Bertie Ahern (Dublin Central, Fianna Fail)

I am very glad of this opportunity to have an early debate in this House on Towards 2016, the ten-year framework draft social partnership agreement, negotiations on which concluded on 14 June last. Deputies will be aware that we have already had a debate on the draft agreement in the Seanad on Wednesday, 21 June.

As I said in my reply to questions in this House last Wednesday, I recognise that all parties have dedicated a great deal of time and effort to the negotiations and I again record my appreciation of their continued commitment, both to the immediate goal of securing a new agreement and to social partnership itself, often in the face of difficult negotiating conditions and misguided criticism, to which I will return later.

Towards 2016, if ratified, will be the seventh social partnership agreement we have negotiated since the process was initiated in 1987. I am glad to say that our economic and social circumstances have been radically transformed for the better since those early days. Social partnership has been central to bringing about that transformation. In particular, the industrial relations environment, which has been transformed, has been critical to our success in attracting increased investment.

As with previous social partnership negotiations, the present draft agreement has reflected the NESC strategy, which provides a strategic analysis of the key opportunities and challenges facing us. A shared understanding of those issues and a consistency of approach in responding to them have been central factors in our successful adaptation to change over many years.

The evident track record of successful economic and social change through social partnership has been recognised and attracted very positive comments, from many international organisations and agencies, including the IMF, the OECD and the European Commission, which have understood its role in the transformation of our economy and society. It is why the European Council urged all member states to develop national reform partnerships, like Ireland, to underpin the Lisbon Strategy for growth and jobs, since neither governments acting in isolation nor public policy alone can deliver the change required.

Some have argued that the draft agreement, in so far as it relates to pay and the workplace, is really relevant only to a minority of private sector employees who are trade union members and that it is essentially a public service pay agreement. This displays a grave misunderstanding of how the Irish labour market works. While it may be true that a majority of employees in the private sector at any one time are not organised members of trade unions, it is equally true that wage determination is always shaped by the organised sectors, within the context of underlying labour market conditions. Wage norms and trends are strongly established, especially in small labour markets.

We know from our own experience the dire consequences when these norms are out of kilter with conditions across the economy generally. Collective bargaining across Europe is a powerful influence on wage setting, even in countries with much lower rates of trade union membership than Ireland. What matters is that the bargaining takes place on the broadest basis possible and with full awareness of the economic and social context. That is precisely what the partnership process secures.

Our model is successful precisely because it is flexible enough to take account of the wide diversity of situations in employment across the economy, while providing certainty and confidence that can successfully and effectively guide not just the setting of pay rates, but also all aspects of the employment relationship, in the right direction.

Employment standards issues arose, in admittedly a small number of companies, in the latter part of last year and caused widespread upset and passionate concern among many thousands of workers and citizens over the potential for displacement and a "race to the bottom" in the labour market. This demonstrated the need for mechanisms to provide assurance on decent standards and fairness, without compromising flexibility or adding unreasonably to the burden of regulation of the labour market. Setting that delicate balance requires the active engagement of all of the parties in our employment system. We are fortunate that the social partnership process provides precisely that opportunity. The proposals in the new draft agreement regarding employment rights and compliance represent a fair balance between the legitimate interests and objectives and will provide confidence for the future in a rapidly changing labour market.

The terms of the pay agreement are quite straightforward, with 10% payable over 27 months in four instalments of 3%, 2%, 2.5% and 2.5%. An additional 0.5% will be added to the payment from 1 July 2006 for those earning €10.25 per hour or less. As with previous agreements, provisions are included which enable employers to plead inability to pay or to seek offsetting productivity changes where circumstances require it. In addition, the parties have agreed to make a recommendation to the Minister for Enterprise, Trade and Employment as regards increasing the national minimum wage with effect from 1 January 2007. The proposed level of pay increases strikes a fair balance between the pressures on the enterprise sector to be competitive in international markets and the need to secure the living standards of our workforce.

The public sector pay terms are the same as for those of the private sector, except that the first payment will fall due on 1 December 2006 rather than 1 January 2006. As was the case under Sustaining Progress, these payments will only be made after the delivery of verified changes. The changes include better opening hours, more flexible operating arrangements, the application of ICT to achieve greater efficiency and improved promotion and recruitment practices, including in particular opening up more senior jobs to competition from those outside the public sector. The second benchmarking body is due to report its findings by the end of 2007. A parallel benchmarking process in respect of the pay of craft grades and related non-nursing and general operative grades is to be completed by the second half of 2007. Again, payment of any recommended increases will be dependent on ensuring the delivery of substantial change and flexibility.

The agreement is about much more than pay. The draft agreement addresses the need to maintain a supportive macro-economic environment to enhance productivity and competitiveness, the successful management of and response to social needs and social change and the imperative of building a more inclusive society. Put simply, it is about mobilising our collective resources to improve people's lives. Draft copies of the agreement have been circulated among Deputies, so I will only briefly set out the main elements.

Chapter two describes the macro-economic context to the agreement. A certain level of economic growth is assumed in the short to medium term. The draft agreement endorses the key national strategies, such as the NSS and NDP, which will inform investment and planning over the period. It also details key actions planned or already in place in terms of sectoral strategies in key areas such as science, technology and innovation, better regulation, public enterprise, manufacturing, transport, housing, energy, telecommunications, education and training, the environment, rural development and the agri-food sector.

Social partnership provides an effective mechanism for driving progress on the social agenda over the next ten years. As well as acting as a forum for dialogue and engagement between the key actors, it provides the means for us to work together to deliver better outcomes for the most vulnerable people in our society. In the developmental welfare state report published last year, NESC suggested that our strong economic performance could serve as a new context within which to seek major improvements within the social sphere. This requires a process of reinvention and repositioning of our social policies and the critical recognition that economic progress and social well-being are equally important and mutually reinforcing. The NESC analysis recognises that increases in social welfare alone will not overcome many of the difficult social problems we face as a society. The delivery of quality public services is essential. We also need to be proactive in encouraging innovative and pioneering responses to social challenges. Community and voluntary groups throughout the country have a key role to play in delivering these responses.

Towards 2016 sets out an ambitious agenda aimed at delivering tangible social change. It adopts a longer term perspective, recognising that many of these social challenges are particularly complex and require coherent and strategic responses. Significantly, the agreement puts in place a new social policy perspective based on the life cycle framework. This approach seeks to move us away from a situation where policy is developed along departmental lines to one where the focus is on the outcomes we need to achieve for people at different stages of their lives. The agreement sets out a vision and long-term goals for children, people of working age, older people and people with disabilities. It also highlights a number of emerging challenges and includes measures for responding to them. These include, for example, the integration of migrant communities, the acute needs of children in disadvantaged communities and support for the role of the community and voluntary sector in the future.

A range of priority commitments are set out under each life cycle stage to be pursued over the first phase of the agreement. For children, a number of measures aim at increasing the supply of child care and improving educational outcomes. For people of working age, there is a focus on measures to promote employability and access to employment, in recognition of the key role that employment plays in helping people to escape poverty and to improve their opportunities. For older people, the social partners have agreed to work together to develop an effective infrastructure of long-term care services on the basis of principles set out in the agreement. The social partners have agreed that the implementation of the national disability strategy provides the most appropriate mechanism for delivering the outcomes we wish to see for people with disabilities. A number of key issues have been highlighted so that they can be addressed through the Disability Act and the sectoral plans process. These goals cannot be achieved during the usual three year agreement. In this context, the Government and the social partners recognise that a ten year framework agreement is more appropriate for this type of effective social dialogue.

On the criticisms made of social partnership, it never ceases to amaze me that the most voluble critics, who denigrate social partnership and, therefore, the social partners, and deny its role in our economic and social transformation, never enlighten us with their suggestions for an alternative. Social partnership works and, despite the difficulties that have occasionally arisen, has proven itself a reliable and effective means of identifying, analysing and addressing key social and economic challenges.

One of the loudest and most often repeated criticisms is that social partnership is anti-democratic. Since its beginnings almost 20 years ago, social partnership has been based on an invitation by the Government of the day to the social partners to join it in discussing how to jointly develop policies and behaviours which better serve the needs of our people. It is entirely appropriate and democratic to recognise the independent roles and contribution made by various social partners.

At the same time, the partners fully recognise and accept that the Government must be able to exercise fully its prerogatives within the framework of political accountability. The Government entered these negotiations on the basis of our published programme for Government. We have been no different in this respect than previous administrations. We have maintained close ministerial oversight at all stages of the negotiations and the terms of the draft agreement were approved by the relevant Ministers in a process led by the Tánaiste and me. We are satisfied that the outcome is entirely consistent with our programme. In implementing the agreement, we will be fully accountable to the Oireachtas. The substantive elements of the agreement require the introduction of 12 Bills, each of which will be subject to close scrutiny and debate here and in the Seanad. The expenditure implications will be dealt with in the budgetary and Estimates process in the normal way, with the normal full accountability, approval and oversight by the Oireachtas. All the implementation arrangements of the last agreement were reported on regularly to the Oireachtas. My ministerial colleagues were also answerable in this House in respect of their particular responsibilities under the agreement. This will continue. I welcome greater parliamentary scrutiny of the process and hope Oireachtas committees will take a greater interest in the substance of social partnership. I also see particular value in direct Oireachtas engagement with the chairs and directors of the social partnership institutions, NESC, NESF and NCPP. The social partners would also be happy to avail of opportunities to share their experiences and their views on the process.

The ten year duration of the draft framework agreement does not bind future Governments unreasonably. The ten year perspective is a realistic acknowledgement of the scale of the development objectives we share with the social partners, arising from the NESC analysis. While the detailed arrangements, including pay, set out in the agreement pertain to the first phase, it is right that we should set out a longer term agenda for social dialogue. It will be for each Government over that period to engage in the detailed discussion on the basis of its electoral mandate. The democratic process and social partnership are, therefore, complementary aspects of modern governance and I look forward to continuing engagement as a means of expressing this complementary relationship.

While talks on the farming sector have not yet concluded, the farming pillar has participated in the negotiations on the non-pay agreement. The draft agreement will now be subject to ratification over the coming weeks, in line with the internal procedures of each social partner pillar and organisation. All concerned will recognise the benefits of the new agreement for themselves and for the country as a whole. Therefore, it will be ratified and we will continue our successful experience of partnership to the benefit of all our people.

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