Oireachtas Joint and Select Committees

Wednesday, 22 July 2015

Committee of Inquiry into the Banking Crisis

Nexus Phase

Mr. David Begg:

Well, I would reject them quite frankly. First of all, I think, in terms of wage movements, that wage movements only tracked inflation over the period of those agreements and inflation was running at around 4.5% on average. And that was against the cost of living situation, which was 29% higher than the European Union average. So I don't think that there was anything, kind of, irrational or immoderate about all of that and I think the significant thing actually is that the wage agreements held in circumstances of very tight labour markets at a time when the economy was growing at over 10%. I mean, it's very easy with the detached people to take a critical view of something like that. But I very well remember the first serious crisis I had to deal with as General Secretary of the congress was when I took over in 2001 when the secondary teachers had actually left the congress of trade unions at that time, over disagreements essentially with congress about what the levels of pay should be and about moderation. And if I may, for a second, just quote to you a statement made by the president of SIPTU at an ICTU conference at that stage, which encapsulates this and which precipitated that great difficulty for me. He said, in relation to the aspirations of people, particularity in the teaching profession at the time, and I quote him now. He said:

You don’t live on the moon. Don’t expect that private sector workers are going to sit back and see you going in for your special, and your other special and your other special, plus the other national pay agreements and say, "That’s grand. We don’t notice". Survival into the next millennium is entirely dependent on our ability to manage success effectively. We mustn't take our eye off the ball of social wage. If we descend into mere sectionalism, if we descend into the worst form of dog-eat-dog capitalism, because that is what it is, the strong will succeed and the poor will go to the wall.

Now, that wasn't me. That was said before I went in but I think it does demonstrate a very responsible, long-term view about what the trade union movement was trying to achieve. The other thing I would say, Chairman, in relation to it as well is that this was at a time when significant productivity improvements were taking place in Ireland. Ireland was about 30% ahead of the EU in terms of the rate of increase or productivity. And it was happening also at a time when that was taking place while labour share of national income actually drifted down by about 10% in the period between 1990 and 2009. So I absolutely reject that and there are alternative pieces of academic research which contradict that and I've cited to you McGuinness et alof the ESRI who clearly showed that there was very significant gains in social partnership from the point of view of the high-tech industries locating their-----

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