The Government decision to exempt 655 public servants from the pay reduction announced on budget day was neither fair nor justified. The unfairness is best exemplified by the fact that it means that people on the lowest level of pay in the public service will see a reduction in their pay of 5% while this category of public servants will see their take-home pay cut by just one third of that amount. That goes to the heart of the sense of injustice that is felt not just on this side of the House. Clearly, individuals on the Government's backbenches feel very strongly that this is an unfair approach to public pay.
Apart from the unfairness, it is simply not justified. We hired a higher remuneration group to recommend how people in these high-paid jobs should be paid. It made a very clear recommendation. In the full knowledge that the bonus system had been suspended, it recommended that cuts of 8% be imposed on assistant secretaries and cuts of 12% on deputy secretaries. Those recommendations were taken up and implemented in the budget. The Minister for Finance and his entire parliamentary party knew that bonuses had been suspended when they made a decision consciously to apply 8% cuts to assistant secretaries and 12% to deputy secretaries and the knock-on effect on 655 individuals in senior privileged positions in the public service.
For some inexplicable reason within two weeks in the shadow of Christmas, the Minister issued a direction under the Financial Emergency Measures in the Public Interest Act after a decision of Government that the recommendation of the review group and the decision of the budget should be reversed. No explanation or justification was offered. The provisions of section 6 of the Financial Emergency Measures in the Public Interest Act are very explicit. This is not a general power to the Minister to do whatever he likes. This is a power under very significant restrictions. He must show that a substantial inequity has occurred and that it is just and equitable in all the circumstances to change the position as announced in the budget.
We are not privy to any such evidence adduced by the Minister. From the Taoiseach and Tánaiste we have seen efforts to defend this decision that were incredible and downright wrong. That suggests to me that the Minister did not take seriously his responsibility under the Act only to use this direction where there was a substantial inequity and where it was just and fair to everyone to take this action. I have not seen any independent commentator take the view that this was just and equitable. Far from it, people see this as those at the top of the tree circling the wagons to protect themselves from cuts that were being applied to those at the bottom. It was the worst example possible at a time when the economy is facing difficult decisions and people are being asked to tighten their belts and take cuts. We then find a privileged few being able to circle the wagons and wriggle out of this.
While I am not sure whether the Minister of State, Deputy Martin Mansergh, knows it himself, I would like to know the procedure for this Government decision. Was there a memorandum setting out the evidence that supported this change? How did it happen that the Taoiseach and Tánaiste came in here blissfully ignorant of any such evidence as was absolutely from their efforts to defend it? I would like to see the evidence that substantial inequity was occurring and that this was fair and just in all the circumstances. What consultation was conducted with the review group that had done the work and presented a report which had been accepted by Government? What consultation took place with it before the Government turned tail and ran in the opposite direction under the shadow of the Christmas holiday?
This stank to high heavens. It is not surprising that Fianna Fáil backbenchers, who are not represented here tonight, saw this for what it was. They are not fools. They may be treated like fools and given the old mushroom treatment — being kept in the dark knee-deep in manure. However, they are not fools and were willing to face this down and take their Minister to task. Unfortunately, the Government applied the full strictures of the Whip to silence these people and we are left with just one individual, Deputy Mattie McGrath, who has the courage of his convictions, to come along and vote to reverse this injustice. I look forward to having his support and it shows that at least there is some responsibility and sense of decorum left in the Fianna Fáil Party.
When the cut was proposed, we took a very different view. We said that people on low pay should be exempted and that the first tranche of €30,000 should not be touched. That was fair and it was broadly supported that something had to be done for the low paid. People on little more than the minimum wage should not be sucked into pay cuts of this nature — the second set of pay cuts. They were struggling to get through this recession, which is very much in contrast to assistant secretaries and deputy secretaries who are on €173,000. They are not in the same category and struggling to get by.
For the Government to take a decision to make what was already in most people's eyes an unfair structure even worse and exempt those top earners was really rubbing salt in the wound. We need to see the evidence laid out so that everyone can have an understanding of this. Let us see why the Government has turned its back on the review group, a professional body of individuals drawn from not just the public sector, but also the private sector, which fully knowing that the bonus system was gone still recommended cuts.
What the Tánaiste said in the House was extraordinary. She pretended that the review group recommended precisely the opposite of what it had recommended. She said: "the review body on higher level pay indicated that the bonus was indicatively part of their salary." That was nowhere in the report. Time and again, year after year, the review group had confirmed that bonuses were not part of salary. They never are, never were and never should be. The Tánaiste seemed to take completely the opposite view. The Taoiseach came in here and asked that we be fair to these people and said that because there were bonuses, their pay had been cut over the years and they had suffered worse than anyone else.
The evidence shows precisely the opposite. The highest pay increases in the public service have been at deputy secretary and assistant secretary level. They have enjoyed the highest increases throughout the public service since 1991. Indeed, they accelerated in the period since 2001 when the bonus scheme went up to 10%. In that time those individuals have received a 78% increase in their pay when the increase for clerical officers has been 48%. That is an enormous gap of 30%. They have enjoyed much quicker growth. The differences in absolute terms are startling. A deputy secretary enjoyed an increase in those eight years of €76,000, which is ten times the increase given to a clerical officer at the bottom of the scale. How can the Government turn around and claim that not only are they entitled to a €76,000 increase over that period, but on top of that a €17,000 bonus, which should be regarded as their entitlement as if it were basic pay?
It flies against everything the review group had recommended. It is ironic that the Taoiseach was so keen to back up the review group when it was telling him and his Ministers that we should have increases. In effect, he was saying: "We always accepted the independent review group's view as gospel, since it makes its decisions fair and objectively." However, when those decisions do not suit certain people in the public service, the Minister turns tail and reverses the increases. It is simply not fair to people and we have to change it.
The Minister for Finance was no better. He came into the House and pretended that those bonuses were always part of pay. He said that the bonus scheme provided for an average payment of salary. It did no such thing. It provided that the maximum that could ever be paid was 10% of the salary pool. It provided that, generally, no increases should be given to anyone who was not exceptional in his or her performance. This was absolutely clear; it had nothing to do with core pay. It was for individual public servants who achieved above and beyond normal performance. That is what the test was.
Time and again the review body insisted that "awards must not be seen as an automatic addition to pay". Again, in another year, it stated: "It is particularly important that an award made in one year is not regarded as an entitlement to a similar award in subsequent years." Again, it said that "award schemes must avoid the perception that there will be something for everyone" and "performance related pay should not be pensionable", yet the Minister has done precisely the opposite. He has pretended this is core pay and that right across the board every deputy secretary and assistant secretary, every one of the 655 workers in local authorities and the HSE at senior level, are automatically entitled to this as part of their core pay and that it has nothing to do with exceptional performance.
The Minister is saying they are entitled to it and they should not be asked for any reduction in their pay because this bonus scheme has been suspended. That is what the Minister decided. It flies in the face of everything we learned from the review group in terms of what performance pay is about, which is rewarding people who were exceptional.
That has been suspended now, as the review group rightly said, because bonus pay has been suspended everywhere else in the economy. People in the private sector were getting similar, and often much greater, bonuses and they have been wiped out. Bonus pay is gone, as the review group told us. The same should apply in the public sector. The reduction and elimination of bonus pay was not, in the review group's view, a reason for not applying fair cuts to everyone else. It was absolutely clear in its decision, but not one of the three, the Taoiseach, the Tánaiste or the Minister, has shown that he or she respects the legislation passed here before Christmas. This provided that, to make a change such as this, there has to be a substantial inequity and it must be just and fair in all circumstances that such inequity be tackled. Far from this, however, the Government has given to people at the top something denied to those at the lowest pay in the public service — people who are genuinely struggling to get by, people earning less than €30,000, those on the minimum wage, porters who are trying to support mortgages. They were told that they had to take the full 5% cut.
They are angry at the substantial inequity that has been applied to them, and neither do they figure on the Government's radar when it comes to measuring exceptional and difficult times. Those who feature on the Government's radar are the people at the top of the tree, earning €173,000 plus a bonus on top of that. I cannot, for the life of me, see how that can be judged as fair and equitable in all circumstances. It is simply a disgrace and, what is more, it is going to carry on into pensions.
By treating non-pensionable pay as a reason for exempting people from cuts, the Government is guaranteeing that for those 655 individuals, where everyone else has not had that opportunity and must look at the prospect, unless they retire in the next 12 months, their pensions will be permanently eroded by this decision, one which is not being applied in the case of those who are better off. I rest the case that this is an inequity which needs to be reversed. I am delighted to have had the opportunity to debate this and to get the views of ordinary backbenchers, whose absence is deafening in its scale. There is no one here on the Government side apart from the poor beleaguered Minister of State who comes in here to listen to us. No doubt he will rise to the occasion and tell us exactly how these decisions were taken.