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Seanad Éireann debate -
Thursday, 3 Feb 2005

Vol. 179 No. 4

Future Development of An Post: Statements.

The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, who is out of the country, extends his regret that he cannot be in the House today to address Members on this matter.

The Government recognises the critical importance of a nationwide, reliable and efficient postal service. Despite the changes that have taken place in recent years, particularly with regard to electronic communications, postal deliveries and the range of services available at the post office counter are an integral part of the daily lives of our business communities, public services and the citizens of every town and village. There is no wavering of the Government commitment to postal services. It is precisely because of this commitment that urgent action is now needed to put in place the necessary measures to ensure An Post can deliver a quality service to its customers and to the community at large.

However, we must all recognise that the challenges facing the postal sector at the start of the 21st century are not the same as those that existed at the start of the 20th century. Like all businesses, if An Post is to prosper and grow, it must adapt to the demands of its customers and must develop a genuine partnership relationship with its employees that places delivery of quality services to its customers as its primary focus and objective.

It is worth emphasising that the universal postal service provided to every address in the country is enshrined in EU and Irish law. The European Community (Postal Service) Regulations 2002 make specific provision for a universal service obligation, featuring nationwide deliveries of mail at a uniform tariff and with guaranteed frequency. This is a statutory obligation which An Post must meet. On the other hand, An Post also has the benefit of having normal letter post deliveries reserved solely for itself. This reserved area, as it is known, represents a significant commercial advantage for An Post, one on which it must capitalise if it is to be fully prepared for liberalisation of the market when that comes on stream, probably in 2009.

There has already been part liberalisation of postal services in the parcels area. Unfortunately, An Post's specialist parcels delivery service, SDS, has been unable to survive in this competitive market. Nobody can say Irish consumers do not have available a range of fast and efficient service providers for parcel delivery, but it is a source of regret that An Post has not been able to compete effectively with other players in this market.

However, An Post management is taking steps to integrate its parcel service back into the main business, thereby saving the jobs of 180 SDS employees. The redundancies required will be entirely voluntary. The management of An Post and the Communications Workers' Union have been working with the national implementation body over the last number of months to resolve outstanding issues surrounding the reintegration of SDS. This process of change in the parcels service will shortly be addressed by the Labour Court to ensure it is completed in a fair and transparent way, with full regard to the rights of employees.

The proposal to go to the Labour Court, which was accepted by both sides, will see both parties bound by the court's decisions on SDS reintegration and also on Sustaining Progress issues. Labour Court hearings on these matters are scheduled to commence in February. While the impending closure and reintegration of SDS is regrettable, it is a timely reminder to us all that if consumers are to have the benefit of competition in all sectors, including the postal area, existing players in the market must adapt to the competitive world. Our citizens are demanding the right to have choice available to them, wherever possible. Accordingly, the way forward for our postal services is to ensure that we have both adequate competition and no diminution of the universal service.

Commission officials in Brussels have embarked on an extensive analysis of postal services throughout the 25 member states. Over the next two years, it will continue with that analysis with a view to proposing a model for EU postal services that combines competition and the delivery of a reliable service to all 450 million EU citizens. This is a daunting task to which Ireland will contribute, with particular regard to the need to cater for both our significant rural population and our fast growing and vibrant economy.

I have concentrated on sketching out the rapidly changing business environment in which our postal services operate because it is important that we are under no illusion about the challenges facing An Post. I turn now to some of the specific issues that An Post management and unions are attempting to resolve so that the company can be placed on a firm financial footing. An Post lost €43 million in 2003. This fact cannot be disguised and nobody can possibly dispute that, following losses on this scale, the workers, management and the Government were facing a crisis. During 2004, however, management and unions working together have made some progress in dealing with the crisis situation and, despite the negative comments we have heard on the issue, there is a joint commitment by all parties to restructuring.

All sides are to be commended for their efforts to date. The Government is not trying in any way to ignore or minimise the significant disagreements that exist between the management and the Communications Workers' Union but we must concentrate on the process, which is well under way, of resolving the issues subject to dispute. Nevertheless, the Minister, Deputy Dempsey, recognises that we are not yet in the position where we can say that the necessary restructuring programme to secure the future of An Post has been agreed.

This is essentially the nub of the problem. The unsustainable losses of 2003 have been stemmed by implementing a number of tough measures including the non-payment of Sustaining Progress increases and the vigorous control of costs. It is regrettable that Sustaining Progress payments have not been made to the workers and pensioners of An Post. The welcome intervention of the national implementation body has ensured that the issue of Sustaining Progress increases will be addressed by the Labour Court as a matter of urgency during February. In particular, the court will investigate the "inability to pay" clause adopted by the company. Both sides in the dispute have agreed to be bound by the Labour Court decision.

Much good work has been done to date by management and unions under the auspices of the Labour Relations Commission. It is essential that both sides continue to work together in conjunction with the State's industrial relations machinery to broker a deal that will allow the company to deliver quality services to our citizens, while at the same time providing sustainable well-paid employment to its staff. That is the challenge facing us and the board and management, together with the unions, should not allow themselves to be deflected from meeting that challenge.

I commend the work of the Labour Relations Commission and the national implementation body in dealing with the serious issues facing An Post. There can be no doubt that they have made a significant contribution towards teasing out the possible way forward for unions and management in the company. With hearings in the Labour Court due to commence this month on the restructuring programme, Sustaining Progress increases and SDS reintegration, the Minister, Deputy Dempsey, urges both parties to embrace this opportunity to reach agreement on how best to work together to secure the future of the company.

One regularly hears concerns expressed about the future of our extensive urban and rural post office network. I emphasise that the Government and An Post remain committed to our nationwide service. To enable the post office network to face the challenge of modernisation, the Government has already provided An Post with an equity injection of €12.7 million.

For its part, An Post has introduced new service delivery models to improve access to post office services. It has 1,000 automated post offices, 475 non-automated post offices and 160 postal agencies. It has also established 3,000 postpoint outlets in retail premises of which 600 can be used for bill payment. Automation of the post office network has also been completed. The automated network accounts for more than 95% of counter business while 475 non-automated offices undertake 5% of business. This figure clearly illustrates the level of business transacted by individual non-automated offices.

The board and management of An Post are in no doubt that the Minister and the Department will be extremely supportive of them in their efforts to ensure that our post office network continues to develop and thrive. I am aware that An Post, in partnership with the postmasters, has had some recent success in acquiring new business for our post offices. For example, many Senators will be aware that in accordance with a contract between An Post and AIB, customers of that bank can now transact business at more than 1,000 post offices throughout the country. Other business opportunities in the public and private sectors are being explored by the company and the postmasters' union. An Post has been assured that the Government will play its part in assisting An Post to secure additional Government business, wherever possible, whether it be in the fields of social welfare or the development of e-Government services. With the roll-out of e-Government services, the automated element of the post office network is ideally placed to capitalise on opportunities arising in this area.

All of these efforts help to underpin the future of our post office services. They also illustrate that the core objective for the Government and An Post continues to be the retention of access to post office services in as many locations as possible, in the manner which best meets customer needs, whether services are provided via post offices, postal agencies or the postpoint network.

I return to the immediate and underlying problem of agreeing a restructuring plan for An Post. The Minister for Communications, the Marine and Natural Resources, Deputy Noel Dempsey, has met separately with the board, management and representatives of the Communications Workers' Union to discuss the future of postal services and of An Post. The Minister has emphasised that it is an absolute imperative that both sides approach the difficulties arising in a spirit of partnership, while at the same time making full use of the available industrial relations machinery, which represents the only way forward.

While it would be easy to be downbeat about An Post in the current environment in which it is operating, I am convinced that the company has significant strengths to build on if it can get the fundamentals right. The future for An Post can be bright if the company and its workers seize the moment to implement change that all agree is necessary to secure the future of the company.

I welcome the Minister of State to the House. If the Minister of State had sat in on yesterday's meeting on the postal structure, what he would have said today would have been considerably different. To quote Shakespeare's Hamlet, "Something is rotten in the state of Denmark". Yesterday I learned that something was seriously wrong when a trade union official described management as a pack of marauding animals. I would never have anticipated hearing that type of statement in 2005, with the type of industrial relations machinery we now have. This statement was symptomatic of the frustration experienced by the unions in their discussions with management. While I do not know the backdrop to this, I know that something is seriously wrong in discussions between management and unions when a leading union official states that his discussions with top management have been negligible.

In January 2004, the chief executive of An Post, Mr. Curtin, outlined the survival plan to the Oireachtas Joint Committee on Communications, Marine and Natural Resources. He pointed out the importance of the plan in addressing the type of losses which An Post had incurred in recent times. He spoke of the rationalisation and redundancies that would be necessary to move on. As he had discussed the plan with the then Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, in October 2003, the Minister would have been aware of the survival plan. While I recognise that management needs to prepare, in doing so it should have some discussions with the union when at least drawing up the framework of a survival plan. If such discussions take place there is at least a chance of embodying in the plan what is achievable and realisable.

Some members of senior management at An Post have come from another semi-State organisation under the umbrella of the Minister for Communications, Marine and Natural Resources, namely, the ESB. While I have no doubt these people were very successful in the ESB, this must be considered in context. The ESB is a very wealthy organisation with a long history. The electricity generating sector had a turnover of €250 million last year and was able to pay a dividend to the Government. It is well recognised that the staff in the ESB are well paid and deservedly so. However, it is also recognised that the staff in An Post are not well paid. Sometimes when trying to give the impression that workers at An Post are well paid, figures are given including excessive overtime. While this pitches the figure fairly high, it is very much a distortion.

When management is framing a policy for An Post it is not possible to expect the same principles to be adopted in An Post as were adopted in the ESB. When changes in the ESB are negotiated, employees are compensated accordingly. One can understand the distrust in An Post. In January 2003 the previous chief executive, John Hynes, told the Oireachtas Joint Committee on Communications, Marine and Natural Resources that he expected a profit of €1 million in that year. We all know that in that year An Post lost €46 million. It is possible to understand how An Post workers would feel in such circumstances given that in the previous years An Post was in profit. What is wrong with its financial forecasting and audits that it could get it so completely wrong? This is mainly down to poor management.

The Minister for Communications, Marine and Natural Resources, as the chief stakeholder, has a major responsibility and it is up to him to provide political leadership. In the past ten years, regulators have been appointed in various sectors and Ministers can claim to have nothing to do with matters which are the responsibility of the regulator. In the past four years electricity charges have increased by 40% because any time the ESB seeks an increase, the regulator, Mr. Reeves, agrees automatically. In recent times it got an increase of 9% just like that.

ESB bills now reflect a "PSO" charge, which is a deduction for a public service obligation. The ESB is a very successful company and everybody sees ESB bills increasing dramatically. On the other side we have ComReg and An Post. An Post applied to increase the price of a stamp for a local letter from 48 cent in May 2004 and ComReg is still deliberating. That is the type of contrast: 9% awarded just like that to the ESB and nothing done for An Post. The liberation of the energy market affecting ESB will have no impact on the domestic consumer because we will not be able to shop around for an alternative.

I was surprised by a recent statement about An Post, which is the nub of the issue. I invite those who recently claimed to be socialists to prove they are. The chief executive of An Post recently said that the company is a commercial operation and should operate as such, without any social obligations to rural communities. That is the nub of the issue. The problems faced by An Post — its universal obligation to deliver mail and the fact that many people live in rural locations — will have to be recognised. This country's demographic structures are different from those of England. There are approximately 140 people per square mile in this country.

If we examine the successful British model, we will see that it receives a great deal of support from the British Government. The Royal Mail has given various commitments. It has guaranteed that no post offices will be closed down and it intends to proceed with the total automation of all post offices in England. Almost 1,000 post offices were included in this country's automation programme, but the other 450 post offices were excluded. Those post offices have to use the old system because, according to An Post, it is not commercially viable to automate them. People who pay their ESB or Eircom bill at a post office may be threatened with being cut off because their payment may be late as a consequence of the slowness of the old system, as opposed to the computerised system.

Approximately 600 rural post offices have closed in recent years. There are six post offices in an area of west Cork that is the same size as County Meath. People in areas with certain demographic problems have to travel long distances to get to a post office. The post office network has a tremendous advantage because, unlike the banking institutions, it has never been tainted by any impropriety or financial scandal. It warrants further development and help. When An Post had losses of €46 million in 2003, the Government committed over €13 million for capital investment in the post office structure. It behoves the Government to offer leadership to An Post and to provide equity funding for the automation of all post offices, if such moneys are required. Many of those who work in smaller post offices are doing well to make a profit of €3,000 per year, after they have paid for rent, heating and light, etc. The postmasters' union made a valid point when it said a commitment should be made to give a postmaster or postmistress a minimum wage.

All politicians should be concerned about the current evolution of An Post. We have to decide whether to seek a commitment at European level. Can we examine every semi-State organisation in a parallel fashion? Can we examine the ESB as we would examine An Post? If we recognise An Post's universal obligation and demographic challenges, should we not consider its social dimension? I think the ESB has a public service obligation to sustain peat stations in various parts of the country. Surely there is justification for building into the system some support for An Post as it deals with various social challenges.

We all know about the industrial relations developments at An Post over the past two years. An Post is becoming dubious about the postal system as a result of the industrial relations malaise within the company. In a competitive era such as this, it is to be expected that the company will move in other directions and it may be difficult to get it to refocus on its core operations. I am conscious that the Government will have to examine and recognise An Post's social dimension. I know every semi-State company is trying to return to profitability, but one has to recognise the factors which lie within that.

The exchange on this issue yesterday was healthy, but worrying. I have never seen union members so bitter and hostile to management. When we discuss Northern Ireland, we often say that those involved are making progress if they are talking to each other. That is not happening in the case of An Post, however. Every time a problem is encountered, labour relations mechanisms are invoked to try to tease out the matter. One has to sit down and talk to people. Management cannot implement its policies if proper discussions do not take place with workers.

We understand the importance of the postman in rural Ireland. The House debated some years ago attempts that were made to place post boxes outside the main gates of houses, for example on laneways, to speed up the mail delivery process. Mr. Hines intended to introduce such a system. An Post ordered the boxes in advance. It reminds me of the €50 million that was spent on electronic voting machines, which is being discussed by the Committee of Public Accounts today. After An Post had ordered all the post boxes, it was told by ComReg that it could not introduce the new system. We said at the time that the proposal was unfair on elderly people in isolated areas who might not see anybody over the course of the day other then the postman who came to deliver their letters and have a chat. We were pleased that the proposal was not accepted. It is obvious that An Post favoured the change in the interests of cost economics.

The management of An Post will have to cop themselves on. I will tell them that when they return to the joint committee in a few weeks. If they want even part of their survival plan to be implemented, they will have to talk to the unions. If they do not engage in such discussions, we will see the return of the industrial relations difficulties of the past. In this day and age, one would not expect to encounter some of the rhetoric that has been used by those involved in the current difficulties, such as "a pack of marauding animals". The use of such a phrase is symptomatic of a malaise. As the sole shareholder, the Minister will have to bang heads together if that is what needs to be done. One cannot allow a stand-off to continue while the whole thing tumbles asunder.

I am happy to contribute to this debate this afternoon. I have received representations from people in County Waterford about the diminished and unsatisfactory nature of the service provided by An Post. I have a great deal of sympathy for the staff of An Post because they have been given a raw deal, almost from the time the new body was established. It is no secret that the new body has been managed badly. Morale has deteriorated steadily almost from the outset and there is little incentive for the staff to try to improve the service.

The record of management since the break-up of the old Department of Posts and Telegraphs is dismal, to put it kindly. The sense of urgency, loyalty and dedication among staff seems to have disappeared. That, along with poor management decisions, has left the service in a lame duck position. An Post has been marked by years of mismanagement, dreadful public relations practices and bad business decisions. Senator Finucane referred to the relatively recent decision to purchase 500,000 roadside boxes without the necessary approval of the regulator to install them. The plan foundered when it was pointed out that the regulator's approval was necessary. Not only did it cost the company money, but it gave a bad impression of the business to everyone.

Radical changes must be made in An Post as it cannot continue the way it is going. It had an operational loss in 2003 of £43 million, which is totally unacceptable and unnecessary. The loss is an indictment of the company because postal services throughout Europe are making profits. While we have to take into account our relatively small population and the dispersed nature of the people in the most remote corners of the country, such a deficit is not acceptable or justifiable. I agree with the chief executive of An Post, who told the Joint Committee on Communications, the Marine and Natural Resources last January:

The maintenance of the universal service obligation inevitably imposes additional costs on postal services. Parcel services are subjected to increasing competition from a wide variety of sources. Crucially, there is growing competition from operators which are not subject to the USO.

I realise the burden this places on the company and that a postal service is, by its very nature, a labour-intensive industry. Having said that, it would still be difficult for any company to lose more than €750,000 every week.

The former chief executive's forecast for the balance sheet for 2003 was as follows:

In 2003 we will start the process of turning the corner and we might explore the assumptions on which we turn that corner. Our operating loss will be a shade above break even at plus €1 million.

It turned out to be a loss of over €40 million. It seems incomprehensible that any chief executive on top of his or her job could get it so wrong. I will not comment further on former management. Suffice it to say that we have staggered from bad years to worse years. Although it was promised that there would be realistic improvement, nothing came of this promise.

Mr. Curtin said the following in his submission to the Joint Committee on Communications, Marine and Natural Resources 12 months ago:

Our customer standards must be raised. To do that, we must develop a culture of customer service to compete in the market. We will need to improve our service level performance on our next day deliveries. Moreover, we need to monitor and reduce queues in the post office business, which is a source of potential growth within our business. Next year, we will introduce a customer charter which will include financial penalties for An Post where there are verifiable service deficiencies.

I look forward to an update from Mr. Curtin on what progress has been made on these aspirations.

Public confidence and morale in the service are at an all-time low and the service that is being delivered continues to be dismal and undependable. A constituent of mine summed this up recently when he said that, 40 years ago, a letter posted in the General Post Office in Dublin and date-stamped in the early hours of the morning would be delivered before 9 a.m. on the same day to a town over 100 miles away. Moreover, it could be depended upon to arrive on time. Last year, the same constituent had the experience of having a letter take 17 days to travel 80 miles to Limerick. Can the chief executive reconcile this with his statement last year that "we will need to improve our service level performance on our next day deliveries"? Such reconciliation has not occurred. I can readily understand that a percentage of post could be a day or two late, but it is incomprehensible and totally unacceptable that it could be 17 days late, or any number of days close to that duration. My post from Leinster House has regularly taken from Thursday to the following Tuesday to arrive in Dungarvan, Waterford. That is also unacceptable and an indictment of the service.

There needs to be a greater sense of realism in An Post and the sooner the company realises that the end of the line is near if it does not get its act together, the better. Most of the family silver is already disposed of to keep the company afloat and it has been made abundantly clear that the Government will not bail it out in the future. Neither will the public have any sympathy with it as public patience ran out a long time ago. It is to be regretted that instead of concentrating its every effort on rationalisation and good business practice, the easier method of selling off premises was the favoured course. We are told that anything saleable is now gone and that a new source of funds is required. We must be realistic and recognise that banks and businesses will not advance money to an ailing company with a record loss of €43 million in one year. The company will have to take hard decisions, develop its business and learn to stand on its own financial feet.

The chief executive stated the following during his appearance at the Joint Committee on Communications, Marine and Natural Resources on 8 January last year:

It is not only the management team's view but my own personal view that such a programme of change cannot and should not be achieved by means other than through negotiations and by agreement. It is a fundamental change to the long-term health of the company and I believe it can only be done through the consensus of the management and the workforce.

We noted at the committee meeting yesterday that this is certainly not happening. The management and workforce seem to be moving further apart. I wonder how Mr. Curtin can reconcile that statement with the SDS debacle of recent weeks. Management will have to do better to convince the workforce, the unions and the public that the company is serious about tackling its many problems on a united front with all the stakeholders involved. There needs to be agreement on the re-integration of the SDS business into the day-to-day business of the company. I realise it may only represent 10% of the company's business, but it also represents 33% of the losses. I am not convinced that the way forward is to ditch SDS just because it is not making money at present. An Post should hold onto every element of its business, make each one financially viable and serve the public it was set up to serve. However, it must be done in a spirit of co-operation and agreement with staff, which is not evident at present.

The company will have to do much better in the area of industrial relations. Much of what we have seen in regard to the SDS debacle would hardly inspire confidence. Without going too deeply into the rights and wrongs of the recent industrial dispute, one must note that it is essential that industrial harmony be made one of the priorities. Overnight notification of changes of work location for employees is at best unwise and at worst a guaranteed recipe for disaster. It is to be hoped that management learned something from the industrial relations and public relations disaster of recent weeks.

I was pleased to hear the chief executive assure the committee yesterday that the company is on the verge of making a profit. Even if this only amounts to the anticipated €1 million per annum, at least it will be a major step in the right direction. There seems to have been little sense of realism in An Post over the past two decades or so. There was no realistic effort to develop the business and even the arrival of the much-vaunted electronic mail does not seem to have rung the warning bells. Instead of meeting the challenge head-on and adopting an aggressive and proactive approach, management was content to sit back, dig into reserves to make ends meet and, in recent times, sell property just to pay the wage bill.

There was little evidence of aggressive marketing on television, for instance. With the exception of the Christmas snowman campaign, which has been running for many years, there seemed to be little evidence of any new initiatives or efforts to sell the strong points of the service. One will recall the postal competitions that were a feature of the "Late Late Show" under Gay Byrne, which generated 500,000 postcards every time a car, exotic holiday or other attractive prize was offered. I know that such competitions are still a feature of the "Late Late Show".

There are other avenues which could also be explored. There should be no shortage of partners in the media who could derive value from such campaigns, generating a considerable postal response with consequent benefits in revenue. Junk mail was never more plentiful than it is at present and incentives could be given to those companies involved which wish to promote their products and services. Everyone has a birthday and birthday cards are still a very personal way of sending greetings. This practice could be developed and expanded upon. St. Patrick's Day is celebrated in a unique way in Ireland and there are enough Irish expatriates and people of Irish descent abroad to justify a promotional campaign in this regard. There was a very successful write-and-invite campaign some years ago which had the benefit of generating postal revenue and afforded the possibility of attracting visitors to Ireland. Such a campaign may not be successful or seem to be worthwhile commercially, but every opportunity to generate an honest euro should be availed of. That is what people in private business do if they want to grow their business and make money.

Given its network of offices around the country, An Post is in a position to pick up some of the business that the banks seem to be shying away from at present. Banks do not seem to want customers to enter their offices and would prefer them to do their business remotely by electronic means. With proper identification and development of services, there is an opportunity for An Post to become the small person's bank. There has been a precedent for limited co-operation with AIB since 2002 but there is ample scope for further co-operation of this nature. There are many other opportunities to be availed of outside the postal service per se, one of which might be to provide motor tax facilities. This was examined in the past, but with little enthusiasm on the part of the licensing authorities. However, with immediate electronic access to files there is no reason An Post could not supply the service.

It is vital that the post offices be kept open in rural areas. Too many post offices have closed already and the Garda stations are long gone. However, we should fight to maintain the post offices we have left. In addition to the companies whose job it is to devise selling campaigns, there must be staff working at the coalface who have ideas for the expansion of the business. Have they ever been asked for their ideas? Are there tangible rewards and an incentive campaign to make their efforts worthwhile? I am not in the marketing business but there are opportunities which could profitably be tapped. There can be little scope left for staff reductions and there is no point reducing the workforce until expansion is no longer possible. Let the service be streamlined but do not make it a lame duck.

It is essential that An Post survive, thrive, serve the people and make a profit. This will not be easy to achieve but must be done because it is a vital service. Management primarily, and all stakeholders generally, must work to achieve that objective.

I welcome the Minister of State to the House. Notwithstanding imminent talks and decisions in the Labour Court it is good to have this debate today, particularly in light of yesterday's four hour meeting of the Oireachtas Joint Committee on Communications, Marine and Natural Resources with the unions and An Post. Like Senators Kenneally and Finucane, I am a member of that committee and attended the meeting yesterday.

Afterwards I tried to think of one positive point that emerged. I was still thinking about it as I sat here but can only say that it seems the unions and management want to find a solution. I saw nothing yesterday, however, to inspire confidence that they will achieve that.

The Minister of State said both sides have agreed to binding arbitration at the Labour Court. That is so in connection with the SDS issue but not other issues. They will have to ballot their members and that will be another problem. If the relationship between An Post management and the unions was a marriage we would by now have engaged every marriage guidance counsellor available because they have reached total breakdown. The management has good intentions but has used disastrous methods to reach a solution.

It blames its predecessor but that is irrelevant. In the two and a half years that I have been on the joint committee An Post management has been saying the same thing and quoting the projected profits mentioned here today. A professional politician does not blame a previous Minister for a problem, saying he or she was not Minister at the time. The management needs to accept that it is in command now, that it is accountable and responsible.

Partnership is the only way to achieve that and everybody favours that approach. For example, yesterday the major unions made their presentations for approximately two hours. The senior management, to my knowledge, had no representation in the Visitors Gallery listening to them. That creates a bad image, suggesting that management does not care what the unions say because it takes the view that "it is our way or the high way". I heard that phrase at least 400 times yesterday from the unions.

The lack of communication between management and unions at An Post is chronic. The level of passion and the amount of steam coming out of the unions' ears was more than one saw in the tough game between Arsenal and Manchester United on Tuesday night. There will be no binding arbitration on the major issues in An Post before the Labour Court on 7 February. Members will be balloted but I doubt they will reach a solution. The body language and gestures we witnessed yesterday do not suggest that even if An Post were to offer €1 million for every employee it would be a deal.

The relationship is not such that there can be a deal without binding arbitration. The Minister must get involved. Senator Finucane used the phrase "bashing heads together". That may well be necessary but the dispute requires professional and sensitive management by the Minister, or another body, to try to heal the wounds that have deepened over many years, whoever is to blame. Management and boards must take responsibility. At least both sides would like a solution but it is a long way off.

It is inconceivable that any Government, much less this one, would allow a situation to develop in the era of the Celtic tiger whereby pay deals promised under Sustaining Progress are not paid. Worse still, pensioners have been overlooked although they gave a lifetime to An Post. Whatever happened in recent years the money should have been found to ensure those people got their due. I hope that will be top of the list in any solution to the dispute and that it will come soon.

The people, particularly those of us from the west, owe a debt of gratitude to the many postmasters and postmistresses throughout the country. They would be the first to say that we need to cut back on the 3,000 post offices but I would not like to see more closures because there is a strong social dimension to these offices. Previous speakers here, and those at the committee meeting yesterday, pointed this out.

Senator Kenneally alluded to other services in which these offices could engage. For example, one should be able to pay one's car tax there, or rent on a county council house, and so on. It will soon be possible to pay parking and Garda fines there. Local authorities are opening one-stop shops around quite large areas yet a State infrastructure exists in the post office network that could be engaged to offer those services.

Some years ago people living in west Wicklow had to travel over the mountains from Baltinglass or Blessington to Wicklow town to pay their car tax. One entrepreneurial newsagent charged a small fee to do this for a few people each day. These suggestions for using the offices could be considered.

We should study the UK model in this regard. The Royal Mail has invested £450 million in securing its network and ensuring that it stays open. While I am not suggesting that level of expenditure we should examine what it would cost. The Minister could devise a strategy for the post office network to establish how we can best use and expand it for the future. Apart from its important social dimension there are many services into which it could diversify. It might be a form of decentralisation without the trouble of asking people to move.

Those people running the offices which have served An Post for years are entitled to a basic minimum wage. Some operate on a very small sum and that too could be examined in light of the UK model. The union representing them is concerned about security in remote areas, because there is money on the premises.

I am not aware of any marketing of An Post. Senator Kenneally mentioned the postman-snowman Christmas advertisement which is approximately 40 years old. It was my favourite advertisement when I was seven and I am now 31 years of age. It is necessary to address the marketing strategy which should come from the hunger and enthusiasm to develop and build on a business that could be successful.

It is laughable that there is only one advertisement in the year and that at Christmas time when business is up anyway. An Post needs to think of a marketing campaign to encourage people to use it when business is slowest. Toyshops sell toys all year round, including January, because they market them and have different items or whatever.

With regard to the public service obligation, since 1994 the company was set up with a commercial mandate. In general terms, State agencies should have a commercial mandate to the extent possible but not to the detriment of public service or the purpose for which they were originally set up. We could say this about a number of agencies, particularly An Post and Bord Gáis. Representatives of Bord Gáis recently attended an Oireachtas committee meeting and stated how well its operations were progressing, yet there is a gaping wound in the north west, including my area of Sligo, because the company has a commercial mandate. We need to revisit the issue of commercial mandates in regard to some of the semi-States, particularly An Post and Bord Gáis.

I wish the unions and management of An Post well in the search for a solution. It will take high level intervention to progress the matter. I hope the Minister will seek to achieve that.

I welcome the Minister of State, Deputy Browne, and welcome this timely debate. I and other speakers were present at yesterday's meeting of the Joint Committee on Communications, Marine and Natural Resources, of which I am a member. Members have described the grim picture presented to the committee of what appears to be an inevitable stand-off between a group of unions representing many thousands of State workers and management, against the backdrop of a commercial State company in difficulty. While I would not go so far as to say An Post is in crisis, it faces serious challenges. We, as Members of the Oireachtas and citizens of the country, must take an interest in and be supportive of initiatives to bring the commercial semi-State body that is An Post forward and ensure the problems are resolved.

I do not want to rehearse what others have stated in regard to the deep unhappiness expressed yesterday by the group of unions at what they perceive to be the refusal of the management of An Post to talk to them or negotiate on change. They believe that not only will management not play ball with them but that it is being obstructive. An example was given of a Labour Court hearing on 22 January last before which, as union officials were entering the Labour Court, they received telephone messages from their members to tell them there had been suspensions. The atmosphere this created was a difficult one and causes union representatives to throw their hands in the air and question whether management are serious about negotiation.

The Minister is aware of the strong indication from the group of unions that it is being forced into a confrontation and forced to take industrial action to protect and preserve the rights of its members. This cannot be allowed to happen. While we did not get to hear fully from the management side, it is clear it takes a different view. We face a potential head-on collision between the group of unions and the management of An Post. It must be asked whether this serves the future of a company facing serious and immediate problems and the answer is that it does not.

All Members of the House are united in believing the only and best way forward is through a partnership approach. I call on all involved, including the Government as the main stakeholder on behalf of the public, to ensure that a way is found to get off the hook the parties are rapidly getting themselves onto. The unions must consider a plan B. It is one thing to state they are protecting the rights of their workers, and I totally support the right of the unions to protect their members as that is their purpose. However, the future of the company is at stake. At some level, a decision must be made by everyone involved to put the interests of the company and the future of the postal service first. A stand-off is not the way to achieve this.

The Minister and the Government must ensure that partnership is put in place. Of course partnership cannot be "put" in place — it is a voluntary decision of the parties to enter a partnership. In particular, I call on the management of An Post to be partners, to respect the views of their workers, treat them with respect and actively listen to what they have to say.

From what I heard yesterday, particularly from the postmasters' union, I am convinced that those working in An Post want to contribute to the future of the company. I know from speaking to workers at Nenagh post office, who raised this matter with me over the counter, that they know the company has difficulties. They want to help and be part of the solution. I call on the company to find the necessary strategies and to actively engage in a partnership because, when one considers the backdrop, it is urgent this happens.

Major change is taking place in postal services worldwide. While the extensive use of Internet facilities is great for consumers, and I use it to pay my bills, it means fewer letters go through the mail system. Therefore, the postal service is facing a new challenge as a result of Internet use, e-commerce and the communications revolution. On the other hand, opportunities arise from this, for example, on the parcel delivery side linked to Internet mail order trade and e-commerce.

An Post needs to be able to manage this change and can only successfully do so if a strategy is in place. That strategy is long overdue. Yesterday's committee meeting, which I attended, was told that a strategy has been in place for over a year. There is not much evidence of this and I did not get any sense of urgency on the part of management to progress the strategy. Thousands of postal workers on the streets outside the Oireachtas complaining about not being paid their last wage round increase, among other complaints, does not create the environment necessary to move forward.

My desire, shared by others in the House, is that An Post would be a commercial State company of which we can all be proud. We want to marry the major social role of An Post with it being a successful commercial enterprise. This is the same ethic which has driven commercial State companies since the idea was first devised in the early days of the State. We want our commercial semi-State companies to continue to play their social role in the community while at the same time being quality commercial enterprises. The question is whether this can be achieved in the case of An Post — I think it can.

Members have referred to the rural post office. There seems to be a sense coming from the management of An Post that they have somehow given up on the rural post office, and that it is a low paid, part-time and unimportant role. That is fine until one lives in rural Ireland or works in a rural post office or small village. The majority of post offices are in rural Ireland. Why do post offices not use the technology which the postmasters told yesterday's committee meeting they wanted to use? The postmasters want investment in rural post offices so they can upgrade their services, provide the full potential service using new technology and be a real hub of activity in their communities. I should not need to reiterate the importance of a post office in a village, particularly for the elderly and those not in a position to travel into towns to avail of services.

Why can we not consider having high quality postal services available locally? Post offices should provide people with a quality service, which is what many postmasters are endeavouring to do, as well providing a hub of social contact and community activity in villages. That has been the role of post offices, in addition to postmen and women. I do not want to pretend that a mythical notion of some former Ireland should somehow be recreated in the modern world, but we can modernise our post office network to a far greater extent than the management of An Post seems committed to doing.

How committed is the management of An Post to seeing the rural network enhanced to a level where it can maximise efficiency, value for money and service? Must we always examine ways of cutting postal services in rural areas on the basis that it will always cost more to provide them outside urban areas? Why can we not be creative and work within the context of the social role of the post office combined with its role as a commercial enterprise? In that context we could possibly move forward.

I am sure the Government is not underestimating the size of the challenge. I note that in his remarks to the House, the Minister of State, Deputy Browne, stressed the partnership approach. The Minister, Deputy Noel Dempsey, although he has only been in the Department of Communications, Marine and Natural Resources a relatively short time, has also emphasised the same approach. Ultimately we are looking at a public service which must manage its business effectively and well. Taxpayers' money is being invested in it so it must be run efficiently and not at a loss. I believe that can be done in a genuine partnership with the workers.

In its edition of 22 January 2005, The Economist examined the global picture for postal services across the world. It painted a clear picture of a major challenge which cannot be underestimated here. The only way An Post can manage the challenge of retaining a social role in a commercial context is to work in a genuine partnership with its workers. That partnership cannot be undertaken on a pretend basis, with An Post management stating: “Yes, we are partners”, while not really meaning it. Such partnerships have worked in other semi-State companies and there is no reason that it could not work in An Post also. I urge the Minister and his Government colleagues to ensure that happens in the case of this company.

I welcome the Minister of State, Deputy Brian Lenihan, to the House. Why did 10,000 CWU workers turn out to protest in Dublin on 8 December 2004? It was the largest number since the tax marches of the 1970s. The reason for that march is clear. In the 12 years prior to the arrival of the current management in An Post, there were no major industrial relations problems. In recent years, however, there have been significant problems. The problem does not lie either with the Government or the unions, but squarely with the management. Management techniques in An Post need to be examined and changed if necessary.

The following national agreements have been breached: Sustaining Progress; the SDS rescue agreement, June 2003; the Transforming through Partnership in An Post agreement, July 2000; the revised working arrangements agreement, Dublin mail centres, 2002; the agreed grievance and disciplinary procedures, 1990; Labour Relations Commission settlement terms, March 2004; and Christmas arrangements, LRC agreement, November 2004.

There appears to be no economic vision, so while the population is growing, An Post is retrenching. The current An Post management purchased a company that declared a loss of €25 million the following year. If workers had been responsible for that there would have been repercussions.

We must restate An Post's current position in society. An Post is an important part of the social capital of Ireland. The company's social aspect is important; it is part of the value of its brand and should not be lost through taking a narrow commercial view. An Post has been successful in transforming from a Government Department into an independent corporation. It provides universal postal services at prices which, until January 2004, were among the lowest in Europe, and are still in the medium price range. The company did this while also spending €250 million on modernising its transport fleet, post offices and sorting services. The expenditure came from its earnings, without borrowing or Government subvention.

An Post operated on a profitable basis until 2001. Given its resources and strong brand, the company has a bright future. It is a major business with a turnover of €700 million. It employs 10,000 people and is a core infrastructure of economic and social development. However, achieving future stability will require the active involvement of all stakeholders in an atmosphere of co-operation and openness.

The vacuum caused by the loss of An Post's SDS services will be filled at a significant cost to small and medium enterprises. That, in turn, will affect our competitiveness as an island nation. We need an efficient postal system. We needed SDS but the management showed no vision in dealing with the difficulties in that subsidiary. It did not deal with proposals from the union and did not examine possibilities for building the company. An Post adopted management techniques from the "cut and slash" school, rather than examining real opportunities in an island nation whose population is expected to grow by 1 million over the next 15 years and where economic growth is running at a minimum of 5% per annum.

The context in Ireland and internationally in which An Post is operating is continuing to change rapidly. Many of the traditional assumptions on the organisation of postal services warrant re-examination. As much postal policy is defined by the Government and the European Union, a forum is required which will involve all the stakeholders in order to examine the future. Such a forum would also help to modernise thinking with regard to the nature and organisation of modern postal services.

Serious questions can justifiably be asked about the quality of management decision making and its modus operandi. Much of the company’s decision making lacks positive long-term vision and there is little integration between overall policies and individual decisions. There is a lack of acceptance of responsibility for bad decisions and a failure to grow the business. Examples of this chaos and lack of integrated decision making included the expenditure of €250 million of cash reserves on technology modernisation when losses and a possible cash shortage for maintaining the business was already an issue and management was stressing the need for cutbacks. If needed at that time, the investment should have been made from long-term borrowing.

The company had no historical debt and interest rates are low. One of the reasons the company found it so difficult to obtain sanction for a rise in the cost of sending a letter was that the regulator considered An Post's cash position to be so strong that it did not require a price rise to maintain the universal service. In 2002, An Post bought two companies which lost €25 million and contributed significantly to the losses of 2003 — a fact that is barely referred to in the annual report.

In 2003, An Post decided to withdraw from attempts to form international alliances with postal operators in other member states and focused only on operating in the Irish market. It has long been recognised that relying solely on the domestic market is not a strategy for economic success. One does not have to be an economics expert to understand that view. Why is An Post's management unable to engage with international companies and form such alliances? The ability to offer clients an international service is now seen as an essential part of competitiveness for postal services. However, An Post's vision of competitiveness seems to be retrenchment and reduction of capacity for a local business market which it defines as being in decline. How can An Post management decide that the Irish market is in decline?

Throughout the world Ireland is seen as a shining example of growth, development and opportunity. The problem is there is a lack of respect for the process of partnership in decision making. There is also a lack of care and concern regarding the effect of language and public statements on relations and the value of the brand. This applies in simple things that none of us would consider doing. For example, a meeting was arranged between the unions and the Labour Relations Commission for 22 January and an An Post employee received a letter telling him he was being transferred from his current position on a certain date and suggesting that he had requested the transfer. He had not requested a transfer and it created major difficulties. This is not the first time major difficulties have been created in An Post by senseless and insensitive decisions that affect workers.

The overall tone of the language used in the recent recovery plan of An Post is abusive of partnership and conveys the view that the workers are the cause of the problems facing An Post. The unions and workforce have accepted major changes within the company and are working towards making a sound economic proposal and ensuring the company is viable, but management is undermining the workers in this regard. The management recovery plan displays obsolete thinking, referring to obsolete or declining industry when there are new opportunities, including the Internet. It has been proved that people who use the Internet, many of whom purchase items thereon, use An Post services. People who use the Internet send three or four times as many letters or post as people who do not. Therefore, the level of Irish mail volumes can reasonably be expected to grow. The changing mail flow trends the new technology allows and the use of zip codes will also assist the company in becoming more profitable, and the workers are willing to negotiate and to assist An Post to come back on track with that. Growing affluence and the economic climate suggest that An Post should be spending money and investing in its people instead of creating industrial relations problems and representing to the public that workers are to blame when there are serious questions over management.

A visionary An Post looking to a bright future for postal services and growing volumes of mail in Ireland and growing revenues from mail and other products and services would borrow money to overcome short-term cash crises rather than dismantling its network and damaging its brand. It would place the creation of a partnership culture at the centre of its concerns for the future. It would modernise its thinking and analysis of postal services and how their economies operate.

I welcome the Minister to hear statements by Members of this House on the future development of An Post.

The image of Postman Pat and his black and white cat, while childish and certainly dated, is one that subconsciously portrays our ideal of the friendly local postman of yesteryear, still visible in some parts of rural Ireland today. Throughout our history, postal communication in all its forms has been our vital link with each other, from the valiant soldier who at great personal risk delivered the order to commence battle to the mail riders who can be credited with opening up the Wild West and the stagecoaches continually attacked by highwaymen. Hard-copy documents have been our lifeline and were hard fought. We must fight now for the future of An Post and ensure that progress does not threaten but rather enhances the service.

While we must take into account the social aspect of the postal services, especially in the rural context where the postman may be the only link the elderly and infirm living in remote areas have with the outside world, viability and enhancement are essential to keeping the service in operation. The 1,500 post offices and sub-post offices are a great national communications network and must be cherished.

As legislators we are aware there is political responsibility for the current situation in An Post. The difficulties An Post is experiencing did not happen in the short term but rather have been a growing and festering sore at the heart of the organisation. That the Government has turned a blind eye to this malaise is undoubted. It is time it took the bit between its teeth and set about rectifying the situation. The Government has let down the postal workers, the An Post pensioners and the public, the consumers of the service.

The An Post pensioners are particularly vulnerable as they have no say in the negotiations between the unions and the company. Despite their hard work over many years, they are being deprived of part of their pensions. This was stated over and over again, in particular when they picketed the Dáil approximately two weeks ago.

The public are the backbone of the postal service. They are the paying customers and they want and are entitled to an efficient service, which unfortunately they are not currently getting. It is not unreasonable to expect that a letter posted today to an address within this country will arrive tomorrow. It seems, however, that this is wishful thinking.

We are now seeing the result of efforts of the chief executive of An Post to force through cost-saving work practices. This led to escalating suspensions, ten days of postal disruption and an eventual and inevitable climbdown by management. An Post is now embroiled in yet another industrial crisis which looks set to damage its future prospects despite the interim settlement last month which saw the SDS closure details referred to the Labour Court.

The future of small post offices was discussed at the Oireachtas Joint Committee on Communications, Marine and Natural Resources yesterday, which I attended, where attention was drawn to the fact that there have been 600 closures of sub-post offices over the past six years, a rate of 100 a year, and nothing has been done to prevent this. There are 1,390 sub-post offices nationwide receiving 50% per transaction from An Post. The company is to take over the collection of fines for speeding, seat belt and other offences from the Garda early next year. This will create potential additional revenue for these sub-post offices.

The Irish Postmasters Union, whose efforts I fully support, both in my area of Longford-Westmeath and countrywide, is seeking the following: a commitment to a certain size and distribution of the post office network; funding for technology, that is computers, for the 400 post offices that are still paper based and which An Post sees as falling outside its commercial remit; the filling of the gap between actual income and legal minimum wage, €15,106, as has been done by the UK Government for its post office network; a continuation of the contract for social welfare payments through the post office network rather than through the banks; the provision of a full banking facility to An Post; to ensure that An Post passes on to the post office network a reasonable portion of the fees that accrue for the social welfare contract and the bill pay corporate consumers; and implementation of the Flynn report, 2002, that sees the post office becoming a one-stop-shop for all Government services.

The unions pitch their proposals on the vital social dimension of the post office within communities across the country, which will be seriously threatened unless the above points are recognised by the Government and adopted. I have had representations from postmasters and postmistresses in the Longford-Westmeath area seeking support for these very provisions that will ensure the future of their business which, in many cases, has been in the same family for generations.

Taxpayers cannot be expected to have unlimited patience with the gross mismanagement of An Post. In January 2003 the company's then chief executive told a Dáil committee that An Post's losses would be turned around and that the company would show a profit of more than €1 million for that year. The company ended up with operating costs of €42.8 million for that year. The losses for 2004 are expected to be over €30 million. The face of communications has changed and will never return to the era of pen and ink. An Post must embrace new technology and use it rather than fear it. The adoption of electronic communications by businesses, which poses a threat to traditional mail services, has to an extent been countered by the creation by An Post of PostGEM, which provides electronic communications and services to An Post business customers, the automation services called Counter Action, and the automated postal sorting project, Track a Package. These are examples of the way forward and the interlinking of traditional and modern services.

During my childhood in Longford I remember the postman had an uncanny knack of knowing when the envelope he was delivering contained bad news, namely, bills, or good news in the form of a cheque which he would hand over with a grin and a comment that this was a good one. An Post needs good news. The cycle of losses must be broken and the Government must take the responsibility it has long avoided to protect its future. There has been much talk of privatisation but it is essential to avoid the mistake of the Royal Mail in the UK, where the move towards privatisation has been abandoned.

The Minister is probably aware that postmistresses and postmasters throughout the country wish to meet all Oireachtas Members next week on this issue. I hope as many Members as possible meet them and hear their genuine grievances which must be addressed.

I welcome the Minister of State and the comments he made during his speech. I am glad we are having this debate which is not before time, having been called for some months ago. The situation in An Post is not a happy one. I do not propose to take one side or the other. However, I should declare an interest in that I have a relationship with An Post as a member of the philatelic advisory committee which advises on the selection of commemorative stamps. Obviously that brings me into some contact with some of those in management in An Post.

The situation of our postal service is reminiscent of attitudes to the railways 30 years ago. People thought that road transport was taking over and that the railways were on the way out. One might argue that modern systems of communications such as e-mail, various types of competitive parcel services, mobile phones and so on make the postal service a thing of the past. I do not believe that is the case. There will be a need for a postal service into the foreseeable future. Just because there are other technologies available does not mean people no longer write letters or that documentation will not continue to come through the door. It is one of the public services which is most valued by the general public.

In rural Ireland in particular, the daily visit by the postman is a form of communication with the relatively isolated farmhouse or bungalow. That service, though costly, needs to be maintained. Anyone who visits one of our large post offices, particularly in rural Ireland, will be aware of long queues at certain times of the week and barely enough staff to cope. Given the number of tasks the post office undertakes in terms of paying bills, banking, payment of child benefit, pensions and so on it has become considerably diversified.

I regret deeply what is obvious to anybody who works in An Post, namely, that morale is not what it should be. There is much unhappiness and, unfortunately, much conflict on a large number of issues. It is demoralising and a bad sign if national wage agreements or programme increases cannot be paid. It means something is badly wrong and needs to be put right. Generally speaking such pay increases do not give the sun, moon and stars but are reasonably modest increases. One cannot expect public service workers to accept that position, as that should not be the case. The Government's instinct and advice is that it should stand back from these issues. I am not sure that is always the best approach. One of the reasons the Taoiseach is Taoiseach is that in the late 1980s and early 1990s he adopted a hands-on attitude to many difficult disputes and helped resolve them. To stand back in the event of a major problem is not necessarily the best advice.

I wish to address two or three specific problems, the first being automation of the post office network. In his contribution the Minister of State categorically stated:

Automation of the post office network has also been completed. The automated network accounts for more than 95% of counter business while 475 non-automated offices undertake 5% of business. This figure clearly illustrates the level of business transacted by individual non-automated offices.

There is no recognition of the extent to which that is a self-fulfilling prophesy. Of course an automated office carries out much more business than a non-automated office. What does one expect? I am aware of non-automated offices in villages which are seven or more miles from large towns which are anxious to be automated to enable them to provide services so customers do not have to drive into the middle of a town where there is traffic congestion. I do not like the idea of a two-tier postal service where the majority of post offices are to be automated and given the opportunities to thrive and survive. It is like saying that a branch line of a railway will not be maintained any longer. If such an approach is taken, after a while pressures will force it in the direction of closure. We have never been given any figures. I ask the Minister of State in his reply to give the House the information. What is the actual cost of automation? Is it really all that expensive to install a computer in a post office? As a result of making representations to post office management, I have found they are absolutely adamant. Like the most extreme Unionist politician in the hearing of any case, they will not give an inch. The dogmatic attitude of "it has been completed" is quite unfair to post offices which perform a very important economic, social and, dare I say, environmental function in the sense that the service could prevent people making unnecessary journeys to town. I am extremely unhappy about the position.

The post office is in possession of some fine properties in towns and cities around the country. Efforts have been made to realise the value of these properties and to push an office from a fine building into a pokey corner of a supermarket where there is not room for people to work. If at all possible, post offices should be able to operate in their original building and where necessary use other parts of the building for other functions. For example, Tipperary railway station is a fine, two-storey building. One room is necessary for railway business and the others have been turned into incubation units for various kinds of business. I recommend such an approach to the post office. As mentioned by Senator Bannon, we will be meeting post office representatives next week. It is important we encourage both sides to seek negotiated and agreed solutions to their difficulties.

The importance of the postal service should not be in doubt. The British Government has given a subsidy of £140 million to maintain rural post offices. I acknowledge it is a much bigger country with a larger population. It took a long time to recognise that the railways needed to be subsidised. It may be that certain vital public services require a small element of subsidisation and if so, the Government should not shrink from that.

It is ironic that Senator Leyden is the Acting Chairman for part of this debate considering that over the years he acted as a junior Minister in the responsible Department. I do not intend to criticise the Senator personally but I have not seen his stamp, to pardon the pun, on that Department.

The Senator cannot drag the Chair into a dispute.

I could not allow the opportunity to pass.

It is also very unfair to attempt to bring the Chair into a debate with a Senator on the floor of the House. I am unable to rise to such an occasion.

I am sure the Acting Chairman will find an opportunity later.

God willing.

The majority of people throughout the country have great confidence in An Post's delivery service and in the people who work at the counters. They look to them to provide a service within the limitations which are strangling them. Senator Mansergh declared his interest in that he acts in an advisory capacity to the committee dealing with commemorative stamps. Will he comment on the practice of An Post sending first editions of postage stamps to all Members of the Oireachtas? They are much appreciated but in the current climate it is a practice that must be reviewed. These stamps could be displayed in the local post offices — those that are still open — or in public places such as libraries and public offices and that would be sufficient. I cannot understand the generosity of this practice. It is a costly exercise and showed be reviewed by An Post, given the current situation.

I will pass on the Senator's point to the committee.

It is a welcome gesture for which I am grateful but it should be reconsidered in the current climate.

Senator Kitt will be familiar with the closure of two rural post offices in my area, similar to those referred to by Senator Mansergh. With the retirement of the postmistress in Abbey post office and despite strong representations to An Post by the community to retain the post office, An Post was hell bent and determined to close it at any cost. The post office is replaced by an agency which is merely licensed to sell stamps and which pays out the old age pensions on a weekly basis. We were promised a bill pay service but this still has not been supplied three years later. We negotiated with An Post at management level. They can delay a simple exercise such as this for three years. It is no wonder the situation is as it is. It is not the fault of the workers. The management will blame the workers at the least excuse.

The Leader of the House was formerly the Minister with responsibility for the postal service. On the occasion of a former crisis in An Post, we were assured that no rural post offices would be closed, rather that they would be upgraded.

A proper banking service was promised. Young people are no longer saving with the post office. The management of An Post must realise their responsibility to provide the traditional services. Saving with the post office gave young people a savings habit. That market has been in the main taken over by the credit unions. An Post is losing sections of the market through its own attitude. It is becoming distant from its customers and shows a lack of understanding.

As regards market values, An Post management is incapable of responding to change. While it reacts to failure in many areas, it is not proactive in devising plans to provide for people's needs. A glance at the list of post offices and changes in the service shows that we have had nothing but contraction.

I welcome the decision to incorporate SDS, the parcel service, into An Post. We have a postal service on which we can rely. Senators described how slow the postal service can be, with Senator Kenneally referring to his local service. I give credit to those who work in the service, as opposed to those who manage it, for doing a good job. I hope the good service provided by the workers on the ground who deliver post and the postmasters and postmistresses who organise deliveries will continue for a long time.

If Government subvention is required to deliver and maintain a service of the standard to which we are accustomed, the Government must indicate its willingness to support An Post in whatever way necessary. If it were to lead by example by expressing confidence in the postal service and indicating that it wants this valued service managed properly, the workers of An Post would respond positively.

It is a pity that the first people targeted by management cuts were workers and pensioners who were denied payments due to them under Sustaining Progress. Why turn on the workers? Is management so starved of inventiveness that it decided to take the easy option and hurt a large number of people?

The post office workers who marched to the gates of Leinster House included people who had given a lifetime's service to An Post and young workers who want to continue providing the service given by their predecessors. They are determined the service will be maintained. It is incumbent on all Members to express support for the continuation of the service. The Government must give a positive lead and the sooner the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, does so, the better. I am not certain the Minister is of such a frame of mind. He must reconsider his approach to secure the future of a service in which people have considerable confidence.

Unlike many postal services elsewhere, it is rare that mail is lost here, whether in large or small volumes. The occasional letter may go astray but the service provided by An Post has been second to none in Europe.

I welcome the Minister of State to the House and thank the Minister of State at the Department of Agriculture and Food, Deputy Browne, for his contribution. Having listened to the debate, I hope the management and unions in An Post will find a resolution to the difficulties in the company. I share the concerns of others that this matter be resolved.

I am concerned by the development of a two-tier postal service, particularly as regards rural areas. During my time in politics the closure of sub-post offices and post offices has been a constant theme. We have been misled by An Post and various Ministers. I was assured by Ministers 25 or 30 years ago when small post offices were being closed that people would be able to get stamps from the local postman. Post boxes were then introduced at the end of roads with the result that the service through which people in rural areas obtained stamps ceased.

More openness and transparency is required with regard to the future direction of the postal service. I am glad the Government is committed to the provision of a service. As a member of the European Union, Ireland is obliged to provide a frequent postal service and An Post meets this obligation by providing a good service. However, rural areas face the threat of more changes which will downgrade services and many postmasters believe changes are taking place too quickly.

The main issue for the trade unions is the €43 million loss suffered by the company in 2003. Only a few years previously the then chief executive stated An Post had made a profit of £1 million. We are entitled to know how a loss of the magnitude of €43 million occurred, who was responsible and who will be held accountable. These are just some of the many questions being asked by trade union members and they deserve an answer.

I am interested in the issues the Irish Postmasters Union wants addressed. Representatives of the union will visit Leinster House next Wednesday to meet public representatives. I hope there will be a large turnout for the meeting. The Irish Postmasters Union has called for funding to provide technology in the 400 post offices which are still paper-based. This is an important issue. The union also raised the gap between postmasters income and the legal minimum wage. I understand governments elsewhere, including in Britain, have addressed this issue.

The post office is a focal point in villages and towns. People want the contract by which social welfare benefits are paid at post offices maintained. They do not want to go to other outlets to receive benefits. It has been suggested that banks could provide this service, which is fine for those who wish to use banks. It is interesting, however, that Allied Irish Bank is the only financial institution which provides a service linked to An Post. Why do other financial institutions not provide this service?

The Irish Postmasters Union also raised the implementation of the Flynn report, which envisages post offices becoming one-stop shops for all Government services. I support the union's position on this issue.

Many contributors have raised the issue of marketing and the need to try to secure new business. I commend postmasters who have ensured the post office network gets involved in new business. Some people have got into processing photographs while others provide a photocopying service. Many have turned their post office into a type of comprehensive shop providing many services.

In that context, I find it hard to understand this constant downgrading of post offices to agencies, an issue to which other speakers referred. As recently as last April, a post office in Kiltormer was downgraded to an agency. It was a post office-cum-shop and was sold. The person who took over, of whom the Minister of State, Deputy Browne, is aware and who is from his area, is dealing with a very different business from the one purchased because of the changes made. Downgrading that post office to an agency was not the way to go, especially when there was a commitment for a post office. It was very unfair on the person who took over the business but who is doing a good job.

The other marketing issues revolve around Christmas and Easter when new opportunities could be availed of. The postal quizzes in which RTE is engaged are welcome. I recommended to the last Minister for Finance, Charlie McCreevy, and will to the current Minister, Deputy Cowen, that every village should have a lotto outlet which, in most cases, would be the post office. There are many outlets in the larger towns but there is none in some of the smaller villages.

When An Post makes decisions about closing post offices, it should not simply put a sign up telling people to go to the nearby village the following week to collect their pensions. That is not how decisions should be made. I am not saying every post office will continue to operate but in a village with a local supermarket or store, people should have the opportunity to take over the running of the post office. There are many questions to which we and the Communications Workers' Union want answers and I hope we get them.

Like other speakers, I believe An Post provides a great service, particularly in rural areas. The people who provide that service are very committed to it but are being undermined. As a Member who represents a rural area, I believe people in rural areas are being undermined when changes are made without any consultation. We find the post office has been downgraded or closed, there is no opportunity to reverse the decision because the die is cast and we are told we must go to the next town or village to do our business. That is not acceptable.

I am grateful for the opportunity to comment on this issue. It is important that the House discusses this public business and public asset. An Post is not some privatised industry owned by shareholders who hold positions throughout the EU and elsewhere. It is our company and Members of this and the other House have a direct responsibility to the people to ensure it is well managed, well run, profitable and, ultimately, provides the type of service about which Members have spoken, whether in rural or urban areas. Many of the arguments made in regard to rural areas can also be made about urban areas, including the lack of facilities, investment and of adequate funding for security and other issues. It is important the House debates this issue on a regular basis until we get it right.

In the past, I have been critical of trade unions in instances where they have been belligerent, have not embraced change and have been unable to see the bigger picture. I said one month ago, on the day the unions involved, including the Communications Workers' Union, brought their workers on to the street, that I fully supported their actions. I said so because the most blatant discrimination in respect of any aspect of this issue was that meted out to An Post workers in regard to the non-payment of the Sustaining Progress pay deal. As my colleague, Senator Finucane, said, last year all the workers in An Post, who do not earn large sums of money, had to forgo the 5% pay increase due to them under the partnership agreement while this year, they have had to forgo a 2% increase. What other group of workers would accept that their gross income would not increase by 7% to which they were entitled under the pay agreement? What other group of workers would just take that on the chin? They have every right to protest and to cause mayhem in terms of lobbying throughout the country. They also have every right to take this matter to these Houses of Parliament and to state their case clearly because it is a justifiable one.

Not only has this affected the existing workers in An Post but it has affected pensioners. It is absolutely scandalous that pensioners on very meagre incomes have had to put up with this. Senator Kitt and other colleagues have asked who is responsible. As I said a month ago, I make no apology for saying that responsibility lies with botched management. How is it that a company with such dramatic business activity in a country with such economic growth as that we have seen in the past eight years and which has been sustained year on year — in some years, there was almost double digit growth — cannot turn around a profit? How is it possible that in one year, as the Minister of State said, losses of €43 million could be chalked up? I got the answer last night when I saw the current chief executive officer of An Post, Mr. Curtin, on "Oireachtas Report" give a most appalling performance to a committee of the Oireachtas and admit that he had made no effort to deal on a one to one basis with the genuine concerns of trade unions in recent months. That is a scandal.

This is public business and it is our company. We have a direct responsibility to our constituents who put us here to stand up and say that. In any process of modernisation, there is change and it is difficult for people. However, the workers of An Post have had to put up with this for far too long. In my constituency, we saw what happened to SDS on the Naas Road. I was glad to hear the Minister of State say that any redundancies there will be voluntary. I was also glad to hear that all these matters will be before the Labour Court shortly. However, someone must take responsibility for the inability to turn this company around in an economic environment in which such amounts of money have been made by the business sector in recent years. I feel very strongly about that.

The response of the Government, particularly that of the Minister, Deputy Noel Dempsey, has been a hands-off one. Much more needs to be done even at EU level. I note the Minister of State said the EU directive in this area gives all EU citizens the right to a national postal delivery service. This country, in particular, needs this service because of its geography and its peripheral location on the western seaboard of the EU. If subvention is required to turn the company around and make it profitable, then we need to work at EU level to make those arguments where it counts. There is little point in stating there is an EU directive in this area that guarantees a nationalised postal delivery service if, as a small country, we are not entitled to fund a company which needs to be turned around from time to time.

I return to the central point I wish to make on behalf of the workers, many of whom live in my constituency. I congratulate them on bringing this matter to my attention, although we all have a responsibility in this regard. If any other semi-State company had been botched in the same way as this company has been, we would call for the head and, indeed, the entire board of that company to resign. The situation must be turned around. I support the industrial relations mechanism of the State in terms of trying to help that process. Ultimately, however, support will have to be sought through the EU if we are to put subventions into the company to ensure its profitability even in the short to medium term.

I support the workers in this case. It is not a stance I have always taken in regard to a group of public sector workers but the An Post workers case is justifiable. I ask the Government to abandon its hands-off approach, deal with the issue directly and ensure that the supports are in place, particularly through the EU, to return the company to profitability.

There is a great deal of unanimity across the House on this issue. As someone from a rural area which has lost its local post office in the past 18 months, it is a topic close to my heart. In fact, Phelan's post office in Tullogher was owned by my cousin so its closure represented the end of an element of family history.

I join with previous speakers who have expressed concerns in this area. Rural representatives have witnessed the continued denuding of services in their areas. The local post office is often one of the last remaining services in many rural communities. The Government should consider proactive measures to ensure that as many rural and urban post offices as possible can remain open into the future.

Previous speakers have referred to the 420 paper offices in operation throughout the country which have not yet been computerised. This is unacceptable in this day and age. The computerisation of any office is not as complicated or costly an issue as it was in the past. If An Post is serious about maintaining its presence in many rural and urban communities, there is no excuse for having 420 post offices that are not fully computerised. I also agree it is unacceptable that 450 postmasters are earning less than the minimum wage.

It is time for the Government to consider the approach taken in the UK whereby, as part of its public service delivery commitment, the Government has stepped in and funded the provision of post offices in many parts of that country. If we are serious about maintaining the service in small rural and urban communities throughout the country, we must be prepared to put our money where our mouth is. I say this as somebody who is not a socialist. I am also somebody who is not traditionally an admirer of some of the stances taken by various trade unions over the years.

However, I was on Molesworth Street to support the postal workers because their action was correct. The treatment meted out to them by An Post in the past number of years is utterly unacceptable. I have no qualms in saying I am 100% behind them in the action they took and in the substance of their complaint. To ask one sector of a workforce to forgo a duly deserved pay award under the Sustaining Progress agreement is indefensible by management or Government. The Government has not tried to defend it. I urge the Minister for Communications, Marine and Natural Resources to take a more active, hands-on approach at the earliest possible opportunity. There is a danger the situation could spiral out of control.

Senator Brian Hayes spoke about the €43 million loss that has just been posted by An Post. There is no possible excuse in this day and age as to how a company in such a position could post such poor returns, particularly when one takes into account that its employees have had to endure a pay freeze. Where has the money gone? It is the clearest example I have seen of pathetic management. I am normally slow to point the finger in one direction but in this instance it is obvious to any objective observer that the management has let the company down.

It is especially disappointing because the postal service is such an integral part of so many communities. The post office and the postman's deliveries represent a social outlet and source of social contact for many. There are people who have no opportunity to speak to another person throughout the day and whose only social interaction takes place with the postman. Every Member of the Dáil and Seanad is well acquainted with the postman who delivers his or her significant volumes of mail. The possibility that this service will be curtailed and that the social aspect of the physical contact it entails may cease to exist in what are mostly rural and certainly vulnerable communities is something we cannot allow to happen. I urge the Minister to take whatever measures are necessary to prevent such a development.

Other Members have observed that an entire range of services is not provided in post offices in which such provision is possible. I will not go through a list of items but some of them are simple issues relating to local government. Senator MacSharry mentioned the payment of motor tax and local authority rent, for example. Facilities for these types of payments could easily be accommodated in post offices. It simply requires some imaginative thinking on the part of local government as well as the Government to ensure the post office remains a focal point for communities throughout the country.

I am deeply saddened to say that I am somewhat fearful for the future of An Post as we know it. It is a vitally important company which does a tremendous service throughout the length and breadth of the land. I urge the Government not to stand back and let it slip away. Hands-on, proactive efforts must be made to ensure this vital public service remains an integral part of society into the future.

I welcome the Minister of State, Deputy Browne, to the House and wish him well in his Ministry. I thank the Leader for arranging this timely debate. We are meeting representatives of the Irish Postmasters Union next week and the information the Minister of State has provided is important. The key point in his speech is the avowal that there is "no wavering in the Government's commitment to our postal services". We have heard that it is precisely because of this commitment that "urgent action" is now needed to guarantee the future of An Post.

I was in the Department of Posts and Telegraphs in 1982, in a period when we were planning for the future. There was a strong network of post offices at that stage, or sub-post offices as they were called. The Irish Postmasters Union was very effective in its representations for that organisation at the time. It was a different era in that most post offices were linked to local shops and the latter were subsidised to some extent by this interlinking with the postal service. A person collecting his or her old age pension or child benefit tended to spend some of that money in the shop.

This situation still exists in my own area of Castlecoote where there is a well-run post office linked to an efficient shop, providing an excellent service in the area. When I was Minister of State at the Department of Posts and Telegraphs in 1982, I remember the postmaster at the time, the late Mark Delaney, sought to have the office upgraded to a money office, which I duly arranged. That assisted in developing that area of the post office regarding savings accounts. Insufficient emphasis has been placed on the possibilities of development in this area.

Unfortunately several post offices have been closed in recent years. In the next few days a very old post office in Donamon outside Roscommon town will close as the postmaster is reaching an advanced age and is retiring. No effort has been made to seek a replacement and nobody seems interested in taking on the task. I have received no representations from people in that area because the money paid to the postmaster would not cover the electricity, insurance and other costs of keeping the shop open. It was a very famous post office as the Divine Word Missionaries was located in that area and all its post went through that post office. It was very profitable at that stage.

When I was Minister of State at the Department of Posts and Telegraphs, I was amazed at the amount of competition for a post office. There was nearly a war over the post office in Ballaghaderreen. Different factions were making different representations over postmistress and postmaster applications. The stately Paddy Cooney had been Minister for Post and Telegraphs in the previous Government. He gave a firm commitment to one person that the office would be given to him. I had to either break or honour that arrangement and I honoured it. No one should think Fine Gael Ministers were always pure; they were very political in the allocation of post offices. I can prove this with the records from the time.

However, that was the procedure at the time. We allocated post offices in the Acting Chairman's constituency and throughout the country. I filled a few post office vacancies before I left office in December 1982. I filled them in Ballinaheglish, Mount Talbot, Monesteraden and other areas. It was and is a great service in these areas. There was immense competition to become a postmaster or postmistress at that time. Many services were being provided by the post offices at the time and it was quite a lucrative business, particularly when it was allied to another business.

We are now facing a major crisis with post offices and An Post in general. Regardless of An Post's difficulties, the payments agreed under national agreements must be guaranteed. For a State organisation not to honour those agreements would undermine social partnership. Irrespective of the cost I appeal to An Post to honour the Sustaining Progress agreement, particularly as this affects pensioners, many of whom provided 50 to 60 years of service. As a Member of the Oireachtas who is paid according to national agreements, I am dismayed that postal workers who provided such a service for the people have not been given their increases. This must be rectified regardless of the cost. We cannot keep a service going on the basis of depriving pensioners of their rightful increases.

I have confidence in the Minister for Communications, Marine and Natural Resources and the previous Minister in that Department, Senator O'Rourke.

Deputy Dermot Ahern was Minister in the interim period.

They have all played a very important role in a difficult portfolio. An Post has been impacted by new technology, particularly e-mail. An Post did not grab the opportunity. It should have had Internet cafés and Internet access in every post office. As far as I know it had an Internet company, which it sold. Golden opportunities were not taken up.

I heard An Post management use megaphone diplomacy on Joe Duffy's radio programme, which was despicable. Labour relations should be discussed at internal meetings and not on the airwaves. One side attacking the other does nothing for the service. A problem exists and I appeal to all concerned to sit down and resolve it.

Senator Mansergh referred to the British Government, which subsidises its service by more than £100 million. We may need to provide a subsidy at some stage. An Post will face a major challenge in 2009. At the moment letter delivery is reserved solely for An Post. While large organisations like the Royal Mail will enter the market in competition with An Post, they may not provide a full door-to-door service. They will cream off the lucrative business in the major cities. We get an excellent service in rural Ireland. Every morning at 9 o'clock, five days a week, letters are delivered to my house by an excellent postman, Micheál Mealy, who is prompt and provides a 100% service to the people in our area. We want this service to continue and, if necessary, we are prepared to pay more to keep the service.

I support An Post and its workers. I support maintaining the maximum number of post offices in rural areas as they are providing a major network and form a key source of assistance for the people of rural Ireland. When a village loses its post office it virtually loses its heart. This should be borne in mind when decisions are made.

I have listened to contributions from all sides of the House. As one Member mentioned, this is one of the few issues on which we can get agreement on all sides of the House. There is a great appreciation for the role played by An Post and a desire for that service to continue in every corner of the country. Shortly after I became a Deputy, I attended a meeting at which a colleague spoke on his retirement. He made the point that the influence of Members of the Oireachtas was in decline. He said that when he first became a Member if a postal vacancy became available in his area it was just a matter of making his nomination and that person got the job. He said that things had changed so much that if the vacancy were to arise today and 100 people applied for the job, the only way a Member could ensure his person got the job was to recommend the other 99. While I am not sure if things have changed to that extent, we can certainly identify with what he said.

The Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Browne, addressed the House earlier. Unfortunately the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, was not in a position to attend today but I will pass on to him the views Senators have expressed. We will appeal to the two sides that in the interest of an efficient An Post they should come together in the spirit of co-operation to try to resolve their differences. I thank all the Members for their contributions.

When is it proposed to sit again?

Next Tuesday at 2.30 p.m.