I move: "That the Bill be now read a Second Time."
This is the second occasion on which I have come to the House with a measure to control the salaries of bank officials. The previous occasion was in 1973. That Act expired by order on 14th December, 1973.
In June last, the Government, with the twin objectives of combating inflation and maintaining employment, took certain budgetary action. The measures included the removal of VAT from clothing, footwear, electricity and all fuels (except road fuels), the introduction of subsidies on most CIE rates and fares, bread and flour, butter, liquid milk and town gas. As a result of these Government initiatives, the cost of living was reduced by 0.8 per cent in the period mid-May to midAugust, 1975. As a Government we sought that, in return for a slowing down of price increases, there should be a corresponding slowing down of income increases. Such voluntary agreement with trade unions was secured in that the third and fourth phases of the 1975 national agreement were revised to link them directly to changes in the consumer price index. The immediate effect of the revision was to cancel the increases due to workers under the third phase of the 1975 national agreement and to provide for indexation in the fourth phase.
The Government's subsidies of June to reduce prices were designed to reduce the cost of living for all—including bank officials. That is why I requested the banks' Staff Relations Committee on 30th September, 1975 to advise as to what proposals the banks had for a comparable revision of the terms of their agreement bearing in mind that all other workers had revised their existing agreements.
The Minister for Finance and I met with the bank employees on 27th and 31st October, 1975, in the hope of securing from them a revision of the third and fourth phases of their pay agreement, in line with the amendments effected in the national wage agreement.
In the discussions with the employees' representatives, we did not seek any sacrifices from them or anything beyond what other workers had accepted voluntarily. The bank employees, however, did not indicate that they would be prepared to amend their agreement in a manner likely to bear comparison to the amendment made by the majority of workers in the national wage agreement.
At a meeting of the Banks' Joint Industrial Council on 13th November, a proposal for the modification of their current pay agreement was considered by both sides. This proposal was subsequently balloted on by the employees but was rejected.
Last Friday I met representatives of the Irish Bank Officials' Association in an effort to avert the need for legislation. I said that if at any time an acceptable voluntary agreement could be reached the legislation would not be activated.
I undertook to withdraw the Bill now before the House on the understanding that I would refer the 1974 and 1975 bank pay agreements to the Labour Court to report on whether these agreements conformed with the 1974 and 1975 National Agreements as revised; for their part, the Irish Bank Officials' Association would agree to a deferral of payment of the third phase increase of their current pay agreement pending such Labour Court recommendation and that they would agree to accept the recommendation. Regrettably, these proposals were not acceptable to the representatives of the Irish Bank Officials' Association.
I accept that bank officials are not parties to the national agreement and in my efforts to achieve voluntary agreement on this matter I respected their wishes that they need not conform with every detail of that agreement but their settlement must bear some comparison with that of the majority. Dáil Members, the Judiciary and many others who are not formally bound by the agreement keep in line with it. This principle appeared to have gained the acceptance of responsible bank employees but their refusal to accept an amendment to their present agreement as other workers have done compels me to ask the House to pass this legislation. If any interest group choose to go their own way they make a mockery of the restraint practised by others, many of whom are suffering much more immediately from the effects of the recession in terms of job insecurity and unemployment. I would hope that on passage of this legislation if any savings accrue to the banks as a result of the Labour Court adjudication that the benefits will be passed on to members of the general public. I have already suggested that consideration should be given to abolition of bank services charges to personal current account holders.
The present recession is longer and deeper than had generally been forecast. Last June the Economic and Social Research Institute predicted a fall of 1½ per cent in GNP for this year. By October they felt the situation had deteriorated still further than had been expected so their revised forecast was for a drop of 3½ per cent.
It is now expected that since the major economies of the world have begun to show signs of improvement by early 1977 a general recovery will be under way. We will be in a weak position to participate in this recovery if we find ourselves with inflation and its counterpart, unemployment at levels above those of our trading partners. In 1976 we must devote our resources, not to consumption but to investment; we must prepare our physical and human assets for a quick return to high growth rates and full participation in an expanding pattern of world trade.
The Bill is on the same lines as the legislation governing pay and conditions in the banks which was enacted in 1973 and I hope, therefore, that all Stages can be taken today. The present measure will come into operation and expire on days to be appointed by order. The Bill contains provisions whereby I would, should I consider it necessary to do so, impose a stay on the salaries and other conditions of employment in the banks.
The Bill also contains provisions which would enable me, by order, to prevent the banks from offering increases in wages or improvements in other conditions of employment in excess of those which the Labour Court would determine as appropriate in the light of the provisions of the national agreements. Contravention or failure by the banks to comply with the terms of such an order would constitute an offence which would render them, on conviction, liable to fines but not imprisonment. There are no penalties of any sort directed against bank employees or their representatives.
I commend the Bill to the House.