Vol. 552 No. 4
7 Mr. Quinn asked the Taoiseach when the next quarterly meeting of the social partners under the Programme for Prosperity and Fairness will be held; the likely agenda for the meeting; and if he will make a statement on the matter. [12381/02]
8 Mr. Quinn asked the Taoiseach his views as to whether there should be a new national agreement when the Programme for Prosperity and Fairness concludes; and if he will make a statement on the matter. [12382/02]
9 Mr. Noonan asked the Taoiseach when he will next meet the social partners; and if he will make a statement on the matter. [12425/02]
10 Mr. Noonan asked the Taoiseach if he will report on the implementation of the Programme for Prosperity and Fairness; and if he will make a statement on the matter. [12426/02]
I propose to take Questions Nos. 7 to 10, inclusive, together.
The next PPF plenary meeting will take place on 29 April. The main items on the agenda are public service modernisation, including better regulation, and waste management. In accordance with normal practice, the meeting will provide an opportunity to review progress and to deal with any issues of particular concern at the time.
As with all PPF plenary meetings, a detailed progress report has been produced for this meeting setting out for each Department, including my own, the progress being made under each action point in the PPF. The eighth report, copies of which have been lodged in the Oireachtas Library, records the continuing good progress in implementing the economic, social and structural development agenda set out in the programme.
As regards the areas of the PPF which are my specific responsibility, my Department exercises the main co-ordinating role for overall implemen tation of the programme as well as supporting a range of cross-departmental issues, such as public service modernisation, quality customer service, better regulation, infrastructure delivery, social inclusion and the information society.
In addition, my Department chairs the National Implementation Body which was established under the adjustments to the terms of the PPF in December 2000. This body continues to meet as necessary to consider, in particular, the potential implications of any ongoing disputes of special national importance.
I meet representatives of individual social partner organisations on a regular basis, in addition to the annual attendance of the Taoiseach and other Ministers at the PPF plenary meeting in the summer – usually in July – in accordance with established practice.
Deputy Quinn asked for my views as to whether there should be a new national agreement when the PPF expires. I have no hesitation in saying that there should be a new agreement. Social partnership has played a very significant role in the radical transformation of this country's economic and social fortunes since 1987 and this has been acknowledged by employer and trade union representatives in their recent statements. I have noted what people have been saying about the possibility of a return to local level bargaining. We all need to think hard about the implications of such a development in terms of competitiveness, employment and social justice.
The experience of the past shows that, in a free for all, the strong tend to prosper at the expense of the weak. This applies to employers and employees, as well as to those looking for a job and those outside the labour market.
In addition, there is the associated danger of a return to the damaging wage price inflationary spiral and wide-scale industrial relations instability which we experienced in the past and in which, ultimately, we were all the losers.
It is also important to bear in mind that social partnership agreements have not only been about pay. They have allowed the social partners to bring their differing interests, perspectives and expertise to bear in helping to tackle a wide range of complex and interdependent issues of common concern, and in embedding a pro-development approach in our culture and society. These partnership agreements have delivered. It was by working together in a disciplined way that we achieved success in the past in reducing the national debt, promoting enterprise, generating enormous numbers of new jobs and raising living standards generally.
The issues confronting us today, whether in terms of competitiveness, social cohesion or environmental sustainability, are no less complex and challenging and require a similar, collective response. In the past, social partnership has demonstrated a capacity for adapting and evolving and this can, and should, be drawn upon again in meeting current circumstances and concerns. Each agreement has to address the current con cerns of Government and the social partners. There are undoubtedly concerns to be met. However, the focus should be on meeting them and getting the right agreement rather than on the principle of an agreement in itself.
The potential for, and the nature of a new agreement will be dependent on the next Government's programme, the views of the social partners as they evolve, the emerging NESC strategy for the period ahead and the report of the Public Service Benchmarking Body. The scope, duration and nature of any new agreement would be a matter for negotiation between Government and the social partners. However, this Government remains committed to the principle of a new social partnership agreement as the best way of ensuring the economic and social cohesion which is of fundamental importance to ensuring a prosperous, fair and sustainable society.
Does the Taoiseach share my view that the process of social partnership is indispensable if we are to move forward and make progress in the first decade of this century? Does he further agree that the agenda for the social partners has changed dramatically since the mid-1980s, but that IBEC – the employers' group – has probably benefited more than any other group within the triangular framework of social partnership? This is the case regarding the framework of legal regulation within which they have to operate, the level of personal tax for high earners, corporation tax, capital gains tax and other areas, including employers' PRSI.
Does the Taoiseach further agree that while it is probable that a "one size fits all" wage agreement at national level seems unlikely in light of statements by a number of key employers and trade unions, the agenda is one of consolidating the social model of this country rather than dealing with issues of employment or taxation? Does he further agree that the Government has a specific role in formulating the kind of agenda around which the trade unions and employers' groups in particular could come together to examine the factors which are driving up employers' costs or wages, depending on which way one looks at it? These factors would include the cost of housing, child care and transport. If the Government could bring to bear its executive and legislative capabilities to address these issues, some of the concerns expressed by the trade union leadership and employers could be assuaged. We need to refocus the agenda of social partnership as we prepare for an eighth agreement.
I accept much of what the Deputy says. His fundamental point is that the times and circumstances of each agreement are different. The agenda of the social partners is certainly different. I have been honoured to have been involved in all of them and to have been central to them. Over the past 15 years I have negotiated four of them and implemented the fifth. Every time we come to the last six or nine months people air their discontent with aspects of the programmes where they have not worked out as per the agenda they set down. As good negotiators why should they not do that? Sometimes I do not appreciate the protests as they exclude the successful elements. In their protestations people sometimes forget how much has been achieved beyond their aspirations. We hear all the gripes but I suppose I should not be surprised at that.
We have always managed to deal with different issues in past agreements. There are also major challenges. Some people are pessimistic but it should be possible to reach a new agreement in the end. The reality is that the social partners have all done well from the process. What is happening in their organisations and the European scene shows how successful the social partnership process has been. People argue that the partnership process is not the only reason for our achievements. That is true but it is the number one reason.
The Deputy made the point that it is the job of Government to build a strategy to deal with this. I accept that. We are now into the second phase of what was the second ten-year strategy of NESC. It has to be in mark two of this decade's NESC strategy that we move forward. Models are being looked at, discussions are taking place and examinations are being made to see how we can do this. There will be a time to signal that publicly but work must be done to move through the programme first. I assure the House that we are working towards that. It was a ten-year strategy because I asked that the NESC strategy not be a three-year one. It was to look to the decade of 2000-2010 and set each agreement, as we did successfully through the 1990s, within that framework allowing for any positive or negative circumstances over the period. We are engaged in that work and will, I hope, move people to that position over the next period.
I welcome the comprehensive statement of Government policy by the Taoiseach. Has he communicated that to the Minister for Finance who seems to be hinting, or allowing it be hinted on his behalf without denial, that he would not mind if there was not a new national agreement? Does the Taoiseach not agree that the reason we have been economically successful is that there has been a political consensus, the second pillar of which has been social partnership, and that it is important that should continue?
Would he also agree that the key criteria by which the aptness of a new agreement would be measured is the effect it has on competitiveness? This must be the key measure if we are to continue our economic success. Will he acknowledge that we have a price problem which has a knock-on effect on wages? Our inflation is among the highest in the European Union and has been for much of the life of this Government compared to the record of the previous Government. The question of competitiveness is a matter of con cern to employers and should be of concern to the Government. Will the Taoiseach agree that competitiveness is not just affected by prices and wages but also by productivity and flexibility? Will the Taoiseach tell us what he will do about the prices problem in this country? The price of houses affects people and leads to higher wage demands. The price of cars, because of high VRT, the price of petrol and the price of supermarket goods lead to the same. Will the Taoiseach accept that his Government has been a failure in respect of prices?
I noted the recent comments of Brian Patterson, the chairman of the National Competitiveness Council, on competitiveness. He cautioned against throwing out the key reason for economic success which in the council's view was social partnership. It pointed out that the partnership demonstrated a capacity for adapting and evolving. This is the challenge. Competitiveness is a key element and is linked to productivity. It is also linked to the people generating the activities of the goods and services field. They also want remuneration compatible with what they believe they are justified in getting. In recent years we gained in competitiveness because, through a combination of fiscal and monetary policies, we were able to keep ourselves in a position where we remained competitive. Wage inflation has now moved up as has inflation although EU, OECD and ESRI reports say inflation will drop back.
I remind Deputy Mitchell that a decade ago inflation was 1% but so was economic growth. While inflation needs to be watched and monitored, it is a fact that in an economy that is generating a great deal of activity some inflation is inevitable. It should be minimised as much as possible. When an economy has grown by 10%, as our economy has for a number of years, inflation is inevitable. That then drives wage inflation which is not good for economic activity so we must be careful. It links to the wage issue and that is part of the challenge of the next agreement. We must make sure that the predominant issues of competitiveness, economic growth, economic prosperity and the ability to generate enough revenue so that we can enhance our services remain the issues for us. We are in a good position to deal with these issues and have been dealing with them through the programmes over the past 15 years. It is always a challenge, but it is far easier now than it was in the past.
The process of social partnership has evolved and developed so that we have a new institution that has grown out of social partnership, a centre for partnership. Will the Taoiseach indicate what role that new autonomous body will have in its present structure as distinct from its previous incarnations? It now has stronger autonomy in implementing or complementing some of the work of any social partnership agreement. Would the Taoiseach give his opinion as to the effectiveness of the present model of social partnership? The present agreement has spawned some 64 separate working groups and parties. In the light of the experience of the Taoiseach's Department and the many Departments whose officials have to provide staffing and representatives to those committees does the Taoiseach see this as the way to go or should we rethink that way of doing business within the structure of social partnership?
I will answer the two issues. The first was the new role for NCCP. It has an enormous opportunity and I look forward to working to its agenda. It has many different priorities now but there is one important priority I would like to see developed. It has taken us some time in the social partnership model to bring the focus from central positions and overall structures down to enterprises. Health partnership groups are now being set up but they are only at the start of perhaps 15 years of partnership. There are many areas in which partnership needs to be developed at local level and people need to see the benefits for themselves. That is the role that partnerships can play and there are enormous opportunities in these areas. I hope that we have left behind the old adversarial days with managements sending out diktats, but we will know that we have when people on local committees are involved in projects such as these. I recently had the pleasure of seeing medics and what would have been considered years ago in the health service to be "ancillary staff" working together as joint stakeholders. It was interesting and rewarding to see this and, as time moves on, things should improve further.
Deputy Quinn also asked about the number of working groups. I would rather see more focus. It has worked well but it is very detailed. If we were to take more central themes we would probably gain more. I do not think there are too many issues that require a huge amount of effort and over a three-year period we would make more progress if we chose fewer of them. There are probably no more than ten really big issues that need to be dealt with. When there are too many and too much effort is invested, it has a bad effect on the system. The system, between the European agenda, legislative measures and so on, is liable to be pulled in too many ways. If we want efficiency in the system we will be better off concentrating on a small number of areas and using public service modernisation effectively. This cannot be done across 70 or 80 different projects. An agreement that focuses on some key issues is more likely to achieve a satisfactory result. This is what we did with the Programme for Economic and Social Progress: we concentrated on a small number of issues and it worked well.
