Dáil Éireann debate -
Tuesday, 15 May 2001

Vol. 536 No. 2

Private Members' Business. - Industrial Relations: Motion.

Mr. Higgins

(Mayo): I move:

That Dáil Éireann, conscious of the escalating industrial unrest, particularly in the public sector, as evidenced by difficulties and disputes

–in Aer Lingus

–among secondary teachers

–in the CIE group of companies

–in the Electricity Supply Board

–among nurses and junior doctors

–in the clerical grades of the Civil Service,

–concerned that these difficulties may undermine the stability of the Programme for Prosperity and Fairness resulting in industrial chaos throughout the economy;

–deplores the Government's policies which have led directly to inflationary pay demands and the Government's abject failure to address the growing industrial unrest and its underlying causes.

What we are witnessing in the public sector area is not a series of industrial relations brush fires. What we are witnessing is the break-up of partnership and the dismantling of the national consensus so assiduously built up and cultivated by successive Governments since the late 1980s. What we are witnessing is the return to the bad old days of the 1970s and 1980s when Ireland had one of the worst industrial relations records in the developed world in terms of the number of strikes, the number of days lost and the knock-on consequences for the economy. We are witnessing the destruction of one of the cornerstones of our current economic success – the partnership approach model. It was this spirit of partnership which was the axis around which the Programme for National Recovery, the Programme for Economic and Social Prosperity, the Programme for Competitiveness and Work and Partnership 2000 were built.

The spirit of partnership which permeated and underpinned all the successful partnership agreements is now gone, with the result that the current model, the Programme for Prosperity and Fairness, is doomed. What this Government has failed to realise is that it has been singularly responsible for allowing the spirit and trust, which is the key ingredient for such partnerships, to dissipate and disappear. Once that spirit of trust goes, it is difficult, if not impossible, to retrieve or restore it.

The primary reason the PPF is doomed is that the disintegration is happening in the public sector where the Government has direct management responsibility. It is not happening in the private sector as was very much the case back in the 1970s and 1980s. It is the Government and its mismanagement of some of the key sectors for which it has responsibility that is directly responsible for the consequences which will flow from such dismemberment.

Never before was national leadership more badly needed to salvage the situation and never before was leadership so markedly absent or non-existent right from the very top – from a Taoiseach who refuses to take tough decisions and who seems to sniff the air every morning to see what way the wind is blowing or in what direction the crowd have gone before deciding what to say – right through to the various Ministers in whose different sectoral areas industrial chaos has broken out.

Last week's lack of performance by the Government in dealing with the rail drivers' dispute was pathetic. Once again, 100,000 commuters in the east were left stranded by Iarnród Éireann. The response of the Minister for Public Enterprise, Deputy O'Rourke on "Morning Ireland" and here in the Dáil, was to throw her hands in the air and plaintively plead: "What can I do?" The Minister is the sole shareholder and yet she refuses to even entertain the suggested possibility that she has any responsibility to do anything to bring about a resolution.

On Wednesday, train services to the south were paralysed, and on Thursday the west was hit. Again the Minister is pressed to get involved in terms of appointing a mediator. It is the same Pontius Pilate response when she asserts that she will not get involved. Not surprisingly, the same ostrich-like posture was adopted by the Taoiseach at Question Time on Wednesday when he stood full square behind the policy of non-action by his Minister. Is it any wonder that on Wednesday the Evening Herald newspaper carried a well-deserved ministerial lambasting under the heading: “The terrible track record of Mary”.

It is a terrible track record. In July 1998, a one-day rail stoppage paralysed the entire national rail system. In November 1998, newspaper headings claimed that rail workers were ready for war on cost cuts. There was an unofficial strike by NBRU because a £44 million cost-cutting plan was being implemented. In December 1999, thousands of commuters about to descend on Dublin to do their Christmas shopping were left stranded ten days before Christmas. The newspapers had headlines such as: "Rail strike misery in row over rostering". There were calls for the Minister to intervene to get the rail services back on the rails. Instead of intervening the Minister told the nation that she was disappointed at the stoppage and sorry for the public. Ministerial disappointment and sadness are of little consolation to the travelling public who expect positive action, leadership and a resolution to problems, not sympathy.

The strikes of 1998 and 1999 were followed by one of the most damaging and devastating strikes in the history of industrial relations, when for the entire summer of 2000, the ILDA train drivers withdrew their services completely. For ten full weeks there were no train services to the provinces. What should have been a boom season for the tourist industry becomes an absolute disaster. Huge losses are incurred by hotels, outdoor pursuits' interests, guesthouses, the bed and breakfast business, restaurants and pubs.

In spite of pleas from all sectors for Minister O'Rourke to take a leadership role, she refused to do so. Nobody at any stage expected her to get directly involved in talks. What was expected, demanded and needed was an initiative from the Minister to get the industrial relations machinery involved at the earliest possible stage. In other words, to get the various parties sitting down together and to get talks going. The Minister steadfastly refused to do anything, taking all her prompts from CIE. Unable to make up her own mind, like some helpless, hapless bystander, she stood idly by while the positions of the warring factions, the company and the drivers, became more entrenched. Finally after the company had lost £11 million, the economy of the provinces had been devastated, the Labour Court and the Labour Relations Commission were both called in to do an evaluation of the train drivers grievances and immediately the strike was called off. The question everyone is asking and I ask again tonight is why this initiative could not have been taken at the start. Why wait until such permanent damage is done to all the interests involved?

Last week's industrial action could also have been averted. On 19 April, the Minister received a letter from the Amalgamated Transport and General Workers' Union, outlining their grievances and requesting that they be examined and addressed. The Minister looked at the letter and decided it was not for her and did not even acknowledge it. She then passed it on to the Taoiseach which seemed to be a way of guaranteeing that nothing would happen, and typically nothing did happen. I wonder why it took three days of chaos before the national implementation body stepped in and the strike was suspended.

I do not wish to be the prophet of doom but I am very strongly of the opinion that we are not talking about the strike being over but simply about it being suspended. I genuinely fear that it is more than probable that worse industrial action will follow unless an acceptable compromise is arrived at and I would not be optimistic about the prospect of such a development.

I have no intention of taking the side of the trade union movement. I do not believe the unions have covered themselves with glory in their performance within CIE. There are serious industrial relations problems within the CIE company and its subsidiary bodies, and they are not all on the union side. The failure to confront them, or to simply address them with temporary "band aid" solutions, is running away from reality. There are serious problems with the way Iarnród Éireann is being managed.

The mini CTC signalling debacle speaks for itself – a £15 million rail safety contract which will now cost the taxpayer, the Minister for Finance and the people of this country not £15 million but £52 million with not a single one of the 28 stations yet equipped with the new system. How any Minister for Public Enterprise can continue to preside over such incompetence by a company which she owns on behalf of the citizens is mind-boggling.

The company gets more than £100 million to run its services and instead of a modern service appropriate to the fastest growing economy in Europe, all we have are slow, old locomotives, many of which were bought in the 1960s and which regularly break down, carriages which are too few, outmoded and over-crowded and where wheelchair passengers are accommodated in the freight wagon with no toilet facilities. Instead of taking action the Minister seems simply satisfied to whistle past the graveyard and refuses to take on management and demand the delivery of a better performance and the re-shaping of industrial policy in order to end once and for all the epidemic of strikes which has blighted the company and driven the commuter back to his car, disaffected and hostile to public transport.

The same Micawber-like ineptitude is again exemplified by the Minister's failure and refusal to tackle the industrial malaise within Aer Lingus. The Minister, Deputy O'Rourke, has presided over the worst phase of industrial action within our once-proud national carrier. For the past nine months every single section within Aer Lingus has been on strike or engaged in varying forms of industrial action. The baggage handlers have been on strike on more than one occasion, the caterers have been on strike on more than one occasion, and the pilots have lodged a pay claim in order to give them parity with their colleagues in the one world alliance. The 1,650 Aer Lingus cabin crew staff grounded all flights leaving 20,000 passengers stranded and costing the company £2 million per day. Eventually the cabin crew got their pay demand. Within days 3,000 ground staff went on strike in support of their catch-up claim with their colleagues in the cabins. Again all flights were grounded. Some 20,000 passengers were stranded and the company lost £2 million per day and again the ground staff got their pay demand.

Like CIE and Iarnród Éireann a major fear is that the industrial peace that may have descended on Aer Lingus is now short-term because of inter-union rivalry between IMPACT and SIPTU. Until such time as the Minister insists on the company developing an interlocking agreement where all the parties would accept relativity, there will be no permanent peace within the Aer Lingus company.

Last week the Minister for Public Enterprise told us that the Aer Lingus flotation is to go ahead now that the industrial relations problems have been, as she put it, sorted out. The Minister cannot be serious. Any Minister for Public Enterprise who seriously considers that Aer Lingus is an attractive proposition for flotation, with 6,000 staff, a huge need for capitalisation and investment and in the wake of the recent disastrous industrial relations record, is not living in the real world. Apart from the performance and state of health of the company itself, one has to ask how much confidence would there be in the marketplace to put a further State utility on the market, offering investors a chance to invest in an enterprise where the Minister for Public Enterprise had made such a debacle of the Eircom flotation, where the shares were over-priced and over-sold, leaving thousands of shareholders, many of them first time investors, not alone dismayed but at a serious loss.

In early April, 550 ESBOA and SIPTU key employees in the ESB warned they would pull the plug on Marino, Moneypoint and Poolbeg unless they got a 28% pay increase. Again the Government and the company capitulated. I am sure the ASTI and the other unions are avidly watching that capitulation.

From 1922 to 1998 the Garda Síochána had stood steadfastly by the State by never resorting to industrial action, notwithstanding the fact that such action would be illegal. However, when the members of the force marched to Leinster House in 1996 they were embraced by the then Opposition spokesman on justice, Deputy John O'Donoghue, who gave them to understand that in government there would be no problem. In government there was a major problem. For the first time ever there was the historic but sad first blue flue. Again the Government capitulated to the wage demands.

The nursing profession is probably the most perpetually extolled and deified but underpaid profession. Always expected to be responsible, they were forced for the first time ever to mount a national strike. The nurses got their pay demand and nobody begrudges it to them. However, one has to ask why the all-important Nursing Commission was not established much earlier.

The reality is that the PPF is in tatters. Last March the State's largest Civil Service union rejected by 87% the 2% cost of living increase in the PPF. It quotes house prices, for example, which since 1974 have increased by 1,916% and GDP of 2,171%, yet clerical officers pay increased by only 801% in the same period. In 1974 two clerical officers could afford to buy an average priced house, today the combined average incomes of two clerical officers would leave them with absolutely no hope of owning a house. Yesterday we had the news that the Association of Higher Civil Servants is seeking pay increases in the order of 25% to 40%.

The predicted 4.5% annual rate of inflation could now be well over 5%. It is entirely home-grown inflation as a direct consequence of a Government unable or unwilling to lead or to manage its own affairs. Drink price have increased by 5.6%, food inflation is running at 7.7%, its highest since 1984. Transport costs, motor insurance costs, fuel, car maintenance, telephone charges, child care and medical fees have increased substantially, yet the Government refuses to listen let alone act. What a pity. What a tragedy.

Mr. Flanagan

I support the motion in the name of Deputy Higgins and my Fine Gael colleagues. The current strike numbers throughout the country in various vocations represent a serious problem for the future economic development of the country. I refer particularly to the rail strike of last week which caused severe problems to busi ness, commerce, enterprise and various vocations in many sectors of the economy, in particular, the tourism industry which had been on its knees for months in the aftermath of the foot and mouth disease. The consequences of such strike action are enormous, not only the actual losses by virtue of people not being at work, late for work, cancellation of important meeting and missing important commercial deadlines, a form of paralysis which is unacceptable, but added to this is the image abroad portrayed by the chaos and the message we have sent as a country to potential investors and to those non-nations on whom we rely for our international trade. This does not give a clear bill of health to our economic standing and it is a matter of major concern.

I accept that last week's rail dispute was unusual in that it resulted from an inter-union wrangle. Given the changes throughout the trade union movement in recent years, this is the type of dispute that will give rise to future concern. It must be regarded as being important in the context of the manner in which we treat our industrial relations. Employers can take little comfort from the type of inter-union strife of last week and a process needs to be established to deal with this precise issue. It was disappointing that the Minister, on "Morning Ireland" on Tuesday of last week, threw her hands in the air and said that, as Minister, there was nothing she could do. Her performance last week was at best uninspiring and at worst negligent.

On Thursday of last week – the Taoiseach refused on Wednesday to become involved – we were told by sources in the Taoiseach's office that the strike was suspended due to the intervention of the British Prime Minister, Mr. Tony Blair. Surely this is the greatest irony of Irish political life that the Minister for Public Enterprise and the Taoiseach could not get involved, yet the British Prime Minister's office claims involvement and part resolution so far as postponement of the industrial action was concerned. The Minister for Public Enterprise as sole shareholder showed a distinct lack of leadership on this regrettable issue. Over the weekend the Tánaiste moved matters a stage further by saying she favours legislation to outlaw the taking of strike action. This is most unwise and is a recipe for industrial chaos. Rather than banning strikes by way of legislation a voluntary code of practice should be agreed by the social partners to maintain essential services throughout the State.

Ten years ago the LRC sought to address this problem and since then no progress has been made on this issue. This represents a significant draw-back in social partnership. The maintenance of essential services is vital to avoid chaos throughout the economy, and huge loss and damage to business, enterprise and commerce will ensue until such time as a code of practice is agreed. Last week's rail dispute showed that an inter-union wrangle could have scuttled the entire partnership programme and paralysed the State.

There is a clear duty on the part of Government, employers and unions to commit themselves towards reaching agreement on appropriate codes of practice to ensure the maintenance of essential services at all times. The taking of strike action must be seen always as a last resort.

I urge the Government, the social partners and the LRC to put in place appropriate safeguards necessary for dealing with disputes in services where strike action or interruption could endanger life, causing major damage to the national economy or widespread hardship to the community, in particular, health services, power and energy supplies, water and sewerage services, fire, ambulance and rescue services and public transport. These safeguards should be introduced through consultation and negotiation on a voluntary basis and should include an undertaking that strike action will not be taken. In this regard it is timely to acknowledge the tremendous work of the Labour Court under the chairmanship of Finbarr Flood, particularly in recent difficult times, and, similarly, the Labour Relations Commission, its chair, Catríona Murphy, and chief executive, Mr. Kieran Mulvey. While we accept that new pay guidelines are needed in spite of the benchmarking process to sustain the current social partnership model, there is a corresponding duty on all concerned to promote the concept of industrial peace and harmony and an advanced code of practice for dispute procedures is vital.

We will only have a peaceful industrial relations climate if we can introduce a greater level of flexibility to the pay elements of social partnership. As the Minister for Finance knows better than anybody else, the PPF came under severe strain before it was even printed and distributed. We had a problem with inflation which now gives rise to even greater concern than at the conclusion of the PPF last year. These are crucial concerns as workers in many vocations rightly believe they have not secured their fair share of the benefits of the Celtic tiger.

In order to address the current unrest, the Government, trade unions and employers need to tackle the issue in a co-ordinated way and we must look at other options which have not been looked at in the manner they might have been. One avenue worth pursuing is gain sharing. Such a model would allow a new approach to pay and the industrial relations process which would see wages rising largely in line with GNP on an annual basis. The mechanism would include an inflation linked increase and an annual lump sum linked to the growth of the economy on a yearly basis, added to which would be a scheme of deferred compensation. Unless we look at such new options, we will be forced into a free-for-all, which would not be in the interests of the people or the economy. Gain sharing should be looked at as a serious alternative.

My colleague, Deputy Jim Higgins, referred to privatisation which is regarded as a significant plank of the Government's economic policy. The only precedent we have is the Eircom debacle where, at the invitation of the Minister for Public Enterprise, Deputy O'Rourke, in partnership with Mr. Ray MacSharry, the public was sold a pup. We were told to go and buy shares and invest like never before, resulting in a huge loss of confidence in the whole system. Small investors have lost considerably because of a negligent misrepresentation on the part of the Minister in tandem with a former ministerial colleague. How will the Government portray Aer Lingus as a suitable candidate for flotation and ask the public to subscribe if the only precedent we have is the Eircom debacle where the public was led up the garden path?

The absence of leadership in this area is very worrying. The Government has taken its collective eye off the ball and we are now paying the price in industrial relations difficulties, a climate of uncertainty, rising inflation and rising job losses of an unexpected type due to sources not entirely within our control, but nevertheless real. We have at the same time a Government which appears to be somewhat semi-detached.

Mr. McGrath

I support the motion. I am glad that the Minister for Finance is present to listen to the debate. Yesterday on national television he addressed the nation and impressed upon it the need for value in the provision of public services. In this context, I remind him of the rail line which runs through his county from Dublin through Maynooth and on to Mullingar. I am not sure how familiar he is with it, but we, in Mullingar, are very familiar with it. A considerable amount of money was spent on upgrading it. The signalling equipment was upgraded at a cost of millions of pounds, continuous track was provided and, most importantly, to provide a better service for the commuter, a double line was installed from Maynooth to the city. While tens of millions of pounds of taxpayers' money have been expended, no additional services have come on stream. This is because CIE management failed to negotiate with the workers and introduce work practices that could bring improved services into play.

It is ridiculous that taxpayers' money should have been expended without negotiating with the workers in parallel in order that, when the infrastructure was put in place, the improved services could come on stream at the same time. That would have been logical and sensible, but, unfortunately, that did not happen. Commuters from Mullingar board the train at 6.45 a.m. and if they are lucky, they will arrive in Dublin at 8.30 a.m. With the improved services that should be in operation, it should be very attractive to travelling commuters to leave their cars at home and travel with Irish Rail. It is very disappointing that those services have not come on stream.

The Minister with responsibility for the public sector has stood back and done nothing. It was outrageous to hear her say on radio recently that she could do absolutely nothing about the matter. A caller to a talk show later the same morning asked the reason we have a Minister with responsibility for rail services if she can do nothing. Should she not be made redundant? That question needs to be answered. If the Minister is not prepared to create a climate in which to resolve the difficulties, why bother having a Minister? Why not let Irish Rail and Bus Éireann run their own businesses and work matters out themselves?

The teachers dispute has dragged on for a long time and looks like continuing in September. For its own reasons, the ASTI decided to opt out of the PPF and wanted to negotiate a separate deal. However, the Government stayed out of it stating that it was not its problem, that it could not negotiate with the ASTI. The poor innocent victims, children in second level schools, lost out. Many are heading into examinations without the groundwork and preparation that would have been expected at this time of year. It is unfair that many of the children concerned will be at a decided disadvantage to those who attended grind schools or the schools unaffected by strike action. Unfortunately, the Government did not do the decent thing and work out a package with the ASTI.

All strikes eventually need to be settled. We saw what happened with the gardaí, nurses and junior doctors. Early intervention by the Government would help to minimise the disruption. We are now witnessing further difficulties in Aer Lingus where it looks like we will have regular stoppages.

Mr. Coveney

I am glad to have the opportunity to make a contribution to this important debate. The motion is a clear attempt by the Opposition to express real concern at the serious and continuous industrial unrest, particularly in the public sector, leading to a long list of costly and painful industrial disputes in the last two years, and the undermining of the Programme for Prosperity and Fairness to which each industrial dispute contributes. It also attempts to express concern at the Government's handling of a series of industrial disputes involving gardaí, teachers, nurses, junior doctors, bus drivers, train drivers, taxi drivers, Aer Lingus cabin crew and handling staff, etc., who have felt obliged to take industrial action to increase pay or improve working conditions. Perhaps most importantly, the Fine Gael aim is to express concern at the Government's short and medium term policies which have contributed to inflationary pay demands, and the failure of the Government to deal with the underlying causes of inflation.

In the past 18 months there has rarely been a week in which there has not been strike action or an industrial dispute of some sort in the public sector. The idea behind the Programme for Prosperity and Fairness is that structures and assurances are put in place to avoid industrial disputes. To this end, the partnership has failed us thus far. Fine Gael supports the concept of partnership between Government, employers, employees and the social and voluntary pillars as a sensible way of anticipating disputes before they arise and to ensure realistic targets and demands are set down on issues such as pay and working hours. However, if a partnership agreement is to succeed, the Government must take on its responsibilities by adopting responsible and prudent policies to avoid crises which have a knock-on effect on workers, such as has happened in the health service where working hours and conditions for nurses and junior doctors in particular have become unacceptable and have been so for some time. This has led to a long and bitter nurses' strike with a potential conflict with junior doctors in future.

The same responsible attitude to fiscal policy must be adopted by Government in controlling inflation, perhaps the biggest threat to the PPF. Employees in the public sector will not continue to work in a progressing and successful economy if their wage increases do not comfortably cover the increase in the cost of living. In the past two budgets the Government got its inflation estimates wrong. Already this year estimates are having to be revised upwards. Last year an inflation figure of 3.5% was predicted before the budget, which was constructed to reflect that figure. However, the final figure was closer to 6% by the end of the year. This is the kind of fundamental error which fuels industrial unrest and increases wage demands as well as unrest in the social and voluntary pillar and adds to instability in the economy. No doubt last year's inflation figures will be blamed on factors such as oil prices and the increase in interest rates which are outside the control of the Government, and there is some merit in that argument. This year, there are no such excuses and inflation is again beginning to rise alarmingly. At budget time in the past two years the Minister for Finance did not take any real or comprehensive steps to control inflation. Instead he has opted for the popular option of a give-away budget, which had the sole aim of putting more money in people's pockets, thereby fuelling spending capacity and fuelling inflation. The criticism of his fuelling of an already strongly burning economy was not confined to Opposition benches in this House. Our partners in Europe have also expressed real concern at budgetary fiscal policy in Ireland over the past two years.

The Government's handling of industrial disputes has done nothing to defuse or end them. In some disputes it has chosen to do nothing, as in the case of the Minister for Public Enterprise, Deputy O'Rourke, last week. Where they have got involved, as in the case of the nurses' and ASTI disputes, the attitudes and comments of the Government have increased tension in certain circumstances. An example is the decision by the Minister for Education and Science to dock pay from all ASTI members before last Christmas. This decision only served to prolong a bitter dispute which has not yet been sorted out.

In fiscal policy and industrial relations, the Government has shown itself to be irresponsible and out of touch at times. If the PPF is to have a realistic chance of survival, the Government must play a more responsible and prudent role.

Mr. Finucane

This motion is timely. When one considers the industrial relations scenario preceding it one wonders how serious the Government is when it talks in its amendment of an ongoing commitment to ensuring stability in industrial relations. This is in the context of a Minister recently saying she could do nothing. It is almost like Manuel in the television series "Fawlty Towers" where he continually says "I could do nothing". It is symptomatic of a malaise which seems to have afflicted the Government in the context of industrial relations.

The Programme for Prosperity and Fairness was valid but seems to have been used as a launching pad with regard to further extending the pay process and getting increases. The malaise is symptomatic of the public service more than the private sector compared to the 1970s and 1980s. Last year the ILDA strike – which I deplore as it was called by a small body of people – held the entire country to ransom for ten weeks, but it could have been resolved very quickly if there had been positive intervention and recommendations to the Labour Relations Commission and the Labour Court, which got involved after ten weeks. Tourism was badly affected as a result, particularly in rural areas. The bad old times of the past are coming back to haunt us.

There seems to be a series of industrial disputes under the Minister for Public Enterprise, Deputy O'Rourke. In Aer Lingus there has been a continuation of disputes which do not do any good for the country or its reputation. I am sure the impression of many people who use our international airports must be of an economy which is fairly sick, given the magnitude of the industrial relations problems. I do not think it augurs well for the future when a Minister decides to go the route of privatisation for Aer Lingus, as we did with disastrous consequences with Eircom. At that time people bought shares based on false expectations which were fuelled by Ministers in deliberate propaganda to encourage them to buy shares. We know how disappointed shareholders are, something we were reminded of at the annual meeting held a short time ago, and by the current share price. One wonders about Aer Lingus and the disputes which have affected it.

In the long running dispute with the ASTI the Government seems totally incapable of acting. Therefore, to talk about an ongoing commitment to ensuring stability in industrial relations is a bit of a misnomer.

In recent years there has been a difficulty in that, even with increased prosperity and everybody talking about the Celtic tiger, we have disputes which seem symptomatic of the public service. We must analyse the reason for this. Much of it is due to economic policies of the Government which have escalated house prices out of all proportion, making it impossible for people to buy houses. In many cases increased expectations have been fuelled as regards wages and salaries. What has happened to bring about such difficulties in terms of housing? The Government called in Peter Bacon to examine the issue. However, in recent times there have been increased difficulties in the house building sector. We had a recent meeting with the Construction Industry Federation. There is now a decrease in house building, particularly in the private sector, with a very limp policy in regards local authority housing, with more people on the housing waiting lists. All this is creating problems for workers who in many cases see industrial action as their only hope of getting an increase in wages.

The Government has not shown leadership. When the current Taoiseach was Minister for Labour, there was intervention by the Government. However, in recent times there has been a malaise in terms of industrial relations, fuelled in particular by the Government.

Minister for Finance (Mr. McCreevy)

I move amendment No. 1:

To delete all words after "Dáil Éireann:" and substitute the following:

commends the Government's economic policies, its ongoing commitment to ensuring stability in industrial relations, including through the work of the National Implementation Body and the innovative but firm approach it is taking to the determination of public service pay through the benchmarking process; and reaffirms the importance of continuing adherence by all parties to the terms of the Programme for Prosperity and Fairness, which provides the essential framework for sustaining the country's economic and social progress.

I wish to share my time with Deputy Cooper-Flynn.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. McCreevy

This motion has been tabled at a time of unprecedented growth and development in the economy. Our economy continues to be one of the most successful in Europe. Growth is set to continue at rates well above the EU average and we have a strong employment performance. I cannot accept that Government policy is inflationary. At budget time, I announced an anti-inflation package to counter inflationary pressures. This package included, first, direct taxation measures to increase participation in the economy and thereby ease the labour shortages which contribute to wage pressures, second, cuts in indirect taxes to bring down the inflation rate and ease transportation costs and, third, measures to encourage consumers to save rather than spend. I remind the House that in November inflation, as measured by the CPI, stood at 7% but had fallen to an annual rate of 5.6% in April of this year.

Since this Government came to power, we have successfully managed the public finances as a foundation for future growth. Significant budget surpluses have been maintained since 1997 and the plan is to continue to run significant surpluses in the future. In addition, we have substantially reduced the debt to GDP ratio below 40% from the 90% plus levels a few years ago. We are also making significant provision for future pensions liabilities. While there are, of course, significant challenges facing the Government – this time we are concerned with the sound management of success – these can be met in the spirit of social partnership, with all sectors acting in a responsible and realistic manner.

Ireland has matured and prospered through the maintenance of solidarity on key areas of national importance. The important enabling factor in all this has been social partnership. It has not only injected strategic direction into national policy development and implementation but has provided stability, which is vital for competitiveness, investment and employment. While facilitating our drive for prosperity, partnership has also demonstrated the capacity to respond imaginatively and flexibly to changed circumstances and new imperatives. The partnership process has never been a static one. Indeed, it would not have survived as long if it had been. Adhering to the terms of the Programme for Prosperity and Fairness will achieve the twin goals of maintaining economic competitiveness and delivering real increases in take home pay for both workers and social welfare recipients. Through this process future Irish economic growth will be maintained and the benefits will be ensured for all our citizens.

In an adjustment to the terms of the Programme for Prosperity and Fairness agreed on 4 December last, a national implementation body, representing Government, IBEC-CIF and the ICTU, was established to ensure delivery of the industrial stability and peace provisions of the PPF. The body, which is chaired by the Department of the Taoiseach, serves as a forum where the Government, employers and trade unions can work together to help ensure a positive industrial relations climate for economic and social progress.

The new body has been actively involved in assisting in the resolution of a number of industrial disputes, including in the construction industry, Aer Lingus and, most importantly, Iarnród Éireann. The body has already clearly demonstrated its value in supporting the work of the Labour Court and the Labour Relations Commission in the industrial relations arena. It has also demonstrated in practical terms the continuing commitment of Government and the main employer and trade union organisations to industrial peace and stability. The national implementation body also takes a forward-looking perspective in seeking to anticipate and redress potential industrial relations problems. It has briefed the Labour Court and the Labour Relations Commission on the application of the terms of the Programme for Prosperity and Fairness. This will further assist in delivering industrial peace and ensuring adherence to proper procedures.

Another key innovation provided for in the Programme for Prosperity and Fairness was the establishment of an independent public service benchmarking body. The background to the establishment of the body is that public service employers and unions recognised that the traditional approach to pay reviews in the public service, based on analogues and relativities, had given rise to serious difficulties in the past. They agreed that an alternative approach was required which would be grounded in a coherent and broadly-based comparison with jobs and pay rates across the economy.

The benchmarking body was formally established in July 2000. As well as examining pay rates, the benchmarking body will examine and compare existing roles, duties and responsibilities in the public service and across the economy. It is to report by 30 June 2002. The two features which distinguish the benchmarking body from what has been done in the past are that it will look at all the main groups at the same time and have a strong, well resourced and fully independent research function. I take this opportunity to stress that the benchmarking body is fully independent.

While it has invited submissions from the relevant parties and will hold oral hearings in due course, its research, deliberations and recommendations are entirely a matter for the board itself. The independence and expertise of the body is reflected in its composition. The benchmarking body is chaired by a High Court judge, the Honourable Mr. Justice Quirke, and its members are Mr. Billy Attley, former General Secretary of SIPTU, Mr. John Dunne, former Director General of IBEC, Mr. Phil Flynn, former General Secretary of IMPACT, Ms Maureen Lynott, Management Consultant, Mr. Paddy Mullarkey, former Secretary General, Department of Finance, and Mr. Jim O'Leary, Chief Economist, Davy Stockbrokers. While anyone can have his or her opinion or expectations about what might emerge from the benchmarking process, it is the benchmarking body alone which will decide on the appropriate recommendations, not anyone else, not Ministers, Departments, trade union leaders or any other body or individual.

One of the major disputes to face the public service in recent years is the action by the Association of Secondary Teachers of Ireland in pursuit of its claim for a 30% pay increase. The current situation is that ASTI has rejected Labour Court recommendations and clarifications, but has lifted its ban on co-operation with the State exams. The background is that ASTI did not accept the PPF. It left the Irish Congress of Trade Unions during the talks. The ASTI claim has been rejected by its own sectoral industrial relations machinery, the Teachers Arbitration Board, which is independent. It has also been rejected by the Labour Court.

At all times the Government has agreed to participate in any process that would solve this dispute. We have abided by the findings of the Teachers Arbitration Board and we have paid pay increases to ASTI members. It is open to ASTI to reconsider its stance even at this stage and join the other teachers' unions in making their claims for an increase to the independent public service benchmarking body. This is the avenue agreed between all the parties as providing the best way of approaching public service pay and ensuring orderly evolution in the sector. Otherwise we will return to the days of leap-frogging claims and unions chasing each other in pursuit of "relativities".

It is clear that the Government as employer has remained firm in its determination to ensure the PPF is not breached. The Government resisted enormous pressures in the interests of the Programme for Prosperity and Fairness and the economy and stability in industrial relations overall.

In the Civil Service, the Civil and Public Service Union has rejected the adjustment to the terms of the Programme for Prosperity and Fairness agreed between the employers and the Irish Congress of Trade Unions in December last. However, this has not led to any form of industrial action. I understand that the union has deferred, until the autumn, consideration of possible steps to be taken. I am glad to note that the CPSU is engaging with the benchmarking exercise. The CPSU has made a submission to the benchmarking body and has been given a copy of my Department's submission to that body.

Aer Lingus management has been negotiating with all sections of the workforce in relation to claims on pay, pensions and working conditions. In their negotiations with unions, Aer Lingus accept that there is a low pay issue in the airline that needed to be addressed and has sought to address this over the past year. A number of claims involving clericals, operatives, pilots and cabin crew have given rise to disputes which resulted in industrial action being taken. The industrial action varied from two hour stoppages to 24 hour stoppages which led to the suspension of Aer Lingus services. Talks are continuing at present in relation to the remaining claims from staff in Aer Lingus, with the assistance of the State mechanisms.

It would appear that the industrial relations difficulties in the company have been exacerbated by the inter-union rivalry between IMPACT and SIPTU. The national implementation body of the Programme for Prosperity and Fairness has, on a number of occasions, expressed serious concern at the industrial action taken in Aer Lingus. This Government fully shares the view of the national implementation body that these strikes, which led to the shut down of the airline, inconvenienced customers and damaged tourism and trade, are not in keeping with the commitment to industrial peace in the Programme for Prosperity and Fairness. We expect all parties to the PPF to live up to their commitments, with employers abiding by the pay increase proposals and unions complying with the industrial peace clauses.

With regard to the ESB, let me make it clear that there has been no industrial action resulting in interruptions to power supplies and all demands for power supply continue to be met. ESB management and unions are currently involved in a detailed round of negotiations to agree the nature and extent of the changes required to work practices, central to which is agreement to the unlimited use of outside contractors. These talks, to be finalised by 31 May 2001, will be followed by a "roadshow" and ballot of ESB staff in June. The results are expected to be available by the end of June.

There are currently no major industrial issues outstanding in Bus Átha Cliath and Bus Éireann. Iarnród Ereann is experiencing a number of difficulties associated with extensive restructuring negotiations. Iarnród Éireann management is currently in negotiation with a number of different unions in relation to this change process. The discussions are at various stages of the agreed industrial relations process.

With a view to securing recognition within the CIE group of unions, the Irish Locomotive Drivers' Association earlier this year became a branch of the ATGWU, which had not previously represented train drivers, and that union has now sought such recognition on their behalf. To press their case, ATGWU held a number of one day strike actions around the country last week. The national implementation body intervened and proposed that the issues in dispute be separated into two categories. These are (1) procedures for dealing with individual disciplinary matters in Irish Rail and (2) inter-union relations and union representation of train drivers in Irish Rail.

The national implementation body requested the Labour Court to investigate the issues in category (1) and to invite the parties to an early hearing. The investigation would be for the purpose of recommending on the fairness or otherwise of the procedures employed in Irish Rail in respect of disciplinary cases in dispute, with reference to the code of practice on grievance and disciplinary procedures. The Labour Court agreed to convene an early hearing, provided further planned strike action was called off. The issues in category (2) will be dealt with by a disputes committee of the Irish Congress of Trade Unions. ATGWU has now voted to support the national implementation body proposals and the threatened actions have been called off. This shows that the initiative taken by Government within the PPF has been effective.

The Government's commitment to a reformed and modern health service is clear from the vastly increased resources allocated to the sector, from work which is being done in the framing of a health strategy and from a number of detailed reviews of various aspects of the health services which have been undertaken. The recent reports of the Medical Manpower Forum and on the 48 hour week for junior doctors have significant implications for the provision of health services in the future. A new priority action plan on the implementation of the core recommendations of the Commission on Nursing has been agreed recently. This covers the period 2002-03 and follows the plan for 2000-01 which provided funding of £22 million. A major investment has been made in clerical and IT support, which will free first line nurse managers to manage efficiently and effectively.

With regard to increased resources, health spending has been increasing at an extraordinary pace in recent years. Having reached £2 billion for the first time in 1994, gross expenditure rose to £3 billion in 1998, to £4.4 billion in 2000 and to £5.4 billion in the Revised Estimates volume provision for 2001. It is thus now running at well over three times the level of ten years ago. Over the same period, staffing levels have increased from less than 60,000 to an authorised total of 86,500 for 2001. In the current year alone, we have allowed for almost 7,000 additional health sector employees.

I wish to clarify, for the benefit of the House, that the junior doctors and nurses are not engaged in industrial action at present. The nurses' organisations have recently expressed concern that other public service workers, that is, teachers, might have an advantage in the benchmarking process. Let me again reiterate most firmly that the benchmarking body is entirely independent. It will undertake a comprehensive examination of jobs and pay across the public service and make comparisons with jobs and pay in the private sector. The benchmarking body will make its recommendations on the basis of its own research and findings and will not be influenced by others.

I have already referred to the programmes of change and restructuring in the ESB and the CIE group. In the public service, the modernisation programme is making an important contribution to sustaining our economic and social development. A modern flexible and responsive public service is at the core of shaping our future and guiding our progress. Steady progress has been made in modernising the public service since the mid-1990s. I have already mentioned the work of the independent benchmarking body. This exercise involves much more than a pay review in the traditional sense.

The report of the benchmarking body will also help to inform future pay determination for the various groups within the Civil Service and the wider public service and the nature and extent of the linkage to ongoing change. The flexibility to recruit, develop, retain and reward people at appropriate levels with the appropriate skills and competencies is central to the new public service envisaged under the strategic management initiat ive. The nature and extent of further changes in all these areas of the modernisation programme will be informed by the outcome of the benchmarking process.

In summary, apart from the ASTI dispute, there are no disputes involving straightforward pay claims over and above the terms of the PPF at present. Furthermore, Government has made clear and effective provision for the conduct of industrial relations and the resolution of disputes in accordance with the terms of the PPF by setting up the national implementation body and by using the well established industrial relations machinery of the State. The Government has also moved to improve the efficiency and effectiveness of the public service by devising and implementing ambitious programmes for change and modernisation. In the longer term, this should contribute to stability in industrial relations by introducing appropriate and agreed changes.

To conclude, I believe that the strength of our social partnership approach has been based on the realism of the partners. We have been realistic about Ireland's place in the global economy, recognising the need to adapt to what we cannot change and the need to change things under our control in line with the needs of the time. We have been realistic about the interdependence of all of us who live and work in this economy. We have been clear too about the need for consistency in behaviour and policy if our shared goals about prosperity and fairness are to be achieved.

All of us bear the responsibility for ensuring that these goals are achieved. We must continue to adhere to the terms of the Programme for Prosperity and Fairness, which provides the essential framework for sustaining the country's economic and social progress.

Ms Cooper-Flynn

I welcome the opportunity of speaking on this motion. The Opposition's motion demonstrates a failure to recognise the benefits that the economic and fiscal policies of the Government have brought to the country. We must discuss this motion in the context of the successful and sound economy which currently exists in Ireland. It is an economy enjoying growth rates well above the EU average. I welcome the economic and budgetary objectives employed by the Government over recent years which have brought about this success. Those objectives are to manage our economy to secure our continued prosperity, to improve our quality of life, to promote a fairer society, to introduce ongoing tax reform to remove low incomes from the tax net, to reduce the tax burden, especially on middle incomes, to increase the incentive to work and to help reduce inflationary pressure.

The last four budgets delivered by the Government have provided an economic and budgetary outlook of which we can be proud. We expect that economic growth will average 6% between 2001 and 2003. We expect employment to expand by an average of 2.5% over each of the next three years and unemployment to decline. We expect inflation to be approximately 2.5% by 2003, a general Government surplus to average 4.2% of gross domestic product and a 5.3% annual average increase in capital investment between 2001 and 2003. That is the success story we have enjoyed since the Government took office.

We have also seen record employment over recent years, with 300,000 new jobs created. We have witnessed a reduction in unemployment from 10.7% to 3.6% and we have also seen a reduction in the long-term unemployed from 4.6% to 1.2%. The live register has dropped by 44% since the Government took office – the current figure is about 135,000 people unemployed.

This is the economy we enjoy today. We have a Government that is prepared to put money into the national pension reserve fund to fund pensions for today's workers. We have the second lowest national debt in Europe. We have the fifth social partnership programme, with increases in net take home pay of up to 25%. Some 23% of all new US mobile investment in Europe locates in Ireland despite the fact that we represent only 1% of the population. Ireland as a country has moved up to fifth place in the global competitiveness report. By anyone's account it is a great success story and this is the context in which we should examine this motion. That is the picture of the Irish economy as seen throughout the world.

If we were to look at that success story and compare it to what happened when the Opposition was in government, whether in terms of social inclusion measures, social welfare payments, care for the elderly, child benefits or any sector, the success of this Government would probably leave the Opposition red-faced and embarrassed. That is why this motion appears to be an element of desperation on the part of the Opposition.

Let us look at the budget measures that were taken, particularly in the last budget, to tackle inflation. The Government is particularly conscious of the need to keep inflation under control and to prevent it from taking root in the economy. Inflation would devalue the savings of pensioners and the incomes of people on welfare. It also damages our competitive position as an exporting nation and, if left unchecked, would threaten the foundations on which our economic prosperity is built. This is not happening under this Government. The rise in inflation over the past year was primarily due to a lot of external factors beyond the control of any Government. The sharp rise in oil prices and the devaluing of our currency have pushed prices up right across the economy. The Government has taken active steps and has demonstrated its commitment to combating the problem. We have done that by reducing the standard rate of added value tax and reducing excise duties on petrol and diesel. Any other excise increases which might have been expected in the budget have been forgone. All these measures have had a significant impact in bringing down the consumer price index.

In addition to that the Government has brought about reductions in personal taxation which underpin social partnership and help control inflationary wage demands in the economy. Anybody who has carried out an independent forecast tells us that the rate of inflation is set to reduce significantly. The package of anti-inflationary measures introduced in the budget will help make that happen. When we look at the Opposition motion we must distinguish between short-term fiscal measures designed to take the sting out of inflation and the long-term measures required to increase the productive capacity of the economy. We are looking at the long-term situation while we recognise that at times short-term measures have to be implemented.

The Government has also introduced measures to encourage consumers to save rather than spend. This has been received positively by the public. It is an innovative step. I welcome it and believe it will have a significant impact on inflation. Already the measures taken in the last budget have seen inflation fall from 7% in November to 5.6% by April.

If we look at partnership programmes we must acknowledge that they have had a huge role to play in the success of our economy. What we have achieved through these programmes is agreement on economic and social priorities, a sharing of the benefits of growth in our economy, stability in industrial relations and certainty on pay. There is a responsibility on all parties to co-operate if we are to maintain and sustain this success story. The Programme for Prosperity and Fairness is a comprehensive and agreed programme for continued economic and social progress. This programme is the basis of our fiscal and budgetary strategy and is fundamental to the continuance of the success we have enjoyed over recent years.

The programme is innovative and forward-looking. It makes provision for public service reform by linking the final increase of 4% to change. In addition, it has provided for the setting up of the benchmarking body. This is critical to the programme's success. It will ensure that people get a fair day's pay for their work. I welcome the benchmarking process as an independent body which is chaired by a High Court judge and set up to compare pay and jobs across the public service with pay and jobs in the private sector. I look forward to its report on 30 June 2002.

There was an amendment to the programme in December 2000 which provides for the national implementation body under the aegis of the Department of the Taoiseach to monitor the working of the agreement and to intervene where necessary to resolve issues emerging – we must recognise that issues will emerge from time to time. There will be pay disputes and it is important to have structures in place to handle those issues. The Government has achieved suc cess by putting structures in place to handle any issues arising.

In his address the Minister dealt with most of the disputes currently in existence. I do not wish to repeat what he said. The ASTI dispute is the only one which involves a pay claim over and above the terms of the PPF. It is important that the Government remains firm and I doubt the Opposition would disagree on that. If we are to retain our success there must be no departure from the terms of the PPF. The benchmarking body will provide a mechanism for the teachers to pursue their claim. Teachers should be better paid but they can achieve that through benchmarking.

A number of other issues relating to change and restructuring in CIE and the ESB are being addressed within established industrial relations procedures. In addition, the national implementation body recently set up has intervened to resolve issues arising in Aer Lingus and the construction sector. We have the structure in place to deal with the concerns of workers. Therefore, I reject the motion put forward by the Opposition and I commend the Government's amendment to the House.

Mr. McDowell

I propose to share my time with Deputies Stagg and Rabbitte.

I was told the Minister for Finance wanted to take this debate. I was puzzled at that and, having listened to what he said, am baffled as to why he took the trouble to do so. The first section of his speech was the recitation of the economy's success going back to the time of Methuselah or slightly afterwards, something which is on all the word-processors in the Department of Finance. Then he gave a list of current industrial disputes with a trite explanation of the Government's current line. Nothing he said gave any indication that he is aware that the public service is bordering on, and getting rapidly to, a state of crisis. Nothing indicated that he understands public servants' feelings, of being undervalued and unable to afford a house which was regarded as a basic until a couple years ago. Nothing he said indicated that he understands the difficulties, to put it mildly, afflicting the partnership process. Why he came in is beyond me.

He recited such trite nonsense as "the Government has also moved to improve the efficiency and effectiveness of the public service by devising and implementing ambitious programmes for change and modernisation." Our problem is that the Government has done nothing of the kind. It committed itself in principle to an SMI process but in practice has failed to deliver. It has also failed to engage seriously with the public sector trades unions. We are a long way from implementing what the Minister describes as his ambitious programme of change. We have to start this debate with a reality check on where we stand. We have a public service with different problems afflicting it at different levels. There is a serious low pay problem affecting grades such as CO and CA. It is shameful in the current state of the economy, as recited by Deputy Cooper-Flynn, that the Department of Social, Community and Family Affairs pays some of its own employees family income supplement. That has to change and no partnership agreement excuses it. At other levels, as is known, skilled professionals leave in droves and, more importantly, it is increasingly difficult to encourage anyone with professional skills into the service.

Effectively the PPF is dead, as is partnership as we have known it these past 13 or 14 years. I agree with most commentators in saying that we owe a significant part of our economic progress in this period to the partnership process, but we must recognise that the sell-by date has arrived. About 50% of the private sector has got wage agreements in excess of what is provided for in the PPF. Virtually every significant body of public sector workers wants increases beyond it. For what it offered employers, public service managers, in terms of certainty of pay and other things, the PPF is dead in the water. It did not get going in the first place and we would do ourselves a service by acknowledging that because then we can look to see where we go from here.

There will be other partnership agreements, but the next one will not deal with wages with the same certainty as this agreement. There are many reasons for that, not least of which is that Government must bring something else to the table. Over the past 13 years, all the social partners and parties in this House broadly accepted the principle that Government brought tax cuts. That will not be so for the next few years. There is scope for further income tax reductions but nothing like what it has been. Therefore the Government's capacity is reduced. We should acknowledge that in the private sector corporate profits are much higher. Looking at the PE ratio or the absolute value of profits reflected in the tax we get, corporations and employers are doing well. In the near future, they must take greater responsibility for ensuring that workers are paid better. Government will not be able to, and should not, subsidise as it has done. There will be collective bargaining in the private sector.

Benchmarking in the public sector is important and innovative. I compliment and support the social partners who agreed it with Government. A reading of the terms of reference is useful. The level of misunderstanding of them is considerable. Modernisation of the public service must be key. Many public sector workers are unable, or fail, to understand what the process entails. Most of them are likely to be better off at the end of the process, but it is not sufficiently appreciated that it is also likely, if not certain, that many traditional and historical relativities will be broken. The process must be done in one tranche with one report that the Government acts on immediately. It must be independent, researched independently and according to terms of reference that we all understand. It is a good, positive pro cess which I hope is not derailed or misrepresented as it has been recently by people with particular interests.

The Labour Party believes in public service and that the State must invest in it for and into the future. That means well paid, well motivated public servants. It cannot mean continuing to shovel all of the additional investment only into public sector pay. It means if we pay more money, we must get a better service. I have pushed that on my party's behalf in recent years. We need to establish a genuine partnership with public servants. They need to know they are valued. They need to be well motivated and to know that Government wants to work with them. They also want and need to know that Government is committed to the service they deliver, and wants to see measurable improvement in that service in times of economic wellbeing.

Deputy Cooper-Flynn mentioned inflation. We must get on the line that inflation is 5.6% and was at 7% a few months ago but almost all of that reduction is accounted for by the fact that the increase of 50p on a packet of cigarettes, in December 1999, is out of the system. Other than that, inflation has been at the same unacceptable level for six months. Nothing in the past three months has made a difference – not the reduction of 1% in VAT or of excise duty. Any suggestion to the contrary is wrong. The Minister touched on an interesting fact which he should have highlighted. That expenditure on the health service has increased by almost 100% hides that much of it has not impacted yet and that much of the increase is only in the current budget. In my budget speech, I acknowledged a significant shift from controlling and dampening down public expenditure and a refusal to invest. There was a last minute pre-election shift to spend extra money. Of the £2.4 billion extra or so that this Government is spending, £1 billion is committed for this year and, of course, most of that has not been spent. When the Minister said we will not see, or we have not seen, an impact, it is really far too early to judge. That is an argument of which we will hear a lot more in the future. We have a serious problem within the Civil Service and the public service and the first thing which Government must do is acknowledge it and then to look to work with the trade unions and the other social partners to work it out.

Mr. Stagg

I welcome the opportunity to speak on this motion tabled by Fine Gael. The term of office of this Government has featured the worst industrial relations crisis the country has seen since the 1980s. The Programme for Prosperity and Fairness negotiated 18 months ago was supposed to guarantee industrial relations peace. This agreement had to be renegotiated last December and again the new arrangements agreed under the auspices of the Department of the Taoiseach were also supposed to provide the illusive key to industrial peace. Instead, we have seen steadily deteriorating industrial relations which show no sign of improving and have all the indications of getting worse.

During the lifetime of this Government we have had major strikes involving the Garda, we had the first ever national nursing strike, we have had strikes in Dublin Bus, DART, Irish Rail and multiple strikes in Aer Lingus. We have had a strike involving members of the ASTI which was seriously mishandled by the Government and has left students doing crucial exams this summer at a serious disadvantage. Only a few weeks ago, we narrowly avoided a major strike in the ESB which would have led to serious disruption in supplies. There is simmering discontent at the level of low pay in the Civil Service with the union representing most of the low paid public service workers having rejected the revised PPF terms and is now threatening action. The ASTI dispute is not over and schools are likely to face renewed problems in the autumn. The dispute which led to the withdrawal of rail services in different parts of the country last week is far from over. The appalling conditions in our hospitals have led to threats of renewed action by nurses and non-consultant junior hospital doctors.

There are many reasons for the current level of industrial unrest. People see quite clearly that all people have not benefited equally from our unprecedented level of economic growth over the past decade. Workers who were asked to accept modest levels of increases have seen directors of their own companies rake in increases many times the level of inflation. Recent figures suggest that my neighbour in Kildare, Michael Smurfit, makes £4,150 per day. Tom Mulcahy, who runs Allied Irish Banks, earns just £3,640 per day, yet tens of thousands of workers earn just about the national minimum wage of £4.40 per hour.

Workers who were asked to accept modest increases have seen the benefits of their extra few pounds eaten away by inflation and have seen the Government fail to honour its repeated commitments to keep inflation under control. On the basis of the inflation figures published last week, yet again this year workers will see the value of their increases eaten away. People are simply running faster than ever simply to stand still. People are working harder than ever, taking more time than ever to get to and from work and are finding it more difficult and more expensive than ever to find somewhere to live. At the same time all around them they see others not subject to the same constraints making huge amounts of money. Is it any wonder there is dissatisfaction and disenchantment?

The State has consistently failed in its responsibility as an employer to ensure that all those it employs receive decent levels of pay and that they work in acceptable conditions. Many of those in the Civil Service, particularly at the lower level, received levels of pay that are simply shameful. We are now all paying the price for this as the rapid exit of staff back to the private sector leads to a deterioration of services in the public service. Many employees of the semi-State com panies work in unacceptable conditions because of a failure, in many cases, to provide adequate funding to these companies and to ensure that management is up to scratch.

I want to see industrial peace and harmony. We need to address the underlying problems of low pay, poor conditions and the general level of alienation and disenchantment. This is a long-term project. In the shorter term we need acceptable procedures for identifying potential industrial relations flash points and defusing situations before they get out of hand. What is particularly alarming in the current situation is the total absence of any coherent strategy for dealing with industrial relations problems or restoring industrial peace, nor is there any sign of anyone in Government being willing to take charge of the situation.

The Tánaiste, as Minister for Enterprise, Trade and Employment, is the Minister with overall responsibility for industrial relations but she shows no obvious interest in the area and seems content to leave it to her junior Minister who, quite frankly, does not inspire confidence and is known in the House as the man who voted against his own Bill. Indeed, the Tánaiste's recent statements that the right to strike should be made illegal speaks volumes as to where she stands. It is amazing that this debate tonight which is directly within her remit is being taken by the Minister for Finance rather than the Minister with responsibility for industrial relations and labour, the Tánaiste. It is amazing that she, or even her junior Minister, is not in the House.

Many of the disputes to which I have referred have been in public sector companies for which the Minister for Public Enterprise, Deputy O'Rourke, has responsibility. Her unpredictable and inconsistent approach has succeeded only in alienating management and unions. The Minister cannot seem to make up her mind whether she is in charge of this sector. When the delivery of a new bus or carriage provides a photo opportunity, the Minister has no problem elbowing her way to the front but when there is an industrial relations problem, she goes to ground and washes her hands of any responsibility. Indeed, her on/off privatisation proposals have engendered uncertainty and real fear for the future among workers and has worsened already poor industrial relations.

The Taoiseach, Deputy Ahern, owes most of his political reputation to his record as Minister for Labour when he successfully brokered solutions to a number of very difficult disputes but he too has given the impression of a man who just does not want to know when we have had disputes in recent years.

More than 2,000 disputes were referred to the Labour Relations Commission last year. It is barely able to cope because of staff shortages and inadequate resources. That is what this Government is doing to try to deal with the disputes at that level. The result of this collective abdication is drift and, often when it is too late, crisis man agement. Somebody has to take charge. We have to look at the resources available to the Labour Relations Commission and the Labour Court. Nobody disputes the difficult nature of many of the disputes we have seen over the past few years but what is most alarming is the total lack of any urgency on the part of the Government and the apparent willingness to see the country drift into industrial relations chaos.

Repeated industrial disputes have the capacity to do untold damage, especially against the background of the slow down in the Irish economy, the problems of the hi-tech sector, the serious problems of the US economy and a worrying increase in the underlying trend of unemployment. This must not be allowed to happen. The Taoiseach and the Tánaiste must do the job for which they were elected. They must take charge and devise a coherent strategy for the restoration and maintenance of industrial peace.

Debate adjourned.