Dáil Éireann Debate, Thursday - 18 April 2013
1. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform the actions he will undertake following the conclusion of the vote by public sector unions on the Croke Park II agreement; and if he will make a statement on the matter. [18030/13]
View answer2. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will set out his implementation plan for the Labour Relations Commission's Croke Park II recommendations. [18001/13]
View answerI propose to take Questions Nos. 1 and 2 together.
At its meeting yesterday, as expected the public services committee of the Irish Congress of Trade Unions did not accept the Labour Relations Commission, LRC, proposals for a new public service pay and industrial relations agreement. Clearly the Government is disappointed at that outcome. It is disappointed because it believes the LRC proposals represented a fair, balanced and negotiated resolution to the stark problem that faces the country, namely, that the Government cannot afford to pay its employees as much as it now does.
The proposals would have ensured that direct pay reductions were reduced, in so far as possible, through public service-delivered productivity. By increasing productivity, it would have allowed the Government to deliver the same level of services with a smaller number of staff and fewer agency workers supplied from the private sector. Consequently, the Government could have reduced the cost of the pay bill by reducing numbers of employees in a voluntary way, while avoiding substantial reductions in the services delivered to the public.
The proposals would have contained the really big drivers of the cost of delivering modern public services, especially those which must run on an all-day and through-the-weekend basis. At the same time, they respected the important principle that those public workers who must work at unsocial or inconvenient times at nights or at weekends should receive more pay for that work. Finally, where direct pay cuts had to be applied, they would have applied only at the upper levels of pay and they were the people who have been asked to take that reduction. The core salaries of the 87% of public workers who earn less than €65,000 were to be protected. The majority of those who earned above that amount but less than €100,000 received an assurance that their pay rates would be restored after 2016.
The LRC proposals therefore went a long way towards avoiding the highly unpalatable outcomes for public servants and giving them security about their terms of employment up to 2016. However, I recognise it is unprecedented to ask public servants to sign up to an agreement that has a negative impact on their pay and conditions and it is now clear that a majority were not willing to so do. It is a matter of regret that, as has been made clear on many occasions by the Government in recent weeks, a rejection of these proposals does not change the inexorable budgetary arithmetic. To conform to its budgetary targets and to continue on its path to economic recovery, the Government must make payroll savings of €300 million this year and €1 billion by 2015. The Government will now reflect on the outcomes of the ballot and the manner in which the required savings can be achieved this year and onwards. It must consider how to do so, while ensuring the ongoing delivery of public services to the people of Ireland, who depend upon them.
I thank the Minister for his reply. What surprises me with regard to the Minister's handling of this issue is that if he thought it was such a good deal, why did he contribute so much, more than anyone else, to its rejection? In the week before the deal was agreed, the Minister started by putting out black propaganda against health workers and how much they were paid on Sundays. Thereafter, at a critical time in the talks he himself forced a large proportion of public sector workers to withdraw from the talks. He set about a policy of divide and conquer. In an interview with the Sunday Business Post on 17 March to give himself good publicity during the St. Patrick's weekend, he referred to an across-the-board pay cut and stated, "It is inefficient, in my view, and does not contribute to the process of long-term reform contained in [the] ... agreement".
A question please, Deputy.
Subsequently, the Minister went on to threaten an across-the-board pay cut of 7%, which is the precise opposite of what he had indicated in the aforementioned interview. Thereafter his colleague, another Labour Party Minister, appeared on television during the final hours of the voting period to state that such an across-the-board pay cut would not apply to low-paid workers, which is something the Minister himself never said. The aforementioned colleague then stated that even were the deal to be rejected, there would be plenty of wriggle room. Is it any wonder the deal was voted down? To revert to my question, what actions will the Minister take? While he has told Members the current position, my question looks forward to where we will go next.
Where is the Minister going next with the proposal that he, with help from other Labour Ministers, ensured was rejected by public sector workers?
I am not going to engage in fisticuffs on these really important issues with the Deputy opposite. In respect of the notion that there was any black propaganda, if I said anything at any stage that was untrue the Deputy should put it on the record now.
I noticed that the Deputy himself set out the Fianna Fáil position last Sunday on national television. He said that we should not be looking for €300 million in savings this year but for €350 million. He contested 6% of the €1 billion set out in the LRC recommendations that I supported, €60 million for front-line services. In other words, he accepted 94% of the proposals. We have an issue to address, a shortfall of €300 million in the allocated, voted monies on the pay side of our budget for this year. We have to address this because neither I nor the Government intend that the matter should continue to a crisis point. We are calmly reflecting upon the decision of workers and it is quite clear that different workers voted for different reasons. The very highest paid, including the IMO, senior civil servants, rejected it. They were hardly doing so because it failed to impact on high pay. Others who were very minimally affected voted against it for other reasons. We have to reflect on that but the inescapable issue Government has to address is that we need to find the money.
It does not really matter at this juncture that the Minister's view remains that the Croke Park deal was fair, equitable, balanced and all of the vocabulary he has used. The workers did not act impulsively or rashly, they thought about this carefully and had done the maths. Whereas the Minister has said the core pay of 87% of workers was unaffected, the difficulty was that in respect of premium payments and allowances and so on people were being hit very hard, particularly at the front line. That is now water under the bridge.
The Minister entered into a process in which the unions were summoned, a deal was struck and it was agreed that the deal would then be put to ballot. The Minister's predecessors in Fianna Fáil never went through that routine: they simply legislated unilaterally. The Minister voluntarily sought to engage the unions and the workers in this process. Now the unions have come back and said "No thanks, we are not signing up to that". It is therefore absolutely critical that the Minister make clear today to the unions but more importantly to the workers that he accepts their verdict in respect of that deal. It is also important that he clarifies today that he will not in fact legislate for a 7% cut across the board. I would like him to do that. He is hiding behind reflection and consideration. By all means let him reflect and consider but he should make it clear to workers, particularly low-paid civil and public servants that he, a Labour Minister, will not legislate for a 7% cut across the board.
Can he tell us also how he got on with the troika? I understand he took a call from them. What did they say to him? What did he say to them? What now is the process? While the Minister reflects it is entirely reasonable that we ask him what is plan B. I would like to hear from him today that plan B does not entail legislating for a 7% cut across the board because that was the threat, or the promise that he made to workers in the course of this process.
The Deputy is right. It remains the view of Government that a negotiated agreed settlement would be the preferable way to advance these issues. That is why we did not take unilateral action as our predecessors in government did. In a very measured way we opened the books of the State to the trade unions to let them understand that we had a hole in the arithmetic, thanks to the previous Administration which had unallocated savings for this year and especially for next year, that I believed could not be met by continuing reductions across the board in respect of front-line services.
On that basis we sought a proportionate contribution from the pay bill, that is, since the balance of adjustments to be made on the expenditure side was €3 billion and since the pay bill is of the order of 35% of current expenditure, €1 billion of the €3 billion should come from that. We sought to do that in a proportionate and fair way with the burden falling on those best able to meet it and for the people who understood, the trade union movement and the workers' representatives to negotiate that. The negotiated settlement brokered by the Labour Relations Commission was demonstrably a fair proposal. I agree entirely that to ask any set of workers to vote for a worsening of their conditions in any way, whether it is an extra hour's work for no pay or any reduction at all, is difficult. All the adjustments we have made over the past few years have been difficult for people dependent on social welfare, health and education services. All expenditure reductions are difficult.
The trade union movement will want to reflect on its position. The Government must and is reflecting on its position but the inescapable issue that we must address is that we need to find €300 million this year from additional payroll savings.
Will the Minister tell us how he got on with the troika?
The Minister has spoken twice but has not told us what he is going to do although he has decided what he is going to do. Yesterday, here in the Dáil, we voted to allow the Revised Estimates for 2013 go to the committees next week. The Minister was in the House on Tuesday and the briefing note on the Estimates from the Government to the Opposition parties stated that they largely follow the budget day allocations with the pay deal recommendations by the Labour Relations Commission having been programmed into departmental Estimates. The Minister produced Estimates, and published them yesterday, that factored in the pay deal cuts in the agreement and he will want the committees to approve them next Tuesday. The Minister has decided what he is doing next. He is working unilaterally and he intends voting the measures through the Estimates line by line, Department by Department, next week. He should have told us he was doing that when we asked him what he was doing.
That is a briefing note, not a statement.
The Minister is sending out mixed messages because on the one hand he says he favours a negotiated settlement and that he will not act unilaterally. If that is the case he is not legislating unilaterally, never mind for a 7% cut. That suggests that he is going to go back and re-engage with the unions and the workers. The point is well made in respect of the Estimates and the factoring in of the deal. He was taking that almost as a fait accompli. He may be reflecting but he is causing confusion. If it is the case that he intends to act unilaterally and to force legislation through, despite the vote of workers and their unions, he should just say so. There is no need for a protracted reflection period. If he were to do that it would represent the heaviest hand of this Government to date.
It does not really matter that he still thinks the LRC proposals and Croke Park II were fair and the best deal, as they have been rejected. It is gone.
The Minister needs to find €300 million this year, accumulating to €1 billion by 2015, and he is hell bent that this must come from the public service payroll. He knows well, because I have argued long and hard about this, that he can go ahead and target overpaid and over pensioned people in the system but he cannot credibly levy further hardship on low and middle income earners if he is serious about maintaining decent public services and rebuilding the domestic economy.
I thank the Deputy. I call on the Minister to reply.
There are other places he can find the €300 million.
We are over time. I would like the Minister to reply.
The Minister should come clean and tell us what he is proposing.
We have had two speeches from the Deputies rather than questions. I made a decision to publish the Estimates, which are based on the implementation of the LRC recommendations, because that is what we hoped to do. We had to have some basis for apportioning the €300 million and I wanted the Estimates out because they had been delayed. There are agencies that need funding and, therefore, we need to pass the formal Votes. Obviously, if there is a different formula for the €300 million, we will come back to the committees to have those adjustments made, as is normal, in the course of the year.
Deputy McDonald has the same mantra always. A total of 87% of public sector workers do not earn more than €65,000 and regard that income as a lot of money. To ask for a proportionate contribution of between 5% and 9% from those earning in excess of €65,000 is reasonable. The Deputy referred to high rollers. It is a lovely jibe to make and she will probably get her headline tomorrow again. If the proposals had been implemented, a Minister would have earned €100,000 less than at the height of the boom. That indicates how much we have attempted to reduce pay over time because we are determined that there will be a proportionate response to these difficult challenges. This morning, the Tánaiste challenged the Deputy's party to introduce legislation to cap all public sector pay at €100,000 per annum if that is what they believe is necessary. We will see how many consultant doctors, judges and so on remain in the system once that is done.
The Minister has answered nothing
I call Question No. 3. We are now dealing with individual questions, for which there is six minutes.
On a point of order, I respect the fact that the Leas-Cheann Comhairle must run an orderly shop and that questions must be time limited but it is disgraceful on such a critical issue that the Minister can come in and talk down the clock and not answer parliamentary questions. This is not an informal arrangement.
The Deputy has made two speeches.
We are parliamentarians asking for answers from the Minister and he has spectacularly failed to give them.
The Deputy has made two speeches and this is her third.
I take Deputy McDonald's point. Has the Minister anything to add?
I am happy to answer all the questions. Both Deputies made speeches.
Our questions were tabled.
I asked them to put questions.
It is amazing that they feel they can make long rhetorical speeches but I am not allowed to rebut the inaccuracies they place on the record. Politics is about putting truth to this House.
I challenge Deputy Fleming, if he believes his black propaganda, to outline any instance of untruth uttered during the debate by me.
By all means, the Minister can make his own speech. I have no objection to that but I strongly object that he was asked straightforward questions which he has refused to answer.
Can we all join in?
Will Deputy McDonald please resume her seat?
This is not a casual conversation.
The Ceann Comhairle has spoken about this and the Deputy can take this issue up with him.
That makes a farce of this Question Time.
