Leo Varadkar (Dublin West, Fine Gael)

I apologise for the delay earlier. I have lost my script but I remember what I have to say.

My party has discussed the issue of public sector pay for a considerable period. In 2003 we stated that we were not in favour of benchmarking unless it delivered real reform. The pay increases were introduced at a cost of €14 billion over seven years, but not the reform. It is something I have discussed a good deal. My party was the first to call for the national wage agreement to be suspended and was among the first to indicate that pay cuts would be necessary in the public service. I have no wish to pretend otherwise. Many of my comments on public sector pay and the public service have offended people. Sometimes this was because I spoke the truth before people were prepared to hear it and at other times I said things that were unfair and harsh; for this I am sorry.

I believe in the public service and I come from a background of public service. Before I came to the House I worked as a junior hospital doctor in public medicine in the public sector. I did not treat private patients. As a Member I am a public servant, my sister is a nurse and my mother a retired nurse. The public service is something in which I believe very much. I do not believe those against reform in the public service really believe in the public service; they believe in self service. The pension levy was necessary but the way in which it was done was not fair. However, pensions must be paid for and as someone who now pays 16% of my gross salary for my pension I do not object to it. However, I hope the pension will be in place when I retire in 2041. This is why we must ensure we have a sustainable pension system. It is in all our interests, especially those of younger public servants, to ensure there is a sustainable pension system which does not run out of money in 20 years' time.

A reduction in the payroll was necessary. It is a testament to the strength, honesty and decency of the two Opposition parties, Fine Gael and the Labour Party, that we were willing to say as much and to sign up to €1.3 billion in payroll reductions. I note that Opposition parties in the UK or the USA have not done so. Some people may be critical of our politics but it is a strong reflection on the Opposition in this State that we have not played the populist card on this issue.

There were choices for the Government. The choices it made on budget day were unfair to people on low pay, especially those earning €30,000, such as clerical officers and cleaners. It was not necessary to cut their pay and this remains the case. The schedule we proposed provides an alternative. It proposes increments should not be paid for one year. They should be deferred and although it would affect people on low pay, at least their pay would not be reduced. It would remain the same for a year. This could still be done.

The cuts were especially unfair on young people. Let us bear in mind that those who will take the greatest cuts will be those earning €40,000 or €50,000 who are young and probably have young families and mortgages. They will be in serious trouble. It is very unfair that a retired school principal earning €60,000 from a pension was untouched, but a young teacher earning €45,000 with a mortgage and two kids to look after took a pay cut. It is unfair that a retired Taoiseach earning €150,000 without a mortgage did not receive a pay cut but the pay of a Senator earning €70,000 with a sizable mortgage and two kids has been cut. That was also unfair. I understand why it was done for political reasons but it is unfair. It was also unfair to state that the pay cuts would be permanent because they need not be permanent. This is the key difference with the proposal put forward by Fine Gael. Our proposal is consistent with the position we have always put forward, that is, benchmarking should be delivered only in return for real reform. That is our view now. Effectively, it is reverse benchmarking. These pay cuts may be necessary but need not be permanent and can be reversed upon the delivery of real reform which could be done on a sectoral basis. In education, for example, when teachers negotiate, agree and sign up to a new contract pay cuts can be reversed. When we agree a new pension system we can amend the pension levy to reflect that by not applying it to non-pensionable income, one of the absurdities that exists now. When there are new agreements in the health sector and radiologists and radiographers sign up to new contracts that allow X-ray departments to be used properly, during weekends and evenings; when nurses and doctors sign up to contracts that allow clinics to be open in the evenings when people finish their day's work, and on Saturdays; when such issues are agreed and we get real reform that actually matters to real people then the pay cuts can be reversed.

The same applies in the Civil Service and local government and even in the Houses of the Oireachtas. For example, the pay cuts applied to Deputies and Senators could be reversed when we reduce the size of the Dáil and reduce the size of or even abolish the Seanad. The same would apply for the emergency services. That is the model I put forward and I believe it stands up to scrutiny.

What the Government did in the pay talks with unions was very wrong. The 12 days leave was never going to fly and I do not understand why people ever thought it would. It shows how out of touch the Government and union leaders are in that regard. When one studied many of the concessions we were led to believe had been offered they had been offered before. We were led to believe that increments would be linked to performance but that is already the case, or is supposed to be. In reality it is not and has turned out to be a sham. The extended working day in the health services that was supposed to be agreed is already in the programme, Towards 2016. Having open recruitment and getting rid of the common pool were supposed to have been agreed before, also in Towards 2016, as was promotion by merit. Sometimes when I hear union leaders speaking they seem like old rope salesmen, offering us the same things in return for this deal they offered during benchmarking and Towards 2016.

What needed to be there - as some was but much was not - was an agreement on redeployment. It appeared to have been there but it was not a single public service in which all public servants would be part of the Irish public service, with no more divisions between State agencies, civil servants and local government and all that nonsense. There was no rationalisation of the quangos and there was nothing on dismissal. We need to have arrangements to dismiss people who are not performing. It is not fair that we have set up our public service in such a way that a young person who is doing a good job and is on a temporary contract is the first to lose a job while a person who is not performing, not doing a good job, who may not even be interested in that job is given tenure and protection for life. That is the kind of reform we need.

We also need to agree a new pension system. For the reasons I outlined we need to ensure there will be pensions for young public servants when they retire in 20 or 30 years time. Under the current system there will be no pensions for anybody. Ironically, the people who are paying the pension levy are those who might not get a pension. That is why we need pension reform.

We also need to address the issue of semi-State bodies. One very strange aspect of this Bill, as was mentioned by others, was the exclusion of some areas. I can understand why the commercial semi-State companies were excluded. I do not understand why the Railway Procurement Agency or the Central Bank were excluded. I understand the Central Bank has agreed to impose the pay cuts in any case, but what about Bord na gCon and the Railway Procurement Agency? Such bodies are State agencies or quangos, not commercial entities and I do not believe they should have been excluded.

There must be some treatment for semi-State companies and it need not involve pay cuts. These are commercial entities and if they are making a profit there should not be pay cuts. No company that is making a profit should exploit its workers by imposing pay cuts but many of the profits semi-State bodies make are not genuine. They arrive because of subsidies given by Government, because of protection from competition also given by Government and because of ridiculously high prices imposed by regulators. For people who are facing pay cuts and paying higher taxes, the very least the Government should do is ensure their ESB and gas prices will go down and that train and bus fares and other Government regulated and semi-State body-imposed charges are brought down. Nobody wishes a pay cut on their neighbour but it is reasonable that such prices should come down and if those semi-State bodies have to make efficiencies subsequently, so be it.

I point to the difference between my party and Fianna Fáil. I hope at some point trade unions and public service workers will come around to the view that they have friends in Fine Gael and we are not out to get them. What we now offer and have always offered are better terms and conditions, pay increases - or, in this case, the reversal of pay cuts - in return for real changes that will deliver better public services for real people. The difference between that and what we got from Fianna Fáil is very clear. We had an enforced pay cut, which three Ministers said was permanent and we had the threatening, bullying and menacing words of the Minister for Finance who effectively told public servants they had better "suck this up", to quote the Minister's brother, who said if people do not like this and protest their pay will be cut even more. We will make no progress in this country either as a common collective or in public service reform if we engage on that basis. What we need is a new Government and a union leadership that are serious about public service reform. I believe we have neither but I hope for the future.

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