception, etc. of telecommunications messages and to regulate the use of overhearing devices. Breaches of the provisions would constitute offences and would be subject to the penalties provided for in the Bill. The Government intend these new provisions as important contributions to the privacy and general civil rights of the public who are users of the services.

In the course of the Dáil Report Stage debate on section 45 of the Bill, which contains provisions relating to the staff to be transferred to the new companies, I undertook to have another look at the section to see whether anything further could be done to strengthen it, and so to allay any residual anxieties of staff who will be entering the employment of the new companies. I made it clear at the time that I could not see scope for further improvement because the parliamentary draftsman, it seems to me, had done all that he had been asked to do. The section as amended in the Dáil is designed to ensure that staff will be guaranteed employment in the new State-sponsored companies on terms no less favourable than they have now, and that they will have the same degree of security of tenure in the new companies as applies in the civil service. I confess that it has been very difficult to see what further amendments could be made to improve the section. However, I will be proposing on Committee Stage two amendments to section 45 which I sincerely hope will remove any remaining doubts and apprehensions.

I may say that the purpose of the various amendments made and proposed in regard to security of tenure is to ensure by legislation what successive Ministers, including myself, have stated would be the practical situation, that is that the staff's tenure of employment will not be worsened by the reorganisation. I am satisfied that section 45 as amended will fulfil the solemn undertakings given by me and by my predecessors, and I am satisfied that the boards of the new companies will be scrupulous in ensuring adherence to the expressed intent of the legislation regarding security of tenure. In the unlikely event that it is needed, there is provision for appropriate appeal to the Minister for the Public Serice.

I am fully aware that this is a vital and sensitive issue for the staff and that is how I have approached it. I am happy to put it on the record of the House that I am satisfied that the provisions in regard to security of tenure will provide all the assurances and protections that any reasonable person could require and, in particular, that they ensure that the security of tenure of transferred staff will be not one whit less than it would have been if the staff had remained civil servants. I am sure that that is what the House would wish. In the section as amended — assuming the House agrees — we will not only be giving assurances but we will be repeating and reiterating the assurances three times at least in the same section.

I would like to say a few words about the services which the new board will be taking over. The nature and range of the mail services have not changed substantially over the years. Because of the developed nature of the service, its progress in general has been one of modest growth. In the past few years, no doubt because of the economic recession and the substantial increases in charges necessitated by inflation, traffic volumes have been stagnant at best although this year there is some indication of renewed growth. That is not unconnected with the fact that there has been no price increase this year, something I have insisted on since I became Minister. The quality of service is very good by international standards although we are still somewhat short of attaining our main service objective of delivering 90 per cent of letter mail by the working day after posting.

An efficient and reliable postal service will enhance public confidence in the service and, when economic activity picks up, enable it to recover lost traffic. One of the primary tasks of the new postal company will be to continue the efforts of the Department to improve the quality and reliability of the service. In coming years, the postal business will have to meet increasing competition from alternative means of communications, arising especially from telecommunications developments. The service does, however, have its own inbuilt advantages. For example, it is unique in its coverage of every home and business in the country. By utilising its advantages and exploiting the opportunities which the new environment will offer, I believe that the service can make steady progress.

On the telecommunications side, we are now in the fourth year of the five-year development programme which was admitted by everyone when it was undertaken to be ambitious and far-reaching. The programme set six main objectives:

—to wipe out the waiting list for telephones,

—to convert all manual exchanges to automatic working,

—to extend STD to all areas of Northern Ireland and Britain,

—to reduce call failure on the automatic system to 2 per cent on local calls and 4 per cent on internal trunk calls,

—to answer 90 per cent of calls made via operators within ten seconds,

—to provide an acceptable repair service.

At the beginning of the programme in 1980, the waiting list for telephones was over 90,000 and represented the equivalent of over two years' capacity. The waiting list at the end of this year will be about 50,000 or the equivalent of eight to nine months output. That is substantial progress. Over all, the position is that the target of being able to meet applications for telephones promptly by the end of next year over the country generally is in prospect.

At the beginning of the programme, about 10 per cent of telephone subscribers had only a manual service provided by over 500 manual telephone exchanges. The programme for completing the conversion of these exchanges to automatic working is on target and should be completed by the end of next year or very largely so.

STD was extended to all areas in Northern Ireland late last year and to all of Britain in April and June of this year. The overall position now is that some 70 per cent of subscribers here have international dialling to over 70 countries.

The failure rate on trunk calls within the country at the beginning of 1980 was at the altogether unacceptable level of over 40 per cent. The present trunk failure rate on routes out of Dublin is now below 20 per cent while the failure rate in the reverse direction is about 16 per cent. The target this year is to reduce the rate to 12 per cent or so, and a failure rate of 4 per cent by the end of next year is in prospect.

The speed of answer by telephone operators in many places has been quite unacceptable, due to no fault, I should add, of the operators. With the extension of automatic service and improvements in the network, however, the way is now being paved for giving a first class service. Already, in Dublin, where the service had been quite poor, the improvement has been dramatic and for long periods all calls, not just 90 per cent, are now answered within ten seconds. Similar improvements should be possible at other major exchanges throughout the country by the end of this year.

The standard of repair service when telephone lines go faulty is a critical factor and in certain areas the time taken to carry out repairs has been excessive, in some cases very considerably so. This will come right over the next year or so although I am afraid that, in some instances, the improvement may be gradual.

This then is a thumbnail sketch of the service as the board of the new company will find it. There are undoubtedly plenty of improvements to be made but I think it can fairly be said that the groundwork for a first class service has been well and truly laid by the current development programme.

The legislation is enabling legislation and, under section 9 (2) of the Bill, it will be the responsibility of the Minister to fix the vesting date for the two companies. A number of detailed transitional matters relating, for example, to staff transfer arrangements, accounts, files and records will have to be dealt with. In particular, consultations with staff organisations about matters affecting staff will continue following the enactment of the legislation by the Oireachtas because many of these matters would not appropriately be covered by the legislation. In determining a vesting date, the position in regard to consultations with the staff organisations will be an important factor to be taken into account.

As I said in my introduction, this matter has been on the stocks for a long time now, and it is in the interests of the services and of all concerned in them that the uncertainty involved should be ended as soon as possible. My aim, therefore, is to vest the new companies at the earliest practicable date. For practical reasons, it is desirable that vesting should be on the first day of a quarter, and, at this stage, a reasonable target would seem to be 1 January next. Vesting will, of course, be sooner if we can manage it.

In conclusion it would, I think, be appropriate to look to the future. I know that the interim boards, An Bord Poist and An Bord Telecom, have been drawing up plans for the improvement and development of the services. I have been most impressed with the commitment of the two boards to the reorganisation, a commitment which, to the credit of the boards and their chief executives, has survived the unplanned delays to the legislation. The period of the interim boards' existence has also been one of continued economic difficulty and the resources which it has been possible to make available to them for planning and for preparing to take over the operation of the services have quite frankly been very restricted and much less than successive Ministers would have wished. Their commitment has survived these difficulties also but, nevertheless, in our early expectations of the boards, we must recognise these realities. To a degree, the boards have had a thankless task waiting for so long in the wings and I would like to take this opportunity to express my sincere appreciation of the services of Fergal Quinn and Michael Smurfit and the members of their respective boards.

I referred earlier to the opportunities and the exciting prospects which are opening up for both companies. But let there by no doubt about it that the challenges facing the boards are most formidable. No one should expect instant solutions to our communications problem. The new companies will need time to make themselves felt and will need the particular understanding of Government and public in their early days. I have no doubt, however, that we can look to the future, in the medium and long term, with every confidence that the public and national needs for first-class communications services will be fully met and I confidently commend the Bill to the House.

Sitting suspended at 6 p.m. and resumed at 7 p.m.

Mr. Lanigan

The Bill is one that we face with a tremendous amount of trepidation as we have the feeling that it is one of the most important pieces of legislation that has ever been introduced in this House or the other House in terms of numbers of people involved. It has been said in the region of 30,000 people will be involved. The amount of money involved is enormous. The change-over from the Department of Posts and Telegraphs to two separate companies is an enormous operation which will have tremendous implications not alone for the people involved in this service but for the future development of telecommunications and the postal system here. It is significant that this is being brought in at a time when tremendous changes are being made in particular in the telecommunications area.

We welcome the introduction of the Bill to the Seanad. It is long overdue having been introduced first by former Minister Wilson in May 1982. The introduction of the Bill at that stage had been held up for quite some time because of the tardiness of the 1981 Coalition Government when there was very little co-operation between the Minister for Posts and Telegraphs, Deputy Cooney, and the Minister for Finance, Deputy Bruton. It took some time before the difficulties between those Departments were resolved and but for the intervention of the then Taoiseach in August 1981 the Bill would not have got to the stage it was at in January 1982. At that stage very little progress was made because the Coalition Government fell. Negotiations on the introduction of the Bill were cut short by virtue of that.

When Deputy Wilson became Minister for Posts and Telegraphs he did not let the grass grow under his feet and with the co-operation of the Government the Bill, a major scheme of re-organisation of our communication and postal services, was introduced in May 1982. The two services encompass two major elements of our national infrastructure serving as they do the economic and social needs of our community. The transfer of control to the new State-sponsored companies has major implications for the future of the services. Equally, there are major implications to be considered for the present and future needs of the staff of the proposed State-sponsored companies. Indeed, when Fianna Fáil laid this Bill before the House the preservation of the status of the staff, and the guarantee that they would maintain at least civil service status, was taken into account.

It would be remiss of me at this time not to praise the work done by Deputy Padraig Faulkner in the preliminary work on the Bill. In 1979, as Minister for Posts and Telegraphs, he announced the decision to launch the accelerated telecommunications development programme covering 1980 to 1984 and in 1979 the Posts and Telegraphs Review Group described the telephone service as being in a state of crisis. There was a shortage of spare capacity due to underinvestment over a long period and there were growing demands for a service as the economy recovered from the recession of the mid-seventies. By mid-1979 the service was at an all time low and public awareness of the importance for the country's economy of a high quality communication service was sharpened.

At the same time there was a huge sense of frustration experienced by workers within the system because they felt the brunt of the public demands which they could not fulfil. The excellent staff of the Department of Posts and Telegraphs have always worked extremely well and were at all time highly efficient within the very antiquated working conditions which they had to endure. The recognition by the staff at all levels that they could not do their job properly in these outdated conditions was noticeable. It was heartening that they were interested in developing the service they were providing under these outdated conditions and were prepared at all times to work so that a proper means of communication could be given to the Irish people and that the postal service would be as good as it should be. It is only natural that they should have reservations about a change of employer and a change of working conditions as any worker placed in a similar position would have.

The Labour Party in their letter of 10 June 1981 from Senator Flor O'Mahony to a member of the engineering union, Mr. Andrew Coleman, and Fine Gael in a letter of 8 June 1981 from Peter Pren-dergast, the secretary of that party, promised to stand over guarantees of employment. Those guarantees stated that their status as workers within the civil service would not be undermined. The Minister in his opening speech said he is bringing in two more amendments to the Bill which will copperfasten the rights of the workers. We should not comment until Committee Stage as to the efficacy of those proposed amendments. The workers within the Department of Posts and Telegraphs at all levels are genuine in their hopes for the future of the services that will be provided by An Post and Bord Telecom and they wish to see these services brought up to the highest standard that could be aspired to.

Since the workers have this commitment it is up to the legislators to take from them the grave worries they have from the point of view of their future employment prospects. It must be said that since the report of 1979 considerable progress has been made in the telecommunications field. We must compliment former Minister Reynolds for his diligence in that field. It could be said that from 1981 backwards we had a cinderella type of operation but since then we have headed towards the "speedy gonzales" type of change. It has been very fast indeed.

It must be recognised by everybody that it would be impossible to bring the service up to international standards overnight but the setting up of two dynamic boards under very excellent chairmen is a good start. I must congratulate Mr. Smurfit and Mr. Quinn on the excellent preliminary work they have done. The fine work of the two chief executives must not be forgotten. I do not think we can forget that when the Bill was introduced first it was opposed by the Labour Party. The result of the vote on 7 July 1982 was 74 votes for the Bill and 15 against, the 15 being the Labour Party Members. At that time Fine Gael abstained and they must at least be embarrassed by virtue of the fact that the Bill is being introduced in a form as close as possible to the proposed legislation of May 1982.

The legislation has wide ranging implications encompassing as it does the restructuring of terms of employment for more than 30,000 people, the greatest number of people ever affected by a piece of legislation.

It is essential that the greatest possible consideration is given to the provisions regarding conditions of change of employment status, also continuity of service within the new boards and guarantees regarding continuity of employment. The Department of Posts and Telegraphs has been most visible to the public in the past and it will remain in this position when the two boards are set up.

The boards must get sufficient capital at the outset to ensure as rapid a movement as possible towards viability. I am glad the Minister in his speech placed emphasis on the need to structure the boards so that they would not be burdened by a liquidity problem in the beginning. Indeed, when one looks at the figures quoted by the Minister in terms of the needs of the two boards one sees that it is essential that they do not run into liquidity problems in the beginning. Mention was made of £1,250,000,000 of equity being required by Bord Telecom of which £755 million was borrowed from the Exchequer and some of the remainder put up by the investment board set up in 1981. It is right that the board be set up on an independent basis although I am sure that the workers within the postal end of the business must be worried lest they be overshadowed by the Telecom element. There is great potential business waiting for both boards.

The work of An Post can be made viable by the proper use of the excellent staff working in this area and also by the board grasping the nettle and developing the services currently on offer from the Department of Posts and Telegraphs. I believe, with the Post Office Workers' Union, that there is tremendous potential in the extension of the Post Office Savings Bank. We have witnessed in the past few years the massive benefits which have accrued to the small investor, the wage earner and the small borrower through the extension of both the Credit Union movement and the extension of services being provided by the Trustee Savings Bank. I firmly believe that there is further room for expansion in this area. This is an area that must be looked into as a matter of priority by An Post.

The extension of our excellent telex services is another area that could be expanded. We have seen a growth of courier services in both letter and parcel fields and it is about time the expertise of the postal workers was harnessed to provide courier services on a continuous and professional basis. We have seen in the past that people who work behind the counters in post offices have to have a broad range of talents in banking and the postal service. Social contact is an area that is often forgotten. Very often the only contact under-privileged people have with public servants is through the Post Office when they go to collect their old age pension, unemployment benefit, children's allowance or deserted wife's allowance. The people who work in the post offices have to have expertise in the broad range of subjects. They must also be salespeople. In the past their expertise as salespeople has been overshadowed to a large degree by the fact that 90 per cent of the places where they work are totally outdated and a throwback to a system which should be done away with. Because they have to have so many talents they are occasionally taken for granted. With proper organisation of time and resources there is tremendous potential for development of the postal side of that business. There is also potential, as I have pointed out, for the extension of our mail service.

On the telecommunications side we, as the Minister said, are in the fourth year of a five-year programme. Tremendous strides have been made in this area although there are still gaps to be filled. The scope for development in this area is exciting and challenging. We have within the Department of Posts and Telegraphs the capabilities to develop with the very fast changing technological world. The world of telecommunications is undergoing immense change and we must grasp the opportunities offered. I have confidence that a dynamic board with a satisfied workforce working in modem conditions and with modem equipment can work for the good of the community with job satisfaction for the worker going hand in hand with service to the public. The Minister referred to changes he is going to make on Committee Stage to copperfasten the workers' rights and we will not comment on them until we hear what they are.

We are looking for the growth of an efficient postal and telecommunications network with maximum protection for the workers who have served the State with distinction for so long. There are so many facets to be encompassed in the Bill that one would have to be an expert in many fields. There are many headings in the Bill and a lot of land to be transferred. I hope that this transfer will go through without the legal profession getting a hand on too much of the transfer negotiations and that the cost will not be prohibitive because of the land changes from the Department of Posts and Telegraphs to both boards. The shareholding element and the proper control of where the shares in the companies go are extremely important.

The fact that we are getting a properly developed users' council will give great satisfaction to the many people who have been fighting for this for years. One of the biggest problems any telephone user has had over the past number of years is how to decipher his telephone bill and the answer he gets from the Department of Posts and Telegraphs when he queries the bill. I hope that with a properly constituted users council it will be easier for the public to find out exactly how much each call costs, how they are monitored and how to find out where calls are made to. That is an integral part of the operation of telephone services in almost every other country.

I sincerely hope that the board will have a look at the cost of providing a telephone service, the rental charged and the deposits. From my discussions with many people I am aware that while there was a big demand for telephones which could not be met because of a shortage of lines the situation now is reversed, more telephones are being returned to the engineering branch than there are applications for telephones. On Committee Stage I will have many questions to put on every section.

Mr. Browne

Tá áthas orm go bhfuil an Bille seo os ár gcomhair, mar de réir dealramh tá sé ag teacht leis na blianta. Faoi mar a éiríonn fíon níos fearr le haois tá súil agam go bhfuil an Bille seo níos fearr toisc go bhfuil aois aige faoi láthair.

I suspect, apart from the fact that it has grown old, that the Bill must have benefitted from the fact that so many Ministers had so much time to check over the Bill. I am sure Senator Lanigan is right in giving credit to some of the past Ministers for the work they have done but, equally, it has fallen to Deputy Mitchell, and his able assistant Deputy Donnellan, to bring the Bill through to us. The mere fact that they accepted 150 amendments in the Dáil means that the Bill must be pretty accurate in what it is supposed to do. I should like to compliment them on meeting the problems that have arisen. We have all got letters asking us to solve some of the problems from the people involved in the Post Office. The fact that we have 150 amendments already means that the problems were listened to and are being tackled.

This Bill must lead to greater efficiency. Its aim is to improve the national telecommunications services and this is important as an integral function of our country. We are in the EEC now and we must have a system of communicating with Europe so that business people will not be put off by the fact that they may have difficulty in contacting their competitors or customers. It is important that protection for the user is in the Bill. In this day and age of advanced technology it is important that there is protection for the individual whether it is phone-tapping or any other device. I am glad to see that letters will be protected and the only way to protect them is to make sure that those who are caught interfering with them are punished severely.

The cost of the installation of telephones seems to be a problem judging by the communications I have got from some of my constituents. They get a bill for £400 or £500 and no matter how much one needs a phone or how long one is waiting for a phone this demand can be a problem. I hope the Minister in the future will be lenient especially where there does not appear to be any great need for high charges if the line is within a few feet of the house. I know it is necessary to pay rental in advance but I do not think people get in a phone to have it taken out immediately. The idea that the rental has to be paid in advance to make sure that people do not get in a phone for the sake of status and then remove it within a few weeks has gone out the door, in my view.

The Post Office has given a good service. I wonder if business has fallen in investments in the Post Office because of a lack of privacy in dealings there. The same may be said about the banks where there are queues but the banks have developed the art of keeping a few feet between the customer at the counter and the next customer. The post offices are very open and do not encourage people to do private business in financial affairs. I am glad that the staff have been looked after and the fact that their position will be no less favourable than at the moment is very important. If the staff are not happy there is no way we will have a good service. Apart from any change in working conditions and worries they may have, the staff in post offices and telephone exchanges are in the firing line for a lot of abuse because people do not get what they think they are entitled to. I should like to pay tribute to the post office staff who have given such good service often under difficult conditions and working in post offices that have grown away beyond what they were meant to be or in small exchanges that could not cope with the lines they had. It is good that those who are being transferred—there was a lot of worry about their working conditions—will not be worse off than they were. The Minister is bringing in a further amendment that will make this better. The Minister has told us that the amended section is designed to ensure that the staff will be guaranteed employment in the new State-sponsored companies on terms no less favourable than they have now.

I hope the Bill when it is passed will mean we will get a better service and greater efficiency and that it will help everybody to a better way of doing business.

Mr. Cassidy

I should like to compliment the Clerk of the Seanad, Mr. Tobin, for supplying us with new speakers. We complained in the first two or three weeks about the speakers and I am delighted to see he has had good ones installed. They are to our satisfaction and he should be complimented.

As a former employee of the Department of Posts and Telegraphs I know the staff have given us a good service over the years. Everything changes and now these services are going their separate ways. The Bill was brought in under three different Fianna Fáil Ministers, Deputies Pádraig Faulkner, Albert Reynolds and John Wilson. Deputy Mitchell is the fourth Minister to have this Bill so it is fair to say that probably both sides of the House welcome this Bill were it not for a few very serious problems in it that have to be ironed out before this side of the House will agree to put it through. We all know that Posts and Telegraphs have 30,000 people. It is the biggest transfer that has ever taken place in the history of the State and it probably affects over 120,000 people when you take into consideration their families and all the usual different problems there are in dividing a Department of this size.

I want to stress the importance of the staff involvement in this. Fianna Fáil made it very clear from the start that we were not going about any political election promises and we made it very clear that when you are a civil servant you cannot be a member of a semi-State body but two people, one from Labour and one from Fine Gael, saw fit to write letters when it was opportune for them at election time. Maybe they did not think they would get into power, but it happened. They very wisely are coming back to the stance that we took when we were in Government. At the same time, I do not think that we can underline enough the security that will have to be given to the staff in this change. I am awaiting the amendments that will come in on Committee State.

We should have a look, too, at the telephone system for old people. People who have worked hard and given a life of service to the State who are now 66 years old are entitled to telephones when they are on their own. We find very often that not alone are they a year or two years waiting but I know one person who is four years waiting for that service. I would like to ask the Minister of State to have a look into that matter and try to give them a better service in the autumn of their lives.

I also think that something will have to be done about the way the telephone bills are compiled at the moment. You do not really know until the bill comes through your letterbox what amount of money you will have to pay for your quarterly bill. I would like to suggest that whether you are a firm or a business or family that the meter system the ESB have is the fairest system. The Department should have a look at that system. I think they have very little option but to provide a fairer system where people can assess their bills and see what is going wrong. It is very important that the Minister and the Department are seen to be doing something about it because it is the greatest single problem that the telephone section of the Department have at the moment.

I would also like to stress that they should connect these meters free of charge, as the ESB do. You know what you are getting when you see it clocking up. Very often people owe the bills but they are not convinced. It seems to me that the demand will soon be met because the cost of the demand — it is not just for the postal services — will be greater than the need. If it is to come to that we have then to start looking for customers. When you are looking for customers you can put everything right but when there is a queue you are inclined to give a lesser service. That is one thing that I wanted to stress. Probably 15 per cent of the workload of any public representative is querying telephone bills.

I would like to make another point. Is it true that all the poles for the Department of Posts and Telegraphs are imported. If this is the case I want to condemn it and put it on record that I think it is a disgrace if all these poles are imported. I come from the fastest growing timber area in Europe, the boglands of north-west Meath and we have a lot of suitable timber now maturing. I wonder if the Department would have a look at the situation and see if something can be done, especially in this time of recession — we all know we are nearing a depression — so that we could at least be seen to be making an effort. I could not believe it when I was told that we were importing timber for the poles for the Post Office.

I would like to ask the Minister to look into the matter of collecting TV licences. This is another area where there is total misuse of a system. It is being exploited by every person in the country and there is no point in saying that it is not. The number of people who are evading paying colour television licences in this country is roughly in the region of 150,000. The estimated number paying for black and white licences when they should be paying for colour is 140,000. When you tot them ail up the estimated cost is £8 million. If that money was collected there would be no need for an increase in a television licence here for two to three years. It would also give RTE the very much needed capital that they need to keep their high standards at the moment. They are in real danger because of lack of money. I want to compliment RTE for having given the Irish people a great service since the foundation of the State. For the last while, due to the economic climate, there are restrictions on any sort of an increase. We in this House are politicians with the exception of a few. We know that we can do a door-to-door canvass, call practically to every house in a county in a period of six weeks to two months. I do not see any problem if the Post Office or RTE in conjunction with the Post Office, were to call to every house once every year. The system we have at the moment is not working. If it is not working there has to be some way to correct it. I would like the Minister of State to ask his Department to try to formulate some new system whereby a better effort will be made to collect these outstanding fees. As far as I am aware, the Post Office are not answerable to anyone if the licences are not taken up. I want to know if that is true. If it is true we will have to take measures to correct it. I also want to know if there is a computer in the Post Office to keep a list of names for the purpose of collecting television licences. RTE, as far as I know, have a computer system in the station. That is one way I suggest to the Minister that would help him and his Department in this difficult task. It seems to be a very difficult task not only for this year or for last year. It has been going on for a long number of years. At this stage that is my contribution. I hope we will be coming in again on the Committee Stage when we will have more to contribute.

Mrs. Robinson

I wish to begin my contribution on this Bill by declaring an interest. Members of the House should know that I have given professional legal advice to the Post Office Workers' Union on the implications of this Bill and, in particular, on how it might affect the status of the members of the union who at present hold the position of established civil servants. It is customary to make such a declaration of interest in the circumstances although I would also make it clear that my contribution to this debate is now a contribution as a Senator and I will be concerned in a balanced way with all aspects of the Bill before us.

I agree with the Minister that the Bill is a most significant measure and a very far-reaching one. As he mentioned in his opening speech it involves the statutory transfer of almost 30,000 people from the civil service to the semi-State sector. He refers to that as being approximately half the civil servants in the public service. This is a very major undertaking with far-reaching implications and with obvious implications for those who are being transferred. Apart from that dimension, which is extremely important, the subject matter of the Bill, the postal and telecommunications service that we will have as a community is clearly of vital interest to us in our economic and social life.

Therefore, it is worth reflecting, even at this relatively late stage in the legislative process, on some of the basic functions behind the measure. As the Minister said in his speech introducing the Bill the legislative process and the prior process of consultation has been rather a long one. He referred to the Green Paper published in 1980 and to the White Paper in 1981 on re-organisation of the postal and telecommunication services and the recommendation that there be a dividing of the services and that they be organised under two separate State companies. He referred to the fact that it was this company model which was favoured by the review group.

A number of institutional and other issues are raised by that approach. First of all, it is worth asking whether we are satisfied that is the best approach to the postal and telecommunications services which we wish to have and need as a rapidly developing country and as a social community. To some extent there is a very basic ideological underlying principle in the approach which can be adopted on this measure. It is perhaps for this reason, given the political structure of the parties in this country, that there is no great divide between Fianna Fáil and Fine Gael on this issue.

If we look at the experience in other countries we can see this in a very interesting way. If we look at the experience in the United Kingdom, where they adopted this approach of dividing up the two sectors and transferring them out of the civil service and into the semi-State sector, we are now witnessing, as I understand it, a considerable drive to privatise parts of the telecom sector, the advanced technological sector and there are companies very interested in getting in on that particular sector in a very profitable way.

The approach in France to this issue is quite different. The French Government and President Mitterand are not persuaded that it would be in principle a desirable economic and social objective to divide up these two areas and to create separate institutional structures for them. This issue has been debated in a number of other countries, as to what is the desirable way of approaching the matter.

Apart from that substantive question of whether it is desirable to hive-off telecommunications services and postal services and create separate institutional frameworks for them another serious question is the whole approach to rationalising and avoiding unnecessary duplication. It is inevitable, in the divide of these two areas of services, that there will be a duplication which does not exist at the moment, even a physical duplication in relation to certain premises and certain counter services in premises etc. It may well be that additional administrative and other overheads will be taken on precisely because of the division of the services.

There is also the question of the framework adopted for doing it. The recommendation was that the two bodies would be established in the form of companies. This Bill proposes that they would be companies which the Minister would register under the Companies Act. The counter view and the other possible model was that they should be statutory corporations, as the Minister has mentioned, which form the basis of what could be considered to be very similar type of semi-State bodies; the ESB and CIE are two examples. The advantages of the statutory corporation model for some of the problems that have arisen here is that the Act itself would spell out a considerable number of the issues and the areas to be covered and would then confer on the Minister power by way of statutory instrument to implement in further areas, but the basic framework would be in the legislation.

One of the difficulties in this Bill, detailed as it may be, is that it does not reveal some of the vital areas in relation to two bodies because we do not have copies of the memoranda and articles of association of these two companies. We do not know in specific detail what will be contained in those memoranda and articles of association. They can be amended, though not without the prior consent of the Minister but this House will not be told if there is an amendment, to the memorandum or articles of association. It will not necessarily come back to us whereas if the structure was that of a statutory corporation there would be the necessity to come back by requiring a change in legislation or indeed if the Minister exercised his powers by Ministerial Order than the House would be able to see what was in the statutory instrument and consider it. I wish to place my doubts on record about this, doubts that are fundamental to what kind of approach we should adopt to an essential public service which I regard this as being. Should we move in the direction of the company model and the ultimate risk of privatisation of the profitable aspects of that company model or should we retain a much greater and structured state corporation involvement which would be less likely to move in that direction? Are we really sure that it is an advance in the provision of the services in question to hive them off and divide them up? I remain unconvinced of that but perhaps we can come back to this in more detail on Committee Stage.

I noted the Minister's reference to the fact that because of the delay involved since this Bill was intitiated and because of the many representations made to him publicly and privately that he has accepted and introduced in all approximately 150 amendments to the text of the Bill. I would agree with him that he has been very open in his approach to amendments. I was particularly pleased that he is prepared in this House to table amendments in some key sections particularly in relation to the security of tenure of staff who are transferred under section 45 of the Bill. I welcome this because it means that our debate will be a much more relevant one on Committee Stage than it might otherwise be. At this time of the year, in the dying week or two of the Dail, unless a Minister is prepared to state at the start of the debate that he is going to introduce an amendment or amendments and is open to it, then we have lost a great deal of our possible thrust and leverage and although we may be eloquent we cannot really be very effective.

I do not intend at this stage to speak at any great length on Second Stage because I think the real work on this Bill can be done and should be done by us on Committee Stage. It is important that we examine this Bill in considerable detail, all sections of the Bill on Committee Stage because unfortunately the Bill ran out of time in the other House and very substantial sections of it were not considered in detail on Committee Stage. We have an opportunity to influence the final shape of this Bill. We have a responsibility in that whole sections of it did not get the kind of consideration which the measure warrants on the two main grounds that I was talking about because so many people's livelihoods and futures are affected by it and the subject matter itself is of such vital importance to the economic and social life of the State and as a social service to ordinary people in the country and to consumers of the postal and telecommunication services.

The kind of questions which I hope we can deal with in considerable detail on Committee Stage would be, for example, the question of the provision by the companies of lossmaking services and the fact that both companies may be required by the Minister to provide services in the manner he prescribes but that there is no spelling out in the Bill of how these are in fact to be funded expressly. There is no provision for payment for these lossmaking services. It is interesting to reflect on the present discussions which the Minister is having with another State-sponsored body in a somewhat similar area, with CIE in relation to the form of accounting for services provided. I hope that we will have an opportunity for some discussion on the aspects of the services to be provided by these two companies, particularly of the postal company, which may be regarded as effectively lossmaking services and how that is to be regulated.

I also hope that it will be possible on Committee Stage to have a full discussion on the provisions of the Bill which provide for licensing. I hope the Minister will be open to consideration of further amendment of the Bill in relation to the powers which the Minister has to grant licences directly or on an appeal where a person has been refused by the company. Under section 89 of the Bill there is a provision where a company have been refused a licence where the licence would he within the exclusive privilege granted to the company under section 87 that an applicant may appeal to the Minister against the refusal and the Minister may then grant the appeal and his decision on that would be final.

In the section dealing with the direct application to the Minister, section 111, where the matter is not within the exclusive privilege of the company and the Minister may decide to grant a licence to a private company the manner of doing so is by order which would then be laid before both Houses and could be the subject of a motion to annul by either House. It seems to me that there should be a standard protection in both cases for the granting of licences but, in particular, perhaps where the Minister would be granting a licence which had been refused by the company for whatever reason the company advanced at the time. It would seem to me that it would be more accountable and more in the public interest that the Minister would act by way of order which would be tabled and come from debate if necessary before both Houses.

I hope that when we discuss the whole question of licensing the Minister will be able to clarify his approach to licensing. It is worrying to see what is at present happening in Britain in relation to British Telecom where there is great deal of economic clout and power behind some of the companies competing for some of the very profitable new technologies in the area of telecommunications. I would be very concerned at the possibility here that we would see pressure for privatisation of these profitable areas, pressure which we should anticipate at this stage and towards which we should clarify our attitudes and ensure that it does not mean that the Minister's assurance in his speech that there is no possibility of privatisation of a company without further legislation is not undermined. I am interested that in his opening speech he specifically stressed this when he said:

It should be stressed that the postal and telecommunication services will remain firmly within the public sector and there is no possibility of privatisation of the company without further legislation.

As I understand the structure of the Bill, it seems to me that there are two possible routes where there can be some privatisation. One of them is through licensing. If there is a licensing to private companies, that fits within my political understanding of what we mean by privatisation here. The other way in which it would appear to be possible would be by the issue of shares. It will be important, when we get to the Committee Stage, for the Minister to clarify in a very particular way his understanding of the way in which the provision in relation to the issue of shares would work. At one reading the issue of shares appears to be very tightly controlled. For example, in section 21 it is provided that:

No issue of share capital shall be made other than those referred to in sections 18, 19, 20, 29 and 31, unless the Minister with the consent of the Minister for Finance, has authorised such issue.

All those sections tightly control the issuing of shares to the Minister who is putting the Bill through or a share to the Minister for Finance or a share to the subscribers in the memorandum of association.

The holding of those shares is very tightly controlled. What does it mean that there should be no other issue of share capital unless the Minister has authorised it? Is he going to authorise very substantial issuing of share capital other than that? If so, perhaps the memorandum and articles of association would tell us more about that but it is not spelt out at all clearly in the Bill itself. Of course, a substantial issue of share capital to private subscribers would be a dilution of the State holdings and, to that extent, would be an indirect form of privatisation.

It is relevant that in section 10 which deals with the names and capital formation of the two companies there is subsection (3) (d) which provides that:

Each company may, with the consent of the Minister and the Minister for Finance, divide the shares in its share capital into several classes and attach thereto respectively any preferential, deferred, qualified or special rights, privileges or conditions.

There is a power to divide the share capital into these classes. Presumably that too is tied into the whole question of the conditions under which there can be further issues of share capital and how this is to work in practice. We do need to know a good deal more about that area.

Amendments were tabled recently by the Minister in relation to the creation of new offences, for interfering with postal packages and interfering with telecommunications messages. Again, these are matters for Committee Stage — and they are amendments which were introduced at quite a late stage in the debate in the other House — but it seems they are matters which could have very wide-reaching implications and could possibly extend the Minister's power in the area of telephone tapping. They can be considered carefully on Committee Stage.

Also on Committee Stage it would be useful to discuss an aspect of the activities of the postal company which has not received sufficient attention and which would warrant very clear understanding by Members of the House of the way in which this will be developed, that is, the possible banking-type services which may be developed, as has already been referred to by Senator Cassidy, and the whole role of the savings bank and the extent to which this has not developed in as productive and high-powered a way as would make it of substantial service to a broad section of the community. For example, the Japanese have developed their savings bank services through a somewhat similar structure. I mention this because at the end of his speech the Minister specifically suggested that it would be appropriate to look to the future but he did not say anything specific in this area. The speech is full of very woolly phrases, that he is impressed with the commitment of the two boards, that there are opportunities and exciting prospects but also that the challenges facing the boards are most formidable. This really does not give us any true indication of the real situation which these two new State companies will be facing. We need to know that.

Most of us have some idea of a fairly realistic nature of some of the problems. For example, what is the position of the telephonists who at the moment are finding that advances in technology are in fact effectively depriving them of their present position? What is their position if they are transferred to a State company? What is their future development within that company? What is their security of tenure within that company?

It is these economic realities which we should not disguise or run away from which are in the background of the deep concern of the staff affected in their security of tenure. I have already welcomed the fact that the Minister has committed himself to bringing in amendments to section 45 and we can look into this in a much more detailed way on Committee Stage. Apart from the copperfastening of the guarantee that there would be no worsening or that the provisions in relation to security of tenure would be no less favourable, we will have to have a very full understanding of section 45 (5). What is meant by the express reference there to the minimum notice in terms of the Employment Act, 1973? That Act excludes people who are in the civil service from its application by expressly referring to it here, given that it is a measure requiring a certain period of notice for lawful dismissal. How is that reconcilable with the full security of tenure which is at present held by the staff in question as established civil servants? That is a very important question which will have to be fully discussed and thrashed out.

Another dimension of this Bill which must be further discussed on Committee Stage is the protection of consumers. Again, I accept that the Minister has brought in an amendment which has strengthened to some extent the users' councils but I would submit that the Bill does not, as yet, adequately protect consumers of postal and telecommunications services. We should be aware of the vulnerable position of some consumers — I agree with Senator Cassidy here — particularly of elderly consumers or those who need a telephone as a life-line or as an essential part of their lives within the community. The users' councils are not, as yet, enabled to voice the criticisms or concerns of consumers and there are not the kind of safeguards which would take into account such worries and criticisms as consumers have had in the past and have been unable to express.

It is a more efficient deployment of time to reserve any detailed discussion of the points I have raised until we are looking at the sections on Committee Stage because we have got an open door on amendments in view of the Minister's openness and attitudes on this. Therefore, we have a real possibility in this House of making a constructive and effective contribution on the terms of this Bill. I look forward to taking up the points on Committee Stage.

Mr. Fallon

This legislation has been described as far-reaching and significant and I certainly agree with that description. Clearly it has massive implications for many people and the Bill is one we will have to consider in great depth. As has been suggested by other speakers, many of the problems in the Bill will be dealt with on Committee Stage. I would like to refer briefly to a number of the points in a general way.

The first one which seems to be very important in this particular context is the users' councils that are mentioned in the Bill. These are badly needed. I do not have to mention that questions dealing with telephone accounts, telephone bills, repairs and telephone tapping take up as much as 20 per cent of the politicians' time. There is a great deal of disquiet among consumers in regard to the matters I have mentioned. There are as many as 20,000 queries at the moment regarding telephone accounts. This seems a very high number but it has been suggested that it may be correct. I have the personal experience of querying an account, of receiving an answer saying that the account was right and then two days later receiving another letter saying that there had been a clerical error of £400. I will always remember the case of a colleague of mine on the Athlone Urban District Council, Councillor Frank Waters, who received a bill for £5,800 when he thought that the bill should have been in the region of £14. After months of querying, the matter was finally sorted out. So that type of situation does exist and the need for competent users' councils is clear. The full rights of the users' councils should be established at the outset. It should certainly be a function of each council to encourage the board to develop the most efficient service possible.

The Post Office Savings Bank has been referred to. We all know that their share of the market has dropped from 15 per cent to 3 per cent. This situation should not exist. The Irish people should support this group but there must be very good reasons for their lack of support. The attitude of successive Governments to savings has not helped the situation. There is no reason whatever why the Giro system could not be introduced in the Post Office system. They have a nationwide outlet and it is something which could be implemented with some degree of ease. The present Minister in his recent Finance Bill has not given people any incentive to save. It seems to me that if this attitude continues, anything connected with the State or a semi-State organisation in this area will be avoided by the people.

While there are more than 100 sections in the Bill, obviously the most important of all is that dealing with the human Element, the staff of the present organisation. A previous speaker referred to the telephonists. They must certainly be worried as to what their role will be having regard to modern technology and equipment which will continue to be a feature of life for them. We have a clear responsibility to allay the fears of the very large workforce which will enter into these two semi-State bodies. The fear and suspicion is very deep-rooted. Security of tenure is something which these people worry about. While the previous speaker, Senator Robinson, rightly declared her interest at the outset in saying that she had a vested interest, it is a very great pity that she did not talk to her colleague, the National Director of Elections for the Labour Party, Senator Flor O'Mahoney, about a letter he wrote on 10 June 1981 or to Mr. Prendergast of the Fine Gael Party about his letter dated 8 June 1981. In the letter written by Peter Prendergast he stated; "In addition, such moves will not involve loss of civil service status". Senator Flor O'Mahoney in his letter stated "We also confirm that any reorganisation must take into account the present status of workers within the civil service. That status will not be undermined". These letters, more than anything else, caused all the problems. These promises — election promises as they were — are now causing more concern and trouble for the people concerned than anything else. That is why these people were protesting outside the gates of Leinster House last week because the election promises could not be implemented, as they were told by the then Minister, Deputy Reynolds. Yet letters were written indicating that these promises would be fulfilled. That was wrong. It was an election gimmick that caused, and will continue to cause, problems in this area.

As other speakers have said, we will have a further opportunity on Committee Stage to tease out the problems in greater detail. This is a huge undertaking. The implications for the people concerned are enormous. I hope that when the two semi-State bodies come into being we will have what we have at present, a happy and content workforce. That should be the aim of any administration.

Mr. B. Ryan

This is a most complex piece of legislation. The staff of the Department of Posts and Telegraphs get, to put it mildly, lambasted for alleged inefficiencies. I would say we have come a long way. Looking at the enormous list of Bills referred to, the enormous amount of legislation which has to be repealed, the enormous complexity of its operation nationally it can be seen that the employees of the Post Office have come a long way. I am sure this was not achieved with 100 per cent enthusiasm but they have not put forward spurious claims, the sort of thing that sections of our media like to focus on when trade unions are involved, but claims born out of very legitimate concern for their own welfare. In the whole discussion about the future of the telecommunications area it is important to remember that central to that will be the obvious willingness of the employees of both the putative companies to work in a new environment and to seek what are quite reasonable concessions to protect their own future. In all the discussions credit should be given to the unions and their members for what seems to me to be the very progressive and reasonable way in which they have approached this entire proposal. I hope, therefore, that their very reasonable concern for their security will be well met by the Minister's proposed amendments.

When people are concerned about their own security it is also important that the definition of the work should be clearly laid out. Concern has been expressed to me, for example, about the absence of a precise definition of what constitutes a postal packet and the enormous commercial gains to be derived if private companies can concentrate on a small section of that market where there is high demand and low cost and, therefore, make a fortune and leave the loss-making enterprises to An Post. It is regrettable, therefore, that there appears still to be some ambivalence in the Bill about that. I hope we can discuss that aspect at some length on Committee Stage.

If these companies are not commercially viable, no amount of legislative guarantees can give people the security of a decent job. They may have a job but if the companies are not commercially viable this whole great undertaking may be undermined and we may have further legislation. For companies to be commercially viable in an area where there are considerable legislative constraints and impositions on those companies to meet what could be described as social needs, it is important that in the areas of commercial activity their monopoly should be protected. There is nothing wrong or shameful about public service monopolies. There is a tendency developing in this country, probably an over-spill from our nearest neighbour, where anything in the public service that is a monopoly in inherently assumed to be worse than any other possible model. This is not the experience in this country. There have been problems with, for instance, the telecommunications service, but it is fairly well known that those problems did not arise from a lack of planning within the telecommunications service but from a lack of response to those plans by successive Governments. When we say "typical public service" because there is something wrong with our telephone service, in fact it is not typical public service: it is typical Irish politician who, because there was not any immediate response or demand for extensions in the telecommunications service five or six years ago put that large and major capital investment on the long finger until the crisis hit us straight between the eyes. Now we have a crash programme to try to catch up with the losses of the past ten years.

It has been consistent, in public and in the media, to attribute the inadequacies of the telecommunications service to the fact it is in the public service. The real reasons for the inadequacy is lack of capital, lack of planning and lack of technical expertise. The lack of capital is directly linked to the fact that the plans that were produced were ignored and the lack of technical expertise is related to fairly insensitive embargoes on recruitment which often made it difficult to recruit highly skilled, highly specialised, and inevitably highly expensive, staff who were needed at various stages of development. The whole mythology behind this, that there will be a transformation just because it is being moved from the public service to being a semi-State corporation, is simplistic and almost the product of ideology than of any realistic assessment of what is going on.

If these proposals are to be successful — and I hope they will be — they will be successful because the new companies will be properly managed and properly capitalised. If they are properly managed they will have a responsive, organised, hard-working staff with high morale. That is the function of the management of these companies: to produce staff who work hard and whose morale is very high. It is not the function of the staff to provide management with the rewards, the incentives and the plans which are management's duty to produce. We have a tendency, again in the public service, when things do not go right to point the finger at the employees who fail to carry out a job and take the responsibility away from management whose job is to plan and operate the four functions of management, namely, staffing, organising, planning and controlling.

Therefore, I hope that when these companies are reorganised we will have a proper management structure, where accountability and responsibility are delegated to the maximum possible extent, and not have a centralised organisation. I do not know the details of the management structure, and I doubt if they are being thought about yet. What we do need is to avoid any attempt to wait and see and blame the staff. What I am coming back to is that we have obviously had considerable goodwill from the staff of these organisations. It is extremely important that this goodwill should be sustained and, therefore, it is extremely important that the structures and decision-making should reflect their concerns, their interests and their priorities. Their obvious priority in this day and age is their own security and I hope that the amendment promised by the Minister will do that.

There are a number of other areas in these proposals that are welcome. One is the facility to set up a national banking service through the Post Office. It is a pity that we will still have to wait for Ministerial orders which will be inhibited by the lobby of the private banking sector. It would be a very welcome development in this country if there was a public banking service with the full facilities of the banks and the full range of banking services. It would be an interesting and ironic fact that there would then be a public sector banking service open five and-a-half or six days a week from 9 a.m. to 6 p.m. providing a full banking service and the allegedly high efficient, allegedly highly competitive private capitalist banking service closing at 3 o'clock in the afternoon, closing for lunch and providing a much less adequate service. Perhaps the apologists of the private sector and the critics of the public sector could explain that to me. I await with interest the ministerial orders which would enable An Post to set up a full and comprehensive banking service. It is badly needed. What is badly lacking in this country is any banking competition in the banking services. Once we get a Giro bank system within the Post Office there will be an enormous new flexibility in opening hours and various other services in the private banking sector. Whatever is wrong with a public sector monopoly, it is not half as bad as a private sector monopoly.

I wish the Minister well. This is a huge undertaking. I am confident, because I know the trade union movement well enough to know the capacity to respond to new situations. I am confident that, given goodwill and given sensitivity to people's very serious worries, these major concerns can be a success. I must reiterate that I wish half as much notice had been given to the flexibility and capacity to respond to change of the employees of these companies as is usually given to the occasional displays of stubbornness and unwillingness to change on the part of the trade union movement. The fact that we have come so far is a tribute to the Minister's staff but also to the employees of both these companies.

Minister of State at the Department of Posts and Telegraphs (Mr. Donnellan)

I wish to thank the Senators who made contributions to the debate on this Bill. It is my intention to try to reply in some detail to what they have said. First, I wish to make a few general remarks in relation to the Second Stage of this Bill. It is approximately five years since the Post and Telegraphs Review Group were set up and four years since they submitted their report. The period since then has been one of uncertainty for all concerned, for the staff, for departmental management and for the interim boards. It is in the interests of the services and all the parties I have mentioned that the prolonged period of uncertainty be brought to an early end. I am, therefore, anxious to have the new companies vested at the earliest practicable date, certainly not later than 1 January 1984.

I would like to avail of the opportunity once again to place on public record my appreciation of the services of the interim postal board chaired by Fergal Quinn and the interim telecommunications board chaired by Michael Smurfit. They have given more than generously of their time and energy and have displayed an extraordinary sense of commitment to the task they have undertaken. I know they are ready and anxious to move from planning to the implementation of their plans. I am more than anxious to be able to permit them to do so as soon as possible. We are fortunate to be able to command the services at nominal cost of men and women of the calibre of those serving on the interim boards.

The new companies will commence operations at a time of continuing economic difficulty. It would be futile to believe that reorganisation will result in overnight solutions to the problems of our telecommunications services. We are providing many new freedoms and opportunities for the companies, but we cannot by legislation provide them with the magic wand which would be necessary to achieve instant solutions to all problems. Patience and understanding will be necessary in the short term but in the medium- and long-term future, I believe that we can be confident that the public and national need for efficient postal and telecommunications services will be met by the new companies.

The postal company, An Post, faces a particularly difficult financial situation in its early years. Postal charges were increased very substantially in recent years to overcome the losses being incurred. Charges were not increased this year and I know that the new company would wish, for marketing reasons, to hold prices at or somewhat below the rate of inflation. This is likely to result in losses until such time as the marketing strategy results in the necessary growth of mail volume. That is one of the reasons why section 29 provides enabling power for the Minister for Finance to make an allowance not exceeding £20 million available as current expenditure grants over the first three years. The telecommunications company, Bord Telecom Éireann, should attain profitability quite quickly. As time goes on a major investment programme should yield very significant benefits. For example, when it is completed it should be possible to double the number of subscribers without a further major increase in infrastructural investment. The company will be in a position, and will be expected, to remunerate State equity investment. In short, the financial future of the telecommunications services looks quite bright.

Sitting suspended at 8.35 p.m. and resumed at 9 p.m.

Minister of State at the Department of Posts and Telegraphs (Mr. Donnellan)

On Committee Stage I will be proposing amendments to sections 73 and 89, in addition to those to section 45 to which I referred in my opening remarks. The amendments to section 73 and 89 are designed to remove any inconsistency between these sections and section 111 (1) wherein the grant of licences by the Minister to permit persons to provide postal or telecommunication services which are within the exclusive privilege of the companies must be done by order. The amendments will require that any licences granted by the Minister following appeal under the provisions of sections 73 and 89 must also be by order. It is my intention to appoint a statutory interim board provided for in section 50 as soon as possible after the passing of the legislation. It has not been possible, in the absence of statutory authority, to delegate functions to the existing non-statutory interim board. Section 50 will provide express statutory authority for the delegation to each of the interim boards of any of the functions to be assigned under the Act to the relevant company. This will give flexibility to permit various transitional matters to be dealt with effectively and so facilitate the smooth change-over on the vesting day of the new companies. There are many transitional matters to be attended to arising out of the separation of the services from the civil service, for example accounting and organisational matters.

As I said in my opening speech, I am particularly concerned that staff should be fairly treated and that they should believe they have been fairly treated. Only if this is so can they be expected to give their wholehearted co-operation to both companies in overcoming the difficult job which they are undertaking. My approach has been to do everything within reason to provide statutory guarantees which will remove the natural anxiety of staff facing such a major change. I believe that the Bill as it stands should remove any cause for apprehension regarding pay and conditions, including superannuation and security of tenure. However, in deference to further representations I will introduce amendments to section 45. I trust that this will put any remaining fears at rest.

Senators Lanigan, Browne, Cassidy and Fallon referred to the telephone billing system. There is undoubtedly some public perception that the telephone accounts system was unsound and as a result the tendency has been for a high proportion of subscribers to question their bills. The telephone billing system is basically sound. The metering and other equipment used are highly reliable and are the same as those used in many other administrations. The great majority of inquiries into telephone accounts queries give no reason to alter bills issued. What must be borne in mind is that increases in charges in recent years have resulted in higher bills and in subscribers being more conscious of the cost.

Action has been taken in a number of ways in recent months to try to improve the public perception of the billing system and to make the public more aware of how bills are made up. These include showing the number of automatic local call STD units charged on a bill and the issue of a leaflet to all subscribers explaining how the account is prepared, rental, automatic call charges and calls made through the operator. In addition, a series of open days have been held at several exchanges throughout the country where customers are shown how calls, manual and automatic, are recorded. These will be held at the other main centres as the opportunity presents itself. Every care is taken in dealing with bills and queries. When a subscriber questions his bills and calls are out of pattern the meter readings are checked and the meter and associated equipment are tested. If a subscriber continues to be dissatisfied and the case is serious, arrangements are made in agreement with the subscriber to place a printed meter check on the line which records the calls that were made and to where but not the content of the call. This record is then compared with the subscriber's own record. Meters are now available for renting to subscribers who want them for installation in their own premises. The meters are in effect replicas of the meters in the Exchange.

It is proposed to introduce detailed billing of trunk calls experimentally in the Naas area in the last quarter of this year. The extension of this to other exchanges where the capacity to do so exists, or can be provided, will be considered in the light of the trial. There will be a charge for detailed billing to cover the cost of the equipment and processing involved for those who opt for detailed billing. The billing system will continue to be given close and continuous attention to improve it in every way possible to restore public confidence in it.

Senator Cassidy asked me to consider what could be done to provide telephones more quickly for old people. Naturally enough I share his sentiments but I would say that the general idea is to eliminate longer delays in providing telephone service for people generally. As the Minister pointed out in his opening speech, our expectation is that telephones will be available on demand by the end of next year in most parts of the country. Senator Cassidy also wanted to know where the Department purchase telephone poles. I cannot give him an answer off the cuff, but I can say that wherever it is practical and economic to do so the Department buy all their equipment within the country.

Senator Robinson raised the fundamental question of the appropriateness of making the change of splitting the services between post and telecommunications. All I can say at this stage is that the review group and the interim boards as well as successive Ministers have been convinced that the best way forward is to remove the services to the State-sponsored sector and to set up separate companies to run the postal and telecommunications services Senator Robinson seemed to associate the company form of organisation with the risk of privatisation. There is no such association and indeed the example quoted by the Senator in Britain demonstrates this. The organisations being privatised there were set up as statutory corporations rather than statutory companies.

Senator Robinson also raised the question of whether the Minister could issue additional shares. The formula for calculating the authorised share capital of the company is expressly confined to not exceeding the value of three specific items arising under the Bill subject to rounding odd sums to the nearest half million or million as appropriate. These items are the property to be transferred to the companies, the working capital to be made available to them and any money up to a maximum of £50 million which the Exchequer may make available to An Post for capital purposes in return for shares. An increase in the companies' authorised capital share would, therefore, require amending legislation in order to provide for the issue of shares to the public. Sections 19 and 23 of the Bill preclude the Minister for Finance and the Minister for Posts and Telegraphs respectively from selling or otherwise disposing of their shares in the companies.

Senator Lanigan referred to opportunities for the development of existing postal services and the Post Office Savings Bank. The Bill provides ample scope for development of existing services. There is nothing to stop them from developing a strong marketing function and I know the interim board have plans which are well advanced. With regard to the banking services, the Bill removes obstacles to the development of the Post Office Savings Bank. This is dealt with in section 104. Section 67 provides enabling power for the provision of banking services generally including the Giro system.

Senator Cassidy referred to the evasion of television licence fees both on the part of those not paying at all and those paying a fee for black and white instead of colour television sets. Campaigns are mounted regularly to detect evaders with considerable success. Legislation exists requiring dealers in sets to register with the Department and to supply particulars of persons to whom sets are sold or rented. A computerised system relating to collection of TV licence fees is also being introduced. The campaign which is now in operation also has yielded quite an amount of revenue.

Finally, I will refer to a point made by Senator Lanigan, who is not here at the moment. He seemed to pay tribute to almost every ex-Minister for Posts and Telegraphs who belong to a certain political party and who were responsible for bringing forward this legislation. To be fair about it, the present Minister has brought in 150 amendments to this legislation, therefore it would be fair to say that he has a particular input into it in that direction, and it was Deputy Cooney who cleared the heads of the Bill in Government. I would like to pay tribute to all the people who contributed in any way and I do not think it is the particular property of any party. Amendments are for the purpose of securing a better Bill for the benefit of all concerned, for the services of consumers and for the employees. I would like to thank all Senators for their contributions.

Question put and agreed to.

An Leas-Chathaoirleach

When is it proposed to take Committee Stage?

Professor Dooge

I indicated today that it is necessary for this Bill to be returned to the Dáil if we are to make amendments to it on Committee Stage. In the course of the present debate there have been indications from some Senators that they wished to move amendments. Senator Robinson in the course of her address indicated that she would not deal with a number of points in detail because it would be more appropriate to go into them on Committee Stage. The House must face the fact that there is liable to be a substantial debate on Committee Stage of this Bill. I would wish to see that debate held without any restrictions but of course if we are in an effective amending House it must be done before the other House rises. My own preference certainly would be that we should take up Committee Stage when we meet tomorrow morning. I understand that there are Senators wishing to offer amendments who feel that to ask for that is to put undue pressure on them in regard to considerations of Committee Stage. I have no desire to press them unduly in this regard and I would suggest, therefore, that Committee Stage be taken on next Tuesday and that the House would meet on Tuesday morning rather than Tuesday afternoon. I make this proposition in the hope that Committee Stage would not only be commenced on Tuesday but concluded on Tuesday.

Mr. W. Ryan

At 11.30 on Tuesday morning. We will be able to meet on Tuesday morning but not at 10.30.

Professor Dooge

At 11.30 on Tuesday morning. When we come to the Adjournment we will adjourn until 11.30 on Tuesday. We will have by that time from the Dáil the expediency motions in regard to the Committee on Women's Rights and the Committee on Marital Breakdown which will also have to be taken. While we will meet at 11.30, the motions that may travel twice between the two Houses may have to be taken first.

Committee Stage ordered for Tuesday, 5 July 1983.