Michael McGrath (Cork South Central, Fianna Fail)
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I do not think we can look at pay in isolation. I have always made the point that in agreeing a pay deal with the public sector there will also be a need to take account of what the Government has done to date on other cost of living measures and what it plans to do in the budget. All of the advice we have received from reputable bodies, domestically and internationally, has been not to chase inflation. Pay alone should not chase inflation. If we did that, we would drive it higher and it would become more embedded with second and third round effects. We need to manage it carefully.

We will need a deal that is fair for public sector workers and acknowledges that their living standards have been impacted and there will need to be pay improvement beyond the existing terms of building momentum. However, a balance has to be struck between that and ensuring that the deal is affordable overall and we do not end up chasing inflation and driving it higher, which would cause all sorts of problems for the economy.