asked the Minister for Labour, in view of the Minister for Finance's statement on Sunday, 1 May 1983, regarding pay agreements already made in the private sector, whether it is Government policy to uphold the principle of free collective bargaining, or whether the Government will seek to prevent the implementation of pay agreements already concluded in the private sector?
Private Notice Questions. - Government Policy on Pay Agreement.
I must say at the outset that this is a question which the Minister for Labour, Deputy Kavanagh, would have been very anxious to answer, but he is attending a ministerial conference in Paris.
In Paris?
A ministerial conference in Paris. I would refer the Deputy to the Government statement of 10 March 1983 which set out their policy in relation to current pay negotiations. The statement indicates that the Government respect the rights and freedom of all parties to the pay negotiations to argue their case from the viewpoint of their own knowledge, experience and interest. However, the statement pointed out that the Government have to take such steps as may be necessary to safeguard the national interest. I understand that it was in accordance with Government policy, as indicated in the statement of 10 March, that the Minister for Finance felt it was approprriate to communicate with the insurance industry about a proposed pay settlement in one of the companies. I am sure that the House will agree that Ministers should not be precluded from giving their views on particular pay settlements which are proposed, when they are satisfied that such action is justified in the national interest.
Do I take it from the Minister of State's reply that the Labour Party policy now is the breaking of agreements formerly entered into by both sides and if he would not agree that this is a dangerous practice and something not acceptable to employer and trade union interests? Is the statement attributed to the Minister last Sunday now firm policy as to what action the Government intend to take regarding agreements which have been made? In other words, is the Minister speaking for the Government in what he said last Sunday, or was it another provocative approach by him?
The Government attitude to agreements on pay has been clearly stated in their statement of 10 March, where they asserted that the Government respect the rights and freedom of all parties to pay negotiations to argue their case from the viewpoint of their own knowledge. The situation in which we find ourselves demands that we place ourselves in a position to benefit from such bright spots as can be seen on the economic horizon and that we place ourselves in a position to maintain and increase competitiveness. Given the unemployment situation we face, anything less would be wholly unsatisfactory. It was in those circumstances that the Minister for Finance found it necessary to comment on a particular pay settlement, just as the previous Minister for Finance found it necessary to communicate similarly. I am sure Deputy Gene Fitzgerald will recall the fact that on 27 September 1982 the then Minister for Finance, Deputy Ray MacSharry, wrote a letter in very similar terms. But, if the Deputy's memory is in any sense deficient, I would be delighted to read the letter and he will see just how similar they are. That letter was addressed to the President of the Federated Union of Employers, written on 27 September 1982 by Deputy Gene Fitzgerald's colleague, the former Minister for Finance, and read as follows:
Dear Mr Galvin.
Last Friday, the Government were discussing the progress of the negotiations with the trade unions on pay restraint in the public sector this year and next when they learned that one of your members, the Zurich Insurance Company, had already settled on a 19½% pay increase for its staff as the opening settlement of the 23rd pay round. I find it extraordinary that, despite the numerous contacts between your organisation and the Government, both at official and Ministerial level since last July, when this settlement was apparently negotiated, the matter has not come to light before now. This sets an appalling headline for other companies in the insurance and financial sectors and makes the position of the Government in its current negotiations with the public sector unions almost impossible.
The Government have for months past been bending every effort — at enormous political cost — to achieve a major reduction in public sector pay increases. Their efforts cannot succeed unless they have the support of the private sector, from whom a great volume of complaints has come about pay levels in the public sector and their repercussive effects on the private sector. It is a strange commentary on these complaints that independent analysis clearly shows that under the 22nd pay round public service pay has increased by 13½%, the rise in manufacturing has been 16½%, while in the insurance sector it has increased by over 20%. In the face of this, the Government find it difficult to take seriously the complaints of the FUE and similar bodies about trend-setting pay increases in the public sector.
I would remind you of the vociferous complaints of your members and others in the insurance industry at the time of the March, 1982 budget about the imposition of the insurance levy. The Government, in response to assertions that the profits of the insurance companies could not absorb the levy, allowed them to pass it on in the form of charges to their policyholders. Since it seems clear that the same profits are capable of sustaining unwarranted pay increases to their staff, the Government must now seriously consider increasing the insurance levy and taking steps to ensure that the companies are not permitted to pass it on.
That is a big difference.
How about that for provocation.
The letter continues:
A vital factor in this consideration will be the behaviour of insurance companies in negotiating wage increases for their employees in the next pay round. I may add that the Government intend to use every means at their disposal, including the National Prices Commission, to ensure that private sector pay increases are generally compatible with the needs of the economy.
The Government request you to bring these views to the attention of your members.
That letter is signed by Deputy MacSharry, Tánaiste and Minister for Finance. In those circumstances I am sure the Deputy will accept that the motivation of the then Minister for Finance was identical: to protect our competitiveness.
Whether the Minister for Foreign Affairs and his colleagues realise it or not this is a very serious business——
(Interruptions.)
Probably they are not even aware of the difference between the two situations. When we get some order in the House——
Deputy Fitzgerald is entitled to ask a question.
First of all, I want to ask the Minister of State would he not agree — this is for the information of his ministerial colleagues — that there is a vast difference between the letter written by my colleagues, Deputy MacSharry, and the public statement of the present Minister for Finance on Sunday last. Would the Minister of State not agree that that letter does not at any stage ask for the breaching of agreements formally entered into between employer and trade union bodies? Would the Minister of State now support the contention he has made, seeing that he says his Minister who is away in Paris, would welcome this question? Is he now endorsing the fact that the Labour Party are supporting the concept of breaching voluntary agreements formally entered into in accordance with well laid down industrial practice?
I can hardly agree that the letters are in any sense dissimilar when the language used is all but identical. The situation was that on 27 September 1982 the then Minister for Finance became aware of a pay settlement which he found to be incompatible with the then Government's objectives. He thought it appropriate to bring his and the Government's views to the notice of the employer organisations at that time. What happened last week was that the Minister for Finance became aware of a proposed pay settlement which was not in accordance with the Government's guidelines set out on 10 March and, following the precedent established by his predecessor, he brought his views to their attention.
The Minister of State has not answered my question. Does he not agree that there is a vast difference between the letter — the private letter, incidentally — which he has read out here, and which I think is another major mistake on the part of the Minister of State, and the statements of the Minister for Finance on Sunday last when he asked for the breaking of formal agreements which had been entered into in accordance with well laid down industrial relations practice? That is the major difference. Secondly, does the Minister of State not now agree that the Minister for Labour is endorsing these comments of the Minister of Finance as being Labour Party policy to breach well laid down formally entered into wage agreements? Is this the Government's attitude to wage agreements? Would the Minister answer those two questions?
The pay negotiations we are now entering into are absolutely critical for our economic and social well-being. In those circumstances the Minister for Finance found it appropriate to communicate his views on one particular settlement that was clearly not in accordance with the guidelines laid down by the Government on 10 March. In doing that he did not depart in any way from a precedent set by a Government of which Deputy Gene Fitzgerald was a member.
May I ask the Minister of State quickly——
Is this a further supplementary?
They are all supplementaries, but I am getting no answer. May I ask the Minister of State is he now saying that the Minister for Finance is laying down Government policy in saying to the parties concerned "You break your formal agreements. The Government have decided that you will break whatever agreements you have entered into"? Would the Minister of State say "yes" or "no"?. That is all I want.
On 27 September 1982 the then Minister for Finance indicated very clearly what he thought of a settlement negotiated by the Zurich Insurance Company and he indicated at that stage what options were available to the Government. Last week the Minister for Finance indicated what he thought of a settlement negotiated by another insurance company.
Will the Minister for Labour be back? May I ask him when he comes back?
(Interruptions.)