Brendan Howlin (Wexford, Labour)

I thank the Deputy for his considered and extensive amendment which seeks to expand the provisions of legislation introduced by his party in government, the first financial emergency measures in the public interest legislation of 2009, to encompass a range of individuals and services to which they cannot and currently should not apply. The amendment would amend the structure so that instead of justifiable reductions in payment, for example, to health professionals imposed following a regular review, a ceiling on payments unrelated to the extensive medical care provided by health professionals would apply.

The primary amendments tabled by the Deputy are amendments Nos. 3 to 5, inclusive, as amendments Nos. 1 and 2 are consequential to amendment No. 3. Amendment No. 1 would include a definition of the word "contractor" in the original Financial Emergency Measures in the Public Interest Act. While the Deputy did not refer to this issue, the purpose of the amendment is to extend the definition of the term "contractors for service", that is, people who provide services such as ICT, data and so forth on an ongoing basis to the State. The Deputy seeks to impose an arbitrary cap on the sums paid to contractors in one accounting year of €200,000 and €250,000, respectively, by anybody concerned. The cap does not take account of the amount of work done, which can be covered by commercial contracts of service, or the value of the work being provided.

On the commercial semi-State bodies listed in the Schedule, let us take as an example CIE. The Broadmeadow Estuary bridge was repaired at a cost of €4 million and reopening that important service for commuters was regarded as an imperative. If we had informed the company in the CIE group charged with doing this work that all procurement activities would be subject to an arbitrary limit of €250,000 per contractor per accounting year, the work would never have been completed. It would not have been practical to disaggregate the work to ensure no one received more than €250,000.

Commercial procurement activities in most, if not all, bodies listed would at times exceed any arbitrary listed figure. While the issue raised by the Deputy needs to be addressed, we must do so through a different approach, namely, procurement. I do not have time to discuss this issue in detail this evening but may have time to address it tomorrow on Committee Stage. I am interested in hearing the Deputy's views on breaking up contracts to make procurement more efficient. Dealing with the matter by way of an amendment to financial emergency measures in the public interest legislation is not the correct approach.

This legislation is extraordinarily special because it hangs together on the basis that it acknowledges the financial crisis in which the country finds itself. As the previous Minister took great care to recognise, we cannot expand its scope in all directions. He knew he was taking extraordinary measures by reducing the pay and pensions of individuals, as I am doing again tonight. I am conscious of case law and clear legal opinions on what constitutes a pension. Pensions are preserved property rights for which people have paid with a legitimate expectation of receiving them. One must, therefore, have a very compelling reason to reduce them. The argument is that there is an overwhelming necessity in the national interest to do so on the basis of this legislation. If this argument fails, the constitutional safeguard for property will hold sway. In truth, we must be very careful about how we try to expand the provisions of the Bill. If some of the propositions in the first five amendments were accepted, I have no doubt they would collapse the entire edifice of the financial emergency measures in the public interest legislation we have put together, which is absolutely essential for the financial well-being of the State.

I do not wish to take up the time of the House by referring to all the points in my speaking notes as I am conscious Deputies wish to contribute. I wish to address specific issues but will not speak in detail. In general terms, I will not accept the amendments. The legislation was crafted to take those elements of pay that I had provided for in the pensions Bill which legislates for reductions to office holders and so forth and deal with the consequences of the overwhelming decision of the people in the referendum to seek to bring the Judiciary into the norms of pay reductions. I have indicated that I intend to submit a further amendment in the other House to address the specific issue of a tiny group of people having extraordinary pensions.

A number of current and former Fianna Fáil Party Deputies acknowledge the way in which these matters have developed in the past couple of decades. Responding to Deputies opposite on a previous occasion, I indicated that I was not aware of what is known as the TELAC process which has apparently been doing the rounds here since 1987. Under this process, Secretaries General could secure extraordinarily generous severance payments at the end of their seven year term. We have ended this process but cannot do so retrospectively.

Deputy Fleming is correct on the issue of contractual rights. We have examined this matter carefully and I share the Deputy's' view on the need to try to address these matters. While we cannot dislodge people who were appointed on certain terms, we have asked them to accept certain changes voluntarily and all of them have done so. The pensions of incumbents will be calculated on the pre-cut basis. After February, however, the reduced salary will impact in the calculation of lump sums and pensions.

I do not intend to broaden the provisions in the manner provided for in the amendments and I believe the Deputy, in his heart of hearts, knows that is the position. We need to make progress on reforming all of these issues. The first step is to introduce a ceiling to ensure this issue does not arise again and individuals will be dealt with differently in future. For this reason, we have the basic, ground-breaking comprehensive legislation on pensions. Subsequently, we need to dig away, if one likes, at and put right the most egregious unacceptable norms that have bedded down in the past couple of decades.

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