Enda Kenny
Question:1 Mr. Kenny asked the Taoiseach if he will report on his attendance at the round table meeting of the social partners in Dublin on 15 February 2007; and if he will make a statement on the matter. [6758/07]
Ceisteanna — Questions.
Social Partnership Talks.
Pat Rabbitte
Question:2 Mr. Rabbitte asked the Taoiseach if he will report on his meeting with the social partners in Dublin Castle on 15 February 2007; the main issues raised; and if he will make a statement on the matter. [8361/07]
Joe Higgins
Question:3 Mr. J. Higgins asked the Taoiseach if he will report on his recent meeting with the social partners. [8942/07]
Caoimhghín Ó Caoláin
Question:4 Caoimhghín Ó Caoláin asked the Taoiseach the discussions he has had with the social partners in relation to the implementation of the Towards 2016 agreement; and if he will make a statement on the matter. [9646/07]
Trevor Sargent
Question:5 Mr. Sargent asked the Taoiseach if he will report on his recent meeting with the social partners; and if he will make a statement on the matter. [11371/07]
Joe Higgins
Question:6 Mr. J. Higgins asked the Taoiseach if he will report on his recent contacts with the social partners. [12302/07]
I propose to take Questions Nos. 1 to 6, inclusive, together.
As I indicated in my reply in the House on 13 February last, the inaugural plenary meeting with the social partners under the new social partnership agreement Towards 2016 took place on 15 February in Dublin Castle.
The Government was represented by myself together with my colleagues, the Tánaiste and Minister for Justice, Equality and Law Reform, the Minister for Finance and the Minister of State at the Department of Enterprise, Trade and Employment with special responsibility for labour affairs.
The papers from the inaugural plenary, including the addresses by myself, the Tánaiste and the Minister for Finance, together with the presentations by senior officials, on the following broad Towards 2016 themes — the National Development Plan 2007-2013, the national spatial strategy, sustainable development, developing the lifecycle approach, health service reform and North-South co-operation — have been laid before the Oireachtas, as has the first progress report, which was circulated at the meeting. The first progress report has also been made available on my Department's website.
A seminar was held on 2 April for the social partners focusing on the implementation of the lifecycle framework under Towards 2016. Collaboration and engagement with the social partners is important in helping to deliver the ambitious social agenda we have set out in Towards 2016, the new National Development Plan 2007-2013 and the National Action Plan for Social Inclusion 2007-2016. This event provided a useful opportunity to engage in some joint thinking on the key issues and challenges that lie ahead as we begin implementation.
As I indicated to the House on 13 February, the mechanisms for implementation of the new agreement are set out in detail in Chapter 4 of Part 1 of Towards 2016.
The reconvened steering group will continue to have overall responsibility for management of the implementation of the agreement as it applies to the wider non-pay issues. The quarterly plenary meetings of the social partner pillars will continue and there will also be an annual meeting of the parties with myself, the Tánaiste and the Minister for Finance.
The next steering group meeting has been arranged for Monday, 30 April. The meeting will focus on the people of working age lifecycle stage and will also receive updates on Transport 21, the Government's White Paper, Delivering a Sustainable Energy Future for Ireland, and the National Climate Change Strategy 2007-2012. The date for the next plenary meeting will be confirmed shortly.
I also met with the leadership of the ICTU last Wednesday to review and discuss issues that generally arise under Part 2 of Towards 2016.
It is nearly summertime. Lest anyone thinks I would not do so, I offer the Taoiseach my congratulations on becoming a grandfather. Deputy Rabbitte said he hoped the Taoiseach would take a few weeks off to mind his grandchildren. I do not know if the Taoiseach is considering doing so.
I am glad the national implementation body is meeting the nurses' unions and the personnel involved today. It is claimed the criteria for assessment of legitimate claims within the benchmarking process are not sufficiently broad or flexible. Assuming the national implementation body and everybody concerned can arrive at a conclusion in respect of the reduction in the hours of work with a commensurate change in practice, efficiency and productivity, does the Taoiseach envisage similar situations finding their way into the benchmarking forum so pay questions can be resolved within the social partnership framework?
Does the Taoiseach see the benchmarking process becoming more open and transparent? Last time, recommendations for pay increases were made but the method by which the recommendations were arrived at was not published and the relevant documents have been shredded.
Is the Taoiseach happy that no other group will break from the social partnership and benchmarking agreements, given the soundings being taken currently?
The normal agreements of recent years have led to a decline in the number of industrial disputes. The figure for last year was one of the lowest since the foundation of the State. There are always groups of workers who are not satisfied or do not believe their issues will be addressed in a way which they consider reasonable. It is inevitable such cases will arise from time to time. There was one group during the last round and there is one at present. Examinations were carried out on the claims of some smaller groups and the system was able to gather them in and deal with them. I cannot recall the exact number but a small number of cases were dealt with. The arrangements are sufficiently flexible to deal with such situations. The benchmarking process depends on the strength and presentation of the case and the history of the area. All of the groups preparing for benchmarking are making their own cases. The process is not the same as the old one involving relativities and knock-on claims which started at point A and went all the way through to everybody in the system. That is what has happened over the past 30 or 40 years in one form or another.
There are certain difficulties in specific disputes. In the case of the nurses dispute, we cannot contemplate an outcome which undermines public service pay policy based on benchmarking and the wider agreements under social partnership. However, progress can be made in the context of hours of work and higher productivity on a cost neutral basis. While it will not necessarily be easy to do that, a great deal of work has been done on the matter over the past few weeks. I understand that further work will be required to establish how a reduction of working time and a full deployment of improvements in efficiencies can be produced given that it involves 7.7 million working hours in the system.
I accept Deputy Kenny's point that we require a framework in which change can happen. In this case, we have been talking about managing change in the health service but there are other areas. I agreed earlier in the year to a proposal from the Irish Congress of Trade Unions to establish a forum within which a more comprehensive approach to the management of change could be discussed. Most of the issues which arise do so in the context of the change agenda and are not simply normal cases. There are always difficulties in the change agenda. Almost all categories of staff working in the health service interact with others and change in any one grade or profession impacts on the others. We could produce a more coherent approach by examining all of the interdependencies involved in the round. We have had useful discussions with congress on that point.
The forum has been convened for two meetings under the chairmanship of the Secretary General of my Department and all of the health trade unions and representative bodies have participated together with the HSE and the Department of Health and Children. It would be better for them in the context of the forum's work if there was not an ongoing work to rule. However, one cannot plan these things perfectly. While the forum is at an early stage, I am hopeful that honest discussion in the context of a shared commitment to patients and the quality of the public health service will enable us to address even intractable problems. No problem is insurmountable, but we must find greater efficiencies to benefit staff and patients alike. I have therefore accepted the congress proposal and I am working to implement it in the broad range of cases. As Deputy Kenny said, the NIB is working on the nursing dispute to try to find a solution.
What assurances can the Taoiseach give employees who are concerned that the entire value of the pay increase provided for in the new agreement will be wiped out by the effect of inflation? What is the Taoiseach's assessment of the worryingly high level of inflation now?
The Taoiseach told me before the break that there were 60 labour inspectors in place last year and that there would be 90 this year. The Minister for Enterprise, Trade and Employment told me in a reply to a parliamentary question the same day that there were only 31 inspectors. I wish to withdraw the remark——
The question is more appropriate to the line Minister.
You have not even heard it yet, Sir.
I did hear the question.
I wanted to say to the Taoiseach that I wanted to withdraw the charge I made that he was telling me fibs. I must accept his word that it was inadvertent. Given that only 31 labour inspectors were in place before the break and the commitment is to have 90, how many are in post now and how many will be in post by the end of the year? I hope that has mollified the Ceann Comhairle.
The matter still does not arise. The question should be directed to the line Minister.
I do not want to cause the Ceann Comhairle's blood pressure to rise. I am in a very agreeable mood today as things are looking very sunny.
Further mollification is not required.
Was the issue of decentralisation raised with the Taoiseach in the discussions with the social partners? I notice that all Government Deputies boycotted the meeting in Liberty Hall on the forced relocation of civil and public servants to various parts of provincial Ireland which has been put in place instead of a balanced programme of negotiated decentralisation. The latter might have worked where the McCreevy plan has failed. Why did the Taoiseach's Deputies stay away from the meeting?
That is a question for the line Minister. It does not arise out of these questions.
Why not, sir? This is a meeting with the social partners.
The Chair is not entering a discussion with the Deputy. The Chair has ruled on the issue. It is a matter for the line Minister.
We are asking about the meeting with the social partners.
Yes, Deputy, but detailed questions arising out of those meetings should be directed to the line Minister. We will be here all day.
I do not know how in the next Dáil we will roll back some of the new precedents the Ceann Comhairle has established. They have made a joke of Question Time. Members have put down questions to the Taoiseach about his meeting with the social partners. I am asking him if decentralisation came up and what assurances he can give the very many people in this city who have children in education and put down roots and who are being given no choice about relocation out of Dublin. Would it not be better to go back to the drawing board to negotiate a voluntary programme of decentralisation in support of more balanced regional development in Ireland?
That is a question for the line Minister.
We have had a number of discussions and meetings on inflation. The figure is higher than we projected in the late months of last year. There are a number of actions and issues under discussion. Primarily, the figures are coming through under two headings, energy costs and interest costs, which account for half the rate of inflation. One cannot exclude consideration of those two headings given their effect on pay, but without them inflation would be 2.1%. We have reactivated the anti-inflation group and it has been calculated that inflation will drift down as the year goes on. However, the current rate will be crucial to the way in which people view the current pay round. The Irish Congress of Trade Unions pointed out as much in our discussions last week.
Wage moderation is a powerful counter-inflationary tool. We must do all we can to ensure we do not price ourselves out of any of the issues. Most of the difficulties are coming from the two areas I mentioned. Looking at many of figures across the headings for the past few months, it is clear that electricity and natural and bottled gas registered zero price movements in March while liquid gas and solid fuel prices rose by 2% and 0.4% respectively. While in some cases natural gas prices fell by 10%, energy prices from the ESB have been extremely high.
While it is not clear what Jean-Claude Trichet and his colleagues in the European Central Bank will do on interest rates, indications are that there will be at least one more increase in 2007. We must do all we can to try to curb services inflation, in particular, which has increased to 10% or 12% in the past two months, which is extremely high. We must be careful in terms of wage increases and of fuelling the difficulties that exist although we have examined these in great detail. Inflation is high this month and will probably remain so for a few months and then pull back. That is the best estimate at this stage.
On inspectors, I accept what Deputy Rabbitte said — I did give him the wrong figure. Interviewing for new inspectors is currently taking place. I gave an update of the figures to the Irish Congress of Trade Unions last week. It will probably take until the end of the summer to get all the inspectors in place. The interview process is under way. The Minister for Enterprise, Trade and Employment, Deputy Martin, has given full details of the interview process to the staff and the advertiser. If I recall correctly, 42 posts require to be filled during the course of this year to meet the target set. The approvals have been given and the interview process is about to commence. I have been told it is hoped the required inspectors will be in place by the end of the year. Quite frankly, I do not understand why it should take that long. However, that is what I have been told. I would imagine that given the interview process is under way, it should be possible to have the inspectors in place during the next three months or so. The Department of Enterprise, Trade and Employment hopes to have all positions filled by the end of 2007.
With the social partners we have also outlined a number of other mechanisms. The employment rights compliance Bill will be published later this year and a director has been appointed to the National Employment Rights Authority, NERA, for which a management team is substantially in place. As I stated, seven new inspectors were recruited in March. I am not sure what the figure is for April but 42 more remain to be recruited.
The Minister for Enterprise, Trade and Employment, Deputy Martin, announced in February proposals on regionalisation of the labour inspectors. During the discussions with the social partners last week we also discussed section 14, Part II of Towards 2016 which requires that legislation be enacted to provide NERA with the power to establish joint investigations by the Revenue Commissioners and the Department of Social and Family Affairs. The necessary legislation has been prepared.
The Revenue Commissioners are monitoring bogus self-employment. I know that Deputy Rabbitte is familiar with this issue. An enormous effort is being made by the Revenue Commissioners and the Department of Social and Family Affairs in respect of bogus self employment. They are focusing most of their efforts on the construction industry. Finally, almost 4,500 employers were visited last year as part of the campaign to stop abuses and fraud in the social welfare system.
Decentralisation is moving forward on the agreed basis. This issue was not raised during the meeting with the Irish Congress of Trade Unions. We are following the basis agreed with the public service workers, namely, that decentralisation will be on a voluntary rather than compulsory basis. The movement of officials, although slow, is continuing. A great deal of progress has been made. Decentralisation has taken place to centres in Cavan and Clonakilty and other centres are moving ahead. This is being done on a voluntary, not compulsory, basis.
On the key issue of inflation, the Taoiseach stated that the two main elements contributing to the extraordinary position in Ireland are energy prices and interest rates. Is it not the case that those member states which are members of the eurozone are subject to exactly the same regime of interest rates and pay the same prices for oil and gas on the international exchange? Why is it that inflation in Ireland is more than twice the eurozone average?
What is voluntary, for example, about the forcible movement of FÁS and BIM staff out of the city? What is voluntary about their relocation? The objections made by them to Government appear to have fallen on deaf ears. The intention is to ensure they are moved out of the city irrespective of whether they want to. Would it not be sensible at this stage, given the endemic problems in the health services, to agree a timeframe for the introduction of a 35 hour week for nurses? This would enable nurses to return to work.
That matter does not arise on these questions. It is a question for the line Minister.
It arises out of the Taoiseach's reply. He dealt with the matter at some length in response to Deputy Kenny. I am asking a question which arises from the Taoiseach's answer.
We cannot have detailed discussions on issues.
Can a timeframe be agreed that would permit the phasing in by a certain date of the 35 hour week and allow any pay claims to be dealt with by the existing machinery? Is that not the broad parameter of a settlement to this dispute? Ultimately, there must be a settlement. Why risk further alienating nurses whose work at the coalface is essential? Whoever is to blame for the shambles that is the health service, it is not the nurses.
I do not believe that is the issue that arises in this dispute. It is a question of 7.7 million hours not being worked. The introduction of a 35 hour week must be examined on a cost neutral basis. Otherwise, this would be seen as a straight pay increase which would have a knock-on effect for 350,000 public servants and the private sector. I do not believe that is what Deputy Rabbitte is advocating. This must be worked out and framed in a manner that meets the interests of the three nursing groups. That is not an easy task. Both sides are conscious of this and of the work and detailed preparation involved in moving to a 35 hour week. It was in this regard the Government offered to move towards the first reduction at the beginning of 2008 and then to work out the more detailed arrangements of moving from a 39 to 35 hour week. A complication arises in that if this is not done on a cost neutral basis, trade unions in the health service generally and outside of it have made it clear they will seek parity in terms of a 35 hour week. Other European countries which have introduced a 35 hour working week are arguing for the opposite claiming it is damaging their economies, and I do not believe it is the right way to go. We are trying to find a basis to do this within the agreement which does not breach the agreement or create a knock-on effect but which can facilitate nurses. However, this must be worked out between the management side of the trade unions and the State which have been engaged in this preparatory work during the past few weeks.
FÁS and BIM are not being forced to move out of the city. Painstaking negotiations have taken place to facilitate people who wish to move within the wider public and Civil Service and to accommodate those who do not want to move. That is why the decentralisation process has been so slow. If it were forced, staff would have moved a long time ago. Staff are not being forced to move.
On inflation, our interest rates are the same as those across Europe. Unfortunately, our gas and oil prices are not. It has been clearly pointed out by the regulator that we are at the end of the pipeline and our costs carry a premium. That is a major difficulty for an island that does not have a very large market. That point has been made time and again. I drew attention earlier to the fact inflation in consumer services was running at 9.3% per annum in March compared to only 0.4% in consumer goods. One does not need to be an expert to see that the difficulty is there is not enough competition in the services sector. That is what is driving inflation in Ireland compared to other countries. There is a very simple European Commission chart that shows where we are out of line. The issue is one of competition. In the consumer goods sector, right across a range of products, the rate of inflation was only 0.4%, which is very creditable compared with our European partners. In the services sector, however, inflation has risen to almost 10%. It is a question of competition which is an issue for all of us because it affects our purchasing power. It is an issue with which we must continue to deal.
Does the Taoiseach agree the first five percentage points wage increase over a 15-month period which is provided for in the social partnership document Towards 2016 has been wiped out before it has been implemented, given the annual rate of inflation for March registered at 5.1%? Can he give us one good reason why workers should tolerate being constrained to these wage limits when the Government has added more than anybody else to inflation with increases in utilities and public service charges running at 9.3%, and the Alice in Wonderland policy in regard to electricity prices implemented by the Minister for Communications, Marine and Natural Resources whereby the regulator, acting on Government policy, has massively increased electricity prices to consumers in order to bring competitors into the market so prices will go down some time in the dim and distant future?
My second question I have tried to ask many times over ten years but the Taoiseach has never answered it satisfactorily. Now that we are in the dying days of the 29th Dáil——
Will the Deputy get around to his question? Other Deputies are offering and I would like to facilitate them.
The Ceann Comhairle called me at 3.04 p.m. I sat here patiently. I am asking my second supplementary question.
The Deputy should ask a question.
As we are in the swan song days of this Dáil, does the Taoiseach agree he has no moral authority to take a cudgel to beat back the nurses in their demands for equality and for a decent wage when not once in ten years did he raise a voice or a finger to stop speculators, developers and big builders putting homes out of the reach of ordinary working people? The Taoiseach mentioned the knock-on effect of the nurses' claims.
The Deputy should confine himself to asking a question.
Has he entertained the knock-on effects of profiteering in the housing market whereby, ten years on, a worker on the average industrial wage is scarcely able to purchase the doors and windows, let alone a house. In view of that, is social partnership not a sham which has added handsomely to the rocketing profits of big business at the expense of workers?
It is in regard to consumer services, not local authority services, that inflation is running at 9.3%.
What about electricity?
The price of electricity is set. There was to be a large increase of 19%, but that was reduced by the regulator. The regulator, which is independent, must take all factors into account.
The regulator is implementing Government policy.
The regulator is implementing legislation passed here setting up the Commission for Energy Regulation to ensure security of supply and that we can keep our electricity and gas companies going. That is the job of the commission. For a sustained period the Electricity Supply Board was able to provide electricity with no increase in cost, but that changed because of the international position.
On the question of pay increases, I have already said to Deputy Rabbitte that it has happened previously that the rate of inflation matched the rate of the pay increase and that does balance out things in wage terms. However, there are other issues related to tax which weigh the balance in favour of the worker. It is never welcome that inflation should eat into pay increases. However, it has happened a number of times in recent years and we have been able to counter it. We must try to do so again to the best of our ability, and I believe it is possible. We did it in 2003 when we halved inflation in a very short period by combined action on the part of the Government, the social partners and relevant agencies. We can do so again. I do not agree with the Deputy's theory. Without centralised agreements there will be a spiralling cycle of wage increases pushing up inflation, reducing the value of wage increases to workers.
The Taoiseach said nothing to the speculators.
On the property market, we have worked towards the position where this year we will build one third of the houses we built last year to bring supply and demand into equilibrium. We did nothing to encourage speculators other than to try to increase supply to enable people to get a house.
The Taoiseach did not raise a finger to stop them.
Allow the Taoiseach to continue without interruption.
Under social partnership agreements we have 600,000 more people working in the past decade. One third of the housing stock consists of new houses, and almost half of that went to first-time buyers. Deputy Higgins' analysis does not add up. There will always be people who experience difficulty purchasing a house. The Government has put an enormous amount of resources into social and affordable housing and has made great strides forward. Some 17,000 households will now benefit from social and affordable housing measures this year and approximately 60,000 households will benefit over the three year period to 2009. Approximately 140,000 people will benefit under social and affordable housing schemes during the life of the next national plan. That is a significant proportion of those seeking social and affordable housing.
What if the current average rate of inflation continues? Does the Taoiseach accept that the average rate for the first three months of this year is in the order of 5%? That is significantly greater than the 4.4% annualised increase, or 10% over 27 months, provided for under Towards 2016. What should happen if that trend continues? Has the Taoiseach specific proposals to counter the effect of prolonged inflation and the clearly devastating effects that must have on the daily living standards of workers throughout this State? Has he specific proposals in the event that that pattern is maintained, which all indicators suggest will be the case?
Why was no provision made for a review clause in this agreement? Such a clause was provided for in the previous agreement. On the same basis, no provision was made for local bargaining, which was another requirement. Does the Taoiseach not accept that he did not tolerate consideration of an ability to pay clause, as against an inability to pay clause, to counterpoise the arguments that some employers would make in their self-interest? Are workers in the very successful sectors not entitled to a reward for their endeavours and contributions to success? Does the Taoiseach agree there is an imbalance in the fundamental approach to Towards 2016, the real effects of which are biting hard on ordinary workers today? How does he propose to deal with a pattern of continuing inflation that is well in excess of the annualised increases provided for in Towards 2016?
On a point of order, I request that I be allowed to ask a short supplementary question, given that Questions to the Taoiseach ends at 3.15 p.m.
Sorry, we are running out of time and I am calling on the Taoiseach to reply in fairness to Members who submitted questions to the line Minister.
So did we.
Deputy Ó Caoláin asked about the work of the anti-inflation group. In the past few months, it had a detailed assessment prepared by the Central Statistics Office on contributors to the consumer price index and associated trends. It has been exploring the inflation drivers from a competitiveness perspective and was assisted by a detailed presentation given by the Competition Authority with the purpose of focusing on the areas in which we can make a difference. There are some areas in which we cannot make a difference but there are others in which we can. The National Consumer Agency and the Commission for Energy Regulation have been involved in the discussions in trying to make a difference. The purpose of these meetings is to ensure that the anti-inflation group can carry out its role in co-ordinating the fight against inflation on an informed basis. That analysis has been completed and it is now trying to make a difference, as it did four years ago.
In the longer term, the Government and the social partners acknowledge in the new social partnership agreement that adherence to its terms amounts to an important counter-inflationary measure. If one was to start conducting a review merely to chase inflation, all one would do is create a spiral. As that would be bad for the economy in terms of losing competitiveness and a disincentive to employment, it would be entirely the wrong thing to do. It is better that we focus our efforts and actions on those areas over which we have control. We cannot control interest rates and we can to an extent control energy prices, but can have an effect on many other areas which contribute to inflation.
On the pay issues, it is important to workers and everybody in employment that we reduce inflation, but doing so on the basis of pay increases or by having a review or introducing any other system would be wrong.