Conor Lenihan (Dublin South West, Fianna Fail)

It is good that this debate is occurring against a background in which, literally within the past 48 hours, we have been inching towards a framework agreement with the social partners. As the previous speaker stated clearly, it is hugely important that our commitment to the partnership process be worked on and renewed. That process was born not of success, but of relative economic failure in 1987, when many people believed the outcomes for Ireland in respect of jobs and opportunities were rather hopeless. It was against such a background that the then Government, led by Mr. Haughey, engaged with the social partners with a view to stabilising our situation and putting us on a trajectory of growth.

Today, Ireland is a radically different place in which 2 million people are in employment, 600,000 more than was the case a decade ago in 1997. The social partners are willing to play their part in the financial and expenditure adjustments that must be made. This will not be an easy process merely because we are inching towards an agreement pertaining to a framework for decisions to be made in this regard. This will not make it easy because there will be intense negotiations and discussions through the coming year, 18 months or two years or for as long as it takes to ensure that whatever adjustments are made will be accompanied by broad consensus and agreement between the social partners and the Government. It is a great sign of leadership by Deputy Brian Cowen as Taoiseach to have stuck with this process, despite the negative voices from the Opposition and other sources from outside this parliamentary arena who, towards the end of last year, tried to urge him to abandon this entire process and throw it aside in favour of draconian cuts. Ultimately, it would have been done without consensus and agreement being formed, and would have led to a difficult situation in this country not unlike that which we can observe clearly in one of our EU partner countries, namely France, where widespread industrial disputes, strikes and unrest have been occasioned by a similar effort on the part of President Sarkozy. We wish him well, nonetheless, but we note that Ireland is quite different in its approach and wishes to proceed by way of consensus where that is possible. Consensus may not be possible in the year or two years ahead, but at least a framework has been established against which we can benchmark and look at what we are doing in a timely and proper fashion, consistent with our country's history and traditions of proceeding by way of consensus.

It is also important to recognise what the view of those observers who were urging us to abandon partnership at the back end of last year would have been if we faced into a deep winter of discontent featuring industrial relations disputes with large public utilities literally shutting down the lights and power supply. A much different form of criticism then would have been directed at the Taoiseach as to why he had not stuck it out. The Taoiseach and the Government have stuck it out with the social partnership experiment, which has been good since 1987.

I know from my experience in business working with a number of companies such as Radio 2000, Digifone, O2 and Radio Bohemia, and, indeed, as a company adviser, that the most important action to take in such crises as that which have assailed this economy and the world economy is to get costs down. That is the simple business response to a challenge of the kind we now face. We must get our costs down, both in the public and private realms. Often people like myself who have had experience in business can be rather glib about suggesting similar solutions to the public sector. However, we must be aware that in a private sector setting, as I often saw in those companies in which I worked, it is easy for management to click the finger and achieve the cost savings and, because it is a private sector employment setting, employees are often far more willing there to accept cutbacks because they know their jobs are on the line than those, for instance, in the public sector.

For that reason the Taoiseach has again been proved correct, that to negotiate and achieve savings in a public setting requires considerable patience and negotiation skills, in all of which, incidentally, I believe he is uniquely capable of as a former Minister for Finance and Foreign Affairs and Minister with responsibility for labour at the critical time when this partnership process was beginning. I applaud his decision to stick this out. We will all look back in a year or two and say how right he was to proceed in that way.

As I stated, it is easy to click the fingers in a private sector company as a senior executive and achieve savings across the board. It is much harder in the public sector, precisely because it is taxpayers' money and there is a more secure form of employment available to those who work in the public sector.

However, let nobody be under any illusions. The public sector, including the political class, will have to make sacrifices. The Cabinet and members of the Government have already done their bit in that direction by taking a 10% pay cut.

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