Introduction of Postal Codes could spell disaster for rural areas-Senator Joe O’ Reilly Cavan/Monaghan

Communications Regulation (Postal Services) Bill 2010: Second Stage

Sitting Time 12:00                                                            Sitting Date 24/11/2010

I welcome the Minister and acknowledge the fact that he has initiated a number of Bills in the House and has engaged fully with the House on all occasions.
As we are debating the postal services Bill, it is worth acknowledging thecurrent success of An Post in terms of delivery speed. The recent ComReg report is heartening in that respect. A total of 87% of mail is delivered throughout the State within one working day while the equivalent proportion in Dublin is 86%. The delivery service is excellent. In addition, An Post is operating based on postage costs. It is not being subsidised by the State. It is self-financing in that regard, which is a major achievement. Acknowledging that success is a good backdrop to our discussion of the legislation. The Bill seeks to transpose Directive 2008/6/EC, the third postal directive, which provides for the final phase of opening the postal services market through the removal of the reserved area, that is, the delivery of letters weighing less than 50g.
The first issue that merits discussion in the House, now and on Committee Stage, is the universal service obligation, which is vital. No one in this House is more acutely aware of its implications and social importance than I am because of the area I am from. It is a vital service. I will not labour the point other than to say that all citizens of the State are equal under the Constitution. They must receive equal service and they must get their deliveries. It is critical.
Under the legislation, An Post will be the sole universal provider for seven years. What is disturbing is that after seven years, ComReg is not obliged to appoint another universal service provider. It may do so and it may appoint any company, but it is not legislatively obliged to do so. In an Irish context, that is disturbing. I am not convinced we will be in a position to dispense with a universal service provider in seven years. This is something we need to keep an eye on. We have removed many aspects of rural living and affected the lives of those beyond the Pale, in all senses of the word, that it is vital we do not remove from these people the last vestige of dignity, which is access to postal services.
ComReg has the power to designate different postal service providers to provide different aspects of the universal service obligation. For example, An Post could be responsible for Dublin while some other company could be responsible for Cork and yet another responsible for the region around Athlone or Galway, where my colleagues present come from. In that case, what would happen in the border regions between these areas? Would there be different standards of delivery within each? What about the cost? It could be a nightmare scenario. I am not happy that this is dealt with sufficiently.
End of Take

My basic contention is that we should observe European law which essentially I accept. We will not vote against the Bill as it is a legislative imperative that we follow the directive, but my fundamental contention is that we should do so to the minimum possible degree, with the greatest focus on the needs of the country, and that we should use our discretion in its implementation to the benefit of the people.
I am concerned about different standards in different areas. It could prove difficult for some postal operators to deliver the service in the proper way. We run a real risk of having deregulation in the most obscene sense to the extent of having an uneven standard of service and problems in Border areas. There could well be different prices in different areas, different delivery times and an entirely different approach which ultimately would be a nightmare. I am not saying benign administrations in the future would wish to do so, but we should build in legislative constraints to prevent anyone getting this wrong.
An objective empirical study of European postal services established that Ireland was not able to accommodate two national providers of postal services as we did not have the critical mass or a sufficiently developed economy to withstand that level of competition. This is a disturbing finding. We need to be concerned about this if we want to maintain nationwide delivery. If the universal service obligation is abolished, studies, including the one by PricewaterhouseCoopers, suggest Ireland will not be a Mecca for competition in that major private operators are not likely to want to come and operate throughout the entire country, but they may want to cherry-pick, wherein lies the difficulty. We must protect consumers in that scenario. A number of objective consultancy studies have been carried out in that regard.
There is an issue with prices, which are reasonable. The great mantra in opening up competition is that costs will be reduced. We all accept that to increase trade and employment, we need to reduce costs. However, the cost reductions to be realised here will benefit large industries and services; in other words, small and medium-sized enterprises, ordinary consumers and those at the lower end of the service face increased costs and will almost be providing a compensatory mechanism. SMEs, individual consumers and small organisations, including local NGOs and voluntary organisations, will be subventing large corporations. This is a very sinister aspect.
Most of us, particularly those of us who come from rural areas, will have attended public meetings about the closure of a local post office – I have sat through such meetings for hours. They are disturbing and traumatic events because a postmaster, postmistress, his or her family and other local people might be losing work.

Senator Joe O’Reilly: A community is losing another vital service following the amalgamation of schools and the closure of the Garda station, which is all very depressing and brings back memories of the 1950s. There is a risk that this legislation will lead to the closure of small local postal outlets as a consequence of opening up to competition. While this is happening already to an extent, at least there is control and a democratic input. I am very concerned about that prospect. The Minister should consider introducing amendments on Committee State to offer protection in the legislation. In Germany 21,000 full-time jobs and 12,000 part-time jobs were lost following the introduction of competition, while 11,000 jobs were lost in Japan. This means we will suffer job losses at possibly the worst time. All of us would gladly spend every waking hour trying to encourage job creation and the risk to jobs represents another difficulty with the legislation. While we have no alternative but to accept the directive, we need to build in as many safeguards as we can and – to use that awful expression – have something of an Irish solution to the problem. If we do not, we run the risk of losing small post offices and jobs and increasing the cost of postal services.
Through a levy, private operators will, rightly, subvent the universal service provider. I ask the Minister to clarify if European law precludes State subvention at all times. If it does not prevent us availing of the option of State subsidisation, we should not rule it out. If the levy does not suffice and there is a risk posed to a good quality universal service, we should have that option, even though it is the last thing we would want to avail of. Just as we frequently talk about job creation and cost competitiveness, we also talk about the need to reduce the cost of public services. Subvention would be the last option, but I would not be opposed to providing for such an option in the legislation.
The legislation will give the green light to the introduction of postal codes, to which I have no objection. While modern reasoning suggests they are more efficient, I would like to be assured that they will in no way diminish, confuse or make it difficult to deliver post efficiently.
Regarding postal codes, I am concerned about the complexities of addresses and local idioms in isolated rural areas that might prevent the efficient delivery of post. Some years ago we used to complain about the speed of An Post deliveries. However, An Post has upped its game and been an unqualified success. The great work it has done in increasing the speed of delivery and ensuring next day delivery should be acknowledged. I am concerned, however, that its success could be damaged in certain areas by the introduction of postal codes. I would like the Minister to outline his Department’s approach to the issue. I could spend the last three minutes of my time by asking how complex addresses, including Gaelic versions, local idioms and distinctions, will be dealt with. I am concerned that issues such as holiday homes could turn into an administrative nightmare. I hope we can return to these points on Committee Stage when we will discuss any amendments the Government or we will table in keeping with our role in Parliament.
End of Take
First, I am concerned about the universal service provision, that it will be maintained evenly across the country and at no extra cost to consumers. It should not place a burden on the ordinary consumer and on small and medium enterprise as a result of cherrypicking and so forth. Second, I am concerned that we do not lose local postal outlets through their random closure as a consequence of this. There is a risk of unevenness of service in certain areas and a disparity between regions due to different service providers in different regions. I am anxious to maintain evenness in that regard.
I am also concerned about jobs. All the empirical findings from Germany, Japan and other states show that no state has achieved this objective without a loss of jobs. That is horrendous, frightening and a great concern. There is also the issue of the general quality of service and its cost. While I acknowledge there has been a move to information technology, there is still a core number of people who use the traditional way of communicating by letter or parcel. They have that right, regardless of where they live, their means or their level of education. If we can protect that, I have no difficulty with the legislation.

Senator Joe O'Reilly representing Cavan & Monaghan 2010. | An ExSite website