Nor, of course, does the misrepresentation end there. We are also told that the new telephone pricing structures represent the implementation of the Culliton report in relation to telecommunications services in Ireland. This, of course, is wholly inaccurate. Culliton never recommended any increase in local calls. Similarly, there is not a line in the entire set of ministerial proposals which tackles the central tenet of Culliton in relation to this matter; namely, the creation of competition in the provision and delivery of telecommunication services and the reduction of Telecom Éireann's costs.
Last week, after the Minister, Deputy Cowen announced his proposals, I stated on behalf of the Progressive Democrats that while we welcomed the reduction in our totally uncompetitive international telephone charges, the associated increase in domestic charges, which was not consequential, as suggested by the Minister, was completely excessive. That remains the kernel of our approach to this matter.
Yes, there are welcome features; most notably the reduction to normal levels of our overseas telephone charges, and also the creation of an effective local call tariff system for the entire island at weekends.
However, what is notable about the reduction in our international telephone charges is the fact that this is the single area where, of course, Telecom Éireann do face competition, and where, on the Minister's own admission, the company is actually losing revenue because of its uncompetitiveness — at a growing rate of at least £15 million a year.
I dare say that if this were not the case, Telecom would have been in no hurry to reduce its international charges to Irish businesses, and other users of the service. We should take with a high degree of scepticism the pro-user declarations on the part of Telecom, and the Minister, that all of this is being done solely for the benefit of Irish exporters. It is being done primarily for Telecom's benefit.
However, it is when we turn to the implications of the new regime on domestic telephone users, for both business and private calls, that the present proposals are seen to be so totally unacceptable.
Firstly, let us take the private phone user. I find it incredible that the Minister has persisted in arguing that the average bill, even after the additional VAT increase, will only increase by 4 per cent. He states this, notwithstanding the fact that, elsewhere, he and Telecom Éireann are agreed that domestic users will face cumulative price rises of over £60 million, £29 million of that from increased VAT charges, and more than £30 million arising directly from the increased cost of calls, where the duration is greater than three minutes.
Last week, in the Dáil, when replying to a short Adjournment Debate on this topic, the Minister declared that the average domestic subscriber would find an increase of just £3 per bill, even with the increased VAT charges. I do not believe that the Minister's figures reflect the likely scenario facing the vast majority of the 750,000 private telephone users in the country.
I suggest that a much more accurate picture of the increased charges, which most people will face from next September, is reflected in a very interesting report in last Sunday's edition of The Sunday Press newspaper. One of the paper's reporters, William Rocke, had his most recent telephone bill recalculated by Telecom on the basis of the new charges which will apply from September next, and also the further revised charges of April next year, when the VAT rate of telephone bills will go up by a further 5 per cent.
The figures from that pertinent and timely exercise are most revealing. They would reflect the experience of the average householder in this country, rather than the obviously, entirely selective approach of Telecom and the Minister in their PR-pronouncements to date. Incidentally, Telecom's enormous and illegal advertisements are very costly, and are being paid for by all telephone subscribers.
Under that exercise, Mr. Rocke's present bill of £70.66 will go to £85.96 from next September, when the new charges, and the first 5 per cent VAT increase, will take effect. That is an increase of more than £15.00, or 21 per cent plus on the present bill. When the further 5 per cent increase is applied from April of next year, the same bill would go up by a total of £19.10, compared to its present level, which is a price rise of 27 per cent.
These are huge increases, and they give the lie to Minister Cowen's PR-sanitised claims of a mere 4 per cent average rise. Of course, in the case of The Sunday Press reporter, Telecom's observation was that it was unfortunate that the person concerned was not making calls to Europe, Australia or America, where he could have saved a great deal of money. What a stupid and specious argument this is. The reality is that there are hundreds of thousands of domestic telephone users who would have very little reason to make overseas calls.