I welcome the Minister to the House.
Communications Regulation (Postal Services) (Amendment) Bill 2016: Committee and Remaining Stages
NEW SECTION
I move amendment No. 1:
In page 3, between lines 10 and 11, to insert the following:
“Amendment of section 28 of Communications Regulation (Postal Services) Act 2011
1. The Communications Regulation (Postal Services) Act 2011 is amended in section 28:
(a) in subsection (1) by the substitution of “that postal service” for “a universal postal service” where it secondly occurs,
(b) in subsection (5) by the insertion of “may fail,” after “a universal postal service provider” where it firstly occurs, and
(c) in subsection (5) by the substitution of “the Commission shall” for “the Commission may”.”.
Section 28(1) of the Communications Regulation (Postal Services) Act 2011 sets out the principles with which the universal postal service provider's tariffs must comply. These principles are enshrined in Article 12 of EU Directive 97/67/EC, as amended by EU Directive 2008/6/EC, and provide that the tariffs must be, inter alia, affordable and cost orientated. These directives are transposed into Irish law by the 2011 Act.
Article 12 of the directive provides that member states will ensure that the tariffs for each of the services forming part of the universal service comply with the tariff principles. The requirements are clearly intended to apply only to the universal postal service, and it was on this basis that the Act was drafted. It appears that the intent of the proposed amendment to section 28(1) of the Act is to widen the scope of the tariff principles beyond the universal postal service. Such action would represent a significant change in policy and require detailed consideration and analysis as well as consultation with stakeholders.
I advise the House that an identical amendment was tabled on Committee and Report Stages in the Dáil. It was argued that the extension of regulatory measures in this manner and without detailed consideration of its impacts was not appropriate. On that basis, the amendment was withdrawn. The position remains unchanged.
Regulatory measures are generally introduced to address issues arising in a particular market and should be introduced where necessary and only in line with the principle of proportionality. There has been no signal from the market of the need for regulatory measures in terms of tariffs outside the universal postal service. Indeed, the level of competition in the packets and parcels market has already been highlighted by ComReg. In addition, real competition in the form of alternative delivery solutions can be observed in the significant decline in mail experienced by An Post as a result of e-substitution where some large customers are moving to electronic alternatives.
The main non-universal service obligation services are parcels, publicity post, PostAim and Express Post. There is competition in these areas from private operators such as DHL, FedEx, Nightline, Fastway, CityPOST, Lettershop and the Leaflet Company, to name a few.
For the reasons outlined, I cannot accept the amendment proposed by Senators Boyhan and McDowell to section 28(1) of the 2011 Act.
Turning to the amendments proposed by the Senator to section 28(5) of the 2011 Act, I must first address the inclusion of the term "may fail". While I understand the wish to see the powers of the regulator strengthened, widening the scope of the powers to include a determination the universal service provider may fail is too subjective. It is difficult to see how ComReg should judge that a universal service provider may fail in its obligations to comply with the tariff principles. In considering this amendment I consulted ComReg, which agrees with this assessment. I understand and am cognisant of the impact this measure might have on consumers and the SME sector. In this regard I have issued a policy direction to An Post instructing that the price increases introduced following the repeal of the price cap mechanism must be subject to prior consultation with ComReg and have due regard to the tariff principles set out in section 28 of the 2011 Act, as well as the interests of personal users of postal services and SMEs. I have reiterated this in person to the chair and chief executive of An Post.
With regard to the substitution of the word "shall" for "may" I do not believe it is appropriate to make obligatory the issuing of a direction. A direction referred to in section 28(5) is an enforcement mechanism which may be used by ComReg, and detailed procedures around the issuing of such directions are provided for in section 51 of the 2011 Act. There may be some instances under section 28(5) where a formal direction of this nature may not be appropriate or necessary and, therefore, it is important that ComReg retains the discretion provided for at present. For the reasons I have outlined I am unable to accept the amendments as they have been proposed.
I ask the Minister to give the rationale behind the Government's decision to walk away from the question of the pricing of stamps, which is the basic issue. Will the price of a stamp increase from 72 cent to 92 cent or €1? I was at the Department a long time ago and something we would never give away was the authority of the ministerial office to decide this because it is a law of diminishing returns. The more it increases the less is received. The more competitive it is made the better it is. There are other options, such as an increase for express post.
I do not particularly like Ministers giving away power. I am dealing with Coillte at present, which is not under the control of anybody. It is a commercial semi-State body and it can do what it likes. My colleague discussed Bord na Móna earlier today. The commercial semi-State bodies have a loose hand in dealing with the public, and the Minister knows what is going on in our area because he was at the meeting. This is an example of the removal of ministerial power from semi-State bodies. They can walk into our area and try to destroy it with wind turbines and they do not care a damn. They do not care about the Minister or me and they do not care about the public. They are only interested in getting maximum subsidy through their work.
I will not second the amendment because I have not dealt with it and I do not know what its implications would be. I accept the Minister's response. I was away in London last week dealing with Brexit issues when this matter came up. On principle, there should be control over the cost of stamps. The Minister knows when the price of stamps increase the number of people who use them decreases. It is the law of diminishing returns. What is the Minister's rationale for this decision?
It is proposed to close 80 post offices and there is a lack of business in post offices. When the price of stamps increases the post offices' cut decreases because they rely on a percentage of sales to keep them in business. This is a very concerning time. I cannot understand why sub-post offices are not the responsibility of the Minister. Why are they under the aegis of the Department with responsibility for rural development? When I was at the Department, all post offices were the responsibility of the Minister at the time and we ran the whole show. We ran it without An Post and we made money, but that is another day's work. We were trying to be innovative, but we were not competing to the same extent with the Internet as it was just about to start.
An Post made bad decisions on many communications issues. The company should be at the cutting edge of communications. It was in the best position to deliver a mobile telephone service, for example, as it had sites all over the countryside. However, we are where we are and the Minister has a responsibility to deal with this difficult matter. Will the price of a stamp increase to 92 cents or €1?
While I was willing to exercise some discretion, I ask Senators to speak to the amendment. I was fortunate to speak on behalf of Senator Leyden in the debate last week.
It seems I was replaced by two Senators last week.
It would take more than two Senators to replace Senator Leyden.
The Senator covered many of the points he would have addressed last week.
I apologise on behalf of Senator McDowell who is unable to come to the House as he has been detained elsewhere unfortunately.
The Bill seeks to remove the powers available to the Commission for Communications Regulation, ComReg, to decide on a price cap for postal charges in circumstances in which ComReg deems that there is no effective competition in the market. These powers are contained in section 30 of the Communications Regulation (Postal Services) Act 2011 which the Bill seeks to repeal.
Having listened to the Minister's contribution, I do not propose to speak in detail about the problems in An Post, including post office closures. We will discuss these matters on another occasion. I am advised by Senator McDowell that he wishes to put this amendment to a vote, although that decision is one for the House. There were few Senators present to hear the Minister set out his stall but perhaps more will come later. I respect the views expressed by the Minister and I have little to add to them. Senator McDowell has given this matter some consideration. There has been substantial correspondence on this issue, on which people take different views. I await the Minister's response.
The Minister was here last week and is no stranger to the House. I welcome him back to discuss this important and urgent legislation. Given the position of the postal service, I hope the Bill will go some way towards resolving An Post's problems in the short term. Any delay in passing it would not be appropriate.
The amendment proposes to change the universal social obligation with regard to parcel post, express post and other issues. As the Minister explained, it would be inappropriate to do so. When the amendments were introduced in the Dáil their proposers withdrew them in response to the arguments made by the Minister. It would be helpful if the House were to compromise on these issues to allow the Bill to pass and place An Post on a good footing for a short period. We all know radical changes will be made to An Post's structure in future. That is the real issue. We are fighting over minor issues such as the universal social obligation that applies to parcel delivery and express post. These are areas where the market is highly competitive. It is logical to change the legislation regarding this matter.
I request that the amendment be withdrawn. This would send out a signal that Members of the Oireachtas are putting their shoulders to the wheel on this important issue. We need to firm up An Post and the Chamber must send out the right vibe because An Post faces serious issues. I am greatly concerned about the organisation and wish the Minister the best of luck in this matter. In some senses, we should save the debate for the bigger issues coming down the line because they will present significant challenges to everyone in the Chamber.
I thank Senator Lombard. Does the Minister want to come in before I put the question?
A number of issues have been raised. I will deal with the most significant one first, which was raised by Senator Boyhan. I echo what Senator Lombard said. There is no realisation here of the issue with which we are actually dealing. Senator Leyden also raised a number of issues, which I will come to in a minute. If these amendments are accepted here today, our debate is pointless. We have explained to the spokespersons how significant and imperative it is that this legislation goes through. If these amendments, which were withdrawn in the Lower House on the basis of the arguments I have put forward, were to be accepted, I would have to go back to Government because there would be a significant policy change involved.
We are talking about introducing a universal service obligation in the parcel sector, which is a very competitive sector. It is the most competitive and growing sector in the postal division in the country and right across the world. It is extremely competitive so I do not see why we should regulate a system that is working quite well. I have not seen the failure or heard an argument from anyone in the Lower House or here about how the system is failing at the moment. I do not see the logic behind putting forward an amendment to interfere in a system that is already working. Let me be crystal clear. It is up to the House to decide on this amendment but if it is carried, I will be asking each one of the Senators to go back to their communities and explain why the five-day postal service is no longer available to them as a result of the delay in this legislation. This is about protecting the service we have at the moment. I made it crystal clear when I brought this issue to the attention of Government at the time of the publication of the legislation, on Second Stage in the Lower House and here, the reason it is of critical importance that it is enacted swiftly. That is why I have taken the step I have taken to remove ComReg from this process.
Coming back to Senator Leyden's question, the decision to have ComReg regulate this was taken in 2011. That is when the power over pricing was taken away from the Minister. ComReg has been involved in it and it has increased the price of the stamp. The difficulty is that those price increases do not reflect the current financial situation of the company. It requires a significant increase in the price of the stamp. I do not know what that figure is at this stage. Senator Leyden was Minister of State at the Department of Posts and Telegraphs so he knows that part of the reason the company did not take the opportunities it should have taken in the past was ministerial interference. The Minister has the power to appoint members to the board of all of these semi-State companies and we now have a system in place through PAS so we can have people of ability appointed to those boards who can actually add to them. We had some very good people and we had some mediocre people on boards in the past. Since the new system was introduced, we have had excellent applications from people. I say in particular to my county colleague, Senator Leyden, that we want people of ability who are willing to serve on State boards, in particular people from outside the Dublin region and very capable women. There are many of them out there who are well able to sit on and contribute to boards. I want to see far more women actively participating on boards. I appeal to anyone who has any interest in this area to make an application through the PAS system to sit on State boards under my jurisdiction or that of other Ministers.
Senator Leyden is right that increasing the price of the stamp will have an impact on the number of stamps that are purchased. There is an issue of elasticity there. It is something I am very conscious of and I have asked the company specific questions about it. I am satisfied that the income and moneys required by the company can be brought in even with this change in the legislation.
I also read the article about the 80 post offices this morning. Discussions are ongoing between the Department of Arts, Heritage, Regional Rural and Gaeltacht Affairs, the Irish Postmasters Union and An Post on a way forward for the post office network. The post office network as a whole is making a profit. There may be aspects of it that need to be improved but, as a whole, it is making a profit. The difficulty is that the mail service is haemorrhaging funds at the moment and we need to take immediate action on it. That is why this legislation is so urgent. The company hoped this legislation would have been enacted at this stage and it has expressed concerns regarding it. I hope that with the co-operation of the House, we can pass this legislation today. If there are amendments to it, we will have to go back to the drawing board and it will be the responsibility of Members of the House to explain to the staff and communities around the country why there is a significant threat to the five-day postal service.
Fianna Fáil will not delay the Bill. It supports its immediate enactment. We appreciate the seriousness of the situation. The circumstances are a matter of debate. The Minister would not be taking this action unless it was necessary. We will give it 100% support to get it enacted as quickly as possible.
That was indicated last week.
I thank the Minister. I have not been instructed to do anything other than press the amendment. We will call for a vote on the Bill. The Minister clearly has the numbers so it is not a problem. It is important. I am not in the business of going out to explain anything to anyone with all due respect. I am not the Minister; Deputy Naughten is the Minister. This is the Upper House. These are amendments that have been put down and ultimately it is a matter for Members to accept or reject them. To be fair, nobody else has tabled an amendment. It is all very well people coming in and having views, but there is nothing wrong with putting down an amendment.
A number of issues are involved. I take on board that the Minister wishes to see the postal service really succeed. We also have a responsibility. I admire anyone who takes the trouble and time to prepare amendments. There are not too many of them coming into the House on any legislation. The ones who are in here proposing amendments seem to be constantly getting knocked while others seem to be getting waved through when they are doing nothing.
Senator Boyhan is missing the point. I have come to the House as the Minister. I have answered the questions and given my justification. The Minister of State, Deputy Kyne, gave the justification on Second Stage and Committee Stage in the House because I was physically not able to attend. My difficulty is that I have set out logically the reason this does not make sense. There is not market failure. I have had this argument with Deputy Ryan, who drafted and tabled the amendments in the Dáil. He understood the point I was making and withdrew the amendments on that basis. The difficulty is that the Senator is saying he has been given an instruction to press these amendments without hearing the argument I have made. No one has given me a reason for the market failure in the parcel service. Senator Boyhan has not given me an example of the market failure and yet he is pressing the amendment that has serious financial implications for the company. If the Senator wants to press the amendment, he should show me the justification for pressing it. He should not come to the House and ask me to respond, which I am quite willing to do, but not listen to my response. I have responded to any question that has been asked by colleagues here. I could stay here all evening answering questions that people want to ask about this. I have no difficulty with that, but there is not much point, with due respect, in me, as Minister, coming in here answering questions and for the Senator to ignore the answers I have given because he is under instruction to press the amendment. That is the point I am making.
Amendment put and declared lost.
I have no difficulty with the decision on the amendment. I like to be responsible. Rather than waste people's time, I will accept the decision. I thank the Minister for taking the time and trouble to deal with this. Perhaps the next time he is here, we might actually have a copy of the response. We could only listen to the Minister today. He made a very valid point on engagement and teasing out the issues. Rather than waste time and play politics with this, I will accept the democratic decision on the amendment.
The amendment has been put. At this point, there is really no need for any further debate.
Section 1 agreed to.
SECTION 2
Has the Minister a written response on these amendments?
I know Senator Boyhan is a new Senator but-----
I am inexperienced. I might not be new here.
Other than on Second Stage, it is not normal for a speech of a Minister to be circulated. The normal process on Committee and Report Stages is to move the amendment, have the argument and hear the response of the Minister. The Senator is not the person who has drafted these amendments, which I accept. I am quite willing to give him the reason I cannot accept the amendment and let him respond to that. I have no difficulty with that at all. I am here to try to answer as many questions as I can. That is the reason I came in here as Minister, and I have tried to come into the Seanad at every opportunity. I believe I will be here tomorrow morning for two Commencement matters. It is my intention as Minister to engage with both Houses as much as I can.
I ask Senator Boyhan to formally move amendment No. 2.
I move amendment No. 2:
In page 3, between lines 28 and 29, to insert the following:
“ “(bc) to undertake a review of terminal dues with particular regard to the requirements of section 29(1) of the Communications Regulation (Postal Services) Act 2011 and to report to the Minister within 6 months of the commencement of this Act. Further such reviews shall be undertaken at least every two years, thereafter,”,”.
ComReg already has a role in regard to terminal dues and, as recently as June last year, ComReg published a review and assessment of An Post's terminal dues agreements in the context of compliance with section 29 of the 2011 Act. Terminal dues are rates paid for delivery of international inbound mail items.
I was mindful of the concerns expressed in regard to the impact of terminal dues on An Post. In this regard, during the passage of the Bill through the Dáil I had instructed my officials to liaise with the Office of the Parliamentary Counsel to draft an amendment along the lines proposed by Senator Michael McDowell. As was outlined on Report Stage in the Dáil, the clear advice of the Office of the Attorney General was that an amendment of the nature proposed would create legal uncertainty and likely impact upon ComReg's existing powers under the 2002 Act. More worryingly, it could potentially leave previous actions undertaken by ComReg on terminal dues open to challenge. Nonetheless, my officials continue to work with the Office of the Parliamentary Counsel to develop a provision that would go some way towards addressing the issues raised in regard to the issue of terminal dues. Consequently, a Government amendment was accepted on Report Stage that requires ComReg to consider any consequential impact of the repeal of the price cap on terminal dues as part of the review of the repeal of the price cap provided for in section 3 of the Bill. ComReg has advised that it will continue to review terminal dues agreements against the provisions of section 29 of the 2011 Act. Having regard to the Attorney General's advice, I cannot accept the amendment proposed by Senator Michael McDowell and trust that the Government amendment accepted on Report Stage in the Dáil clarifies the issue.
It has always been my intention as Minister to try to facilitate amendments coming from the Opposition whenever I can. I have done so in respect of any Bill I have brought through the Houses, and I will continue to do so. I will put my officials under pressure to accept amendments or to justify why they cannot be accepted.
I accept an issue arises over terminal dues. I listened to the arguments put forward by the Opposition on Committee Stage in the Dáil. On foot of my doing so, we drafted an amendment for Report Stage to address the issue. As a result of that, I ask Senator Boyhan to withdraw amendment No. 2 in favour of the provision we have already made on Report Stage in the Lower House.
In light of what the Minister said and the rationale he has given - I put my hands up and admit he is better prepared than I - I am very happy to withdraw the amendment. I thank the Minister for setting out his stall so elaborately.
Amendment, by leave, withdrawn.
Section 2 agreed to.
Section 3 agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.
When is it proposed to sit again?
At 10.30 a.m. tomorrow.
The Seanad adjourned at 5.20 p.m. until 10.30 a.m. on Wednesday, 8 March 2017.