Postal and Telecommunications Services Bill, 1982: Committee Stage.
Section 1 agreed to.
Question proposed: "That section 2 stand part of the Bill."
There is general acceptance of this Bill. I am a little surprised that it has arrived at all in that the functions and powers and duties of the Minister are being handed over to a semi-State organisation. The system is being changed. From our knowledge of all semi-State organisations it is quite clear that not one of them is profitable. The Department of Posts and Telegraphs are not a profitable organisation either, but they have been and could be. The Minister might have another look at section 24 (2) to find a new device whereby demands would be made on the Minister for tax purposes only. It is too much of a fall-back for the companies to allow them to know that if things do not go right the Minister will have to find the money for them. The State will have to give them the money
I will give an instance of a similar matter. When the former President, the late Mr. Childers, was Minister for Transport and Power he brought in an enabling Bill granting £4 million to CIE. At that time that was to be the end of all the problems of CIE. We know what happened, and we know what is happening today. I am afraid we are giving those boards too much of a fall-back on the Government of the day for financial purposes only. Apart from that you will be told: "It is none of your business". It is your business if they have no money, but everything else is not your business. We are giving them too much of a fall-back and they should be made to face the music themselves. The end product should be their product. In fairness to the Minister, his idea is right but I do not think it is implemented in this Bill. We do not want those boards to say: "Finances are slack this year. It is all right. We can go to the Government. They will not close the place down".
I am not quite clear if I have understood Senator Killilea in criticising the models chosen in this Bill for the establishment of the two companies. If that is what he is criticising, I agree with him. The company model is not the best format, and I mentioned this on Second Stage.
I also have doubts about the splitting off of postal and telecommunications services. The Bill requires that a national and comprehensive service which would have a strong social dimension to it be provided by the two companies. Therefore, it would be wrong to simplify the position and say they are purely commercial companies providing a purely commercial service. I regret that the original Bill adopted the company model because, once that was adopted — even though a lot of time has passed since the Bill was published, and even though the Minister has in fact accepted a number of important amendments and introduced them on Committee and Report Stages in the Dáil and is prepared to introduce amendments in this House — it has not been possible, regrettably, to change the basis for the establishement of these two bodies.
I would have preferred, if we are hiving it off from the civil service, that it would be one statutory corporation and that the Bill itself would have spelt out in very specific detail the functions, duties and responsibilities of that statutory corporation. I accept that it is too late in the day now to do other than express criticism as I do of the company model which has been adopted. Here I disagree with Senator Killilea. The company model is a very insecure one from which to provide a major national service either in the area of postal services or telecommunications services. I would be very worried that there might be privatisation or that there would be values which would be appropriate to a commercial company but would not be appropriate to providing a national service. As legislators we must be concerned about the medium and long term nature of services in this area which we are going to have. If it were possible, realistically, to table amendments on this company structure I would certainly have been prepared to do it.
The point raised by Senator Killilea is a fairly fundamental one. For too long we have tolerated a situation where we almost expect semi-State bodies to lose money. Senator Killilea is incorrect in saying that all semi-State bodies lose money. They do not all lose money, but most of them do.
Could the Minister tell me one?
Aer Rianta make money and up to last year Irish Shipping Ltd. consistently made money and hopefully they will return to that situation. The onus is on us, if we are setting up semi-State bodies, as we are in this case to create the right environment so that they can be a commercial success. Even though, as Senator Robinson said, quite a bit of what An Post and An Bord Telecom will do will be of a social nature, the overwhelming mass of what they will do will be of a commercial nature. It is fully expected of them in this Bill to make profits and from those profits to subsidise the social element of the service. Profits have been made. Last year profits were made by the services as a Department of State. There is no reason why the services should not make profits. I fully expect both of them will make profits, only if we give them the right environment and we do not impose on them too many unneccessary obligations.
In the latter half of 1979 and in 1980 I had a small role to play in that Department. The idea was to leave them within the Department and not push the boards. For example we had the management structure set up with the district managers. We were about to do something about the collection of revenue. In different districts the building programme had commenced. A good deal happened in those two years. I was listening to the out of order gimmicks about telephones on the radio this moming. That has gone on for years. But nobody praised the installation figures of 60,000 and 80,000 and how well the Department worked. We had the problem of the choking up of the higher parts in the Department. Perhaps we were overstaffed in the Department in O'Connell Street. Perhaps the whole system which was in operation from days gone by was carried on, not through any fault of theirs — the system that had developed over the years that authority started and ended in O'Connell Street. I am not saying there was anything wrong with it, but it could have been rearranged in a better way, even without this semi-State organisation.
I speak personally, of course, and from experience. It was one of the best experiences I ever had in my life. If the Department had been given an initiative and if that initiative had continued we would hardly have needed this semi-State organisation which can come running back seeking more cash. That is really all the power that is left to the Minister — the same power as he has in CIE, and in Aer Lingus, the power of money. That is the power the Minister has. We are handing away our powers day by day. We appoint the boards and that is the last we see of them. That is history now, the history of every Government.
I do not want to wander too much from this point. I was not here for Second Stage last week, but this is a point I would have made strongly. Perhaps it is not so easy to make it on this Stage. The Minister might have been braver if he had had another look at the two alternatives. There were two alternatives. The 1978 review was not the absolute answer for 1983. It is late now but I make that point. I do not agree with all Senator Robinson said. I do not understand all the legal terms because I am not a legal man, but I understand the complexity of the Department. Will the hive-off be as fruitful and as successful as we first thought? I hope it will be, but I am afraid that it may not be. I will be sorry for the Minister or any Minister if it is not.
I am sure the doubts expressed by Senator Killilea have entered the minds of many people from time to time. Of course we cannot be certain that the course on which we are embarking will be successful. I am reasonably confident that it will be. Six months ago I inherited plans which were in progress. Perhaps if I was starting afresh I might have done some things differently, but if I started again I would have delayed the whole re-organisation for a long time to come, and would have continued the uncertainty which has existed since the Dargan review of 1979. Uncertainty is one of the real problems we have at the moment, and the sooner the uncertainty is ended the better.
Senator Killilea made a point about criticisms in the newspapers and on the radio and television of the telecommunications service. I agree to a great extent with what Senator Killilea said. Much of it is not justified. There is far too much of it. Some of it, of course, is justified, but we have to make allowances for the public, especially the public who are suffering frustration waiting for telephones or for telephone repairs. We have to make allowances for the criticisms but equally we have to say that a great deal of progress has been made, as Senator Killilea says.
One thing on which I did not agree with Senator Killilea was the implied criticism of senior civil servants in the Department of Posts and Telegraphs. Quite frankly, I think that is a bit of a cop-out. Politicians have to accept responsibility. It is true to say that one of the reasons for the relatively underdeveloped nature of our telecommunications service is that up to 1977 very little thought had been given to telecommunications. There was a great deal of thought about infrastructural development, industrial development, and so on, but telephones were not included in that. It only dawned on Ministers towards the latter half of the seventies that this was a problem. There has been a great deal of criticism of Ministers who held office since that time, but very little credit has been given to them. What Senator Killilea has said is correct. A good deal of progress has been made. A very high number of connections are being made and, in fairness, while criticism can be levelled at previous Ministers, credit should also be given to them. This gives me an opportunity to say that some of my predecessors, Deputy Faulkner, Deputy Reynolds, Deputy Cooney, Deputy Witson, and their Ministers of State, who included Senator Killilea, deserve a great deal more credit than they get and a great deal less criticism.
I was not implying any criticism of the senior civil servants, and I want to make that clear. The system in operation since the foundation of the State suddenly took a huge leap forward in the seventies. Demands for services really got out of hand to such an extent in 1979 that as fast as telephones were installed twice as many people were applying for more. I am implying a criticism of the system that operated, and very little was done about it. I will give an example and it still applies. If you have an extravagant telephone hill and you want to query it, or if there is an error in it we are all aware of the ferocious task it is to try to get it corrected. That is not the fault of the senior civil servants. It is the fault of the system in operation. If you are down in Belclare where I live and you want to question your telephone account, you have to make contact with Dublin city. You have to go down to the Department of Posts and Telegraphs in O'Connell Street. How do they know whether your phone was working correctly without going back and checking it out in Galway?
I am not implying criticism of the senior civil servants, I am criticising the system. We had done something about that. We had appointed district managers and we hoped that the whole system would be built round them. If that had continued to be done from 1981 on, I say openly and categorically in this House, there would be no need for this Bill. Despite what the Minister said, it was as important in 1979 and 1980 to bring in such a Bill as it is today. The pressures were exactly the same. There were conferences day in, day out, with the unions. We had problems discussing this matter with the unions just as we have today. My Minister, Deputy Reynolds, had done an enormous amount of work. The Bill is before the House and we must deal with it. The Minister said I implied criticism of senior civil servants. I did not. I criticised the archaic system. Much needed to be done to make it viable.
One final point on this definitions section which refers to the fact that there will be two companies dealing with the two different services. One problem which might well arise from having two separate and distinct companies which legally have no relationship with each other could be a problem of duplication. A number of the services provided at the moment are provided in the same building, at the same counter, by the Department of Posts and Telegraphs. I would be interested in the Minister's view on how unnecessary duplication could be avoided.
The point Senator Robinson has mentioned is worth considering. It is one that I have reflected upon. When the Dargan committee were looking at this whole problem they looked at models of what happened elsewhere. Having considered all those points they felt that the better thing to do was to have two separate enterprises. I feel on balance that that decision was correct notwithstanding some of the possible drawbacks that may be inherent in it.
Senator Killilea suggested we should keep this within the civil service. The main recommendation of the Dargan Review Group was to take these two businesses out of a civil service environment, which is no longer appropriate to such a big business, and put them into a commercial environment and that is the main purpose of the Bill. If we were not to accept that, we would have no cause to be pressing this Bill.
Would the Minister be able to give us any idea of the change of profitability that can take place? He has told us that in the last year there was a profit made by the Department of Posts and Telegraphs. Could he quantify the profits that can be made by dividing the board? What will be a quantifiable benefit to the consumer by setting up two separate boards if the Department of Posts and Telegraphs are making a profit at present?
The Dargan Review Group looked at this and felt that in a semi-State commercial environment there would be greater flexibility and greater commercial input, and the bodies would be able to recruit commercial people rather than be confined purely to civil servants. Again this is based on experience elsewhere where, generally speaking, these services have been very successful out of the civil service and have made considerable profits. We are basing all our judgments on the hope that the success elsewhere would be replicated here. I am very hopeful and optimistic that it will.
Can the Minister indicate the other countries which were successful in changing from State to semi-State status and the change in the profitability, or lack of profitability, by changing from a State to a semi-State entity?
This has happened in a number of countries, most notably and most recently in the United Kingdom. It has also happened in Australia and there has been restructuring in the United States of America. There are a number of other examples — I do not have them to hand — and I hope we will replicate the success in those countries.
Can the Minister quantify in any way the benefits that can accrue by changing? There have to be quantifiable benefits, and the Department and the Minister's advisers must have gone into this situation before agreeing to changing from State to semi-State status. Can the Minister give us any indication of quantifiable benefits?
I draw the Senator's attention to the Dargan Review Group which covered all these points. Because of the great flexibility of a commercial environment the main benefit expected is that we will end up with a better, more expanded and more profitable service. That is the whole purpose of the reorganisation. Not only are the interests of the consumer well protected but also the interests of the work force and the taxpayer.
If I borrow money I like to find out exactly how much per month I am going to pay back. If I go into a business enterprise I like to know what the, return on my investment will be. The Minister keeps mentioning the Dargan Report. Let us be straight about this: the Dargan Report has no relevance to my question: what profits can the Minister see accruing from this board that are not now accruing to the Department of Posts and Telegraphs?
Section 13 deals with the financial targets, and we could deal with the subject there. It does not come up under the definitions section, but I would be reluctant, even on section 13, to start quantifying the matter of profits. I could set unrealistic targets, especially in the present state of the——
In reality the Dargan Report might have been the cop out, not us.
I will have to blame the Fianna Fáil Government for it.
I would appreciate it if the Minister would explain subsection (6).
Subsection (6) merely provides that the legal requirements set out in this Bill as they apply to An Post and Bord Telecom would equally apply to any subsidiary they create. It is as simple as that.
Will there be guidelines in the legislation for any subsidiaries that may be set up in time?
No, that is a matter for the commercial judgment of the companies concerned.
Would the Minister not think that might be giving them an unnecessary freedom?
The Senator should be aware that these two companies will be subject to the Companies Act. In relation to giving freedom, this gets back to the point I made earlier. For too long we have been hamstringing some of our semi-State companies and dooming them to failure. We must not do that on this occasion. We must create the right environment and give them sufficient freedom to make a go of it. We cannot have Ministers running semi-State companies, as the Senator knows from experience, because we have not got the time or the expertise to do it. That is what we are appointing boards to do.
I disagree completely with the Minister on that. I do not see where the big strains are on all those semi-State organisations. I have not seen any interference, if there ever is. Can a Minister go down to CIE and make an ordinary day-to-day working decision? I do not think he can.
I do not think he can do that in the Sugar Company or in Aer Lingus. The only authority the Minister and the Government of the day have is to save these semi-State organisations when they are in financial trouble. Apart from that, the functions of any Minister in any of those Departments are practically nil. It is wrong for this Minister, or for any Minister, be he in this Government or any other Government, to say that for far too long we have been hamstringing those semi-State organisations. That is copping out. I cannot see any semi-State organisation that I know of, and particularly the ones most seriously in debt, allowing a Minister to intervene. If they are asked to change a judgment they will quickly and sharply say that that was a commercial decision made by the board and it was none of the Minister's business. I do not think it is true to say that we have a grip on those semi-State organisations. What is wrong is that we have let go the grip on those semi-State organisations and they can do as they damn well like. The good companies are all in debt now and it is their own fault. I would not take the blame for that politically.
Question put and agreed to.
Section 3 agreed to.
Question proposed: "That section 4 stand part of the Bill."
Subsection (4) reads:
Where an offence relates to which subsection (1) relates is committed by a body corporate and is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of any person (or any person acting on his behalf) being a director, manager, or secretary of such body, that person or the person so acting, as the case may be, shall also be guilty of that offence.
Could the Minister tell me how that relates to the Companies Act, 1963, in terms of the responsibility of directors, secretaries or managers of companies?
This is a standard provision: where a company or other body corporate commits any of the offences referred to, the responsible director, manager or secretary of that body will also be guilty of that offence.
Question put and agreed to.
Section 5 agreed to.
Question proposed: "That section 6 stand part of the Bill."
Could the Minister tell me why expenses incurred by the Minister in the administration of this Bill should have to go to the Minister for Finance for sanction — moneys provided by the Oireachtas? Any expenses incurred in the administration of commercial companies should be paid for by those companies, and not by the Minister for Finance acting on behalf of the Minister for Posts and Telegraphs.
This is a standard provision. This section deals with expenses arising from the Minister's function in the administration of the legislation. This section is included in all Bills involving expenditure by a Government Minister of his Department. It provides for the recoupment of moneys provided by the Oireachtas of the cost of the administration of the Bill when enacted.
Just because something is standard does not mean it is right. We are talking about transferring the running of two particular entities from the Department of Posts and Telegraphs to two semi-State commercial bodies. Surely every expense incurred in the running of those two enterprises should be borne by the companies themselves? This is one of the problems we hear when we talk about the day-to-day running of State and semi-State companies, and these companies making a profit. It is said that because they do not have to repay loans to the Government, or that they do not have to pay the type of expenses mentioned by the Minister, they are not commercial. If we are setting up commercial bodies, every expense incurred should be borne by these companies.
After this reorganisation there will be a residual Department of Posts and Telegraphs which will be responsible for general policy in the area of posts, telecommunications, broadcasting and so on — as is the case with the Department of Transport which is responsible for general policy. The expenses of the Minister and his office are borne by the Exchequer and this happens in every case. Later in this Bill we will come to sections dealing with financial targets and targets for the remuneration of investment by the State will be set. We expect that these companies will be net contributors to the Exchequer before very long. It is normal practice in even Act that administrative expenses fall on the Exchequer.
If I understood the Minister. we are now going to have a residual Department of Posts and Telegraphs which will look after the affairs of these two companies from the Government's point of view. It appears that we are running into the type of situation we have in the Department of Defence where we have the professional Defence Forces on one side and the Department of Defence on the other side. We are talking about two semi-State bodies and now the Minister has brought a third dimension into it — the residual Department of Posts and Telegraphs, an over-seeing body to run these two commercial companies. I have no doubt that if we are going to leave a residual Department of Posts and Telegraphs behind we will incur costs, because the administration in the Department of Posts and Telegraphs will milk the semi-State bodies being set up under this Bill. This makes a sham of the idea that we are setting up semi-State companies which are going to make a profit. If there is any sense in this at all, we should leave the administration of these two semi-State bodies where it belongs. There is no need for a residual Department of Posts and Telegraphs. If there is any expense incurred, or if there is any need to refer to any Department, it should be the Department of Finance.
I could not agree with Senator Lanigan. There is a need for residual power. For example one of the sections we have already passed, section 4, deals with the question of penalties for breaches of various pre-existing legislation. Somebody will have to decide on an on-going basis the revision of these penalties and it should not be the job of the Post Office or of An Bord Telecom. That is not the line of country they are in. That is a matter of public policy and it can only be done by a Department which will have the type of residual power the Minister is speaking of. There are many over-riding functions of this nature for which administration will be necessary.
I gave an example. Who is to decide in future that £800 will be the maximum fine for a breach under section 45 of the Telegraph Act, 1863? In due course that is going to become inadequate. Somebody is going to have to decide to change it. Somebody is going to have to introduce the legislation. You cannot have a semi-State body introducing legislation. Therefore, there must be a Minister with responsibility.
May I ask the Senator why——
I did not interrupt Senator Lanigan.
I apologise for interrupting the Senator.
I am fed up with Senator Lanigan interrupting me every time I get up to speak, and I am not putting up with it any longer. I am also fed up with Senator Killilea, not having the courtesy to make a Second Stage speech and coming here this morning and wasting our time making a Second Stage speech. He should have been here last week if he wanted to make it.
The Senator, on section 6.
The Minister's explanation of why he needs section 6 is satisfactory. There will inevitably be residual powers and discretions remaining which will need to be exercised, and not by officials or boards of the semi-State bodies, and they will need to be looked at in a general policy way. There will also be the consideration of the working of the Act itself, and whether any amendments would be necessary to help and further advance the bodies being set up under this legislation. In those circumstances section 6 is a proper safeguard.
I consider it vital to have a dimension that will have some Government responsibility in future, and ensure the continuation of the service we all now enjoy through such a large Department as the Department of Posts and Telegraphs. I do not want to vest totally in any new board the power to withdraw what I consider a social service just because they felt it was uneconomic. Certainly, we must maintain structures that will dictate a policy outlined by Government and by all the Members of both Houses of the Oireachtas. We must have a forum in which we can express reservations if these two semi-State bodies decide for commercial reasons that they are unable to deliver letters to Paddy Joe on top of a mountain, who has always enjoyed the service of a postal delivery. The Minister has been kind enough in his amendments to write in as far as possible all the various definitions of service we consider people require. A structure in which we would have an input at some future date is important because this Department will have to provide a social service and we want to have a voice to ensure that that is carried out. If some expenses are necessarily incurred I think it is a necessary safeguard for the public.
I agree with Senator Ferris when he said that all powers should not be handed over. Senator Lanigan mentioned the need for the Ministry, but the theme running through this Bill is "with the consent of the Minister for Finance". Everything has to be done with the consent of the Minister for Finance as I well know.
Senator Lanigan has a point, but I am not saying that it is absolutely correct. I can also see Senator Ferris' point. I apologise to the House that I was not here for the Second Stage debate, but I was at the Council of Europe doing my duty because I was selected to go there. What amazes me is that when I read the Second Stage debate I did not see any contribution from Senator O'Leary.
Senator Killilea on section 6.
That astounds me because he stands up here in a most dictatorial O'Duffy fashion, as if he was God Almighty sitting on the Front Bench of Fine Gael——
Senator Killilea, on section 6 please.
I am just protecting myself, and I am entitled to do that. I have seen men like him come and go from this House quickly. I only say that as a warning to him.
I have seen more men like Senator Killilea who spent 30 years or more in a House like this and contributed nothing.
That is not the attitude one adopts in politics. If one is six foot tall one stands up to six foot; one does not pretend to be six foot tall when one is only five foot six. I hope Senator O'Leary takes the point because what he says runs off me like water off a duck——
And very similar to a duck——
Let him learn a little in the short time he will be in this House. Let him educate himself, learn the protocol and the ethics of this House which you, a Chathaoirligh, are honouring to the greatest extent I have ever seen, with the exception of the lady herself, the Leas-Chathaoirleach. I was here for only a short few months in her time.
I seek the protection of the Cathaoirleach when a little man like that would try to dictate to the House from a pair of shoes that are far too big for him, in my opinion. I hope Senator O'Leary has learned from what I said because if he has not, I can teach him a much more severe lesson.
I am anxious to hear from the Minister on the points I have raised. Taking Senator Lanigan's point of view, the theme right through the Bill — the most important sections deal with finance — is always "with the consent of the Minister for Finance". The Minister for Justice could deal with the sections dealing with fines; the Minister for Transport could deal with other sections and the Minister for Finance could deal with the most important sections because at the end of the day he is the person who will be approached either by the board or by the Minister for Posts and Telegraphs. I am looking forward to a comment from the Minister on this matter.
This House is much more enjoyable than the other House. In relation to the residual Department, there are now 30,000 employees in my Department, of whom about 100 will remain in the residual Department. Many functions will be retained. There are many sections in the Bill under which the orders will have to be laid before the House, regulations made etc. There is also the question of international postal and telecommunications agreements, etc. Some Minister has to be responsible to both Houses for general policy and for reviewing the performance of those companies. It is normal practice that ministerial expenses fall on the Exchequer and are paid out of general taxation. Hopefully, in this case there will be revenue coming from both companies to help to alleviate the taxpayers' burden.
I raised this matter in the first place, but I will not be as hard on Senator O'Leary as he was on my colleague. If I ask a question of the Senator he should not jump down my throat and suggest that every time that he opens his mouth I jump down it. Maybe his sensibilities are a little more acute than mine. However, I never objected to him asking me a question when I was speaking.
It appears that the residual Department of Posts and Telegraphs will have about 100 employees. We are setting up commercial enterprises, and we are leaving a residual Department of Posts and Telegraphs. I suggest that the Department of the Public Service would be the best Department to operate the residual end of the Department, and the Department of Finance would deal with the actual finance arrangements. We have to relate the Companies Act when we talk of penalties. Surely the Companies Act should encompass every penalty for every offence under every enactment of this House. I cannot see why we have to waste taxpayers' money with each Department dealing with different types of fines for the basic misuse of company organisation. If we are going to have this residual Department of Posts and Telegraphs, not alone will there be 100 employees but that number will grow, as has happened with the Department of Defence. The Department of Defence are only an administrative body who pay wages and deal with administration and have nothing to do with the running of the Army. The Department of the Public Service should take under their wing that particular type of organisation, the Department of Trade, Commerce and Tourism should take in the offences against breaches of company law and the Department of Finance should take upon themselves some of the duties to be left with this residual Department of Posts and Telegraphs. I am disappointed to hear that anything being said on this side on this Bill is a waste of time.
The points made by Senator Lanigan have been noted. There are administrative matters that can be changed any time in the future. His last point is just not correct. I have been keenly listening to points made by Members on all sides of this House and of the other House. During the Committee and Report Stages I have been criticised for accepting amendments in the other House——
I was not referring to the Minister when I made my comment.
I appreciate that. The points made by Senator Lanigan are noted.
Question put and agreed to.
Sections 7 and 8 agreed to.
Question proposed: "That section 9 stand part of the Bill."
This section was discussed at length.
The theme of the debate had to be set today. It might be hurtful to some people to have to listen to it, but if they do not want to listen they can leave. No one is compelling them to stay here.
This is a very serious matter. This Bill deals with the most serious division of responsibility that can be given from the State to private enterprise. In the area of communications, what happens today might not be relevant tomorrow. It is a fast moving world and we have to keep abreast of developments, nationally and internationally. I questioned the Minister because of my inability to be here last week. I wanted his opinion and I got it. I can see that he is not over-enamoured of the idea of the Bill and I am sorry he did not give it a little bit more time and thought.
The claim is being made that this Government are going to stay in power for four years. That is a long time. Two more years would not have been too long and things could have developed. I do not accept the excuse that this Bill was foisted on him and that he inherited it. This Government always claim responsibility for the good things but the bad things they inherit. We have another Bill coming into this House later, an inheritance the Government did not accept, but this Bill they do accept. The only thing I question is the necessity for it.
The first line of section 9 is the most important and it reflects what Senator Lanigan was talking about a few minutes ago. It is again the Minister, with the consent of the Minister for Finance. You can see who is holding on to the reins all the time. I have had the devastating experience when coming up with a fresh idea in the Department, nourishing it to see if it was fruitful and arriving inevitably at the Department of Finance. I remember the episodes in our famous efforts to try to introduce the Giro system into the Post Office. When you arrived at the Department of Finance you would be stalemated and cross-questioned.
In those days things were not casual in the Department of Finance any more than they are now. I do not think they ever will be because they are the hierarchy of the nation. You genuflect gently if you want to achieve something from the Department of Finance — that is if you are working in another Ministry. We know what it is like to be an ordinary TD or Senator if you are asking anything of the Department of Finance. You just genuflect gently and hope it will happen or that someone might err.
I would be worried that these boards will not be able to do at the end of the day exactly what they want to do. Giro is one instance. If the postal board do not move with the times, they will disintegrate into a very weak company. The financial operations of the Post Office are the key to their success. For example, the post office in any town holds the most prominent commercial position. On reflection, that will he agreed. The staff at the counter are of the highest integrity and are merely selling stamps. It is not today or yesterday that the post office should have zoomed in on this financial business. I hope that An Post will be able at this late stage to zoom in and grab some of that most important business.
The small saver is the most important saver and has always been. Any Government will explain that the best saver is the small saver. They are the people who down through the years have used the facility of the Post Office, but modem times and changes have deflected them. A big effort must be made now by the postal board and I am afraid that restrictions will be placed on them by the Department of Finance, which would be a tragedy. An employee of the post office who is paying out pensions on a Friday, may be asked by a couple who come in at 2.55 p.m. to give them the pension quickly because they want to go to the bank to lodge it. It is tragedy that that has been allowed to happen. The system in the post office never changed when it could have changed. Giro was the answer but we shirked it at the time.
I believe that Giro is still the answer and new methods and new devices can be used to attract people to save in the Post Office. Small savers placed their trust in it in years gone by. I beseech the Minister, on this Stage in the Bill, to insist that no restrictions on progress towards that end be placed upon An Post. That is imperative. It is fundamental to the whole process. There are many agency types of work that the Post Office can do other than issue television licences, which was very appropriate work. I would like the assurance of the Minister here today that the small savings money market is made available freely and without any restrictions to An Post.
I asked a question on a previous occasion about the subsidiaries. I cannot imagine how that is going to work or why it was brought into the Bill. An Post is the answer and it should be so registered. If they are going to hive-off certain sections to subsidiary organisations of the board, I cannot see it being of any great value. For example, the philatelic side can be very fruitful and financially rewarding and I would hate to see it given away to a subsidiary company. I cannot see why in one section of the Bill we are saying that we give the right to form subsidiaries and in another section of the Bill we are registering it as a full company. We should set up the framework clearly and emphatically for one company.
I do not know when the Minister intends the vesting to take place. It is, of course, a very important part of the whole programme and I would like him to extend to me the courtesy of notice of his intentions on subsection (2) of section 9 before I make any further comment on it.
The Senator has raised quite a number of points some not relevant to this section and we will be dealing with them later. In relation to subsection (2) which says "The Minister shall by order appoint a day to be the vesting day for each of the two companies as soon as practicable after the companies have been registered." The sooner they are registered the better because there has been a great deal of uncertainty and because of successive changes of Government there has been an inordinate delay in enacting this legislation. I certainly would be very disappointed if 1 January 1984 passes without vesting date being declared. We would like it to be sooner than that, if practicable.
Are there any problems arising from the unions regarding vesting?
Unions never say, "Great, you have given us more than we want. Take some back". They are not going to say that they are over-pleased. In fairness, everybody will accept that I have been more than generous in meeting the points raised by the unions in the past six months. Of course, once the Bill is enacted we shall have a very major job managing the transitions from the Department of State to semi-State and that will not be without its problems. The sooner the companies are vested the better for the workers in the two services, for the consumer and the taxpayer.
Absolutely. It is true that the unions are not going to say that the Minister is a great man, but are there any major obstacles between the Minister and the unions in this regard? I do not think that there are.
I would not want to pretend that there are not items to be sorted out but I do not see any insuperable obstacles. I believe that we will be able to negotiate the transition and manage it well. It is as much in the interests of the unions and their members as of everybody else that this is a success; and the sooner the better, as far as I am concerned. The unions appreciate that the uncertainty of the last few years has been very damaging for themselves and very worrying for their members.
I suggest that this arises more under section 45, which deals with the question of transfer of staff.
Not really. It is very important that before the vesting takes place the course be very clear, although there will be other obstacles. We should not let it pass without asking for the comments of the Minister at this stage.
Question put and agreed to.
Question proposed: "That section 10 stand part of the Bill."
Section 10 deals with authorised share capital and the value of the property to be transferred. In his opening speech the Minister mentioned £1,500 million as the value of the property to be transferred on vesting day, that this amount of £275 million was debt free, that there was £705 million of Exchequer loans, that £355 million was going to be issued by the Minister under the Act and close to £80 million to finance leasing arrangements with Irish Telecommunications Investments Limited. He then mentioned, under sections 29 and 31, capital works and current works. Section 29 mentions £50 million to be made available for the financing of capital works and grants for current expenditure for An Post. It goes on to say that the postal company will get £10 million and the telecommunications company will get £150 million for working capital. There is, however, no mention of provision of money for capital works for Bord Telecom Éireann. Does it arise under some other section, or why is there no mention in this section of capital amounts?
The reason is that Bord Telecom Éireann will be in a position to finance their own capital.
Could the Minister please tell us where there is mention of the provision of money for the financing of Bord Telecom Éireann in the Bill?
There is no provision for money in the Bill under this heading. It will be up to Bord Telecom Éireann themselves to fund capital works within the service. The nature of the business is such that it should be able to finance itself. It is a different situation in An Post.
Surely if the Minister does not make prior arrangements for the provision of sums for capital purposes he is flying in the face of current economic thinking. Irish Telecommunications Investments Limited are there and this is possibly the company which should provide these funds. There is no guarantee and there is nothing at all written into this Bill on the provision of capital sums for Bord Telecom Éireann.
As the Senator will know, Irish Telecommunications Investments Limited were set up as a subsidiary a couple of years ago and progressively more and more of the capital needs of Bord Telecom Éireann have been raised by ITI, so the Exchequer contribution this year is very small indeed. Next year, after vesting date, there will be no Exchequer contribution and all the funds will be raised by ITI, assuming Bord Telecom Éireann want ITI to continue, or if not, by Bord Telecom Éireann direct. That has been the way it has been and that is the way it will continue to be. There is plenty of money around for this purpose because it is seen as a very good investment.
There are two points that I would like to raise. One is the question of the exclusion of the word "limited" or "teoranta" from the title of both companies. I understand for historical reasons, that to add the word "limited" in the case of the Post Office might not be aesthetically very pleasing because of the long history of the Post Office. I have no real objection to that in Irish or English. It would be preferable if it were there, but for that special reason. That special reason does not apply at all to the Irish Telecommunications Board. What it really shows is the lack of determination with which we are establishing semi-State structures. On the one hand we establish limited liability companies, and on the other hand we do not insist on the use of the word "limited". This helps to create the mystique that in some way they are guaranteed by the State and have unlimited power to commit the State. For that reason it should have been made perfectly clear — and I would like to place this on record — that they are a limited liability company. They do not have unfettered power to borrow or to speculate but must live within the normal commercial rules like everybody else.
The other point relates to subsection (3) (a). This paragraph deals with what the authorised share capital of the Post Office shall be, the value of the property transferred under sections 40 and 41, the value of the money made available under section 29 to finance capital works and the value of working capital to be made available under section 31. Those three together, increased if necessary by around £½ million or £1 million as the case may be, shall comprise the total authorised share capital of the Post Office. If you contrast that with section 19 of the Bill you will see that there is also an instruction under section 19 that the Post Office shall issue to the Minister for Finance one share of £1 in a share capital company. That is not covered elsewhere. Also, section 31 from my reading of it authorises the issue of additional shares to the Minister for Finance. It appears that under subsection 3 (a) and similarly under (b) as it relates to Bord Telecom Éireann. There should be a provision which would make it quite clear that the share to be issued under section 19 and the corresponding share to, be issued in respect of Bord Telecom Éireann form part of the authorised share capital of the respective boards.
I also have a question on share capital, so perhaps the Minister could answer that as well. I would like the Minister to explain the inclusion in section 10, of (d): "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." Given the nature of the share capital and share-holding, would the Minister clarify whether, in fact, it will be open to either of these companies, particularly the telecommunications company, to offer shares in the company to private subscribers or whether those shares will be confined and held only by the subscribers to the memorandum of association, the Minister himself and the Minister for Finance. Is it going to be possible for a private party to acquire shares in these companies? If not, what is the purpose of authorising the companies to classify the shares in that way?
On the point made by Senator Robinson about whether it is possible to give or sell shares to anybody else, the answer is emphatically "No". There will be two shareholders in this company — the Minister for Posts and Telegraphs will own all but one share and the Minister for Finance will own one share. That is the position. Subsection (3) (d) of this section states that each company may, with the consent of the Minister and the Minister for Finance, divide the shares. Later on we will be dealing with the setting of financial targets. That is to allow for the creation of preference shares and shares which would have to be remunerated first and so on, if the need ever arose. We have to make allowances for that. That would be dealt with in the articles of association. Senator O'Leary pointed out——
When would the need arise for that, except by issuing shares to private parties?
In the amendment we inserted in the Dáil it is prohibited that any shares can be disposed of, as the Senator knows. There were some questions during the discussions leading up to the reintroduction of this Bill as to whether certain portions of shares should be, for instance, cumulative preference shares, in other words, shares that would have to be remunerated at a certain time in a certain way. It was argued that part of the money that is being capitalised should be cumulative preference shares, to be remunerated first, but it was decided not to proceed on that basis at this stage. But there is the option in the future to decide whether or not there should be preference shares of any sort. It is part of the powers of the Exchequer in seeking its remuneration.
Senator O'Leary has questioned the reason for omitting the word "limited". This was at the request of both companies. It was felt that from a marketing point of view it would help. There are precedents for it. For instance, the Housing Finance Agency and Youth Employment Agency are limited companies. I do not think that there is any major significance in that.
I did not quite catch that last remark made about limited companies. Which are limited companies?
The Housing Finance Agency is a limited company and also the Youth Employment Agency, but they do not have appended to their names the word "limited". We are just following that example here. As you will see in the preceding section 9 (1) we have already agreed:
The Minister, after consultation with the Minister for Finance, shall cause two limited companies conforming to the conditions laid down in this Act, to be formed and registered under the Companies Act.
So they are limited companies. It is just that they are being exempted from the use of the word "limited" at the end of their title.
There was a point about the question of this one share that should issue to the Minister for Finance. Under what heading of subsection (3) (a) does that come in as being part of the authorised share capital of the company?
The parliamentary draftsman when consulted on this point felt that it was not necessary to have it inserted here. It is inserted later on in the Bill, as the Senator will see.
The parliamentary draftsman should be asked again. It is not going to be a major issue but, at the same time, one part of the Bill says that authorised share capital of the company shall consist of shares issued under very specific sections — sections 40, 41, 29 and 31, yet under section 19 another share is being issued. Is that part of the authorised share capital or not? That is a crazy situation. Just because it is a share which is going only to the Minister for Finance, there is no point in not getting the thing done properly, if it is to be done at all. It appears that the parliamentary draftsman should be asked again. I have no ideological hang-ups on whether it is included or not, but I do not want the Bill to be found unsatisfactory in any way as a result of failure to include something which can be included without any controversy at this stage.
Just one point. I agree that the addendum of "limited" should be placed after both of these companies in every section of the Bill. We find that the only two shareholders are the Minister for Finance and the Minister for Posts and Telegraphs. Section 4 (4) states that the Minister is equally responsible if an offence is committed under the subsection (1), (a), (b), (c), (d), (e) and (f) and under sections 37, 60, 84, 87, 98 or 99. It appears that the only people left out of the offences sections are the two Ministers who are the only shareholders.
I am not sure that I understand the Senator's point. The Minister for Posts and Telegraphs will own all but one share and the Minister for Finance will own the other.
That is only a technicality. There are two other people holding shares in trust. They are civil servants and responsible to the Minister. The whole Bill provides the legal framework within which the companies will operate. The companies will have an entity as distinct from the shareholders. They will be responsible for the actions of the company. I do not quite get the point the Senator made.
Under normal company law or company procedure, the shareholders are equally as responsible as the manager or the secretary of the company. Here we have a situation where the only people who are not going to bear responsibility for any misdemeanours are the two Ministers who are the only shareholders.
That point is covered in the Companies Act.
Could the Minister tell me where it is covered in the Companies Act. Could he get that information?
My advice is that the responsibility of the shareholders is covered by the Companies Act. That is the relevant Act. It is not at all necessary to go into that detail in this Bill because the normal Companies Act covers responsibilities of shareholders in every company.
Would the Minister have another look at the point that I raised? I understand from Senator Robinson that section 19 (1), of which I was not aware, was introduced at a relatively late stage in the Bill. I also have the Bill as initiated in the other House and it is correct that it is not in the Bill as initiated. It does not make any difference to me, but the Minister should check with the draftsman again to see whether or not it is necessary to include something under section 10, (2) or (3) (a) and (b) on Report Stage.
I certainly will check the point again, although we have already discussed this with the draftsman, as I said, who did not think it necessary.
One final point on the shareholding. In response to Senator Lanigan earlier, the Minister made it clear that it was not intended to provide any capital initially to Bord Telecom because they would be able to raise capital. They are on the profitable side of the services to be offered. If they are prohibited from issuing shares to anyone and if the shares held are held by the Minister and he cannot alienate them, how are Bord Telecom to raise the necessary capital?
They will be borrowing. We will be dealing with this in greater detail in other sections. As Senator Lanigan said, some of the debts undertaken by the Exchequer will be given to An Bord Telecom as shares. They will have something in the order of £435 million of shares. It is envisaged that their debt equity ratio will be maintained on a 1 to 1 point something basis. There will be scope for borrowing something in the order of £500 million to £600 million at peak against their assets.
Seeing that those points are finalised, I want to ask a question on subsection (3) (a) which states that the authorised share capital of An Post shall be an amount not exceeding the total of the value of the property to be transferred. Could the Minister say when this valuation was carried out and is he satisfied that it is absolutely up to date? Is it appropriate either today, when the Bill is passing through this House, or at 1 January when the transfer is about to take place? Will the value be given at the date of transfer? Is the Minister satisfied that the valuation of the property is correct?
Yes. The last valuation of the property was done in the last year and will be done again on vesting day by the Valuation Office. I am satisfied that the value attributed to the property is correct.
I am also confused about paragraph (d). My mind is not adequately clear on the reply given by the Minister to Senator Robinson.
Sitting suspended at 1 p.m. and resumed at 2 p.m.
Section 10 agreed to.
Section 11 agreed to.
Question proposed: "That section 12 stand part of the Bill."
Regarding the postal service we have been used to, on a door-to-door basis for both letters and parcels, I wish to compliment the Post Office on the way they have served the people down through the years. Of course no service is ever 100 per cent: there is always room for improvement but as a former postal deliverer I understand the difficult conditions under which postmen had to work. It was only in the last ten years or so that they were provided with transport in the form of vans. Until then they had to use bicycles which were often in bad condition, as were also the roads they had to travel.
When the Minister hands this operation over to the semi-State board, there may be changes in the delivery of the post. As he has stated, in countries such as Australia where a similar change has been made, it is customary for people whose homes are out in the wilds to collect their post at a pick-up point. I am totally against that and so are my party. Before he hands over this responsibility I should like the Minister to give an assurance that this will not happen here and that, as Senator Ferris said, the board are not just being set up from the point of view of making money. There are other social aspects to be taken into account.
The Senator will see that in paragraph (a) the requirement is to provide a national postal service within the State and between the State and places outside the State and in (b), to meet the industrial, commercial, social and household needs of the State for comprehensive and efficient postal services in so far as the company consider it reasonably practicable to satisfy all reasonable demands for such services throughout the State.
Later on in the Bill we make the provision that the Senator seeks, by using the words, "unless alternative acceptable services are provided". So I think we have covered the point made by Senator Cassidy. We have added here in this section the word "household" and later on the word "comprehensive" to cover those points.
On this section, again we have not been daring enough. The statement, "to provide a national postal service within the State and between the State and places outside the State" is very broad and general. The next paragraph ends with the words, "so far as the company consider it reasonably practicable to satisfy all reasonable demands for such services throughout the State". I cannot understand why the Minister would allow the draftsman to put in the word "reasonable" there. We must look at the postal services in its reality. Every morning or at some time during the day a person from the Post Office will call to every household for which he has mail. The network is so wide and so broad that if a postman has not some mail for the first house, he is almost certain to have it for the second. The route takes him each day to tap on the door, if needs be, of every household in his area.
Going back to previous remarks, what has happened is that we loaded the postman going out in the morning but we never thought, as a nation, that we should have offered facilities for him to bring home something in the evening also. That half of the journey was always forgotten. There were many services that could have been rendered. The scope of the Post Office could have been widened so as to deal, for instance, with advertising at a cheap rate. No organisation in this country or in the world has such a contact nationally and internationally as has the Post Office. It is wrong for us to place demands on the Post Office by way of the use of the word "reasonable".
The Post Office is capable of rendering a wide range of services at reasonable costs to the nation or to individuals or companies. Unfortunately, that facility is not utilised. Instead we see private individuals huckstering around the country with different brand names on their vans delivering mail when the Post Office if utilised correctly could do all that so simply, so gently, and so easily.
It is imperative at this stage, particularly on section 12, that we reflect a little so that we get the matter correct. There is no denying the fact that the Post Office parcel service collapsed totally. This all generated down in Sheriff Street. Hassle between workers and management in regard to modernisation has gone on for so long now that the Post Office has lost out on that particular trade but that does not mean it is gone forever. Now is the time to re-instil some optimism, to regain all that lost work, not to mention the new work that can be generated. We talk of satisfying all reasonable demands. The Post Office could satisfy so gently the most unreasonable demands that could be made on anybody. The word "reasonable" does not mean very much. I make that point because we should have looked in this Bill for the absolute amount of optimism. When one considers the system that is now there — from the time when a letter is dropped into the letter box until it is delivered to the addressee — one realises the whole nucleus that is involved on a 24-hour basis and the contact there is between the Minister and the whole country.
Another point is that there are outlying areas in this country which the postman passes every morning and there are children who walk four and five miles to school from such areas. I often wondered why we never thought of having a post van carrier system that would transport such children to and from school. It would be no trouble to the postman to do this in addition to his duty to deliver mail. What is needed is just some imagination. I hope that the postal board will use their imagination in regard to the many facets with which they might become involved. If a company wanted to give a personal advertisement to every person in this nation, there is machinery available now which can print all that sort of thing and it could be delivered in one day by the Post Office to every individual. That is another facet that has not been thought of.
We are talking about being reasonable but we canot be reasonable in regard to the Post Office any more. In order to make it pay, to make it viable and to give it a new thrust we must be unreasonable in the demands we make on it.
We should not in this House be asking the Minister or the Government to do what is reasonable because they can do that anyhow. It is what is unreasonable, what we cannot imagine they can do which is so easy for them to do. They must do what we would consider to be unreasonable if they are to be successful. Otherwise, each year the Minister for Posts and Telegraphs will be asking for an increase in moneys for the Post Office and we will all agree and utter pious platitudes about the board. If the postal board do not go outside the realm of what we as lay people imagine to be possible, they will not succeed.
In the Bill we must be flexible on that and we must have also absolute optimism because this is the one place in which optimism is imperative. The Post Office is a wonderful arm of society but we have not half utilised it in the past. I hope we will utilise it fully in the future.
I come now to subsection (c) which is to provide services by which money may be remitted whether by means of money orders, postal orders or otherwise. We should have left that out of the Bill completely. I regret sincerely that I was not here last week because that is something I would have asked this House to drop from the Bill. We should not specify orders — postal orders or otherwise. We should just leave it without that and let the boards have the authority to provide services by which money may be remitted as they think fit. We should have been big enough and broad enough to omit it.
The point is that we are more or less defining the role for An Post. We should not be. We should be giving them the authority to do the job and not be coming back here to us saying they want more money to do it. We should give them the wherewithal now to do the Job. I submit that the words in brackets in (c) should be deleted so as to give an outward look to the whole idea. The word "otherwise" can mean everything and anything and it can mean nothing.
I spoke earlier about Giro. The greatest tragedy ever to befall the Post Office was that it did not introduce the Giro system. Perhaps it is not too late to do so now but if that system had been introduced long ago, the Post Office would be a tremendous organisation today. I see no reason why the Post Office should not have for its small savers a saving scheme for house purchase, or a bank card scheme. What is wrong with the Post Office? Why should they not be able to keep such accounts? There is a section in the Post Office already full with computers which would be quite capable of dealing with financial matters in the same way as can any of the bigger banks. With their skills, the Post Office could probably do the job even better than most of the commercial banks can do it.
That is why we should not limit the activities of An Post. For example, there is no reason why we should not have a banking account system and cheque book from the Post Office. All we lacked in the past was imagination. What is wrong with a small saver having a Post Office cheque book account? Is it not possible for the Post Office to have a cash-disposing system such as that operated by some of the banks whereby one can obtain a certain amount of cash by putting a card into a slot machine outside the building? There is a real need for such a service throughout the country and the Post Office are capable of providing it.
I took forward to an imaginative postal board. We should open up the scope of the Post Office and use it as an alternative to the banking system which today dictates its term as it wishes. I do not want to go into that part of it. There is an alternative and we should get back to the small saver, to those who have used the Post Office all their lives and who have no reason now not to trust it except in the sense that it cannot offer them the facilities they need.
I welcome also in the Bill the proposal to provide consultancy advisory training and contract services inside and outside the State as the company think fit. That speaks for itself and indicates that there was and that there is optimism somewhere at the back of the minds of those people who drafted this Bill.
We talk about Third World problems. In this context the Post Office can give to any State training, any advice that is unparalleled by any other semi-State organisation in the country. It is a field the new board should develop just as the ESB gave advice on services throughout the world. I could never understand why the Post Office did not engage in this field before now. I welcome the Minister's opinion on the withdrawal of that particular statement because it is closing rather than widening the whole operation.
After that rather imaginative treatise from Senator Killilea I want to make a couple of points on the wording. What he says is obviously very accurate but on the question of satisfying all reasonable demands there can always be a situation where someone can be unreasonable. For instance, if a fellow decided to go off to some barren island in the Atlantic and insisted on having daily delivery of post he would be covered by the words "a reasonable demand" in that situation. While it may be tautological, the word "otherwise" covers anything and everything and opens up the whole situation again even though it is listed.
The mental attitude is wrong.
Once it is there it gives scope for including anything.
It will allow too much interpretation.
What the Senator said about what the Post Office is capable of doing is all very true. We all have had experience from childhood of letters being delivered in desperate conditions. I would not have any worries about the new board not being able to develop to the very full the potential that is obviously there with the skills they have. Senator Killilea has ministerial experience and he knows what the background is but I am looking forward with confidence to the board pressing ahead with many of the ideas he has put forward.
I welcome the fact that the Minister agreed to have the word "household" included in this section. This goes a long way towards the concern all of us had that this new board might consider that the needs of the household were not as important as what we would consider them to be in terms of the social aspect. The inclusion of this word is indicative of the Minister's contribution to the framing of this legislation after the draftsman had finished with it. There is no doubt that the Bill has the stamp of the Minister on it, arising from various meetings he had with people, including the trade unions involved in the postal services, up to date. I am satisfied that the word "household" will meet that requirement together with the other amendment he referred to.
In defining what we consider the principal objects of the postal company I have no objection to spelling out what the situation should be in regard to money orders and postal orders. It is important when we are diverting from a State to a semi-State company that we spell out in legislation what we consider the role of the company to be.
I echo Senator Killilea's call for an expansion, a total revolution of what in fact a Post Office can do by way of service for the people in the area of finance, savings and savings banks. After the doctor and the vet I would rank the postman as the next most important socially acceptable person in the country because of his having a daily contact with people who might not otherwise be contacted. He is a vital link between civilisation and isolated areas. Therefore, the postman must be recognised by all of us as a very key person. His service to this day can never be adequately recognised in any legislation. It is only in a definition of what the service is that we can put on the record of this House our appreciation of the service that postmen give and have given. He is a link with people in isolated areas, people who are in receipt of social welfare or other payments. If the service was linked to a banking system, it would be of tremendous benefit to people living in remote areas and who would be apprehensive about keeping money in the house. There are calls from all sorts of people about the nationalisation of banks. That is something the Government cannot afford but in the Post Office they have access to and practically own a banking system. All we need to do is to spell out that role for the new board. There is nothing in the legislation which will prohibit the new board from delving into whole areas that we consider they should become involved in.
One of the places we can look to for a shining example of the banking system in the area of the postal service is Japan where the postal banking system has been developed to an outstanding degree of success. The Japanese postal savings system is one of the largest banks in the world. Deposits in the system have been growing twice as rapidly as those in any of the commercial banks. If that sort of system took off in this country one could imagine the importance of having money readily available in post offices which could come to the assistance of people in the area of local loans, loans for house building, loans for improvements, or loans to farming organisations. One need only look at what has happened in the area of loans from banks to fanning enterprises which have run into difficulty and the fact that farmers have been forced to sell some of their stock and part of their land to meet commitments to the banks.
The postal Giro system that was originally advocated but never really took off was the nucleus of what that could possibly be. We have rural postmen traversing the country on bicycles or in vans on a daily basis. They would give a much better service to small villages than a mobile bank which possibly only visits once a week. I hold no brief for banking but the public would benefit to a great extent if, like Japan, we had this saving service. In that country it constitutes the most important part of Government funding for loans and investments and through the Trust Fund Bureau there are funds for housing, environmental improvement, medium and small term enterprises, agriculture, forestry and fisheries.
I recognise that there is a great difference between the population of Ireland and that of Japan but the people of Ireland have great confidence in the postal service and postal institutions. There would be satisfaction at having money readily available on a daily basis and not just on a weekly basis. People would not have to travel great distances to the nearest town where there was a branch of one of the banks. It is appropriate that we should tell this new board to continue, as we have specified here, a service that we feel has industrial, commercial, social and household implications. The Japanese system could be looked at.
It is appropriate that under this section we should advise An Post that we look to them to revolutionise the transportation of cash. At present the transfer of large amounts of money from one town and village is guarded by many gardaí, squad cars, the Army and so on on a regular basis. It is so regular that I do not know why they bother to send escorts with them because everybody knows when they are arriving. The people that knock the banks off are as aware of the time as anybody else because the escorts arrive on the dot every day at the same bank. The Post Office could give a much better and safer service to people who trust them with all sorts of other little chores. The Minister must be aware that postmen are an important and vital link between isolated people and civilisation. In fact, like politicians, they are doing a whole lot of things that they are not paid to do.
As you have mentioned it, county councillors who happen to be postmen always head the poll in their areas so that is indicative of the support that is given to them by the people because they trust them.
You should tell the Tánaiste.
The Tánaiste knows about it. There are several of them in the Labour Party.
I was interested by the contributions of Senators. I greatly share the optimism expressed and also the desire for expansion in new businesses which was first articulated by Senator Killilea and shared by Senators Browne and Ferris. I see great possibilities for business in new areas especially in the financial area.
To deal with the point on paragraph (c) to which Senator Killilea referred, he is probably reading it incorrectly. We are not just talking about money order business or postal order business but about other business. As the Senator will know, there are money orders in the post office and there are also postal orders but it goes on to state "or otherwise" for the specific purpose of indicating that we want them to cover new areas. To take that out would weaken the section.
Senator Ferris mentioned the transfer of cash with safety. I agree that this should be the theme and this brings me back to the phrase which the Minister has mentioned — whether by means of money order, postal order or otherwise. "Otherwise" is the worst word that could be actually put into that paragraph. It frowns upon the meaning of what we want the Post Office to do. I will give an example and I would appreciate a positive and clear reply on it from the Minister.
At present, the Post Office acts for savings for the Department of Finance. It is only on an agency basis. Could the Minister give an assurance to the House now — I do not want to put him on the spot but I want to point to the reality — that the Minister for Finance would give permission to the Post Office tomorrow to operate its own savings bank? It is a very simple question but it personifies what I am talking about. Will the Minister give a reply before I continue?
Not only this Government but successive Governments have seen the scope for expansion into this area of business and have specifically provided for that expansion in this legislation. The impression I got in the Dáil and here is that there is a broad agreement on all sides of the House that this is the sort of country that An Post should get into provided they deem it commercially prudent. I see great hope for it. The answer is "yes".
The Minister would give an assurance?
I think it is likely that the Minister for Finance would give permission.
The Minister thinks lightly. It is not that I do not know what I am talking about. There is a reluctance down in that gestapo of Finance to get anything from them and the time will come when they will stifle An Post. I can guarantee that to this House today. Rather than taking out the word "otherwise" the Minister should put in "also give certificates for the operation of a savings bank" and "otherwise" or whatever. That would be positive thinking. I know from experience that it is different. I say that with sincerity because I would rather not change the postal board at all. I would rather leave it in the Department the way it is at present than to make a bad board. We are heading towards a restriction because, as I said at the very beginning of this debate today, every section of importance commences with the words "as may be approved by the Minister with the consent of the Minister for Finance".
Senator Ferris is correct — it is seldom I agree with the Labour Party — but he was probably stealing from what I had said. There are many small savings banks around the country who are looking for a father figure. They do not want to join the big consortiums. The Post Office is the father figure for those groups. We have 84 pages of green sheets and not one of them says that this shall be. Talking to one another here is one thing but it is different when people get together in a little room in the Department of Finance where the cold perspiration must run off everybody before anybody says anything. That is the reality of the situation. Pious platitudes here are worthless. Lorry loads of sympathy to An Post are not worth a damn. The Minister should make a statement now which will go into the annals of the House that if the board apply for a certificate for a savings bank the Minister for Posts and Telegraphs will guarantee they will get it.
Part VI of the Bill deals with the savings bank in great detail, so perhaps the Senator is anticipating the debate. I hope we will get to that section before the end of the day.
I see under section 64 that the company shall not be required to deliver a postal package to the addressee's residence or office provided the company makes acceptable alternative arrangements to make it available to the addressee. That cuts across what Senator Ferris and I are coming at in section 12. As far as we are concerned, my party and I want an assurance that there will be a house to house delivery of letters and parcels operated by the new semi-State organisation.
I have given that assurance already and we added in the words "comprehensive" and "household" to meet the points made. The section the Senator referred to states "acceptable alternative". In other words, if you have an apartment block instead of the postman having to go up the stairs to each apartment, there might be post boxes in the hallway. That is the sort of alternative arrangement envisaged. As Senators will be aware, there are, by agreement with the trade unions, pilot schemes going on experimenting with various methods of delivery. That is what we have in mind in the section.
Some earlier remarks seem to have been lost in all the furore about the savings bank. There is the cheque book issue, for example. That is an innovation. What has the Minister to say about the omission of permission for Bank Giro to operate, for example? The Post Office cash desk and cash card would be innovations. Under this heading we are talking about the industrial, commercial, social and household needs of the State.
I asked about deleting "reasonable demands". I think "demands" would quite suffice. There is no need to put in "reasonable". As I said, what we might think to be unreasonable would be classified as a very simple matter within the framework of the Post Office. I do not think we should be protecting anything or anybody. We should not be protecting An Post by using the word "reasonable". It should be omitted. We must be broad-minded and optimistic. That word "reasonable" is unnecessary. It does not serve any purpose and I would appreciate it if the Minister would satisfy this side of the House on this occasion by saying "Yes, I will take it out". As regards the other point about the paragraph, I have proved conclusively that it is unnecessary. We must broaden the horizons of An Post. I am not being unreasonable in asking those things.
I think the word "reasonable" is reasonable. The section as it stands is reasonable. It has been carefully drafted and considered. It is very difficult to answer all the points raised by Senators as we are on the section now for 45 minutes. All I can say is, in general I accept the suggestions that Senator Killilea made in relation to the expansion of financial services including the possibility of cheque books and Post Office cards. They are developments which I would like to encourage.
Can the Minister say why the word "reasonable" is included?
I think it is reasonable.
I would appreciate if the Minister would give consideration to that word before the next Stage. It does not strengthen the section. As a matter of fact it weakens it. It states:
to meet the industrial, commercial, social and household needs of the State for comprehensive and efficient postal services and, so far as the company considers reasonably practicable, to satisfy all reasonable demands...
Some individual will say such and such is reasonable and another reasonable person will say that it is unreasonable. It will create argument. It is not necessary. I would appreciate it if the Minister would assure me that he will give more thought to this word before the next Stage.
I gather that Senator Killilea is sincere in what he is saying. If you leave out "reasonable" and you satisfy all demands then you could have a demand that was crazy.
Would the Senator give an example of a crazy demand?
If some fellow decided he was going off to a desert island in the Atlantic and said he wanted a daily delivery of post. Every postal delivery man in the country going out with his post every morning would be drowned.
Now we are all being unreasonable.
The industrial, commercial, social and household needs of the State are defined clearly. It is the word "reasonable" I am talking about.
Someone puts up a little tent on an island. It is his house and his kingdom.
The Senator is off the theme altogether.
It is only the word "reasonable" I am talking about.
I am open to consider points made by Members but we have to be conscious of the fact that we are hoping this Bill passes through the Seanad today and passes through the Dáil tomorrow. Of all the points that have been made during the course of the passage of this Bill to date, the points on the word "reasonable" being made by Senator Killilea are most unreasonable.
We have heard again and again that the Bill must be passed today. We have been 15 minutes on this section. When one considers we are transferring £2,000 million worth of property and 30,000 people, one or two days is not a long time to spend debating the Bill. I do not wish to delay it. I want to be as reasonable as possible. We are making valid points. I know what I am talking about from experience. It is probably greater than the Minister's because we were in the Department in far more difficult times than is the Minister.
I was present one night at a union function at which even the mildest words addressed to Minister Reynolds and myself could not be expressed here. They were difficult times in the Post Office but we came through them. We worked hard with the people and we learned a lot. There is still a lot to be learned. I have no animosity towards the Minister but I am making a sincere contribution and doing so from my knowledge of the Post Office and the direction in which I believe it should go. We should face it with a new dash and daring, otherwise they will be back begging for money from the State every year.
I fully appreciate the spirit of the Senator's contribution. Many of the points he has made have been excellent ones. I will consider his point about "reasonable".
Question put and agreed to.
Question proposed: "That section 13 stand part of the Bill."
One does not have to remark that the charges for services are not always reasonable especially when we are paying four times more for a telephone call than we were five years ago or that we are paying 15 times more for a stamp now than we were ten years ago. You get 380 Turkish lira for an English pound and you get two gins and tonics in Cyprus for 260 lira and who says that is not reasonable? Revenue for the company is most important and freedom for this must be given. It is for services rendered. We can no longer put down a blanket price. If people living in rural Ireland have a telephone installed, for example, so that their daughters or sons who are away from home can telephone them on a Saturday or Sunday evening because they cannot get home, the rental for that person should not be the same as for a business. The service is completely different and for two separate purposes. Now that Telecom have come into operation they should be able to define different rates for different purposes. We promised that everybody would have a telephone on order by 1984. I do not know how that is today but when I was leaving, it was coming on fine.
The cost of installation has gone up out of proportion. The demand has dropped significantly and it is easy to keep abreast with it. I hope An Bord Telecom will realise that. A telephone in a house is generally an asset, although in some it might be considered a necessary evil. An Bord Telecom should have a scale price for the usage of a telephone. I know of cases where people only make ten outgoing calls in the whole two months.
Section 13 deals with the Post Office.
I beg your pardon. I agree with the section. When I was in the Department I gave a lot of thought to the idea of a postal museum. The philatelic world in the Post Office is absolutely fascinating. Every day we come in here to this House we see outside the gates numerous buses bringing children along to watch the hocus-pocus that goes on here. Then they go to the National Library and the College of Art. If we had a postal museum it is the first place that the children would love to go to. There would be a tremendous amount to be done in it. It is a place that would be self-sufficient, because admittance to it would keep it viable.
This is another area of the Post Office where the profit could be staggering. The philatelic scene is a big one. A museum would be a wonderful way to educate children about stamps and their origin. An Post should see this as a priority.
The history of the Post Office should not be forgotten. We should have a place in this city where it could be explained to the public at large and, in particular, to the youth. It is a fascinating world. The more I grew to understand it, the more fascinated I became. Children at school should be encouraged along those lines. We would not have to subsidise such a museum. We cannot get things for nothing and if children want to go into a postal museum they should be asked to pay. I am sure they would be quite willing to do so. It would come under section 1 (b) (3) — to remunerate capital and to repay borrowings. I would like the Minister's opinion on this. Has it been shelved like the Sugar Company in Tuam and the factory for the peat briquettes? I suppose the postal museum got the same hammering — the Government had not the money to put into it so bye-bye. I would be amazed if it was not put into the cupboard.
In relation to the postal museum, as much progress has been made in my time as was in the Senator's. I would not consider it a great priority although there is some merit in the suggestion. There is not much else to be said about the section. It deals with the general duty of the postal board and I commend it to the House.
Question put and agreed to.
Question proposed: "That section 14 stand part of the Bill."
The telecommunications section is even broader than the post office section because what is relevant today in Telecom may not be relevant tomorrow. The one fear that I have about telecommunications is that the system is advancing so fast that the control of it may just slip out of the hands of the Minister or the Government of the day. That should not be allowed to happen. I am not saying we are deliberately trying to do that or that it is intended in the Bill to do that. I am saying technology may do it in spite of us. We need to be very careful about that.
It is very hard for people to understand how two wires can be passing their house and they cannot get a telephone. I know why they do not get a telephone. I am sure many Senators here do not realise how difficult it is to get a telephone. It may not be a problem with the wires at all. It may be the exchange. There may be no space in it. There are many things Senator Ferns does not know about. I do not know about them myself. Technology is becoming so advanced now that it is outside his reach. The most prohibitive thing is the cost.
We are handing over to Bord Telecom. They must be very happy to receive this system. Despite what commentators who start at 10 o'clock in the morning on RTE may say, they are getting the nucleus of a tremendous organisation and a system of which they can be proud. Much money was invested in the five-year programme, and prior to that we had the ordinary day-to-day workings of the telecommunications side. We had a new building programme, most of which is completed. We had a new installations programme. Whether they like it or not, or whether they know it or not, or whether they want to know it or not is another question, but it is one of the most modem installations available. We can be rightly proud of it and when it is fully in operation it will operate correctly, and it will operate perfectly. There have been tremendous advances in the technological field. Members of this House can be quite proud of it.
Members of this House or the other House and people who want to have a look at the technology in the Department can go and see where, the taxpayers' money was spent. It was wisely spent. We had installations built for this Department at a tremendous saving to the nation. This was a boost to the economy at the time and they were built cheaply, effectively and with great efficiency. They may now be considered to be too large. Other things can be done with them. They are there and they cost very little in comparison with many other investments made.
We should be able to move into the field of advice, training and contract services. I do not want to go too deeply into those matters. The first place we have to go into the contract business is at home. We have every type of people putting installations into office buildings, private homes and so on. The technicians in the Post Office should have the facility available to them to instal every make and shape of apparatus to suit every type of business in the country, and they have failed. This is where management have failed in the Post Office. It is the one area in which senior management in the GPO have failed to move with the times to redirect technicians and to redirect stores. Much revenue to the Departments has been lost in this field. They have an inferior type service in comparison with what could have been given to them.
Bord Telecom have a major role to play and they must have freedom of expression and total freedom to be imaginative about those things. I know they will. I had some dealings with Bord Telecom as I had with An Post and I know the outlook is good. I hope that we will not restrict the attitude of mind which I am sure prevails within the board and which should be allowed to continue so that a proper service can be given which we can be proud of all the way from the exchange to the receiver. I should like the Minister to tell me specifically what section 14 (3) means.
On this section I should like to ask the Minister how there is going to be a meeting or a marriage between the private sector and semi-State sector in terms of the very necessary commercial competition there should be as between the semi-State and the private sector. The commercial sector had been making most of the running in terms of modernising the telecommunications system until about 1981, and from 1981 an impetus was given to the public sector. I should like to know how the Minister sees the future of this telecommunications industry as between the private and the public sector. Naturally Bord Telecom will have an inbuilt advantage. He mentioned that the State will underwrite most of the borrowings and give a capital base to the semi-State body which a normal commercial business would not be able to provide for its own resources.
Bord Telecom should operate in line with an up-to-date private sector in the telecommunications business, and I do not feel that Bord Telecom should have any inbuilt advantage. If they have an inbuilt advantage they will not be as commercially hungry as the private sector. In 1981 we had the setting up by the Department of Posts and Telegraphs of sales areas in the main streets of our cities and towns for the sale and installation of modem technology. I sincerely hope that will continue. I should like to know how the Minister sees the private sector going along with the public sector or semi-State sector vis-a-vis the capitalisation of Bord Telecom.
Senator Killilea asked about subsection (3) which reads:
The company shall have power to do anything which appears to it to be requisite, advantageous or incidental to, or which appears to it to facilitate, either directly or indirectly, the performance by it of its functions as specified in this Act or in its memorandum of association and is not inconsistent with any enactment for the time being in force.
That is purely an enabling clause to cover any incidental points which have not been otherwise clearly set out in the legislation. On Senator Lanigan's point, we are specifically giving Bord Telecom Éireann a monopoly in providing telecommunications services within the State, and between the State and other States. The reason for that is, as has been said rightly by Senators during the debate, is that there are areas of this country where it is not profitable, nor will it ever be profitable, to provide telecommunications services. That does not mean they should not have them. There are very strong social reasons why they should. So that those services can be paid for and subsidised, we are providing the monopoly, and the same goes for the postal services.
I agree with the sentiments behind Senator Lanigan's point. I am all for competition. The semi-State sector could do with a little more competition than they have at the moment. Perhaps the results in other areas of the semi-State sector would be better if they had a bit of competition. The role for the private sector here is (a) in providing the equipment which Bord Telecom Éireann require in their purchasing on a grand scale, and (b) in providing equipment within houses, and within establishments for that matter. In other words, providing private branch exchanges, and so on, within companies, providing different types of telephones or extensions of telephones within houses. The monopoly extends only as far as the point of entry to the home, or factory, or office, or whatever. That is where the private sector comes in—providing the ancillary equipment and providing to Bord Telecom Éireann their own transmission equipment, and so on.
Question put and agreed to.
Question proposed: "That section 15 stand part of the Bill."
Have we a section in the Bill about the collection of debts and moneys separate from this section?
I always found and still find a terrible anomaly in the reality of the situation. If people receive a bill with which they do not agree and they want to question it, it comes to the city of Dublin rather than being dealt with in the district. At least locally they would be able to find out that the area system was out of order on the particular date, a fact which would not be known in Dublin. If cross queries have to be made, by the time they are finalised the poor person who raised the query on the bill will have died from frustration and most certainly will have received two more warning notices to pay the bill from a different section outside of Dublin. This is not a fallacy. We will not mention the thousands of pounds of errors some people dream about. I do not fully agree with that. But there are very genuine cases. I have queried bills. The procedure is frustrating. You get an anonymous phone call from Dublin from a lovely person who is very placid and nice to you, and two days later you get back the same bill saying you have six days to pay or you will be cut off.
The appointment of the district managers was the most important thing we did in our time. I had intended to tackle that problem but time was not on our side. Responsibility is a key issue. Responsibility locally is what is needed. You cannot have responsibility in headquarters for the whole country. I hope when the Minister is handing over the keys of the kingdom at dinner in the Gresham or over a hot dog down in the storeroom of the GPO, he will tell Bord Telecom that the first priority is accountability locally for telephone bills, and other items, rent and so on, in the telecommunications services. That has to be acknowledged. It must be a priority. Otherwise, we are wasting our time.
The point made by Senator Killilea is an excellent one and there have been a number of moves to decentralise dealing with queries on bills, and so on. It is not an area that I am satisfied with and we are continuing with our efforts to improve the situation.
On the question of accountability and the problems encountered by telephone users in finding out exactly how much they owe and for what, this is one of the most frustrating exercises one can go through. Any other commercial enterprise are accountable for each and every item incurred by them. All commercial enterprises have to issue individual invoices. A Department of State will not pay a bill to a commercial enterprise unless (1) there is an order number and (2) there is an invoice. In the Department of Posts and Telegraphs we get no invoice. We get a statement and the statement only gives figures. If you query a particular amount on the bill, you are not told how that actual amount arose. I do not think it is outside the bounds of possibility in a technological age to have the telephone number that is dialled put on the bill. With a computer system surely it would not be too hard to put in the telephone number dialled.
We were told about 12 months ago that there was a fail safe system built into the dialling system and that when you called an operator, that operator would ring you back at your own number. That is not happening. It did happen possibly in one in 100 cases, but it is not happening at all now. Perhaps fewer telephone operators are involved now that we have gone on to automatic dialling. Automatic dialling means there is less accountability by the Department for the calls being recorded to a particular number. If we are to be totally in favour of this section of the Bill, we must have accountability by Bord Telecom for calls being charged to a particular number.
It would be remiss of me if I did not concur with my colleagues across the floor. This is an area of complete disquiet in the country. I accept that the Minister has said he is not satisfied with it. I have even gone as far as suggesting to subscribers that they should get a completely new line because they would have day and date, and all sorts of fail safes of their own installed. It is ludicrous that your phone still apparently registers calls you never made from your house. It is possible that in the installation of phones wires were crossed and that your phone number might be connected with somebody else's meter.
What right have subscribers to see meters? Is it ever explained to them what a meter reading looks like? Is there a beginning to a meter reading and an end after a period as there is on a water meter or an ESB meter, or how does it function, so that people can really be reassured that there is nothing wrong with the system? Private people formed an organisation called the protection of telephone subscribers or some such name. People who have day and dates and books, and even used a coin box over a period to check and see if calls were registering, found when they got their bill that calls were still registering. They were not operator assisted calls. They were supposed to be direct dial calls. When I queried this I was told nothing could be done about it. What rights have these people? I tried to get a new line for a person and a new meter installed and the number taken out of the directory so that people could not use their phone number, if that was what was happening. In dial calls a person should be entitled to inspect the equipment. What advice have we on how people can interpret what is happening to their own meter in the local exchange?
I want to endorse what has been said. We all know from personal experience that the telephone charge system is crazy. The time has come when everybody should be given a private meter. People are receiving bills which are indefensible. It is frustrating that after a month you get back a reply saying: "We have checked your meter and we find the bill is correct". There have been cases where people were on holidays for two months but they still received bills. We are told the system is foolproof and day after day it is proving to be anything but foolproof. We are at the stage where we must be given private meters so that we can see them ticking over. We are told that local calls can go on all day. I am very dubious about that. I would like to see a meter in front of me not ticking over. I am convinced that local calls are ticking over at very long distance call rates. That is my interpretation from my own experience.
Undoubtedly there is widespread concern on both sides of the House about this problem as indeed there was in the Dáil. I am not satisfied with the situation. Senators made suggestions. Senator Lanigan mentioned the question of giving details of all calls made from each telephone. That would be a very big chore. Hopefully by the end of the year we will be in a position in certain areas to operate pilot schemes whereby we can give details as requested. If requested we could give details for the following quarter. We would not be able to do that for every phone call. We have meters available for hire. If people want to have their own meter they can hire one. That certainly would be helpful.
The vast majority of people get their bills and never query them. They pay them and there is no problem. Of those people who do query them, the vast majority are satisfied after it is explained to them. Only a relatively small number of people continue to dispute their bills. You hear of the case, as Senator Browne said, of people who were away for two months. I had a similar case in my own constituency — I am not saying this explains away the problem — but it transpired that others were minding the house for the two months and they were not very conscientious about how they used the phone. Mistakes can happen. There is a meter in the exchange connected to each phone. A local call only registers once — one unit. For a long distance call there are eight degrees of charge, Australia would be the highest charge. A long distance call within Ireland would be the lowest charge. Each ten seconds to Australia would represent so many local units, and so many local units would register for every ten seconds. That is the way it works. The readings show up on the meters in the exchange. Those readings are taken when the bills are being calculated. Sometimes there can be clerical errors in writing down the numbers. That would become clear if people queried their bills and the numbers were checked. In any event it would correct itself at the next billing period.
We have had open days in exchanges for people to come in and see how these meters work. We hope to continue to do that. Nonetheless, given what Senators and Deputies have said, there is obviously a perception that there is a problem. The perception exaggerates the problem. The onus is on us in the Department of Posts and Telegraphs to try to put that right. Every effort is being made to put it right.
The Minister is giving the line that we get ourselves. If you go into the exchange and are shown the meter, the number will be there. A neighbour of mine in Carlow managed to get Manchester exchange when he was dialling Galway and this was long before there was direct dialling to England. Why do we always stand over the suggestion that the mechanism for charging never goes wrong, when quite clearly the mechanism for getting numbers goes wrong? I cannot accept that the mechanism for charging never goes wrong. I have been in dispute with the Post Office about this for quite some time. I never accept it when they tell me to come in and read the meter. I kept a tally with my local exchange for two months and my reckoning was half of the Bill I got. I did it as conscientiously as possible. I have ordered a meter on hire, but I have not got it. Another matter which worries me is that the Post Office put in a covering note saying they do not accept the reading if there is a dispute. They cannot have it both ways.
This section sets out the duties of the telecommunications company. It provides safeguards for the company. Except in section 49 of the Bill where the Users' Council is mentioned, there is absolutely no protection for the user. This section of the Bill gives every protection to the telecommunications company but no protection to the user. It is not mentioned in any part of the Bill that the user has the right to query. It does not say that the telecommunications company have to issue a detailed Bill. It gives no protection at all to the user. I suggest that section 15 is at fault in this.
In other sections there are protections against misuse of the telecommunications system. In the Companies Act there are various sections which give every type of protection. Penalties can be levied on misusers of the system. There is no section in this Bill, other than section 49 which we will come to later, which gives the users' council the power to look into matters pertaining to various problems which might arise. It does not give any specific protection to the consumer.
I support that. On Second Stage I suggested that we should bring in the meter system already adopted by the ESB, and have meters installed free of charge. This would give everybody an idea of how much his telephone bill would be. How many of us have been shocked at our telephone bills? If you query it, you get back a stereotype letter and you still have to pay the bill. Everybody knows you cannot run a business without a telephone nowadays. If the meter system was installed, it would be to the advantage of the Department. The Minister and his Department would be seen to be doing something that was only right and proper. If a person owned a telephone, and a neighbour wanted to make a call on it, he would know how much that call cost and where the system was going wrong. Very often it is not the Department's fault; it could be an employee or a babysitter using the phone, unknown to the owner of the company or of the house. For that reason I ask the Minister to look into the possibility of installing meters, as is done by the ESB.
I will deal with the consumer question first. That comes up under a later section, as Senator Lanigan said, and we have greatly strengthened that section. We have made provisions for regulations — I will deal with that matter when we come to it.
The point was also made during the Second Stage that the ESB connect meters free of charge; they do charge for them. You have to pay to have your meter installed and you have to pay rental for that meter. We have made provision in the Department whereby people can have meters for their telephones for a rental.
Are they accepted as accurate?
They are accepted as generally accurate, but if there is a conflict between the meter in the exchange and the other meter, obviously that conflict would have to be reconciled.
There is technology available whereby the Department can install a meter on the side of the telephone and a bill card will be posted to that subscriber at the end of each quarter. That is the only bill card that can make its way through the meter. It has a print-out of the number and the use of the meter. You put it in an envelope, post it to the Department and your bill is posted to you. It is a simple process and one which we should turn to. It is the lack of visible contact of the cost that is the problem. Senator Browne made the point that if you knew you were wasting all this money, you would at least have got some satisfaction out of it.
The provision the Senator talks about would depend on digital facilities which, as he knows, are coming on stream rapidly.
Do we not have a digital system already?
Only to a very limited extent. By the time the whole service is developed a very large part will be using digital facilities. That will enable those sorts of services to be contemplated.
You may be back here then——
I will have no powers then because everything will be subject to the consent of the Minister for Finance.
We are dealing with the general duties, and I said that the only protection offered to the customer is in section 49 which deals with the consumers' council. If one reads section 49 one will see there is absolutely no protection given to anybody by virtue of the fact that a users' council has been set up. All the section does is to set the parameters to deal with any complaint. It does not give the users' council any teeth; under section 49 they must report to the Minister annually and look at the problems.
We should discuss this fully on section 49. We all have reservations about the power of this——
Nothing in section 15 gives any protection to the consumer.
Sections 48 and 49 deal with the consumer.
Question put and agreed to.
Question proposed: "That section 16 stand part of the Bill."
This section personifies what I have been saying all day. On reading each paragraph of subsection (2), (a), (b), (c), (d) and (e), one can see everything is done with the consent of another Ministry. That is a tragedy. Not alone are we giving the Department to two boards, but we are giving away the power of authority over the two companies also. I do not see any logical reason why the Minister for Posts and Telegraphs should have to contact the Minister for Finance if he is appointing 12 or more members to either of the two boards. To highlight my protest on this section, I am going to call a vote, as a matter of principle.
Does the Senator mean the Minister for Finance?
Paragraph (2) (a) says "...(including the chairman) shall be at least 12 or such greater number as the Minister with the consent of the Minister for Finance may determine from time to time". Surely the Minister for Posts and Telegraphs should be able to determine from time to time. Do not give me the story that he has to get the few bob from the Minister for Finance to pay for the extra directors on the board. If these boards are worth their salt there will be plenty of profits left after paying the directors. There is no need to go to the gestapo to get permission to do anything. This is a giveaway. I am ashamed of a Minister who would give away all his authority, although perhaps he was not aware of that. Perhaps he does not take this seriously, but I do. I resent it. I resent the authority of the Minister for Posts and Telegraphs being handed to other Ministers. This is more fundamental to me than the appointment of the boards because there is nothing we can do about the appointment of the boards. I will not delay too long on this because we know what will happen regarding the appointment of the boards. There are the few who will have to be appointed, and we know where the rest of them are going to come from.
I would not even say that, because the boy who gets this job will have to be a smart boy. I resent the words "consent of the Minister for Finance" in subsection (2) (a). In subsection (2) (b) I resent the words "by the Minister with the consent of the Minister for Finance", in subsection (2) (c) the words "the remuneration of the chairman and other directors shall be determined by the Minister given with the consent of the Minister for Public Service;" and subsection (2) (d) the words "no person shall be appointed as auditor of the company without the approval of the Minister given with the consent of the Minister for Finance;...".
I am ashamed of the Minister for Posts and Telegraphs, to think that a responsible Minister would hand over his authority to two other Ministers. Imagine, he cannot appoint the auditor without the consent of the Minister for Finance. I abhor that. If he does not give me an assurance that those three phrases will be removed from this section, I am going to call a vote on this because I feel very strongly about it. That is the first point I want to make. Would the Minister care to answer before I continue?
I am very upset by Senator Killilea's attack on this section. He said he was ashamed of me for giving away so much. Senator Killilea has a very short memory. It was not I who drafted this Bill in the first place, it was Deputy Wilson, his colleague, and the Senator is going to challenge a vote.
The Minister is here today presenting this Bill. Do not pass the buck.
The Senator knows the battle was fought and won when this Bill was being drafted when Deputy Mac-Sharry was Minister for Finance and Deputy Wilson was Minister for Posts and Telegraphs.
The Minister is the man presenting the Bill here today.
Unfortunately, I am not able to have that reversed. I am sorry to see this split in Fianna Fáil, this attack on Deputy John Wilson and Deputy Ray MacSharry by Senator Killilea. I wonder, if having reflected on the authors of the section, he will still continue to call for a vote.
I do not accept what the Minister said. How am I, or how is the House, to know authentically that Deputy Wilson or Deputy Mac Sharry had anything to do with the drafting of this Bill? How do we know that the Minister, Deputy J. Mitchell, with Deputy Dukes, the Minister for Finance, did not draft it? Do not talk to me about splits or divisions. I am talking to the Minister. I am ashamed of him; he is the authoritative person in this House today. Do not pass the buck. I do not believe that as Minister responsible he should allow all his powers to be handed over in such a manner. He is the producer of this Bill, not those who have gone before him or those who come after him. At this moment, he is the person responsible and he should ensure that these powers are not given to another Minister. For that reason, I do not accept your word, I cannot accept your word——
It might be better if the Senator addressed the Chair.
I am addressing the Chair and I address it quite clearly. I have always honoured and respected your position, and that of the Leas-Chathaoirleach. I am replying to the Minister's tactics to try to divide the Senators on this side of the House.
I want to say clearly and emphatically that the responsibility for the document before this House today lies with Deputy J. Mitchell, Minister for Posts and Telegraphs, not any other person. He is the man who brought it to this House. He is the man who stands over every word of it, whether he likes or not. I want no more of that petty talk. If he realises now that he was wrong when he handed over those responsibilities in such a glib way to other Ministries, I want him emphatically to say so. I want to state emphatically that I disagree with what he did. It is a scandal in 1983 that a Ministry are handing over all their authority to two boards, maybe correctly so — we will have a difference of opinion on that when we go through the Bill slowly but surely — but to hand over all his remaining responsibilities is the lowest cut of all. The Minister should be strong enough, brave enough and big enough to get up now and say he is withdrawing those obnoxious sentences from those four paragraphs. It is a simple matter. I do not want him to come here trying to play politics. We can all have a go at playing politics, but we are making reasonable arguments on facts, and the fact is this: the Minister is responsible for section 16 (2) (a), (b), (c), (d) and (f) and the status of the Ministry for which he holds the credentials, was given to him by the President recently. If he withdraws those words he will have the agreement of every Member of this House.
Perhaps when we come to this section on the next Stage the Minister might consider the legal situation. There is no doubt in my mind — I am not a legal man, as Senator Killilea commented this morning — that this is not the first Bill in which certain rights are vested in the Minister for Finance. He does control the purse strings whether we or the Minister for Posts and Telegraphs like it or not. In all legislation setting up boards certain powers have always been vested in the Minister for Finance. I am sure if the Attorney General's advice were available to us on this section on the next Stage that point would be confirmed. If I was at a county council meeting I could ask for the legal opinion and get it. I cannot do that in this House but I ask the Minister to confirm the legal situation.
I share some of the sentiments expressed already. I think Senator Killilea is defending the Minister. He feels the Minister should have the powers in this section, not another Minister. If there is a legal reason for it let us hear about it.
One point in reply to Senator Ferris: he summarises the whole matter. Subsection (2) (d) reads: "no person shall be appointed as auditor of the company without the approval of the Minister given with the consent of the Minister for Finance;". Does Senator Ferris solemnly state that he saw legislation which stooped so low that the Minister responsible for the Department had to ask the permission of the Minister for Finance to appoint an auditor? I never have, and I am here longer than the Senator. People might not realise that.
I know that; I have a good memory.
I have never noticed. The Minister tried to score a political point by saying a previous Minister drafted this Bill. I do not accept that, and I know Senator Ferris does not accept it either. The Minister is responsible for this Bill, let him stand up and be counted on this issue. Cut out the nonsense and the codology. As regards the legal opinion from the Attorney General, maybe the least legal mind might be the best mind on-occasions. I am not saying that he is right or wrong. I did not say anything illegal. What I am saying is that our own opinion sometimes——
You are sailing close to the wind.
We have all sailed close to the wind in our time. None of us in this Chamber is exonerated.
Do not look at the Chair.
Some of us were very close to the rocks on occasion, but we sailed away from them.
Senator Killilea on section 16.
I put my case on paragraph (d) and I will say no more on it. Let us he clear about this. This Bill is the Minister's responsibility; he should defend his Ministry because if he does not, in my estimation he will have a zero rating. The least one would expect of a Minister is that he would defend his Ministry, the portfolio given him by his Taoiseach, and the honour bestowed on him by the President on the formation of a Government.
There is one thing that must be said about this Bill — this Bill will never be an orphan. We have a residual Department of Posts and Telegraphs which will operate these two companies. Now we find that not alone is the Minister for Finance involved in the operation of these companies and in the operation of this Bill, but we have another element — the Department of the Public Service. I do not really believe we are legislating for commercially viable companies if we have to have a residual Department of Posts and Telegraphs with, as the Minister said, approximately 100 employees. We know when the Minister says approximately 100, that that approximation could be out by 1,000 per cent or by 5,000 per cent. Irrespective of whether there are embargoes on bringing people newly into the public service, or replacing jobs in the public service we are now talking about a residual situation and we now have the Department of Finance involved. How many people in the Department of Finance are going to be involved in this legislation? How many people in the Department of the Public Service are going to be involved? In every section where finance is involved the Minister for Finance is mentioned, but when it comes to remuneration, an area one would imagine the Minister for Finance might have an input, it is not the Minister for Finance but the Minister for the Public Service who is mentioned.
Is that not the man who was working hard all last weekend?
The Minister for the Public Service does nothing except try to tie his policies to what the Minister for Finance will give him. In the only area in which there is responsibility for paying staff, the Minister for the Public Service is involved. We are creating a monster by virtue of the fact that we have not got rid of the Department of Posts and Telegraphs and we have not given control of the two new boards to the Minister for Finance and the Minister for Finance only. It is the Government's job to give a political direction to these two companies. We now have an outrageous area with three Departments running two boards which were to be commercially viable. They cannot become commercially viable under the restraints being put on them because of civil service input. I respect the Minister's attitude in this but he would not like to be operating two companies under the restraints being imposed here because we have three Departments running two supposedly commercial companies. It is not on.
I would like to put on record my appreciation on behalf of the Labour Party of subsection (2) (e) which says: "the company shall, in consultation and agreement with recognised trade unions and staff associations, set up the machinery for the purposes of negotiations concerned with the pay and conditions of service of its staff;". That is a most important section which includes the word "agreement". There is no point in having consultation and discussions if no agreement can be reached. It is a most reasonable word to have put in and I thank the Minister for it. The staff who are being transferred to the two new boards will appreciate the fact that the Minister's heart was with them when he tried to ensure that their terms of employment will not be worse and that he would leave room for negotiation and agreement in the future.
Regardless of the parentage of this section, I do not like — as no Minister would — the heavy hand of the Department of Finance intruding into my Department, but unfortunately for the overall benefit of the State and the Administration, it is deemed to be necessary. I sometimes greatly resent it but we have to put up with it and I can see the reasons for it. This section was discussed in the Dáil and there was broad agreement from all sides of the House on it. I hope that Senators can accept it and will not press it to a division.
I want to mention a point Senator Ferris raised which was contradictory. On the one hand he said that the Minister for the Public Service was busy all weekend doing good for the country or for his association. He is the man who is balancing the act. He is the man who says you get 2 per cent, 6 per cent, 10 per cent or 8 per cent. It is unnecessary to put this section into the Bill. What powers have the board? Is it not the Minister for the Public Service who will say what they are going to get in their wages?
I did not disagree with that.
I cannot let go of the situation concerning the board and the appointments to the board. The present board of one company has been appointed for five and the other for three years.
It has been extended for one year.
They are a very reputable organisation who have given a lot of their time and energy and great personal sacrifices were made by that board. I hope when the Minister is appointing the new board, whenever that be, cognisance will be taken of that fact. It is a very representative board. I met them on occasions and while I had not a lot of dealings with them, one could see they were worried and were making extreme efforts to make a tremendous input to the transformation of the Department to the boards. I do hope they will be remembered for this. I do not know whether people from the Ministers constituency are barred or not. Rumour has it that nobody from Dublin South-West can get on boards any more. In the knowledge that more than a dash of fair play will be available to the selection of the boards may I pass one comment?
They are already on all the boards they could possibly be.
Not at all. I was never involved in that sort of a carry-on. Maybe if I had been I would have got further, but that is debatable. If you do it, you are wrong, and if you do not, you are wrong. It is hard to win.
I wanted to ask about a small group which got very little mention in this Bill, and that is those in the sub-post offices. They are a very strong organisation. There was a great worry at one stage that they would be debarred from the board for technical reasons. I hope that has been overcome and that the sub-post office people, who are very responsible, will elect their own representative to the board. The form of selection should be sent to the association rather than nominating a person——
They will be included in this——
The postmasters will elect him.
I suppose every political party played this game: we said a certain person was appointed from an association, but that did not mean the association would have appointed him or her. I hope that sort of procedure is not brought into this particular appointment. I believe these boards are above and beyond politics. We are talking about posterity and the transformation of a very old, solid, loyal and strong organisation to a new status. It is very serious from that point of view. I hope it is above politics and above reproach. People say nothing is above politics as far as the Minister is concerned, but I do not know whether that is true because I have never had much dealings with him. On making these appointments the Minister must remember that these appointments are very important and should be above local politics. I say that openly and honestly: appoint the best people to do this job, whatever their politics or, even better, do not let us know their politics. Appoint them on their ability.
I am not going back on my statement that the Minister is wrong in throwing away all this power. I am going to oppose it vehemently, with all my ability, because I feel very deeply about this. I am disappointed the Minister did not say he would change this section on Report Stage. For that reason, I will have to call a vote.
There are a couple of points I want to raise. The first being on the numbers on the board. The Bill says "the number of directors ... shall be at least 12 or such greater number as the Minister with the consent of the Minister for Finance may determine from time to time,". Everybody agrees that 12 is over and above the number that can be considered a workable group. The Minister in his selection of 12 and with powers to increase that number, may be considering giving the broadest possible spectrum to the board of directors. I do not think the board should be comprised of the greatest possible number. What we should be looking for is a small compact board which would deal with problems as they arise.
Another major problem arises in this section of the Bill in that neither of the companies shall, without the consent of the Minister or the Minister for Finance, get involved in anything with which the Minister for Posts and Telegraphs or the Minister for Finance do not agree. This is a major constraint on both companies. How can you say that you are setting up individual companies in the telecommunications and postal fields and immediately restrict their activities by virtue of paragraph (f) which states: "the company shall not invest in any other undertaking without the approval of the Minister given with the consent of the Minister for Finance."? Surely if each of the companies are going to be commercially viable, they must have the right, as companies, to deal with whatever they feel to be commercially viable enterprises within the telecommunications and the postal fields.
The companies are being let down by the insertion of paragraph (f). The Bill would not be lessened by the removal of that paragraph and it is definitely not strengthening the case being made by the Minister or by the Government that we are setting up commercially viable companies. With the constraint in paragraph (f), we are restricting them totally and are giving back again to the Minister for Finance the right to restrict the areas in which the two boards can get involved. Could we have a comment on paragraph (f)?
Twelve is the normal number in the case of any State company which has worker directors and provision is made in the Bill that one-third of the directors will be worker directors. This is the normal number. In the case of Bord Telecom Éireann there will be 12 directors, four of whom will be worker directors. However, in An Post there will be 15 directors. The reason for that is that there will be four worker directors as laid down by the Worker Participation (State Enterprises) Act, 1977 and there will be one postmaster director and between them they will constitute one-third of the board, so there will be ten other directors. I think the numbers are a little high.
On paragraph (f), could the Minister give me an indication as to why this is included in this section?
It is hard to disagree with what the Senator says about its being restrictive. There are undoubtedly some restrictive clauses in it, just as there are restrictions on Ministers. They are not free agents, they have to go to the Government for permission to do one thing or another. On other occasions they have to get permission from the Minister of the Public Service or of the Minister for Finance. This would appear to be a little restrictive, but on the other hand——
On the other hand, Senators will be aware that many semi-State companies have got into trouble because they have gone off in their areas which have been loss-making. Decisions have been taken which have posed great problems for Ministers and the Exchequer. So it is a safety net. We may have to review the whole question as to whether Finance and the Public Service should have so much of a role in these things at all.
We will give the Minister a strengthened hand in his argument.
The Committee divided: Tá, 23; Níl, 15.
- Belton, Luke.
- Browne, John.
- Bulbulia, Katharine.
- Burke, Ulick.
- Conway, Timmy.
- Daly, Jack.
- Dooge, James C.I.
- Durcan, Patrick.
- Ferris, Michael.
- Hourigan, Richard V.
- Howard, Michael.
- Howlin, Brendan.
- Kelleher, Peter.
- Kennedy, Patrick.
- Lennon, Joseph.
- Loughrey, Joachim.
- McAuliffe-Ennis, Helena.
- McDonald, Charlie.
- McMahon, Larry.
- O'Brien, Andy.
- O'Leary, Seán
- Quealy, Michael A.
- Robinson, Mary T.W.
- Cassidy, Donie.
- Fitzsimons, Jack.
- Hanafin, Des.
- Killilea, Mark.
- Lanigan, Mick.
- Lynch, Michael.
- McGuinness, Catherine I.B.
- Mullooly, Brian.
- Honan, Tras.
- Hussey, Thomas.
- Kiely, Rory.
- O'Toole, Martin J.
- Ryan, Brendan.
- Ryan, William.
- Smith, Michael.
Tellers: Tá, Senators Belton and Howlin; Níl, Senators W. Ryan and Cassidy.
Question declared carried.
Question proposed: "That section 17 stand part of the Bill".
I am never too sure why when we get a Bill from the parliamentary draftsman it says "notwithstanding anything contained in the Companies Act ...." Why should anything be legislated for here which could be contrary to the Companies Act? "Notwithstanding" suggests that there is a fault in the Companies Act or that there might be a fault in this Bill that is contrary to the Companies Act and in either case it is faulty parliamentary draftsmanship. Why do we have this in this Bill, just as we have had these sections in other Bills?
That any proposed alteration would be notified by the company to recognised trade unions and staff associations is a welcome provision in that section, apart from the question raised by Senator Lanigan on the earlier part of the section.
On the first point raised, section 17 overrules the Companies Act and this is a standard provision for all State companies.
I would like to support Senator Lanigan. I do not think that this is important enough to bother with, but the principle that he is talking about is important enough. Here we have a company, the vast majority of the shares in which will be owned by the Minister concerned, anyway, who under the Companies Act, if there were no provision here, would have the right to change the memorandum and articles of association by reason of his voting power. It should not be necessary to write it into legislation. I know that it is there because it was there previously. It is just not necessary and Senator Lanigan has made a fair point. The parliamentary draftsman and those who are bringing forward new legislation of this type should seriously examine whether many of these standard provisions are necessary.
It is not just enough for the Minister to get up and say that because a particular section is in other Bills we have to accept it. In this Bill the Minister is looking for the protection of the Companies Act in quite a number of cases, but he is running away from the obligations of the Companies Act in other cases. It is not quite right for him just to say that this is a standard subparagraph in most legislation. It obviously is wrong to start off a section of a Bill with "notwithstanding". There is either a fault in the Companies Act, or the Minister is trying to get away from his obligations under the Companies Act when it suits him.
On that point, the Minister and the Minister for Finance are the owners of the company and it is a reasonable provision, but I will accept the point made by Senator O'Leary and already made by Senator Lanigan. Very often, on a personal basis, I do not like to see clauses taken automatically from one Bill and handed down through the generations from one Bill to another. Also, as regards adopting Bills with standard pieces of legislation from Acts that possibly go back away into the past century in British legislation, all these things should be looked at and each individual area taken on its own. However, in this section it is a fact that the Minister and the Minister for Finance are the owners of the company and in that case it is reasonable and it is a standard clause for all State companies.
Technically speaking, the Minister for Finance is not the owner. He is only one shareholder and the other remaining 99 shares belong to the Minister for Posts and Telegraphs. I have had an argument all day on this issue. I think 80 or 81 per cent of the shares of any company give complete ownership to that person and the others are only nominal from the point of view of administrative purposes or voting powers. I cannot see why the one per cent of the Minister for Finance makes such heavy demands right through the Bill.
This Bill should have been introduced in this House with a little panache, dash and daring. It becomes even more restrictive as we go through the Bill, and I am dealing with it for the first time today. I am more disappointed as each section comes up because it is the same old swan song that I have heard for the last 14 years in this House or the other House and here it is again in section 17. The Minister could be brave in this instance and show a little dash, dare and flair. He should agree that we should take section 17 out of the Bill completely and he should show, not alone to the Members of the Seanad, but to the public at large, that he is sincere in what he is doing in this Bill. I am afraid that we are not sincere or serious and we are just passing the buck. That is not good enough in this instance. The Minister has admitted it openly and clearly and should be daring enough to say that on the next Stage of this Bill he will omit section 17, just to show reason and reality.
If the Houses of Parliament are to have the respect that they should command and demand from the public, they should be doing something positive and slightly daring and if it is not right later on, it could be amended. Twenty seconds in this House will amend any legislation if we all know it is wrong. For the sake of Bord Telecom and An Post and the 30,000 people that are employed in both, let us have a bit of dash and daring from the Government on this Bill and get away from this tight-rope situation of having to accept what is written down. There is no logical reason why we should have this in section 17 when you refer back to some of the subsections and the sections we have dealt with earlier. Senator Lanigan rightly said on one hand you are seeking protection and on the other demanding protection and I fail to see the reason for it. It stands to gain nothing for the Government for either board.
On the last section, Senator Killilea has already put on record the importance of the contribution that the Government are making to the board. We are handing over a great deal of capital investment by the State out of public finances and it is important that this section give the required power to the Minister for Finance that I read into it. Perhaps I am wrong. I am anxious that some recognition be given to the State for their contribution to the setting up of the board. They are being handled a present of taxpayers' investment.
It is not going to be taxpayers' investment.
Senator Ferris suggests that the addition of the final sentence there gives to the unions a certain amount of power, but in actual fact what the section says is that any alterations shall be notified. It does not suggest that the unions have any contribution to make. Paragraph (f) in the previous section says "the company shall not invest in any other undertaking without the approval of the Minister given with the consent of the Minister for Finance". We are now talking about changing the articles of association. There is a contrast as between paragraph (f) in the previous section and this section. The first says that they shall not invest in any undertaking and the second says that notwithstanding anything in the Companies Act the articles of association can be changed by consultation with the Minister for Finance and the Minister for the Public Service. Again we get back to this ridiculous situation where the Minister for Finance and the Minister for the Public Service are becoming involved. I do not think that there is anything in this section that would give confidence to the unions because all it does is suggest that they shall be notified. There is absolutely no consultative power being given to them. This section should equally be withdrawn from the Bill because it gives no powers and does not change anything for anybody.
Surely the Minister should have some comment to make other than the one that he has made.
If section 17 were dropped, as the Senator has suggested, it would also mean dropping the last part of it which means that proposed alterations in either the memorandum or articles must be notified to the recognised trade unions and staff associations. That is a very important aspect of it and that element should not be dropped. Maybe some of the clauses were not changed in deference to our predecessors. We would not like to be too critical of the proposed legislation that the Senator and his colleagues in the Department of Posts and Telegraphs have left behind.
That was an old ploy that was tried here a half an hour ago by the Minister. I would not say that he is more experienced than the Minister of State from the point of view of contributions to debates but that old ploy and political gimmick is gone now. The Coalition are seven or eight months in power. Let me add that when we were down in that Department in days of difficult, hard work we had Transport and Power and Posts and Telegraphs and had a Minister and a Minister of State. Now in Posts and Telegraphs alone there are a Minister and two Ministers of State. Surely the Minister or the two Ministers of State are not worth their salt, if the only answer they can come up with today is to talk about their predecessors referring, of course, to Fianna Fáil. It is the Ministers of the day who are responsible for this Bill. Passing the buck is not good enough.
I would like to support what Senator Lanigan said about the last paragraph. "Any proposed alteration shall be notified by the company to recognised trade unions and staff associations." What does that mean? If they do not like it, it means nothing. If we are enacting a Bill, they are going to know it anyway. It does not take section 17 of this Bill to tell them what is going on in their place of work. If it is to be regrettable to them in their place of work they will know it a lot faster than by way of section 17 of this Bill. It serves no purpose. You put a message up on the board and you say, "We are doing A, B and C and whether you like it or not we are doing it". I do not care whether Senator O'Leary shakes his head. I am only reading the English in section 17. Senator Lanigan really brought the point out. All it is is dictating to the associations and the trade unions. It is just notifying them.
If you notified the trade unions tomorrow morning that they were taking a reduction of 7 per cent in their salaries, putting that information on the notice board would not mean anything. I am only giving an extreme example but the point is made quite clearly. If the Minister wishes to be authentic, strong and forceful with a bit of panache and dash he would delete this section. It is of no relevance.
The Minister and Ministers of State are now handing over in detail to the Ministers for Finance and for the Public Service all the power remaining to them. The whole thing is a shocking performance by this Government. The Bill is deteriorating as it goes on.
I just wish to make the point that no alteration would take place without the Minister's approval. When approval from the Minister would be received the workers would be entitled to be notified. How many companies in this country have not notified their workers of whatever they wished to do or of whatever articles they wished to change and put them in bankruptcy courts and put themselves out of business without their workers even knowing about it? That is why this section is here. At least the workers will be notified. The Minister will have agreed previously to it so that workers can take the proper action under the legislation governing the employment of people in this country by which they can protect their interest. This new board will not have the power to ignore their workers and may make no alterations within the terms of the Companies Act without the prior approval of the Minister. That is a double safeguard for the employees. I accept everything else the Senator has said by way of valid criticism but I want to be careful that we do not try to water down the Bill by changing words around. This is an important section for us. It is an important section for the workers in the industry. It is very important that the new board would know that there are those safeguards for the workers.
I am afraid Senator Ferris is misguided in his criticism because in actual fact what we are talking about here are the articles of association of the company not the operation of the company. Let us be quite straight about it. If the people who set up the company in the first place have any sense at all they will cover every probability or possibility or suggestion of a possibility in the articles of association. One of the things that printers love is to get the articles of association of an ice-cream limited company because if you set up a company, irrespective of the size of it, everything will be covered within the ambit of the articles of association. To say that the workers are getting protection by virtue of the fact that there is a suggestion that they will be told of any alteration in the articles of association and that that gives them protection is a false argument. It does not give them any protection at all.
They will be entitled to take action.
Question put and agreed to.
Question proposed: "That section 18 stand part of the Bill".
When we said that this Bill was one of the most important Bills to come through the Houses of the Oireachtas, we dealt in the main with the fact that we were talking about 30,000 workers but in addition we are talking about considerable assets. The structure of these companies is to be associated with the assets that are there at present plus Government borrowing and plus the amount of money that can be raised by Telecommunications Investments Limited.
The structure of the company will be based on the valuations put on the properties on the day of vesting or the day prior to vesting. The capital construction of these companies will be vital in the capital structuring of the company and obviously if a valuation is put on these companies which is too high, the market will not bear that particular burden and we could have an under-capitalised situation in the two companies. If there is an under-valuation put on the properties and the assets of the Department of Posts and Telegraphs, there could be a situation which would be totally detrimental to the initial setting up of these companies. I should like to ask the Minister on what basis is he to value these companies on the day prior to vesting.
The property is valued by the Valuation Office and the total value of assets at the end of 1983 is given as £32.5 million for An Post. As far as Bord Telecom Éireann are concerned, the total value of telecommunications assets at the end of 1983 is to be £1,500 million.
Is the Minister aware that there are fluctuations in the asset value? Is this based, as is done in the Department of the Environment, on cost plus inflation or on commercial value or on what the Valuation Office consider to be the value of these as commercial premises? This has a major bearing on the capital structuring of these companies.
For building, it is valued on alternative yields while for equipment it is the up-to-date replacement value.
Could the Minister give me his objective view of what is the alternative use value?
As the Senator will appreciate, this is a very technical matter. It is something on which we will have to accept the advice of the Valuation Office.
In this issue, we should not say merely that it is just a technical matter. We are dealing here with the setting up of two major companies and we cannot capitalise these companies unless we find out exactly what the asset value of these is. I agree with the Minister when he says that the replacement cost of the equipment is the valuation that should be put on equipment. That is all right if one is in an ongoing business — one talks about replacement cost — but when setting up a new company one is taking over assets but not taking them over at replacement cost. They are taken over at the valuation as they are at the time. What is being suggested here is that the value of the motor vehicles and technical equipment is to be assessed and that they are to be handed over to the companies at the replacement value. That is a ludicrous situation. On the subject of the asset value, I suggest that if you take the valuation on premises as at December 1982 it would be completely different from the valuation in 1983. I am not sure what the vesting date is to be but I am certain that the valuation on the vesting day will be totally different from the valuation that is put down in the Bill giving the assets of Bord Telecom as £1,500 million.
The Minister is correct in this regard in that the valuation of the property put on it by the Valuation Office and as dealt with in section 18 (1) is largely theoretical. It is largely irrelevant from the point of view of the financing of the company. Let me explain to the Senator so that he may understand why I hold that view. If one takes a building which might comprise 20,000 square feet, containing equipment, and if the valuation on that building is put at £100,000, that means that there will be £100,000 worth of shares issued in respect of it. It will be issued in total at the end of the day. If the valuation put on the building is £90,000 instead of £100,000 there will be £90,000 worth of shares issued in respect of that but it will make no difference to the repayments of the company whether it is £100,000 on the balance sheet or £90,000 on the balance sheet. There will be no repayment for the Minister arising directly out of the nominal value of the shares. So whether it is valued at £100,000 or at £90,000 makes no difference to the actual day-to-day operation of the companies or the day-to-day repayments which they must meet in respect of any capital advanced. It is purely a balance sheet figure.
It would, of course, make a difference if everything was transferred for £1. Particularly in the case of the telecommunications board there is some expectation of a return on investment and some measure of that must be available. But within large margins of error it makes little or no difference as to what valuation is put on. There will be no liability from the company to the Minister for Finance except the notional liability of the value of the shares.
I disagree totally with what Senator O'Leary has said. If one goes to our neighbouring country and sees the privatisation of nationalised industry, including the oil industry, one will find that one of the problems that arose was that when the shares were offered to the public they were offered at a price that would not be the price that would be set down as being a commercial valuation.
The Minister made a definitive statement of £1,500 million being the asset value of Bord Telecom, of which £725 million was made up by loans of which there was £435 million investment by the investment company and he told us that he would issue shares to the value of £355 million and would write off £80 million of what was owed to Telecommunications Investments Limited. Therefore it is vitally important that a proper means of assessing the valuation of the capital assests should be arrived at. A transfer of run-down vehicles to Bord Telecom at the replacement cost will be a major hindrance to the board because regardless of what type of equipment there may be at present in the Department of Posts and Telegraphs it has to be written off over a certain number of years on an on-going basis and the Department have to provide for the replacement of that. It is ludicrous to suggest that there are 1,000 Bedford CF vans around the country which can be handed over to Bord Telecom as being 1985-1986 vehicles.
By way of explanation of that, the value will be the written down replacement value. As far as the Minister is concerned he will have all the shares himself with the exception of one for the Minister for Finance. There is no question of privatisation. It is reasonable that the Valuation Office should be the people to put a value on this, and that the current value of assets on the vesting date should be the actual figure arrived at. It is an entirely reasonable approach in this particular area. I personally would not see any great difficulty in it. In this case, because of the highly technical nature of it, we will have to rely very much on the Valuation Office.
Would the Minister not agree that the most important facet of it all is, that apart from the shares, that Telecommunications Investments Limited who are to collect money from the public sector themselves should know exactly and precisely and up to date the valuation of the properties and the valuation of the other matters relevant? Also, it is even more serious from the point of view of An Post because they are the people who are going to start off with the biggest hardship, and the correct valuation to them is even more important than is the case in respect of Bord Telecom. For that purpose I suggest that the valuations as assessed last be placed in the Library so that people can see that they are sound basically, that they would at least be up to standard and they would not be open to criticism. This should be done rather urgently so that when the next Stage of this Bill is brought here, if there is anything irregular in those assessments they can be corrected by this House and by the Minister.
I would hope that that is the least the Minister of State in the Department of Posts and Telegraphs could do for us when indeed he could not do much for us under section 17. Senator Lanigan is right. It is most imperative from Bord Telecom's point of view that the valuations be absolutely correct because they are the people who have to go to the open market to purchase money at whatever rates are applicable. Therefore, we must be absolutely correct. This must not be done by way of a blanket assessment by the Valuation Office. There must be details. The public are entitled to see them. I most certainly believe that this House is entitled to see them. It would serve the purpose tremendously if the Minister could make them available before we reach the next Stage of this Bill.
I understand that so far as An Post are concerned, the valuation will be handed over as equity to them and that that will be publicised.
The actual value will not be known until the vesting dates. What we have now are estimates for the end of 1983.
The individual ones. The obvious place to put them is the Library for those who are interested enough to read them.
How could we expect to examine the details or the valuation carried out on an item-by-item basis? How are we competent to do so in this House?
We are blessed in the Government we have. We are told every day and it is drummed into us that we must be cost-conscious in everything we do. Every day we hear that we must be exact and correct, that we have the most correct Government and most correct Leader of the Government we ever had in our lives. There are 30,000 people employed in the Department of Posts and Telegraphs so surely it is a small thing to expect some of them to produce for us the documents giving the assessment only of the valuation. It is available somewhere and all I am asking is that it be made available in the Library before the next Stage of this Bill. I am sure we will be able to justify its existence because it is fundamental to the whole process.
As the Senator rightly points out, these are estimates but they are available in the Minister's Second Stage speech.
They are a fair breakdown.
If one looks at the Minister's Second Stage speech, there is reference to a figure of £32.5 million for An Post and £1,500 million for Bord Telecom. He gives a breakdown of the indebtedness by the Department of Posts and Telegraphs to Telecommunications Investments Ltd. He gives the indebtedness to the State but he does not give any evaluation of the assets of the company. How can he justify saying that on the day before vesting the valuation officer will say this is the valuation and still come in here and not tell us how there is a breakdown between buildings, land, vehicles and equipment? This information should be known to us here.
The global figure was an estimate by the Valuation Office. There are assets being added all the time, such as new buildings and acquisitions of one sort or another, and these will be updated on the vesting date. This was a detailed examination done by the Valuation Office.
Our point is that we are asked to give a blanket "yes" to proposals which are fundamental to the assessment of the valuation. We are being asked to do this without seeing the figures which are available in the Department. They are important within the framework of the Bill because, as Senator Lanigan rightly said, Bord Telecom are dependent on the valuations when the Telecommunications Investments Company go to the public at large to seek money from them. Yet the Minister shirks the responsibility of making available in the Library of this House the right for us to see what these assessments are. It is a reasonable request from the Opposition to find out what the Valuation Office made their assessments on. It is just as important, although the Minister glibly slipped by it, as the valuations on post offices. It would be interesting to know what the valuations are on individual post offices. It is not be unreasonable for us to ask for such information. The Minister should state when the information will be available.
The situation is that the Bill does not provide for the transfer of any specific figure. It provides for the transfer of the assets. In such case the actual figures, or the total breakdown, which are estimates and which will be up-dated on the vesting date, are not necessary for the purpose of the Bill.
Is the Minister afraid of something?
I am stating the fact that the Bill does not specify any definite figure. It is a question of the transfer of assets.
When the investment board of Bord Telecom seek financial support for the company, on what basis will they be seeking it?
So far as the Bill is concerned there is no specific date for the transfer of assets.
There is something afoot.
Question put and agreed to.
Question proposed: "That section 19 stand part of the Bill."
Why is it necessary to state that the Minister for Finance shall not transfer or alienate his share in the share capital in either company? Does it not say at the beginning that the Minister will hold all the shares except one? Why is it necessary to have this section in the Bill?
The purpose of that paragraph is to reassure the work force in both Bord Telecom and in An Post. As the Senator is aware, one of the great worries of the work force has been the question of possible future privatisation and therefore the uncertainty that might attach to their future position. I have gone to great pains throughout the Bill to emphasise to the work force that their future in the semi-State companies will be as secure as it is at the moment in the civil service.
Can the Minister explain what difference will it make if the Minister for Finance has one share or not? The section states that one share shall be issued to the Minister for Finance and the Minister shall not alienate that share. What effect or difference will this make to the Bill?
That is a very good question. The Minister for Finance traditionally has shares in semi-State companies so that he can be represented, especially at annual general meetings. Bearing in mind that the Minister for Finance will be setting financial targets for each company, it is reasonable that he should have formal contact with the company through having this one share.
What protection is there for the workers?
The Senator will be aware that normally in semi-State companies the Minister for Finance is the shareholder. He normally holds all the shares. In this case it is the Minister for Posts and Telegraphs who holds all but one of the shares. That is to do with purposes of administration and to facilitate the optimum facilities from the EEC.
But there is no protection for the workers.
Question put and agreed to.
Section 20 agreed to.
Government amendment No. 1:
In page 17, lines 2 and 3, to delete "unless the Minister, with the consent of the Minister for Finance, has authorised such issue".
Apart from this section it is specified elsewhere in the Bill that neither the Minister for Finance nor the Minister for Posts and Telegraphs can make any other issues nor can they alienate their shares. The words "unless the Minister, with the consent of the Minister for Finance, has authorised such issue" are superfluous and contradict the main thrust of the Bill. Therefore, we propose that they be deleted.
I welcome this amendment because it would be difficult to reconcile the earlier provisions and indeed the guarantee the Minister has made that the shares held by the Minister for Posts and Telegraphs and the share held by the Minister for Finance would not be alienated and that neither would the shares held by the subscribers to the memoranda of association of the two companies be alienated. I am asking for clarification of the point that as the Bill now reads, with the amendment adopted, there is no provision for the issue of new share capital for either company. It would need new legislation for the issue of new share capital.
Amendment agreed to.
Section 21, as amended, agreed to.
Sections 22 to 26, inclusive, agreed to.
Question proposed: "That section 27 stand part of the Bill."
I merely wish to make the point on section 27 (1) (a) that where the borrowing is not from the Minister for Finance, it shall still require the consent of the Minister and the Minister for Finance. If the Minister for Posts and Telegraphs says, "Yes" and the Minister for Finance says, "No", who reconciles the situation.
The Government, I expect.
For the purpose of utilising the share capital owned by the Minister for Finance, for the purposes of utilising the situation of the EEC, they now also usurp the power and authority of the Minister for Posts and Telegraphs on this issue, I do not think it is necessary. The decision of the Minister for Posts and Telegraphs should satisfy the needs of the Government. I am sure the memorandum circulated to the Government, should in this instance be so. I abhor the reason why the Minister for Finance will have to give consent to the decision of the Minister for Posts and Telegraphs. If we are giving power to these boards, then let us give it to them with the responsibility for them remaining in the hands of the Minister for Posts and Telegraphs.
One of the values of semi-State bodies is they do not have much difficulty when they go to borrow because they are backed up by the guarantee of the Minister for Finance. If the Minister for Finance is to guarantee borrowing, then it is reasonable that his consent should be given to that borrowing. It is normally forthcoming if it is a reasonable proposition.
I always thought it was a guarantee by the State. I do not think, in the history of this country, that such a provision has been inserted into a Bill that "where a borrowing is not from the Minister for Finance, it shall require the consent of the Minister and the Minister for Finance". Can the Minister give me some instances of where that occurred before?
It is in the Gas Act and also in the ESB Act.
I admit that I have never taken notice of it before in my life. It is ridiculous, foolish and unnecessary that the work of the Minister for Posts and Telegraphs, as a 99 per cent shareholder in the company, cannot be taken at Government level and consent for borrowing be given on the basis of a memorandum circulated for reasons a, b, c, d, f, as pronounced by him, without having to go on bended knee to the Department of Finance. It is time we broke away from this. The new boards should not be strangled by the Department of Finance but released from it. The only way release can be given is through the offices of the Minister for Posts and Telegraphs. We are entwining them. Not alone will they have to get over the worry of discussing the matter with the Minister for Posts and Telegraphs but they will also have to troop across town to have a word with the Minister for Finance. His one per cent has the same say as the Minister for Posts and Telegraphs' 99 per cent. To me it sounds absolutely ridiculous. I do not remember seeing it before, I am open to contradiction on that, but whether I did or not it does not mean that it should be inserted here. The Minister should act now, before it goes too far and retract the consent of the Minister for Finance for such an issue, taking into account what I have said.
The point the Senator has been making throughout the debate about the Department of Finance having so much say in everything is very significant. There are arguments for it but the question arises whether we are over-centralising things in this respect. It is a subject which merits consideration in a general way by both Houses of the Oireachtas. If CIE borrow money they need the guarantee of the Minister for Finance. It is of great help to them when they go to the banks with that guarantee. Otherwise the money might not be forthcoming.
I hope that An Post or Bord Telecom will never find themselves in the same situation as CIE. We will not go into that argument.
The Sugar Company may be its own strangler. We will not debate that. The Minister has endorsed everything I believe but he does not seem to act upon it. We are now in a new situation. The oldest organisation in this State is the Post Office. That is an undeniable fact. We are giving it a new impetus and we are strangling it before we even give it a start because we are attaching it to the Department of Finance. We should be giving it the freedom about which I spoke all day. That is what we should be giving the board, not tying it up in knots with the Department of Finance. They nearly need the authority of the Minister for Finance to scratch their backs. It is disgraceful. Now is the time for the Minister for Posts and Telegraphs, since he agrees with me, to delete that. It would be forward thinking by the Minister. Many members of the Minister's party agree with me that we have to give an impetus to this board and not batten down the hatches before they even move. I am depressed, as the day goes on, by the hold of the Department of Finance on this Bill. Now is the time to break that. The Minister should do it, and every party and the Independents would agree with it. The Minister should do something before this comes to a terrible, grinding halt.
There is considerable force in the point but if I was to do what the Senator proposes I could, in one fell swoop, destroy the possibilities of the board. If the Minister for Finance was excluded from it and his guarantee was not forthcoming, it could well be that this board and many other boards would have great difficulty in borrowing. That could destroy the telephone development programme which started three-and-a-half years ago when the Senator's party were in power. It was a very ambitious programme which is on target. All the borrowings to date, including the borrowing by ITI which was devised during the Senator's own term as Minister of State and was a very clever and bright idea had to be guaranteed by the Minister for Finance. If that guarantee was not forthcoming, ITI would not have been the success it is. The guarantee has to be there. While acknowledging that there is some substance in the general point, it is something we would have to look at in a global way. As of now, the guarantee of the Minister for Finance has to be forthcoming and if his guarantee has to be forthcoming so has his consent.
Section 27 states that the aggregate at any one time of borrowings by the postal company under paragraph (a), will not exceed £58,500,000 and at any one time of borrowings by the telecommunications company, under paragraph (a), it shall not exceed £1,400 million. Section 28 states that the guarantees are only valid to £8,500,000 in the case of the postal company. In the case of the postal company the Minister does not guarantee £50 million of the borrowing whereas in the case of the telecommunications section he is guaranteeing the whole lot.
The reason for the difference in figures is that the Minister for Finance will be providing up to £50 million out of Exchequer funds so he would not have to guarantee what he is providing himself. That will come up on section 29.
Irrespective of what is contained in section 29 (1) there is a section here, section 28, which states specifically that the Minister is only guaranteeing £8,500,000.
Are we on section 28 now?
The board is getting the rights to borrow £58.5 million.
Have we cleared section 27?
The two sections have to be related because the Minister is only guaranteeing. It then states in section 29 that the Minister can provide £50 million. It does not say that he guarantees the £58.5 million which is the borrowing limit.
Section 29 provides that £50 million of the £58.5 million will be provided by the Exchequer. Only £8.5 million will not be provided by the Exchequer, therefore, only £8.5 million will have to be guaranteed by the Exchequer.
It states specifically in section 29 (1) that the Minister for Finance after consultation with the Minister may make available to the postal company a sum not exceeding £50 million to finance capital works. Relate that back to section 28 where the Minister is only guaranteeing £8.5 million. In section 27 the aggregate borrowing limit is £58.5 million. In the next section the guarantee is only for £8.5 million. In the next section then we are suggesting that the Minister can make available. Surely the Minister should guarantee whatever he makes available. If he makes that amount of money available to the company surely he is responsible for guaranteeing in the end that if there is a problem he will guarantee against that loss.
The Senator is missing the point. The £50 million will be money directly from the Exchequer which would not need guaranteeing. The Minister will be taking it our of central funds. The £8.5 million will be money borrowed from elsewhere. The only thing that needs guaranteeing is the £8.5 million. If the figures did not add up I would say the Minister had a point, but they do add up.
Question put and agreed to.
Sections 28 to 30, inclusive, agreed to.
Question proposed: "That section 31 stand part of the Bill".
Can the Minister give some indication as to the basis on which the working capital is being allotted? Ten million pounds is being allocated to the postal company and £150 million to the telecommunications company, which would seem to be out of line with the capital requirements in both cases where £32.5 million is the asset value of one company compared to £1,500 million as the asset value of the other company.
The figures mentioned by Senator Lanigan are for both services.
Question put and agreed to.
Question proposed: "That section 32 stand part of the Bill".
As regards accounts, in the event of the boards not going the way we would wish them to go, does the Minister not think yearly accounts are a bit antiquated and that a lot can happen within a 12-month period? Would it not be possible for us to have a quarterly synopsis? I suggest that we should have accountability on a quarterly basis rather than on a yearly basis. Most reputable companies, probably the exceptionally good ones, have one every Monday to know how they are doing. The direction a large body such as this is going in should be known at more frequent intervals than one year.
We must strike a balance. There can be a tendency for Ministers to become too involved in the affairs of semi-State companies on the one hand and on the other hand there can sometimes be a very distant relationship when Ministers do not know what the boards are doing. The last sentence of subsection (1) states: "shall keep in such form as aforesaid all such special accounts as the Minister may from time to time direct". The Minister will have the power to say he would like to see accounts quarterly. The Government have recently said that in the case of CIE.
I know, but what I am saying is that we should not leave it that loose. What we should do, if we can within the framework of this Bill, is to have accountability on a quarterly basis
I note the Senator's point.
A full audit may not be necessary but the general direction of the company should be known on a quarterly basis. The Minister could change the wording of the Bill on the next Stage.
I will take the point the Senator has made. There is provision in this section for it and I will certainly take into account the Senator's view.
Question put and agreed to.
Section 33 agreed to.
Question proposed: "That section 34 stand part of the Bill."
This is a welcome section in that employees can be appointed as directors of the company because this gives employees an insight into what is going on within their own working area on a day-to-day basis. I am glad that this ties in also with section 35 where, irrespective of the remuneration that might be applicable to a board member, he would not be at a loss of any earnings by virtue of the fact that he had to attend board meetings. There is in both sections 34 and 35 a protection for employees in that they have an input which is of tremendous relevance in today's business world. Many companies had problems but the workers were not told of them until it was too late for either the company or the workers to become involved in rescue packages. The appointment of a director does not mean that he will, in any way, suffer financially from his appointment as a director of the company. That is a welcome addition to the Bill.
I welcome the appointment of workers to the board. There is a responsibility implicit in that which one must mention at this stage. If something is pertinent to the employment of the staff or to the unions they are entitled to report back to their respective union. However, reporting back must be looked at in a very careful manner. At board meetings there are certain items and certain parts of the agenda relevant to the normal day-to-day profit-making or working of the boards which are confidential. We should protect the board in some way. We should insert a clause to state that certain aspects of the workings of the board should be kept confidential. I know of cases where there have been leaks from board meetings. We should protect the boards. It is good for the work force to have representation on the board. There is the other point of the board working as a business organisation. In An Post, for example, if there were leaks concerning the rejuvenation of the parcel service there would be parties outside of the board who would be very interested. They should not know about that because that belongs to An Post and to the Department of Posts and Telegraphs. I just give that as an example.
I suppose confidentiality and secrecy are pious hopes. I had the experience one time in the Department of Posts and Telegraphs of discussing a matter and putting it on a piece of paper. I read it in detail the following Sunday in the newspaper. I was not shocked but keeping certain matters secret is of great importance.
What the Senator has said is correct. It is important that it should be seen in the context of section 37 and not the present section. The comment he has rightly made about disclosures of confidential information is a matter for all directors not just worker directors. It should be kept confidential because otherwise the viability of the business could be undermined.
Like other Senators I welcome this provision but there will be a time gap before the elections take place. The Bill provides that they should take place within 12 months after the vesting day or such longer period as may be agreed between the company and recognised trade unions and staff associations. In the meanwhile, the Minister under subsection (8), can appoint as a director of each board a member who serves as a representative of the recognised unions and staff association. I understand there are three at present but there is provision for appointing two here, which would be two out of 12. Will the Minister clarify the proportion? One third of the members of the interim board should be worker representatives to keep that balance.
We have increased the number to 12. At the moment both boards have nine directors. It is my intention in relation to the boards to add the chief executive to each board and also to appoint two additional trade union directors pending the employee-director elections.
Question put and agreed to.
Sections 35 and 36 agreed to.
Question proposed: "That section 37 stand part of the Bill."
Part of what is mentioned in section 37 has been covered already by Senator Killilea. Nevertheless we must deal with the matter of confidentiality by any civil servant. It is part of his terms of employment that whatever information he gets within his Department he keeps confidential. Unfortunately, over the years this has not been adhered to. If we are talking about confidential information would this be the section under which we could talk about the transfer of files or would it be best taken on a later section? The transfer of personal files must be taken into account. I do not mind whether we discuss it now or on section 45.
I welcome the views expressed by Senators Killilea and Lanigan. It is a growing problem that leaks are taking place from Government Departments. This has been increasing over the past couple of years.
Poor Seán Doherty — little did you know then.
It can only be detrimental to the conduct of business. There have been problems in the Department of Posts and Telegraphs over the past year. Things have appeared in the papers. I remember some time ago there was an article about an investigation in the Department into a phone call between insurance officials. As Deputy Kelly said in the Dáil, the tapes seemed to have fallen from the back of a lorry. All the names of the officials involved in the investigation and details, not entirely accurate but fairly accurate, appeared in a publication. That was just one example. There are other examples as well. That is happening in the civil service context and it can only be a matter of concern. Here we are dealing with a semi-State situation. We are trying to provide in law that where directors, members of the staff or consultants are privy to information declared to be confidential it would be an offence to disclose that information. It is a proper provision.
Senator Lanigan has raised the question about personal files. It is not the intention to transfer personal files to the semi-State companies. What will be transferred are essential details of service, levels of remuneration and so on. It is not the intention to transfer personal files in detail.
Does the Minister intend to transfer to each proposed company the nature of all sick absences, assessments submitted in confidence for promotion, records of all discipline and irregularities, late attendance, supervisors' private comments and employee explanations for alleged misdemeanours? No prospective employer would normally have any right to or expect this type of information. In a situation where this information was passed on to a new employer the staff should be consulted beforehand. This is of major importance. If we transfer personal documents we cannot suggest that we are setting up new semi-State companies. I suggest that if there is to be any transfer of such documents, which exist in all Government Departments, employees should have the right of access to these documents and to be able to make whatever comments on them that they regard as necessary. It is a vital area of staff relations. If this is to happen, we cannot start off these new companies with a proper relationship basis as between staff and the new companies.
I should like to support Senator Lanigan on this matter of personal files. I am pleased the Minister said that the actual personal files will not be passed on, only factual details of services. To pass on personal files of this kind would be like tying a stone around the neck of employees who are moving into a different sphere of employment. I hope the Minister can reassure us that this will not be done. The principle still remains that in this sort of matter where files are kept on employees they should have access to them and they should be able to see what is being said about them. It is often said about the right of privacy, and so on, that it is a kind of 1984 situation in which files are kept on people and they never know the information that is being passed in regard to credit, in regard to past convictions, in regard to all sorts of things, who has this information and who has not. It certainly is a safeguard to any employee to know that he can see what is being said about him and have the opportunity, if possible, to refute it, if he feels that he is being accused in the wrong. This seems to be an ordinary part of natural justice.
It appears to be the practice in Northern Ireland and in Britain, at any rate with regard to the civil service, that they are allowed access to these personal files. Where files of this sort are kept on employees in the new companies, they should be allowed access to them. I hope the Minister will also be able to reassure us that the whole personal file will not be passed on and that a new start in every sense will be made.
I am very pleased with what Senator Lanigan and Senator McGuinness have said because it certainly coincides very much with my own instincts and my own thoughts on the matter. The question of what personal files will be transferred will be a matter for discussion with the trade unions. That is one of the things that will be discussed. Essential information regarding seniority, levels of pay, and so on, will have to be transferred. It is not the intention to transfer the whole personal file, but there are certain grey areas, relative seniority, for instance, which may have to be transferred, but they are the sort of things which will be discussed with the trade unions.
The general question of access to files is, I understand, being discussed in the general council of the conciliation and arbitration scheme. From my time in the Department of Justice I know work is going on in the area of legislation generally dealing with public access to files, and I certainly would welcome progress in that regard. It is absolutely correct that we should go in that direction. I have noted what Senators have said, and I will take up the point with the Minister for the Public Service in relation to the general council, and with the Minister for Justice in relation to possible legislation on the matter.
I want to put one question to the Minister. If all the files are not to be transferred, will there then rest in the Department of Posts and Telegraphs an enormous collection of personal files on individuals who are no longer employees of the Department of Posts and Telegraphs, or will there be a big bonfire? Can the soon to be ex-employees of the Department of Posts and Telegraphs be assured that all personal records about them that are not transferred to their new employers will be destroyed?
It has not been the intention to destroy those records because there are all sorts of reasons why they should be kept. Like a lot of other files in the Department, there may be a need in the interests of individuals to have those files in the future when it comes to questions of pensions and so on. I take the point raised and I will certainly consider it very sympathetically because, as I said earlier, I very much agree with the sentiments that lie behind what Senators have said.
Whereas the Minister has said that he will consider this sympathetically, he has not stated whether the staff will have the right to look at their personal files before those files are transferred to the new company. Access to personal files is a legal right in the UK at present and, even in the North of Ireland where the Special Branch have gone through the records of various members of the staff of the civil service, these files are available by right to the civil service. Where notations are taken by the Special Branch and recorded on files, one would imagine that these files might not be available to the public, but in the UK and in the North of Ireland, which unfortunately is administratively a part of the UK, the civil service have the right to look at their files at all times.
I appreciate what the Minister has said. There are obviously areas where a person's own interests would be best served by not destroying his file, but there is a very simple answer and that is to let the individual see his file and he will identify what is in his own interests. I would be very concerned, for instance, that reasons of what is usually described as national security would tempt people to hold on to very interesting information on 30,000 individuals working in a sensitive area of the State's operations, in other words, that we would keep records just because they might become interesting later on. Perhaps the Minister could be a little more specific in his assurance that it will only be where the retention of information in his Department would be for the benefit of the individual in his future career that that information will be retained.
I feel it would be very wrong that files in the Department should be used for purposes, as the Senator says, of national security. This would be wrong, and I certainly would favour very strongly a move to have legislation covering the points raised by the Senators. RTE were transferred out of the civil service 20 years ago and we still have queries from RTE about people transferred, usually relating to the service of a person, pension rights, and so on. We have to strike a balance between that need and the dangers the Senators are raising. I can assure Senators that I personally will do everything I can to ensure that the files are kept only for what are benign interests, and not in any way extraneous interests, or for reasons which are inimical to the interests of the employees.
There must be an end to the practice whereby supervisory staff may add private notes on all staff correspondence before forwarding it to the management who will decide on it. This conflicts directly with the report on Administrative Justice by the then Chief Justice to the Devlin Report (Appendix 1, "Note on Administrative Law and Procedure" under Cearbhall Ó Dálaigh, pages 456 and 457 on natural justice in procedures 1966-1969; Prl. 792).
I would suggest that an amendment should be made to this Bill which would state that in the Minister's interests and in the interests of natural justice, each employee of the companies or company may inspect the files which are kept by the company recording details of his or her service and shall have made available all of the information recorded in the same way as it made available to any level of management which may have cause to take the records of the staff member into account; that an inspecting member of the staff may require an insertion which they furnish as a factual correction or rejoinder to be included in their files. This would give the staff the rights which are now provided to people in the civil service in other countries. It would equally give them access to their files, and if the supervisor in a particular section has made an amendment to a report the staff member would either be able to put a rebuttal into the files or his own comments, and this would be kept on the files as a permanent record.
If I do not get the Minister to give me a specific answer this time, I will not pursue it. If his intention is to ensure that only, as he said himself, benign information will be retained in his Department, then surely he can also tell us that it is his desire that the individuals in question should have access to that information. After all, if it is benign and in their interest there should be no reason not to let them see it.
I agree with the Senator very much on this. This is being discussed with the general council affecting all civil servants in every Department of State. I personally would very much welcome progress being made on that front, and hopefully progress will be made shortly. I would also welcome legislation on it from the Department of Justice. As I have said I will communicate to the Minister for the Public Service and with the Minister for Justice the views so well expressed by Senators here today with which I thoroughly agree. It is a matter which is being discussed. It is an area where we are behind other countries. We should be seeking to make progress and hopefully we can make progress in the not too distant future. It is a question that arises not just in the case of my Department. It arises within the general civil service and, indeed it arises outside the civil service as well.
I accept that what the Minister said is probably the best we can get from this particular deal. It is obvious that there are implications and complications. The point has been made and the Minister has accepted it. I can see there are difficulties. Naturally there will be difficulties because of the difficulty of interpretation. The Minister has given an assurance and, while he has not given us the exact words some of us would desire to get, he has gone a fair distance to give them to us. There is another type of informative person who gives out information and this is the type something should be done about, that is, the person who gives out information for political purposes. The Department of Posts and Telegraphs are full of such people who leak information like sieves for political purposes, either for political party purposes or for their own purposes. I hope the boards will be able to contain this problem. I had an instance once in the Dáil and the Minister knows all about it. There was an alleged phone tap at a particular time on the Fine Gael headquarters. The then general secretary who is now head of Government Information Services made statements every day of the week about what this phone tap was and what it was not. I honourably gave an honest reply in the Dáil at the time to all and sundry and I gave such information as was available to us. It was dragged on and on. It was a sad occasion.
We were out of Government not long afterwards. I asked the then Minister the very same question that was asked of me. Phone tapping was dropped and changed to overhearing. The politics of the Department of Posts and Telegraphs have been often and odd and it was sad to hear the abuse being dished out to technicians. There were horrific and wild statements about alleged tapping and all this tripe that went on over the years. I hope the new Bord Telecom will reserve the right not to answer such stupid questions in future. I have instanced a typical case where there was no more of a tap put on that phone or that establishment than there was on the clock on the wall. Something happened and alleged facts were multiplied and extracted, and it was a disgrace.
I hope the new board will be protected in some part of this legislation against such wild, extravagant remarks. I would like to hear the Minister's comments on what protection he will be giving them in whatever section of the Bill is appropriate. I raise this because matters relevant to staff were raised. They were serious matters and they have to be handled delicately but firmly. It is worrying the staff that private records of what happened in the Department are being handed over to the new board. The theme now should be: "Come home, James; all is forgiven. Whether you did right or you did wrong we will all start off equally again." I hope that will be the theme. The ferocious lies — and I do not care what political party make the allegation — and whispers about listening performances in the Department and in certain exchanges in this city or outside it are total and absolute bunkum. I know that from experience.
What about phone calls to America?
There was supposed to be a phone booth at one time in Spiddal from which you could ring New York. It was there until the technician went out, and after that it was not.
For 5p that time. That was when we were in Government. It only went up to 10p since this Government took office. Those are matters that grab the headlines and are horrifying to workers in those places. I feel sorry sometimes for the type of technician who works in the exchange. He is a different person from the one out on the field. Going home in the evenings if he goes for a jorum to his local pub he must feel that all the lads will say, "Well, what was going on today? Did you hear the Secretary of Fine Gael talking to John Bruton about the Green Paper and the Blue Paper and all the rest of the papers?".
Seriously speaking, we must protect those workers from that sort of wild allegation and crazy talk. It was admitted subsequently by the then Minister, Deputy Harte, that it was only an overhearing error but at first it was a phone tap. That is typical of what was done. I felt sorry for the workers then and I feel sorry for them now. Somewhere in this Bill they should be protected just as the private records of other people are protected in the Bill. We should stop this political carry-on that has gone on over the years, this nonsense regarding allegations. A very limited number of really top-class technicians run the exchanges throughout the country, and some protection should be given to them too. The new board should be given protection against those crazy, Walt Disney performers.
Listening to the discussion on the files, as a person on whom there is a file in the Department of Education, I hope the interest is benign.
Knowing the Senator, I doubt it.
It is possible. I do not know what the background is to a lot of the pressure. Is it possible there are so many bad files that they have to be destroyed, or is it possible that a person who was not co-operating would be put on the same footing as somebody who was working extremely well, that his record would disappear and that the bad would equal the good eventually? We can bend over backwards to make sure that nobody suffers anything, but will the good suffer if we protect everybody?
To deal with the points raised by Senator Killilea, there are sections later on in the Bill dealing with the question of telephone interception and mail interception, and so on. Senator Browne's point is the other side of the coin. We will be striving to achieve a balance and we will be discussing with the trade unions what information should be transferred and what should not.
Question put and agreed to.
Question proposed: "That section 38 stand part of the Bill".
I will not delay on this, but I hate this self-destruction part. I know it was the protocol in times gone by that if you were a Member of this House or the other House, dare you ever do anything for yourself. I disagree with the principle that because you are a Senator you are barred from participating. The Leader of the House, for example, Senator Dooge, is a most learned man in his field. There are very few like him in this country. It is shocking that the board of a company should be unable to avail of his abilities, just because he is a Member of Seanad Éireann. We are our own worst enemies in that we are always putting ourselves down. It is a sin almost to be a politician these days. In section 38 we are banning ourselves from becoming members of boards. I do not agree with that. If we do not have respect for ourselves how can we expect the public to have respect for us? I do not think this section should be in this Bill or in any Bill. There are many other people such as Senator Eoin Ryan. Because I do not name other Senators when I look at them that does not mean they are not fine people. In his field, Senator Dooge is almost unique. There are not many people with the same capability in that field.
On that side of the House.
The Senator is being political. I am being factual. It is bad form and bad politics. I thought there might be a change when this Government took office because they are to introduce reforms. There is no reform here. We are worse than ever. Not alone are we tying ourselves to Ministries but we are tying one Ministry to another as well. We are almost debarring ourselves from coming into Leinster House. We used to have to get out of our cars, open the boot and show what we were carrying. It is little wonder that the youth have little respect for us as public representatives. We are saying we are not capable of serving on boards. I know I would not be appointed, but I would dearly love to serve on An Post. I believe I would have a tremendous contribution to make to it. If I were lucky enough to be appointed a director of the philatelic section of the board I would have a tremendous contribution to make. That is a fact. I will not be debarred from believing in my own ability. Now is the time for Senators to back me on this. We are downgrading ourselves and our abilities. God rest Johnny Callanan. He was the man who put together and held together the wool council. He was a Member of the Dáil. He was a man of integrity and he was an example to this nation.
Now that Senator Killilea has sat down, perhaps we can leap in and support him. I agree with Senator Killilea. I am saying this as someone who has suffered from this, because I was a member of the Board of the Voluntary Health Insurance before I was elected to the Seanad and I was sacked from the board promptly on being elected to the Seanad. In one sense I rather resented that, because I was the only woman who had ever served on the board and since at least half the unhealthy people in the country are women, I felt there was something to be said for having a woman on the VHI Board. I do not agree that being a Member of the Oireachtas should debar one from functioning properly provided one has any sense of integrity. This is included in virtually all Bills. The same thing applies in the legislation on the Community Development Agency and, again, that was a field in which I had served for a considerable number of years. Because I became a candidate for the Seanad I was not allowed to be appointed to that board. I do not want to be running myself up and other people down, but you lose the experience of people who have served for a considerable length of time in a particular area. It is not just Members of the Oireachtas who are debarred — for which there might be some justification — but candidates for either House of the Oireachtas. You may not be elected. There are many people who have been candidates over and over again and who have never been elected. Yet just because they were candidates they had to leave boards with presumably no guarantee that they would be taken back again.
I would join with Senator Killilea in his remarks about Senator Dooge. Boards have been deprived of his learned contribution for this very same reason. There are other State bodies, for instance, the very valuable National Economic and Social Council do not operate this, and which have Members of the Oireachtas on their boards, and Members of the Oireachtas who make very considerable contributions. Therefore this is not something automatic which has to be done. I suggest that it should be thought about again and perhaps this section could be taken out of the Bill.
Much to Senator Killilea's amazement I agree fully with him.
One of us had better watch out. I raised this very early in my period in the Seanad on the Youth Employment Agency Bill when the same provisions were introduced. I have never understood why this form of discrimination was introduced. On the question of a conflict of interests, I am a member of the board of management of the Cork Regional College, where I am employed, and two other members of the board of that college are in the same position. You could just as easily disbar members of a college. We take decisions about the allocation of the college budget and major decisions on resources and funding. We as politicians have a habit of apologising incessantly for ourselves and, at the same time, giving the public every reason to believe that what is suspected about us is true. I instance this, and also the performance of a party in another House did not do our image any good either.
I am even more concerned about another section. First of all, on the question of people who are nominated having to resign from boards. I remember one case. The former Vice-President of University College, Cork, was a member of the Higher Education Authority, a man with considerable expertise and knowledge in an area of education where he was badly needed, the area of agriculture. He chose to run for the Seanad but was unsuccessful. Because he was a candidate he resigned from the Higher Education Authority. That is very wrong. Whatever about Members of the Oireachtas, the idea that because a person is a candidate in an election he must resign is absolutely appalling and is offensive to politics. The other part of it is the very bald reference to what happens to Members if they are elected to the Oireachtas. I can understand the point.
Progress reported; Committee to sit again.