Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I propose to take Questions Nos. 69 and 102 together.

As I have explained in previous responses to questions on this matter, discussions are ongoing at three banks - AIB, Band of Ireland and Permanent TSB - in response to the Government's decision that they were to come up with plans on how they intended to achieve savings of 6% to 10% of total remuneration costs. It was an inescapable conclusion arising from the review of remuneration practices and frameworks at the covered institutions, a report commissioned by the Government in response to a programme for Government commitment that the cost base of the institutions needed to be reduced further. This is essential if they are to return to profitability, be in a position to support the economy and repay the State's investment through a return to private ownership.

In requesting this, I was not prescriptive in how the target was to be achieved, respecting the banks' differing levels of State ownership and paths to profitability. I am not neutral on the method they may use to achieve the savings and must be satisfied that the terms of the Government decision will be honoured. However, there is a wide tolerance as to how the required reductions will be achieved.

Each of the banks submitted its outline plans to me by the due date requested. As a consequence of the ongoing negotiations, some of which are quite far advanced, it is not possible at this stage to reveal precise individual details bar what has been put into the public domain. In that vein, I can confirm that all three institutions have put forward pension changes to varying degrees as part of their overall responses.

My abiding mantra in dealing with these matters has been to insist that the normal industrial relations protocols and consultation procedures need to be observed by all participants. I am anxious, therefore, that all parties to these discussions are afforded the necessary space and time to conduct and conclude these critical negotiations.

I have put on the record that the Government readily acknowledges the sacrifices and changes made by bank employees to date at all levels and recognises that this has been achieved without major industrial unrest in what is a critically important sector. However, there can be no doubt that whatever emerges from the respective talks will present some unpalatable measures for those concerned and will require reflection from them and their representatives.

The cost bases of the banks must be reduced and remuneration costs must come down. While it would not be appropriate or realistic to specify a timeframe for the savings to be delivered, it is clear that the timely delivery of such savings is critical.

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