Enda Kenny (Mayo, Fine Gael)
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In recent months members of the Government, including the Taoiseach and the Minister for Finance, have travelled around the country and abroad, and have made perfectly plain that it is the Government's intention to take out €1.3 billion from the public sector pay bill without compromising services. Is the Taoiseach still committed to taking out €1.3 billion from the public service pay bill without compromising services?

Brian Cowen (Laois-Offaly, Fianna Fail)
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It remains the objective of Government to effect savings of that order vis-À-vis the public sector pay bill for 2009 compared to 2010. The Government has made clear that the public service pay bill must make a substantial contribution to the fiscal adjustment required for next year. This is a structural adjustment and, therefore, the savings will be permanent.

The public services committee of ICTU proposed to the Government that this adjustment could be made without imposing cuts in pay rates. This would be based on commitments to a smaller, more efficient and more flexible public service to be achieved in line with the objectives set out in the Government Statement on Transforming Public Services. Discussions on these proposals have been continuing with the trade unions, which have proposed as a bridging measure pending completion of the various efficiency measures involved in transformation that there would be an agreed reduction in pay rates in 2010 and that this commitment to change would be recognised by permitting staff to take 12 days of unpaid leave over a period of years on a basis that it did not disrupt the delivery of services.

Proposals emerging from the discussions were considered by the Government yesterday and it was indicated to the unions that they did not in their present form provide a basis for the Government to confirm that it would not consider other options to effect the necessary savings. The public service unions responded by indicating they wished to continue to develop their proposals and I welcome the fact that in that context the planned day of industrial action for tomorrow has been postponed.

The Government will consider any further proposals emerging from current discussions. I want to make clear, however, that a basis for agreement will only exist if the scale of reduction in the public service pay bill is sufficient, if it is clearly seen to be permanent in character and if any transitional arrangements do not impact negatively on services as assessed by public service management.

Paul Kehoe (Wexford, Fine Gael)
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Did the unions give the Taoiseach the script as well?

Enda Kenny (Mayo, Fine Gael)
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It seems as if the Government has abdicated its responsibility to sort out the economic mess into which it has led us. It is not possible to get permanent savings by having a further 12 days' holidays. It is not possible to give the same level of service with 5% less man-hours.

The detail available to Opposition parties, such as it is, leads me to believe that what the Taoiseach is talking about is grossly unfair. Where is the fairness in a situation where a person on the minimum wage will have the same proportion of cut as somebody on €100,000, and give up 5% of his or her income? How is it fair that ordinary families with children at school will suffer as a consequence of this? How is it fair that the unemployed will have less chance of getting a job when the capital budget is cut? How is it fair that children who are vulnerable will be at risk now because of less social work hours being worked by social workers and those in the social services? There is no sense of fairness in what the Taoiseach is talking about and it seems as if the commitment given by himself and the Minister for Finance has been nothing but words again. Even ten days ago the newspapers reported that the Taoiseach was not for turning on pay.

How many gardaí will be taken off the beat as a consequence of this? How many operations will be cancelled? How many classes will be left without teachers? How many children will be put at risk because of fewer social workers working 5% less hours? Where is the sense of fairness in what the Taoiseach is talking about?

Brian Cowen (Laois-Offaly, Fianna Fail)
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If the Deputy listened to my response - obviously, he did not - he would have heard that there are discussions taking place, progress was reviewed, the Government indicated its position and the public service unions sought to continue with the discussions, which we are continuing in good faith with a view to obtaining the objectives which I have set out. If Deputy Kenny's wants to promulgate some other version of events, that is obviously for his own political purposes. What I am interested in, and this Government is interested in,-----

Enda Kenny (Mayo, Fine Gael)
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The Taoiseach stated we would get more with less and he will give us less with less.

Brian Cowen (Laois-Offaly, Fianna Fail)
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If I may be allowed-----

Deputies:

When in Rome.

Brian Cowen (Laois-Offaly, Fianna Fail)
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If I may be allowed-----

Paul Kehoe (Wexford, Fine Gael)
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The Taoiseach rolled over.

Brian Cowen (Laois-Offaly, Fianna Fail)
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There is sufficient being said about it for me to be able to clarify the position. The level of savings that we seek to obtain remains of the order of €1.3 billion in terms of a reduction between the cost of the public service pay bill this year compared to next year. That remains our position and we wish to discuss with the trade unions on that basis. Those discussions are not complete. As I stated, proposals still must be discussed and developed. However, I made clear what the Government's position is and we reserve our position until we see if we can find an agreement. Otherwise, we must consider other options.

Enda Kenny (Mayo, Fine Gael)
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A logistical shambles.

Paul Kehoe (Wexford, Fine Gael)
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The Taoiseach does what the unions tell him to do.

Deputies:

The Taoiseach will give his seat to Fine Gael now.

Eamon Gilmore (Dún Laoghaire, Labour)
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I welcome the fact that there will not be a strike tomorrow. Some of the strident voices that appear to wish for conflict are not helping the situation. As the Taoiseach will be aware, the Labour Party has been arguing for quite some months that the reductions in the public service pay bill should be achieved by way of a negotiated agreement which would involve significant public service reform. The difficulty the Taoiseach is in is that he did not engage in those discussions until the eleventh hour. There was not serious engagement until after the first strike. The Taoiseach appeared to be too interested in listening to some of the hardline commentators who appear to be pumped up on the steroids of conflict rather than in engaging seriously at an early stage. He is now in a situation where there is a very narrow period of time within which agreement can be reached.

What is the Taoiseach's intention here? Does he intend to conclude an agreement before the budget? Does he accept that any agreement which is negotiated will have to be put to a ballot? He is now in a situation that such a ballot will have to take place after the budget and may, in turn, be influenced by its content. Has the Taoiseach considered what his position will be if an agreement is not accepted in a ballot? I heard his reply to Deputy Kenny, that he is still seeking €1.3 billion in savings, which presumably will be reflected one way or another in next week's Budget Statement. How will the Taoiseach achieve that €1.3 billion in savings if there is no agreement?

Can the Taoiseach explain his point about unpaid leave being taken over a period of years? I understood from his reply to Deputy Kenny that the formula he is now proposing to agree is one whereby there will, in effect, be a cut in pay in 2010. However, the corresponding leave which is to be negotiated to allow that to happen may be taken over a number of years. Is the Taoiseach saying that the pay reduction will take effect in 2010, but that the leave arrangements might not be taken until 2011 or 2012? I heard one trade union leader say this morning that it might even be out to 2013.

Brian Cowen (Laois-Offaly, Fianna Fail)
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It has always been the position of this Government that it is preferable, if possible, to obtain an agreed way forward, in the interests of maintaining services, by proceeding with adjustments which are necessary in the budgetary context and to which the Government remains committed.

As regards these negotiations, it was at the unions' request that they sought to put before the Government policy options, other than a cut in basic rates, as a means of providing the necessary savings. Those discussions are continuing. I have been in discussions and have kept a close brief on all these negotiations. As regards the proposals based on the review the Government undertook yesterday, I want to acknowledge the progress that people have made, the effort that is being made and the good faith in which people are seeking to proceed. None of that is in question. As an employer, the Government has a duty to see if there are proposals that are capable of meeting its objectives and doing it on an agreed basis.

Michael Creed (Cork North West, Fine Gael)
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Do the Taoiseach's Cabinet colleagues agree?

Brian Cowen (Laois-Offaly, Fianna Fail)
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That is the Government's position.

Michael Creed (Cork North West, Fine Gael)
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Were they all for it?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The second point is that in their current form these proposals do not provide the basis for an agreement. Until they do, we do not have the basis for an agreement, but we want to continue with those discussions.

The third point is that the savings will be in 2010. They will be permanent on the basis that the Government is not in a position to continue with a public service pay bill of the quantum that currently exists given our current budgetary position.

Michael Creed (Cork North West, Fine Gael)
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Twelve days extra holidays next year.

Séamus Kirk (Louth, Ceann Comhairle)
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The Taoiseach without interruption, please.

Brian Cowen (Laois-Offaly, Fianna Fail)
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As regards the proposals, which are emerging from the continuing discussions, on how to ensure that one does not disrupt services, it may be required in some instances - if this were to be developed into a proposal that provided the means of an acceptable solution - for people to take that leave back over a period of years. That would be precisely to avoid a disruption of services.

If we are to provide an agreed way forward, it will have to be before the budget because the Minister for Finance will be coming into the House with his budget on the basis of what amounts he will have available for public service pay and pensions next year. I have said that there will have to be a reduction in the 2010 figure for that particular bill, substantially less than it is at the moment, of the order of the €1.3 billion we have sought as an objective. That remains the position. In the meantime, efforts are being made to see if there is an agreed way forward on how to do that. In the meantime, the Government is reserving its position.

Eamon Gilmore (Dún Laoghaire, Labour)
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That appears to be a very muddled strategy, if it can be called a strategy at all.

Dinny McGinley (Donegal South West, Fine Gael)
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Alice in Wonderland stuff.

Eamon Gilmore (Dún Laoghaire, Labour)
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First of all, the Taoiseach is telling us that he still wants to achieve €1.3 billion in the budget. He does not know whether he will get an agreement with the trade unions between now and budget day on 9 December because he has left the negotiations far too late. Second, he has not been able to tell me what will happen if he secures an agreement on paper before budget day, but that agreement is subsequently rejected in a ballot. He has now boxed himself into a situation where the ballot on any agreement that is concluded will take place in the aftermath of the budget. Third, the Taoiseach is also telling us that while savings will be made in 2010, the impact on services arising from those savings may not take place until 2011, 2012 or whenever the staff concerned decide to take the unpaid leave. That would appear to compromise the Taoiseach's prospects of securing longer-term reform in the public services in the years ahead.

Fergus O'Dowd (Louth, Fine Gael)
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Of course it will.

Eamon Gilmore (Dún Laoghaire, Labour)
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Clearly, if there is backed-up unpaid leave going into 2011 and 2012, it will impact on the Taoiseach's ability to achieve reforms in those years with the consequential effect that will have on the budgets for those years. I would like to get some clarity on this because this day week, presumably, we will hear from the Minister for Finance that there is a reduction in the public sector pay bill of €1.3 billion. At the moment, however, there does not seem to be any basis for that. The Taoiseach may or may not have an agreement by this day week. Even if he has, he has left it so late that he does not know whether that agreement will be confirmed in a subsequent ballot. While the Taoiseach might get the financial savings in 2010, there may be a longer-term impact on services in the subsequent years. From what he is saying, he does not appear to have a position on what will happen if there is no agreement. How will he get €1.3 billion in savings if he finds himself this day week either with no agreement or with one that he is unsure will be confirmed in a subsequent ballot?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The whole purpose is not to delay reforms, but to accelerate reforms in the public service. It is about everyone being committed to an integrated public service.

Olivia Mitchell (Dublin South, Fine Gael)
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What is it then?

Brian Cowen (Laois-Offaly, Fianna Fail)
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It is about new policies for deployment and a whole range of other issues, which have been locked for years and have held up reforms. It is a question not only of dealing with the 2010 issue, but also of dealing with the need for an integrated public service that will be smaller over a period of time. It will have all the flexibility on redeployment that we need in order to effect modern public services as envisaged in the Transforming Public Services document. There is no lack of clarity about it. The position is very simple.

Michael Ring (Mayo, Fine Gael)
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It is like a FÁS scheme.

Dinny McGinley (Donegal South West, Fine Gael)
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Nobody understands it and nobody believes it.

Séamus Kirk (Louth, Ceann Comhairle)
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Silence please.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The savings in the public service pay bill will be delivered in 2010. It will be done on an agreed basis, if possible, to obtain it before the budget, or it will be done by the Government in another way. That is the position. That is what is going to happen.

Michael Creed (Cork North West, Fine Gael)
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One would need Pythagoras for that.

Brian Cowen (Laois-Offaly, Fianna Fail)
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We are involved in discussions to see if an agreed way forward on that can be found. Deputies should be clear about one thing, however - those savings have to be made-----

Paul Kehoe (Wexford, Fine Gael)
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The Taoiseach should have told the unions that.

Brian Cowen (Laois-Offaly, Fianna Fail)
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-----because the Government does not have the money to pay the public service pay bill as it is currently constituted.

Jim O'Keeffe (Cork South West, Fine Gael)
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Twelve days of Christmas for good.