Sustaining Progress: Statements.

Minister of State at the Department of Finance (Mr. Parlon)

Sustaining Progress continues the successful formula of its predecessor agreements of a consistent policy framework in the macro-economic, distributional and structural areas. The new agreement aims, within the parameters of the programme for Government, to build upon the progress made under the Programme for Prosperity and Fairness. It is appropriate to current circumstances and reflects the reality of an uncertain international environment. It acknowledges fiscal constraints and their implications for the pace of progress across all policy areas. The overall macro-economic objective is to achieve a medium-term growth rate capable of sustaining high levels of employment and promoting social inclusion.

I cannot overstate the importance of competitiveness and, if jobs are to be secured, of reducing inflation as quickly as possible towards levels comparable with those of our trading partners. I am also mindful of the recognition in Sustaining Progress of the reciprocal relationship between competitiveness and social inclusion, whereby "competitiveness helps to generate the resources to enhance social inclusion, while increased social inclusion enhances competitiveness".

The anti-inflation initiative contained in the new agreement involves representatives of employer and union organisations working with the Government to target domestic sources of inflationary pressure. The sustained appreciation of the euro, together with uncertainty in the international economic environment, make it even more imperative that wages and costs evolve on a sustainable basis and consistent with the terms of the agreement. If wages and prices continue to increase as they are at present, employment and output levels will be compromised.

The new agreement charts the way forward in these uncertain times. It seeks improvements in public services, through a better focus on priorities, and anticipates a dividend from modernisation and change right across the public sector. The pay and benchmarking increases for public servants are linked to the delivery of such improvements.

Sustaining Progress provides a basis for confidence in our ability to take advantage of the international recovery when it comes. It details actions already under way or proposed by Government in areas such as infrastructure, the environment and the need for adaptation to continuing change. We want to ensure that the country is provided with a level of physical and social infrastructure that is affordable and underpins economic development for the benefit of our people.

The special initiatives part of the agreement, which is a further development of the partnership process, identifies a number of major cross-cutting economic and social issues which will be progressed over the lifetime of the agreement. We are also concerned with progressing the social agenda. The actions set out in the agreement aim to promote a fair and inclusive society in which people have access to quality public services. Across the public expenditure area, there is increased emphasis on the monitoring and evaluation of outputs and on value for money.

The implementation of the agreement is being overseen by a high level steering group composed of representatives of each of the social partner pillars and of the Departments of the Taoiseach, Enterprise, Trade and Employment and Finance. The agreement between the Government and the social partners has identified housing and accommodation as a key policy area requiring sustained and integrated effort. It proposes: the introduction of a new affordable housing initiative, as well as the continuation of efforts to increase the supply of housing generally; to improve the delivery of social housing; and to implement planned reforms of the private rented sector.

The objective of the affordable housing initiative will be to enhance the supply of affordable housing. It will be aimed at those who, in the past, would have expected to purchase a house from their own resources but who find that they are unable to do so in the current housing market. Under the initiative, houses will be made available for sale on a full cost-recovery basis and will not impact on the Exchequer. Therefore, it will not detract from the Government's emphasis on delivering a broad range of initiatives for lower income groups and those with social and special housing needs. The initiative will also complement the continuing efforts to maintain a high level of overall housing supply which brings greater stability to the market and greater opportunities, particularly for first-time buyers.

The Government's response is being pursued as a matter of urgency. The first meeting of the steering group to advance the various special initiatives under Sustaining Progress has already taken place. The Government undertook preliminary work in advance of this. The Department of Finance has been involved in discussions with other Departments to flesh out detailed actions which will be undertaken to deliver on this objective.

A total of 57,695 houses were completed nationally in 2002, which was the eighth consecutive year of record housing output. While it will be important to maintain this trend of increasing output, it will also be necessary to optimise output from the local authority and social housing programme. Sustaining Progress provides a framework for the Government and the social partners to contribute to and deliver on housing policy.

Under the programme, the Government committed itself to amending the Redundancy Payments Acts to implement the recommendations of the report of the redundancy review group. It agreed to enhance statutory redundancy terms to provide for two weeks pay per year of service, with the abolition of differentiation by age, and to retain the bonus week in the calculations of payments. The rebate of 60% of the statutory redundancy payment from the social insurance fund will apply to this revised level of support. Following the recent introduction of the amending legislation by the Minister for Enterprise, Trade and Employment, the revised rates took effect on 25 May. The fact that this measure is expected to cost €149 million to implement – financed through the social insurance fund – is an indication of the high level of Government commitment to it and to honouring the terms of Sustaining Progress.

The public service pay agreement provides for a pay increase of 7% over an 18 month period, with an initial six-month pay pause. This increase is to apply as follows: 3% from 1 January 2004; 2% from 1 July 2004; and 2% from 1 December 2004. In addition, the agreement provides for the payment of the increases recommended by the public service benchmarking body on the following basis: 25% of the increases in 2003 backdated to 1 December 2001. This was already provided for under the adjustment to the PPF agreed in December 2000 – 50% of the increase from 1 January 2004 and 25% of the increase from 1 June 2005.

Sustaining Progress emphasises the need for industrial peace and stability in the lifetime of the agreement. To that end, there are similar provisions in the public service for settling disputes through the Labour Relations Commission and/or the Labour Court or, where relevant, the appropriate conciliation and arbitration scheme. In addition, a public service sub-group of the national implementation group has been established to review progress on the agreement and to consider any issues arising from its implementation. There is a commitment by the parties to agreeing codes of practice for disputes in essential services.

Provision is also made for the continuation of the public service monitoring group, which was established under the PPF, and consists of representatives of the public service employers and the public service unions. In addition to fostering industrial peace, the approach in this agreement builds on the experience in the PPF in that it links payments to the achievement of progress on flexibility and change. There is a strong emphasis on the need for co-operation with change and with modernisation. Unlike the PPF, in which only the final phase of the agreement was linked to achievement of targets, the target setting in this case will have to allow assessments of progress before each phase of the general rounds and the final two phases of the benchmarking increases are paid.

The aim of the modernisation process is to improve the delivery of public services. This will involve increased flexibility by staff in service delivery, changes in recruitment methods to attract those with the necessary skills and expertise, the achievement of better value for money and a strong emphasis on improving customer service. Other modernisation objectives and specific commitments have been agreed by the health and education sectors, the local authorities and the Civil Service.

A key element of Sustaining Progress is that payment of 75% of the benchmarking increases and all of the general round increases will be made only if satisfactory progress is verified in regard to the commitments in the chapter entitled "Delivering Quality Public Services". This means co-operation with flexibility and ongoing change, satisfactory implementation of the agenda for modernisation and the maintenance of stable industrial relations. The central feature of the arrangements to verify that the conditions for the payment of these increases has been met is the establishment of performance verification groups for each sector of the public service. These groups will make an assessment of progress no later than one month before each of the four payment dates specified in the agreement. These assessments will be made in respect of agreed action plans for each organisation derived from the commitments in the agreement, which have been agreed by each performance verification group, as well as on an assessment of progress achieved in the relevant sector provided to the performance verification group by the Secretary General responsible.

The agreement also provides that each sectoral performance verification group will maintain close contact with the various organisations under its remit throughout the reporting period. This contact will also help ensure that action to implement commitments will be early, consistent and effective. Performance verification groups for the Civil Service and the health, local government and education sectors will ensure that progress under the new agreement is sufficient to warrant payment. While this mechanism is similar to the quality assurance process which operated under the Programme for Prosperity and Fairness, I am satisfied that it will be even more rigorous, as progress can be assessed and payment awarded at sectoral, organisational and grade levels rather than – as was the case under the PPF – at organisational level only.

The Civil Service, education and health sector PVGs have nine members plus an independent chairman, while the local government sector PVG comprises six members plus an independent chairman. Each of these PVGs includes independent members drawn from the private sector and customers of the relevant sector of the public service.

As well as the PVGs, arrangements have also been put in place by the Department of Finance to monitor developments, across the public service, in respect of the commitments in Sustaining Progress. In addition, an SMI implementation group of Secretaries General has assumed the role of overseeing and driving progress towards achieving these commitments. The SMI implementing group of Secretaries General has also taken on the crucial role of promoting the modernisation agenda over the duration of the agreement, ensuring that action is taken to meet the commitments in the agreement and monitoring progress in this regard.

Significant work is also taking place within public service organisations, which are currently putting in place all the necessary measures to ensure that the public service change and modernisation agenda set out in Sustaining Progress are delivered. Secretaries General who are responsible for agencies within their sector are being advised to ensure that commitments are being met in these organisations and that they actively participate in pushing forward the change and modernisation agenda. I am satisfied that these verification arrangements will be sufficient to ensure that significant progress is made on these commitments over the lifetime of Sustaining Progress.

As previously stated, there is a strong emphasis in the agreement on the need for industrial peace in both the private sector and in the public service. This arises because of the greater need for certainty by the employers that the terms of the agreement will be adhered to and that action will not be taken to secure pay increases in excess of the terms of the agreement.

In the public service in particular, there have been disputes in the past about pay and non-pay issues. These have disrupted public services and had a negative impact on people availing of such services. As employers, we cannot continue to have these disruptions. The new agreement puts in place mechanisms designed to ensure that if there are disagreements between management and unions, they will be resolved within a framework set up in the agreement and without resource to industrial action.

All of the previous agreements contained industrial peace clauses, but the provisions in Sustaining Progress are reinforced and underlined to a much greater extent than heretofore. The public service unions cannot have been in any way unclear that industrial relations stability was an essential requirement and demand of the Government negotiators, and it was to this that they signed up.

Taxpayers have a right to expect that, in return for the substantial increases in the public service pay bill – in the region of €2 billion – arising from the new agreement and benchmarking, they will get a better public service, free from interruption from disputes. In the context of the need for industrial peace, the Government is concerned about current instances of industrial action in the public service in contravention of the agreement. If the stability which was sought and negotiated in the agreement is to be delivered, it is important that these disputes are resolved.

Mr. Higgins

I welcome the opportunity to contribute to the debate on the Sustaining Progress programme. There is no doubt that partnership agreements have been one of the cornerstones of the recovery of this country's economy, particularly since the dark days when it languished as one of the worst and most under-performing in the EU. The coming together of the social partners in order to work out a common economic and social platform and programme over a fixed timescale has undoubtedly provided stability and growth.

While one must acknowledge the unprecedented and totally politically unselfish grand gesture by Alan Dukes, as leader of Fine Gael in the late 1980s, in committing the party to the Tallaght strategy, one must also give credit to the then Taoiseach, Charles J. Haughey, who, together with the social partners of the time, were the architects of the first programme – the Programme for National Recovery.

Up to that time, the country chugged along on what were known as national wage agreements. The problem for the country and the economy, however, was that they were just that. We had a very confined sequence of agreements which dealt only with wages and, almost always, played catch-up, as inflation – as Members will recall – sometimes spiralled as high as 18%. Inflation eroded the real value of the wage increases awarded in preceding agreements. The spiral continued.

The success of the Programme for National Recovery, the Programme for Economic and Social Progress and the subsequent programmes, lay in their being multidimensional. They dealt not just with wages, but with a range of economic factors and became more all-embracing as they evolved. One need only look at the index to Sustaining Progress to see how they have evolved and developed in the meantime.

A key to the success of the programmes has been the review mechanism, which was previously known as the central review committee but to which the Minister of State referred as the steering committee. Members on this side of the House welcome Sustaining Progress, which is an excellent document. Following the initial hiccups that are an inevitable part of the wheeling, dealing and bartering that takes place, we all breathed a sigh of relief when the deal was finally struck.

What is noteworthy, but also a matter of concern, is the fact that Sustaining Progress is a very short-term arrangement which will last approximately 24 months. One cannot blame the unions for their reluctance to sign up to a longer-term agreement or arrangement, given the current economic volatility. Uncertainty was one of the keynotes in the Minister of State's contribution. There is a considerable amount of economic uncertainty and volatility in terms, for example, about what growth will be achieved in the economy. There is also considerable uncertainty about what will be the rate of inflation and the impact this will have the wage and taxation elements agreed in the programme.

Sustaining Progress illustrates the developments that have occurred since the early programmes were introduced. It refers, for example, to the establishment of a PIAB in respect of insurance claims, although it does not go far enough. It also refers to child care and to care of the elderly. With regard to the latter, however, we have been presented with yet another study and little commitment to real action. There is a section dealing with combating long-term unemployment, which is particularly significant if one considers current unemployment trends.

In the section dealing with waste management, policy details are, again, not spelled out. I have a major reservation about our failure to manage recycling. Our efforts in this regard have been much too diverse and disorganised. Until we put some kind of semi-State structure in place for waste management, we will not get to the core of the problem or be successful in managing what is a potentially lucrative area. I have previously advocated that a semi-State body such as Bord na Móna – which has done excellent work and shown considerable imagination in diversifying, but the core business of which has been greatly diminished because of the disappearance of the bogs – should be brought in to deal with waste management. If and when it becomes a profitable enterprise, it should, by all means, be sold off.

The programme refers to improving the nation's health, which is a topical issue, and alludes to tackling alcohol, drugs, etc. It then proceeds to deal with the macro-economic policy areas and with taxation. The programme is comprehensive and we are glad that the deal was finally struck.

I spoke about uncertainty. What is certain at this juncture is that the economy is going through a very turbulent period. Nowhere is that more obvious than in the succession of job losses that have become a weekly feature. In the last week of April, for example, Unifi Ireland announced that it was making 250 workers in Letterkenny in County Donegal redundant. This was followed a few days later by the loss of 80 jobs at Mutual and Scottish Provident. The pattern continued into May, beginning with the announcement that Celestica in north Dublin was closing down with 250 employees being let go. This was followed a few days later with the loss of 25 jobs at the UK-owned Cedar Software in Castlebar. Since then, the Gallaher cigarette company has decided to let 121 employees go at its south Dublin plant. In Waterford, Kromberg and Schubert has cut its staff by 70 and these jobs are going to Hungary. The Mater Hospital announced last week that it is letting 121 of its staff go.

In April ISME, Irish Small and Medium Enterprises Association, predicted that up to 20,000 industrial jobs could be lost before the end of the year as small companies faced what it described as "a crisis of confidence". In a survey carried out for ISME, 55% of manufacturing companies stated they expected a downturn over the next year. One third of manufacturing companies responded by saying they expected employee numbers to drop while some 37% of respondents reported that they employed fewer staff than this time last year. This compares to a figure of 18% of firms which stated they had increased employee numbers. When one considers that 28% – more than one in four companies – have had cancellations of orders in recent months, ISME could not be accused of being overly pessimistic in its predictions.

Equally sobering has been the frank assessment by the American Chamber of Commerce in Ireland regarding the major deterrents in the economy to US firms staying here or new United States companies establishing. The message from the chamber was blunt and to the point. We have lost our competitiveness which, as we all know, is the key.

I have listed the various job losses over the past seven weeks. However, if one examines the reason companies are upping sticks and leaving, it is not that they are going out of business but rather, in most cases, that they are simply transferring their operations out of the country. They are moving to low cost countries where labour costs are much cheaper – for example, Hungary in the case of the Waterford plant which has lost 70 jobs. They can make exactly the same product to the same standard but at a much cheaper cost, thereby making much greater profit for their United States shareholders.

In spite of the mountain of evidence that insurance costs are way out of line with those in developed countries and adding hugely to employer difficulties, nothing substantial has happened. I mentioned earlier the new agency which has been set up in relation to the processing of claims. We have been very strong on diagnosis over a long period and on the prescriptions: awards and legal costs are too high, and the system is too cumbersome and needs to be streamlined. However, as of now and in this programme, all we are doing is picking at the problem. I give credit to the current Minister for Transport, Deputy Séamus Brennan, for his actions some years ago as a Minister of State. He decided to grasp the nettle but was faced down by his colleagues because of pressure from the legal eagles. This area must be tackled if we are to make and sustain progress.

The problem is that there are so many damaging negatives surrounding the economy. Last week, for example, the National Competitiveness Council, NCC, predicted that Ireland was about to become the most expensive country in the euro zone. In 1995 our prices were well below those of our EU partners. Now, because of inflation, we are 2.5% above the EU average and have overtaken our partners.

The shopping basket speaks for itself. The House should consider the cost of getting sick. A box of the same brand of 12 antibiotic tablets cost €6.60 in Spain, €11.10 in France and €20.50 here. Throughout the whole range of the shopping basket and in regard to residential rents, alcohol, tobacco and restaurants, prices have gone through the roof. People are being ripped off. We are killing the goose that laid the golden egg. If we are trying to achieve recovery of the tourism industry, to have prices pitched at so high a level by comparison with our competitors is extremely damaging. For example, in the year to January 2000, the cost of services provided by the State increased by 15% compared to a national inflation rate of 4.8%.

The analysis from the NCC could not be more blunt or explicit. It states: "More broadly, the price of all goods and services that are subject to significant levels of Government influence accounted for 59% of national inflation in the year 2003." The Forfás report carried out by PricewaterhouseCoopers agrees with the broad thrust of the NCC conclusion, although it does not put the figure as high. Nonetheless, it is still extremely high and the implications are obvious and damaging. It means high prices, high inflation and a body blow to competitiveness. Companies based here find that their prices are rising and they will exit from the country as soon as they can find a more attractive foreign base. It is an extremely difficult situation, one not improved by today's announcement that the euro has reached a record high of €1.19 against the US dollar. The high cost of living and housing is a major deterrent to top class researchers and scientists – crucial to industrial development – coming here.

I will finish on a parochial but an important point. The Minister for Finance and his Department reduced the starting salary scale for secretarial assistants working with Deputies and Senators in the Houses of the Oireachtas in October last. This decision was taken, I am told, by the Department of Finance on the basis that it was no longer possible to pay age-related salaries which were deemed to be discriminatory under employment equality legislation. In adjusting the salary scales to reflect his adherence to the employment equality legislation, the Minister fixed the starting salary for secretarial assistants in the Houses of the Oireachtas at €327.82 per week, a massive reduction of €70 for a secretarial assistant on the former starting salary of €398.15 per week.

Despite the secretarial assistants exhausting every measure at their disposal, the Minister and his Department have refused to review the situation. The secretarial assistants and their representatives have pleaded for examination of this matter by the Minister. They have exhausted every channel. Fine Gael, therefore, was obliged to refer the matter to the Labour Court on 7 March 2003. To date, the Department has not even had the courtesy to respond to the Labour Court's invitation to attend a conciliation conference to consider the issue.

Even allowing for the benchmarking award of 8.5%, plus 7% under Sustaining Progress, the secretarial assistants employed since October 2002 will still not have reached the original salary scale of €398.15 per week. I would like the Minister of State to address this issue which has been ignored by his Department. From the point of view of view of fair play, the moral obligation of the Department, cothrom na féine and doing justice to the workers concerned, this matter should be addressed and the Minister should at least respond to the Labour Court invitation.

Dr. Mansergh

I welcome the Minister of State. While I have no knowledge of the situation pertaining to the secretarial assistants, if the facts are as stated by Senator Higgins, I would have a good deal of sympathy with the case made.

The Senator also gave a very fair historical analysis of one of the most notable achievements of the past 15 years, social partnership. While it is not the only ingredient of our economic success and social progress, it has certainly been a very powerful one. This is the sixth agreement. As somebody who has come from the Department of the Taoiseach, the acronyms roll off the tongue: Programme for National Recovery, PESP, PCW, P2000 and PPF. I am not sure what this agreement is – perhaps SP, although I do not think it has been worked out yet.

I congratulate all of the social partners, especially the trade union leader, Senator O'Toole. The trade unions have always been a key partner in the process. I also pay tribute to a group which is perhaps mentioned less often, civil servants. They are involved in all the committees and, certainly in regard to the Departments of the Taoiseach and Finance, immensely committed to the process. They have built up tremendous expertise.

The critics of the process come from both directions. On the one side, there is the ultra-leftist element in the trade union movement which would clearly prefer a kamikaze, Scargill-type leadership and, on the other, the rigorous, right wing neo-liberals who always dismiss these agreements as just wage agreements. They are a great deal more than that. If they were just that, they would only have half the merit. The inclusivity of all social partners is important. I am glad that the farmers' organisations and the social and community pillars decided, though not without hesitation, to come on board. As far as the farmers' organisations are concerned, it is far more important to get increases on the REPS than the 20% on roll-over relief for what in many cases is a significant windfall payment.

One does hear odd voices from different parts of the spectrum, arguing that social partnership in some way detracts from democracy. I have always disagreed with that argument. It is an addition and an amplification of democracy. Democracy, in my definition, means the greatest possible popular participation. This House was an early attempt – one can argue not very far-reaching – to recognise the different vocational elements in society, agriculture, labour, industrial, and so on. Social partnership in that regard is more effective in achieving that recognition.

We live in difficult economic times. It is not clear how long these difficult circumstances will continue. As we have seen before, international agencies like the OECD and the EU tend to predict the upturn will happen in the autumn or early next year. Often it can take much longer than people care to anticipate. Senator Higgins pointed out that we now have the challenge of the strength of the euro on the currency markets. That said, we did live for two or three years with the punt at parity with sterling. Though we are not at that equivalent stage, if we could do it before, then presumably we ought to be in the position to do it again.

Some of the economic debate of the last year or two centred on whether the economy would have a soft or hard landing. I will state, though I heavily qualify my remark as we do not know how long the difficulties will last, so far we have had a soft landing. Unemployment is still only at 4.5%. If it stays at that rate, it will not be too bad. Senator Higgins gave a list of job losses. I wish I had come equipped with a similar list of job gains. I am not denying the job losses and the pain they have caused. Recently, Tipperary town experienced it with the PAL factory closure. However, there are some positives in all of this. While we lose some investment, we are still managing to attract it. We are going to face a competitive challenge form Eastern Europe. If that requires us to up our game, so be it.

It is a tribute to the negotiators that, despite the wage terms of the agreement, it looks as if the trade unions, in particular, were accepting something a little under par with regard to the expected rate of inflation. It may be that with the downward pressures on inflation, especially with the strengthening exchange rate, they will have to do a little bit better than using the rate of inflation. Good luck to them.

Last year a small firm employer told me in Drogheda that the great benefit of social partnership, particularly for small firm employers, was that it gave a reasonable degree of certainty and stability in industrial relations. Employers did not have to enter into difficult negotiations with their workforce. There were clear guidelines that benefited industrial relations in small, and by definition, vulnerable, businesses.

Benchmarking has been attacked in some quarters. I have always defended it. It is often attacked because what the public service does is not measured by the profit line. However, as we noted this morning, not all the huge pay increases at the top of the scale are measured by the profit line either. The public service – teachers, health workers etc. – makes just as valuable a contribution to society as the private sector. I would not extol the public sector above the private sector, but if benchmarking is needed to attract and keep people in the public sector, as well as providing for industrial peace, then it is worthwhile.

There are problems anticipated in the health services and the point has already been made by the Minister of State. Sustaining Progress, at paragraph 23.2 on the modernisation of the health service, states:

The parties to this Agreement recognise the paramount importance of a stable industrial relations climate. The need for stability is all the greater in the context of implementing the Health Strategy, which envisages improving and extending services, underpinning investment, and the requirement for modernisation, change and reform.

There are many problems in the health service, yet, health service workers, some of whom have achieved large wage increases in the recent past, should not operate on the assumption that the public and the media will back the blank cheque approach to solving problems within the health service. If it is claimed that the Government is acting contrary to Sustaining Progress, we should have chapter and verse on that. If we are to achieve progress in health, descending into industrial relations chaos is not going to be the way to do it.

It is important that we do not talk down the economy. In many respects, the economy is in a strong position. I read over the weekend some of the problems faced by the German economy with some 4.5 million people unemployed, a yawning deficit and unsustainable social provisions. The Irish economy is in a much stronger position than that. There is a temptation in the media to preach economic hell and damnation. Sometimes the Opposition succumb to that as well. The former Taoiseach, Mr. Lemass, used to criticise the Department of Finance for its inverted Micawberism, always waiting for something to turn down. That is a temptation that should be resisted.

The programme recognises that the main challenge we are facing is one of consolidation. We need to hold on to the considerable economic and social gains we have made, as well as building on them. Nothing would be easier than to fritter them away. One can spend decades building up an economic reputation and then destroy it within six months. It can be hard to recover that ground. It is tremendously important, having made the huge effort collectively over the past 15 years, that we do not throw it away in more difficult circumstances. The fact that this agreement is in place is a considerable assurance that people intend to tackle the problems constructively and together.

I want to mention the cost of insurance, although this is by no means the first time I have mentioned it. The Irish Life annual report for 2002 came into my home because one of my children has a small number of shares in the company. Irish Life's profit increased from €46 million in 2001 to €290 million in 2002, a 600% increase. We are all aware from our personal experience of outrageous increases in the cost of insurance. Will the barn in the farmyard fall down because of the events of 11 September 2001? Hardly, but people have been faced with demands amounting to a several hundred per cent increase. This is an example of the huge profits being made, certainly by one company, on the back of that event. If that is not the case, and I do not pretend to be an expert on the insurance industry, I would like a detailed explanation for this huge increase because there is no doubt that it is having a crippling effect on the economy.

I would like to see the Government, the Tánaiste and the Department adopt a vigorous approach to the insurance industry. At times we may have tended, officially anyway, to be a little too protective in that we needed a strong and solid insurance industry and so on, but not at the expense of the rest of the economy. This is something the social partners need to get their teeth into and examine the profits of the insurance companies in the aftermath of the events of 11 September 2001 and call them to account in the Oireachtas if that is necessary.

Mr. O'Toole

I thank the Minister of State for outlining the position. It gives me great pleasure to discuss this issue. I strongly support the points made earlier by Senator Mansergh about the effort that goes into the production of such a report. I ask the Minister to convey my thanks to the teams of civil servants who worked day and night and at weekends over a long period, and have done so for the past 16 years each time it was necessary. I mention in particular the three lead Departments of the Taoiseach, Finance, and Enterprise, Trade and Employment which were involved. The team co-ordinated by the Secretary General of the Taoiseach's Department, Dermot McCarthy, was superb.

I will break with precedent and say that the Minister's adviser here today, Ciaran Connolly, had a huge input into the work in terms of modernisation and flexibility. Mr. Connolly and his team would give anybody watching their operation a great sense of confidence in the Civil Service and the way it goes about its work. It is important to say that because we often argue with them. Indeed, I often banged the table across from these people but, whatever differences I had with them, I never questioned their commitment in terms of what they are trying to achieve.

From the narrow point of view of trade unions, and I will speak more broadly later in my contribution, I agree with many of the points made by Senator Higgins on the importance of making partnership work and keeping a check on it afterwards to ensure it delivers. The advances made in the area of minimum pay, redundancy payments and union recognition are the most significant in quantitative terms ever made in those areas. In the redundancy area it has been the greatest advance since the scheme was established. In the area of union recognition, we did not get what we were looking for but we made significant advances on those made previously.

The Government's change in its approach to the charter of rights in Europe was the most significant aspect for the trade union leadership, although I have not seen a line or a paragraph in any newspaper about it. The Taoiseach, the Tánaiste and the Government were prepared to change their position on an issue that had embarrassed the social partners in Europe in terms of the position they were taking. This was hugely important to the leadership of the trade union movement and I want to record that they were supportive of that.

As I said to many trade unions when we were selling this, the process of negotiation is very simple. One spends weeks and months trying to hammer out a deal and nobody is ever happy with the outcome. In my 30 years of negotiation I have never been satisfied with the outcome of negotiations. I presume one never should be if it is to be fair negotiation, unless the other side collapses completely. It is always about compromise and when we sit down at the table we know that. Having achieved what we achieved, however, I believe it is a good deal.

A point was raised about the level of expectation. People had higher expectations and others talked about inflation but here is an interesting point. I said three months ago, and I say it with even more confidence today, that when the 18 months is at an end we will have had an increase higher than the rate of inflation over that period. I am certain of that.

Senator Mansergh and a number of speakers made reference to those who constantly talk down the economy. It is interesting to go back over the Sunday newspapers for the months of November and December last when all the great commentators gave their views on the economy. I am talking in particular about the people who forecast increases in inflation and so on. Five months later, only one of those commentators has proven to be right, that is Davy Kelleher McCarthy. The Dublin footballer got it right about inflation. Our view in the trade union movement, and on the Government side, based on the information before us, was that there were deflationary pressures which would bring down inflation and that is proving to be the case.

I make that point because these forecasters should be shown up on every occasion. They have the greatest brass necks in society. We talk about many groups but these people can pop up on "Morning Ireland" or television programmes, a month after getting it wrong about growth, inflation, deflation and other aspects of the economy, and give a new set of forecasts, yet nobody asks them about the previous set. They should be challenged every time and I am fed up asking radio interviewers to remind these people about their previous forecasts.

It is interesting to watch what is happening with the euro. We all believe that people in the service industry and other sectors took advantage of the introduction of the euro. There was inflation at that stage which was driven by greed rather than anything else, and we have all paid the price for that, but we have also seen the gains. The Economist used to be dearer in Ireland than in any other country in Europe. At least that was always my view when I saw the different prices in lire, francs, Belgian francs, Deutschmark or whatever, but it is now approximately €4 in every euro country. It is interesting to make those comparisons.

We used to hear about Mac economics, which was based on the price of the Big Mac in various countries throughout the world. We all should have our own price measurements. The comparison I make when I travel to other countries in Europe concerns the price of the regular size pizza margherita.

Ms O'Rourke

Pina colada.

Mr. O'Toole

No, not the drink, the pizza. We are anti-drink at the moment. We cannot mention drink. I am talking about the basic margherita pizza, which one can get anywhere in Italy for about €5.50 to €6, whereas it is difficult to get one for less than €7 here. To make comparisons, we should have access to lists showing the price of baskets of commonly purchased goods in the various European Union countries. I have noticed convergence in some areas. More surveys such as the Forfás report published last week would increase downward pressure on prices.

Recently, I was asked about the housing initiative to which the Minister of State referred. People have short memories. One of the commitments made in the Programme for Prosperity and Fairness negotiated three or four years ago was that at least 50,000 housing units would be built each year. Every commentator on the PPF said this objective could not and would not be achieved. I remember trying to explain the issue to trade unionists opposed to the measure. It is a tribute to social partnership and a major achievement that 58,000 housing units were built last year and more than 50,000 in each of the two previous years. I do not want to return to the discussion on who owns development land and its appalling manipulation. At least we are making progress and the new initiative on social housing will deliver even greater advances.

I am the type of person who likes to remind people of promises they have made. The Minister for Finance agreed to fund the pay award recommended in the benchmarking report, under certain conditions. He delivered on his undertaking, despite the advice of all the commentators, including my good colleague Senator Ross every Sunday, not to meet the cost of benchmarking. This was an extremely important decision. I appreciate it when people deliver on deals in which business is done and hands shaken. This has been the case through thick and thin in the partnership process and is part of the basis of social partnership. It also means, however, that I have to sell my soul when representing my membership in some negotiations or do deals of which one would not be proud. Ultimately, the reason we are paid our salaries is that we are prepared to prostitute ourselves on behalf of our members. The condition is that both sides must deliver on any agreements reached.

The Minister of State raised the qualitative nature of benchmarking and the importance of ensuring modernisation and flexibility form part of the process. I wish to address the myth that trade unions are opposed to modernisation or flexibility. This is not the case. At the same time, however, trade union members are no different from other workers in that, like everybody else, they feel threatened by major change. The most difficult aspect of life is implementing change as it is a natural source of worry and fear. It is important that the changes agreed continue to proceed gradually. Under the headings, Education, Health, Local Authority and Civil Service, we have outlined a significant number of issues on which progress must be made.

The Minister of State and Senator Mansergh referred to the importance of industrial peace. I fully support industrial peace, it is part of the new agreement and was one of the objectives of the participants in the process. If difficulties arise in this regard, they must be addressed. We have created ways for doing this and will stick to them.

In every part of the social partnership process, particularly in the trade union movement, there are what I describe as career nihilists for whom all outcomes will be a sell-out, betrayal or the worst decision ever made. They will argue in favour of walking away from social partnership, which is an unfortunate position as it creates uncertainty, distrust and problems. People with a negative approach to life will always find a receptive audience because the forces of "No" are always more powerful that the forces of "Yes" in all parts of this island, not just among Unionists and loyalists in the North. Persuading people to buy into change is always difficult. Social partnership is about the management of change.

I ask the Minister of State to take with him one message, namely, that social partnership does not apply only at the highest levels, but must also have depth and operate at ground level. It must mean asking people in accident and emergency departments their views on how such departments could be more effectively managed. It is about ensuring that people at all levels use their brains at work and give their views on how this might be done best.

It also means that those making decisions must share the decision-making process with others. There is a significant lack of confidence in this regard in Government Departments and industry. People are afraid to consult because they do not have the confidence to say "No". However, consulting people does not mean one has to be led by them. People need to be given a good hearing and their views taken on board. They should also be told when their comments do not fit in. We must do this honestly and openly to ensure people are not afraid of the process. Workers must be stakeholders in the services and products they deliver or the industry of which they are part.

I wish to address briefly the issue of democracy in the partnership process. The Government is part of social partnership and should report more often to one or both of the Houses or a joint committee on progress being made in negotiations. All the other parties to the negotiations do this. The trade union leadership must seek the approval of its members, representatives of the farming organisations must consult their members which, as the Minister of State will be aware, they do not do quietly, while IBEC and the employers representatives also consult their members. There is, therefore, no reason the Government side should not report to the Houses on progress and the objectives it hopes to achieve. This would ensure that all concerned would at least buy into those objectives.

As a trade unionist, my role in negotiations is to increase the proportion of national wealth allocated to the trade union members I represent, while others want to maintain the status quo or shift wealth in other directions. The issue at stake is simple. Wealth is created and shared through profit, reinvestment or taxation which is then redistributed towards services, the support of the disadvantaged in society, the running of the State etc. The process can only begin if wealth is created in the first instance, which is conditional on whether we are competitive. The trade union movement is committed to competitiveness because its members know there is no future without it. We will work on this as well as on the control of inflation and the expansion of the economy.

In the past 15 years, Ireland has moved from having the worst debt to GNP ratio in western Europe to having the best, with the exception of Luxembourg, which in some senses does not count. Although we have the highest rate of inflation in the European Union, we also have its highest growth rate. In such circumstances, making a fair comparison would require that we take as our inflation target the average EU inflation rate plus 50%. While I accept we are not within reach of that target now, it must be our objective. It would be impossible to sustain our current levels of growth while keeping inflation at the European average. We are catching up with other members states.

I could say much more on the issue of partnership. It has brought people closer together and forced Members on this side of the House to understand the problems facing those on the other side and vice versa, which has been good for all of us.

Mr. Minihan

I welcome the Minister of State to the House. I am grateful for the opportunity to speak on this subject, which has, as Senator O'Toole stated, become an integral part of the society in which we live and the way in which we conduct our business. Social partnership has been a feature of public life here since 1987 and the partnership process has become an accepted part of our political arrangements and essential component of the way in which our system of economical management functions. Ireland has achieved great success in recent times, to which social partnership undoubtedly made a significant contribution. In particular, it has helped us to deal with change and cope with the rapidly changing demands of the international marketplace.

Our economy has undergone dynamic changes and a process of adjustment during the past 15 years. Old industries have closed, but new ones have replaced them. Old technologies have been abandoned, but new ones have been embraced and old work practices have been jettisoned and new ones adopted. Employers and workers have proved that partnership is the key to the workplace and our future success. It facilitates change in management for everyone's benefit. This is a crucial part of the partnership process.

Globalisation was seen as a threat by many people in recent years, but we saw it as an opportunity to be embraced. The more we opened our economy to outside investment, influences and competition, the more we succeeded. Our model is now being copied by many other countries.

Social partnership was an easy system to operate during the past five to six years. We had a rapidly growing economy, the capacity to increase public spending substantially and the ability to deliver generous increases in social supports. However, we are now dealing with a more demanding situation. The international economy has slowed remarkably. We continue to out perform our European neighbours, but we have not been immune to the pressures of international recession.

The rapid appreciation in the value of our currency in recent months adds to our difficulties. The euro reached an all-time high against the dollar today. A rising currency is good news for us in terms of inflation. A strong euro means that we do not import price inflation from the dollar and the sterling areas. However, a rising euro represents a challenge for exporters. Ireland is an exporting country. Statistics show that we are now one of the greatest trading nations in the world, particularly if we measure international trade as a percentage of our total economic output. Our ability to deal with this challenge will be crucial to our continued economic success.

I hope that social partnership will help us to deal with that challenge just as it helped us to deal with similar challenges during the past 15 years. The new partnership agreement, Sustaining Progress, is comprehensive and covers a wide range of issues relating to social inclusion, employment and economic progress.

A feature of all partnership agreements from the outset has been a commitment to pay moderation. This is a central part of the new deal. We can pay ourselves lavish wage increases, but if they are not supported by productivity improvements the net result will be an increase in unemployment. That would undoubtedly be a step backwards. It is vital that we maintain moderate wage levels and that we do not price ourselves out of competitive export markets and ultimately jobs.

Sustaining Progress includes provision for the payment of benchmarking awards. Benchmarking is an important issue, not just for those who work in the public service but for the entire country. The benchmarking awards will close any gap that exists between the public and private sectors in terms of wage levels. I hope that the awards will also deliver the reforms necessary to modernise our public service and make it more responsive to the needs of a rapidly changing economy.

There is a price to be paid for everything. We, as public representatives, have to continuously enforce the principles behind the social partnership. As Senator O'Toole said, it is a quid pro quo; it is a partnership deal. We must make ourselves more productive in return for the demands made on the economy in regard to wage increases. I hope this social partnership agreement will be embraced in good spirit. Social partnership has served the country well in recent years and, if embraced, Sustaining Progress will be the cornerstone for our future economic success.

Mr. Leyden

I welcome the Minister of State at the Department of Finance, Deputy Parlon, and I congratulate him on the tremendous work he is doing in the Department. I look forward to some wonderful decisions in regard to decentralisation.

I have, for the first time, had the opportunity to vote for an agreement as a member of SIPTU. I am in the House as a SIPTU member and nominee of professional associations. I was delighted when the document was issued because I could contribute a vote in favour of it. It is an excellent agreement. Some features of the agreement, such as those regarding affordable housing, are important. The constitutional review in regard to property rights will also have a bearing on the excessive price of housing. The cost of housing is totally inflated and it is difficult for any young person, couple or partners to buy a new home. There is a major difference between buying a house now and the position that obtained 30 years ago, when it was much easier to build one's own home. It is important, therefore, that this document is given priority.

I compliment the Government on its introduction of the improved redundancy payments from last Sunday. This is a major development. The Tánaiste, Deputy Harney, brought the relevant legislation forward in a most expeditious way and it was passed by both Houses on 25 May. It will help those who lose their jobs in these difficult and challenging times. We are fighting to maintain our position in a market where the strength of the euro is not a help.

The Forfás consumer price report 2003 – which was compiled on Forfás behalf by PricewaterhouseCoopers and published in the past week – clearly indicates that we are outpricing ourselves. We will have to take action, individually and collectively, to bring prices down. Today I launched the "name and shame" consumer campaign, which is linked to this agreement on the basis of the excessive prices for goods and services operating in the Irish market. There is free choice as far as prices are concerned. Bearing in mind that I was launching the campaign, I brought this issue to the attention of the Office of the Director of Consumer Affairs, whose support I was seeking. Its outlook is that if people comply with the law in regard to the display of prices, they are free to set their own price. The product prices regulations of 2002 require the individual pricing of products in each supermarket or shop and the display of prices in garages. That is the law.

There is a good case to be made for having a barcode machine in stores – some stores already have them – for checking prices prior to going to the check-out. Then if the price is not quite clear the customer can find out exactly what his or her basket of groceries will cost. If the customer does not like the price, my advice is to put the item back on the shelf.

The campaign I launched today will run for the month of June and will mobilise people throughout the country to contact the Consumers Association of Ireland, which has agreed to support the campaign in order to highlight the best and worst examples of competitive pricing. The Leader, Senator O'Rourke, has agreed that we will have a debate in the House in early July – when the campaign is complete – on the Forfás report. In that debate, I hope I can name and shame those traders who are making excessive profits.

On the journey from Roscommon to Dublin today I noticed a differential of 11 cent in the price of unleaded petrol. That is an example of the lack of competition. There seems to be an agreement between all the traders in some towns to keep the price of petrol the same. However, that is not the case in other towns. The public should be more aware of prices. If people are not satisfied with the price in one store, they should make their views known to the owners.

The minimum grocery price order was part of Government policy for some time. It was put in place to ensure major outlets would not have loss leaders and to limit the size of superstores on the outskirts of towns. However, that is not the main issue. When our surveys are completed, it may be possible to impose maximum price levels on drink and food. The restaurant sector is seen as a serious contender in this regard. The report published by Forfás states the increases in consumer prices over the past five years have sharply outpaced those in our European neighbours. Ireland is the second highest in the euro zone after Finland. Pubs and restaurants are the worst offenders, with the most expensive food from low priced outlets, the second from mid-priced outlets and the third from high priced outlets. The power is in the hands of consumers and we must empower them to use it. As Members of this House, we must take action through Government policies to retain the lowest possible and most competitive pricing. We do not want to outprice ourselves as we are now in the euro zone which means people can compare costs in Spain, Greece or anywhere else within the zone. Our costs exceed those in most other European countries, with the exception of Finland, an advanced society with a high standard of living.

The agreement the Minister of State outlined is a step forward. I compliment Senator O'Toole, president of the Irish Congress of Trade Unions. It is a great honour that he is a Member of this House. He has contributed greatly to all the agreements which Senator Mansergh was effective in negotiating when in the Department of Finance and the Department of the Taoiseach. He deserves our praise for the great work he did on all previous agreements. He welcomed the publication of this agreement and praised the higher civil servants responsible for it.

I fully endorse the agreement because it contains the successful formula of previous agreements, namely, consistent policy framework, macro-economics and structural areas. I wish it every success. It is vital that it works and is adhered to and that first class industrial relations continue. We must retain our competitive edge because, if we do not, we will have difficulty selling our products. As a former Minister of State with responsibility for trade and marketing, I know it is a major advantage that the euro is not strong vis-à-vis the dollar and sterling. However, it is competitive at present. We will compete with the new member states after next year.

I wish the agreement every success and thank the Minister of State for coming into the House. I invite him to participate in the name and shame campaign in his capacity as Minister of State. I hope he brings it to the attention of the Consumers Association of Ireland which will be delighted to investigate excessive pricing. I noticed during my trip from Roscommon to Dublin this morning that one of the best prices for petrol was in County Westmeath.

Ms O'Meara

When I was in County Meath over the weekend I noted that the price of unleaded petrol was more than €1 a litre, the highest price I have seen. Senator Leyden probably did not notice this on his trip from Roscommon to Dublin but he might like to note it as one of the most extraordinary price increases we have seen recently.

I recall speaking in 1992 to a college friend who had emigrated to London, as many did in the early to mid-1980s, because of the lack of employment opportunities. He got married there and is now working successfully. When he came home in the early 1990s, he said things had improved and that he wanted to know the key to it. We discussed the national programmes and the manner in which they had been used successfully to turn around the situation we faced in the mid-1980s of high unemployment, serious economic difficulty and emigration, which had caused a huge drain on the economy. There is no doubt the formula used in the national programmes, including Sustaining Progress, of bringing all the partners together and hammering out a national agreement whereby there would be industrial peace and wage levels would be set at a certain level which would help employers was successful. The Government, in turn, kept its side of the arrangement. It worked successfully in conjunction with major investment from the European Union for education, roads and other infrastructure.

The national programmes since the late 1980s have been a major contributor to our economic prosperity and enhanced economic performance. However, things have changed, some for the better. How well will this formula work in a changed environment and how well will the programme work over its lifetime? It was interesting to note the level of difficulty the Government faced in the late stages of the negotiations on the programme, particularly its efforts to keep the voluntary and community pillar and farmers on board, as the Minister of State knows. What is in it for some groups and why should they stay in it? Some elements of our society are probably wondering if it is a good idea.

There is a major change in our economic environment. In the past year, in particular, a number of people have faced problems. Inflation was mentioned on more than one occasion in the House. It is causing problems across the board. Job losses have started to rise in recent months. It is fine to talk about benchmarking and pay increases but that will not help someone who does not have a job. The increases in indirect taxation since the last general election mean that the value of many people's pay packets is considerably undermined by increased ESB bills, third level registration fees and hospital charges. The situation has changed a lot in the past year. One must ask if the agreement is capable of maintaining the level of economic activity we need.

The Minister of State did not refer to the voluntary and community or agricultural sectors, yet he mentioned the housing issue, flexibility and increased productivity linked to benchmarking, without specifying what that entails. He also did not refer to the problems that have emerged at the heart of the partnership process, which must be addressed if this structure is to be maintained in its current form. What thought is the Government putting into this? Does it intend to abandon this structure or does it plan to alter the partnership process to make it more flexible and relevant for the future? The Minister of State did not address this issue, which is crucial, particularly given our changed economic circumstances.

Senator Leyden referred to the expansion of the European Union over the next number of years. Ireland will have to be competitive in that changed environment. The world economy has changed and Ireland will also have to compete in that environment. How much planning is the Government doing for the future? Will the partnership process serve the economy as well as it has done in the past?

Ms Cox

I am delighted to have an opportunity to contribute to the debate. It is funny how times change. I did a course in industrial relations in the National Institute of Higher Education, Limerick, in the 1980s and I recall writing a project on whether there would be another agreement and what it would be called. I do not recollect what I thought it would be called but I predicted there would be another agreement. Nobody at the time, including the gurus in the Departments of Finance and Industry and Commerce, failed to predict the success of the agreements and the difference they made to the economy and Ireland's position in the global economy. The history of the agreements needs to be borne in mind.

I pursued a part-time course in Limerick and worked full-time for a recruitment agency in Galway, which paid my tuition fees. There was significant unemployment in the State and the agency more or less ran a social service for the unemployed. I recall letters landing on my desk from numerous public representatives asking for help for various individuals who came from great families. There were no jobs.

Digital had a plant in Galway and used a temporary workforce. It was great when people got a three-month temporary contract to work for the company because they experienced a manufacturing environment for the first time. They were able to include that experience in their CVs and seek alternative work if their contracts were not renewed for another three months. The opportunity to work at the coal face of a multinational organisation made a difference to people in the west.

I use the same recruitment company nowadays and it is frantically trying to find people to fill temporary production positions for which they would earn more than the minimum wage. People are being hired on temporary visas from the United States and New Zealand, countries with which Ireland has agreements. The workforce in Galway is mobile and flexible because there is more work than the locals can handle. This should be mentioned, even though it does not take away from job losses. My heart goes out to people in places such as Donegal, which suffers because of its peripherality, and Waterford where jobs were lost at an engineering company.

We must ask what has happened and whether it will be sustained. I spoke to the general manager of a multinational company recently and he asked me whether I knew what was killing the company. I said I was aware there were difficulties related to wage costs and competitiveness but he said it was the cost of logistics, including rent, insurance and insurance claims. Many people are bringing claims against companies that have adopted good health and safety practices. I am worried that false claims under the employer's liability scheme have not been eliminated.

The cost of doing business in Ireland is increasing on a daily basis. Insurance costs are killing both large and small organisations. Competitiveness is vital. I do not pretend to understand economics but in the old days Ireland was able to match the US dollar for dollar in terms of production costs. We knew we could not compete with the Philippines or India and we hoped we could beat the US and, therefore, attract multinational companies, but we are not doing that anymore. It is incredible that companies in the US can make products cheaper than their counterparts in Ireland. That is frightening.

The basis of our economic policy should be the reduction of inflation and improving competitiveness by driving down costs to ensure companies continue to invest in Ireland and provide jobs that are needed. Economic growth must be enhanced. The Taoiseach attended a function in Galway last Saturday night and he spoke about Ireland's position in the world economy in terms of growth. Officials from various EU member states meet our Ministers and officials at Council meetings and they are envious of Ireland's economic growth. While growth is not in double digits anymore, it is much better than in other member states. Our economic growth needs to be enhanced and fertilised so that we can eradicate the inflationary and anti-competitive weeds. We need to ensure core industries are examined and costs are reduced so that we can create a competitive environment.

Continued industrial peace is a key factor in this regard. There has been an increase in the number of industrial disputes in recent years. That does not help nationally. Perhaps we need to move from the bad old days when people embarked on industrial action when disputes were not working out. Ireland cannot afford that anymore.

The INO conference is being held at the airport hotel in Dublin and during a radio report this morning nurses said they would consider industrial action to fight cutbacks. That is not the way to fight the challenges in front of us. Industrial action never saved anybody. It cost us jobs, competitiveness and investment. Industrial peace and the moves that we have built into this agreement are crucially important for our continued development.

It is interesting that affordable housing has been identified in this agreement as one of the key drivers in terms of policy delivery and what we want to give back to the people. More and more people who visit my clinic on a weekly basis are saving the money they need to put down their deposit, ensuring that they have enough work to earn sufficient money to buy an affordable house and then getting into the system to benefit from that scheme. People do not want to be provided for by the State. They want to buy their own homes. The brilliant thing now is that they are doing so, either on their own as single people or together as couples. That is the way we will continue to go forward.

I did not know until recently that under the working time legislation a person who works by choice for more than 48 hours commits a criminal act and can be prosecuted for choosing to do so. If I have one job in which I work for 39 hours, Monday to Friday, but also have a part-time job at weekends because I want to save to go to Australia, I can be prosecuted, as can my employer, even though I am working by choice. I sometimes wonder where our sense of entrepreneurship and drive have gone. While it is not the case with this agreement, we can move too far over towards protecting employees from themselves without realising that sometimes we need to let them look after themselves.

Mr. Ross

I have more than doubts about this document. I recognise that when a debate of this sort happens in this House, people take the opportunity to speak about anything they feel like. It is a very wide-ranging debate with very few interruptions from the Chair regarding relevance, simply because this document is so all-embracing that one can speak virtually on any issue affecting the public finances or public policy.

What does that tell us about the document? It tells me that it is a document which could be an election manifesto, an agreement or programme for Government or just a pay deal, which is the bones of it. However, it is a pay deal with an awful lot of cosmetic and aspirational dressing around it. It tells me that the governance of this country is not taking place in this building and that power rests elsewhere. I regret very much the readiness of all parties in this House to take so much dictatorship of policy, principally from the trade union movement but also from others whom they so benignly call the social partners.

This is, I think, the fifth document of its sort—