Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context

Question 3: To ask the Taoiseach if he will make a statement on the outcome of his meeting on 20 October 2009 with the social partners. [38395/09]

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context

Question 4: To ask the Taoiseach if he will report on his meeting with the social partners on 20 October 2009; and if he will make a statement on the matter. [38483/09]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
Link to this: Individually | In context

Question 5: To ask the Taoiseach if he will report on his recent meetings with trade union representatives and others in the social partnership process; and if he will make a statement on the matter. [44309/09]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 3 to 5, inclusive, together.

The Government has made it clear for some time that the public finance position is unsustainable. Our tax revenues have fallen sharply back to 2003 levels. This means we will have a deficit in the region of €22 billion this year. To bridge this gap, we are borrowing more than €400 million per week. We have made it clear that this cannot continue.

By the end of this year, the national debt will be about €76 billion, double the level at end of 2007. Our main priority now is to stabilise the public finances. The Government has stated unambiguously that the public service pay bill must make a significant and proportionate contribution to the necessary adjustment in the public finances in 2010 and subsequent years. Furthermore, the Government was keen that this significant adjustment would be achieved by agreement.

Against this background, the Minister for Finance and I held discussions with trade union and employer representatives in Government Buildings on 20 October. In the course of these discussions, we set out in detail the context framing budget 2010 and provided an assessment of the medium-term economic outlook. We also elaborated on some of the key choices facing Government in the period ahead. Similar engagements with the other pillars of social partnership took place on 27 October last.

Following this initial round of meetings, the trade unions represented by the public service committee of ICTU proposed that the necessary adjustment could be found by means other than cuts in rates of pay. In good faith, the Government facilitated the trade unions with detailed information about the composition of the pay bill and the implications in cost terms of various potential changes. Discussions also took place with the associations representing the Garda Síochána and the Defence Forces.

On the morning of Tuesday, 1 December ICTU presented its proposal based on pursuing payroll reductions through the accelerated implementation of an agenda for change and transformation of the public service. This was a positive vision that would reflect in many respects the Government's own vision of the public service of the future, which we had provided at the request of the unions. Savings would arise over time.

Given that such transformational changes would take some time to put in place, it was suggested that an interim approach would be taken by deducting payments from the payroll in 2010 on the basis that staff would take 12 days of unpaid leave in a way which would avoid disruption of services. This approach was discussed by Government on Tuesday, 1 December. As the amount of the savings in 2010 was less than the minimum amount required, it did not provide a basis for agreement and the Government reserved its position. The Government informed the public service unions that this was not the basis for agreement and the public service unions responded by indicating that they wished to develop their proposals further.

In the Dáil on Wednesday, 2 December I confirmed that a basis for agreement would exist only if the scale of the reduction in the public service pay bill were sufficient, it were permanent in character, and any transitional arrangements did not impact negatively on services to the public. I also made clear to the House last Wednesday that proposals emerging from the discussions were considered by the Government and that it was indicated to the unions that they did not in their present form provide a basis for the Government to confirm that it could not consider other options to effect the necessary savings.

In discussions that followed, the unions felt that they would be in a position to increase the level of savings to be offered in 2010 on the basis of the structure which had been already proposed, namely, a voluntary reduction from pay associated with 12 days of unpaid leave. Discussions with management in the various sectors of the public service also clarified the nature of the change agenda which would be undertaken by agreement and these changes are significant and worthwhile. The unions also indicated their agreement that the arrangements for the taking of unpaid leave could be spread over a period of years.

It is clear that the level of savings generated in 2010 would need to be sustained and increased in 2011 and subsequent years. Accordingly, the proposals would require an assessment to be made of the level of savings generated from the change process and further discussions next year on other steps necessary to secure the necessary level of saving.

The Government considered that the proposals did not constitute a basis for agreement. This was because of the combination of the requirement that the pay savings in 2010 be accompanied by a reduction in days worked, albeit over an extended period, and that there would be no certainty about the specific basis upon which the necessary savings would be achieved in 2011 and thereafter.

The Government has made it clear that the fiscal adjustments to be made in 2010 must stabilise the public finances; reduce, on a permanent basis, the structural element of the deficit; and form part of an overall package of adjustment measures which are balanced in terms of their certainty and effect. We must now proceed to implement our plan to reduce the public service pay and pensions bill by €1.3 billion next year compared with 2009.

As I indicated in my statement last Friday, the Government is appreciative of the constructive and dedicated effort of trade union officials to develop proposals which would be helpful overall. The engagement with all of the social partners during this difficult period has been most welcome and the contribution made to discussions on these issues is very much appreciated. The Government continues to believe in the value of social dialogue as a way to maximise common understanding and engagement between all sectors. The inability to achieve consensus, although regrettable, does not alter the fact that the savings are essential. The Government must act in the interests of all our citizens.

I understand from media reports that the Public Services Committee of the ICTU has signalled that it is considering a "long and sustained" campaign of industrial action. I regret this development and hope that if any action is undertaken that it does not adversely impact on the delivery of public services especially at a time when we need to ensure we make best use of the limited resources at our disposal to protect services to the most vulnerable in our society and that we do not create obstacles to economic recovery.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

When the Taoiseach answered questions in the House on social partnership in May, he stated that it is clear there is a great deal of common ground between the Government and the social partners and that there is a strong case for the continuation of social partnership. That was the Taoiseach's view in May but it was certainly not his view last week, given the unilateral decision taken by the Government to collapse the pay talks. In many ways, that decision by the Taoiseach sounded the death knell of social partnership. Is it not the case that the Taoiseach was within touching distance of an historic agreement that would have provided for radical reform of the public service? We know from the various documents put into the public arena in recent days that radical reform, particularly in the areas of education and health, had been signed up to and that the Taoiseach has blown it for his own political reasons. Does he see any future for social partnership? Does he see any way back from the damage he caused last Friday? Is it not regrettable that he chose to put short term political expediency ahead of the national interest?

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

Quite the contrary. It is not about political expediency at all.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

We had a deal on Friday morning.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

Are we back into this process again?

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

We had a deal on Friday.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

Given that good substantive questions have been asked I would like the opportunity to reply. I listened attentively in silence to what the Deputy had to say and I would like to respond. After my first sentence, perhaps people will allow me to expand and give my side of the equation. I do not expect the Deputy to agree with everything I have to say but, perhaps, that courtesy could be extended to me as I have extended it to the Deputy.

Social partnership is about more than one pay agreement. I regret the fact that it was not possible to reach agreement. Everyone made good efforts in good faith to achieve an agreement but it was not possible. Much work was done. The strategic gains are important pieces of work that have been done sector by sector, where a common vision has been outlined between management and unions about how we could proceed with reforming of public services. Clearly much of that work was being done in the hope of also achieving agreement on the contribution the public sector pay bill would make towards the consolidation of the public finances that we will discuss this afternoon. Unfortunately, we were not in a position, for a combination of reasons which I have outlined in my reply, to reach agreement. I regret that. I did not in any expedient way seek to avoid agreement. What we had to have was a permanent reduction and an ability to see beyond 2010 that a reduction would be of that magnitude and that further reductions would be possible and further contributions from the changed programme would be able to be made.

There was also the question of the unpaid leave aspect. I can understand the negotiating position of the unions on the other side. They had come with a very restrictive mandate and that was not to accept pay cuts, reductions in rates of pay. A deduction was proposed for 2010 which involved banking equivalent unpaid days leave subsequently. It was further developed to provide that over a longer period than the original proposal would suggest. That was in an effort to see in what way disruption to levels of service could be minimised while that would take place. The problem was also that, in the context of where the proposal had been developed, further talks during 2010 would have been required on how the contribution to the deficit could be made up in the event that the changed programme would not have provided savings of €1 billion in 2010 on the pay side. I always believe that one should try to find agreement if possible but regrettably we were not in a position to find sufficient agreement on that basis.

Social partnership is a structured approach to an interaction between stakeholders in society that has to take place. One has either a structured approach to what it is one is doing or one has an unstructured approach. Having a structured approach is far better because in the modern governance of any society it allows all stakeholders to put their proposals not only on the traditional areas of industrial relations, which are quite narrow in terms of pay and conditions, but on the wider vision of a society and how one can expand equality of opportunity and improve the lot of people in society. That is what social partnership is about. While it has been fashionable to malign that process in recent times, for whatever reason, one has to acknowledge the contribution it has made. It has not been the panacea and solution to all our problems but it has been the new way for the past 20 years of trying to deal with problems and finding accommodation and a way forward. Not every side gets what it wants in toto but it is a means by which a structured discussion can take place that can lead to, hopefully, coherent outcomes. It is more than a single pay agreement.

We have been able to have extended discussions on social partnership over a series of programmes. Many have taken far longer to negotiate than others because of the complexity and difficulties that have to be encountered at any given time when a programme is being formed. The idea of something beyond simply pay and conditions and the relationship between those who employ and those who represent employees, Government, farming and the voluntary and community pillar representatives is a far more inclusive concept of social dialogue than would have been the case with precursors to its emergence and development over the past 20 years.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

I fully accept that national agreements have to be about a wider vision of society. In fairness if one looks at the work various unions have done in terms of the wider economy and society generally, they have produced a good deal of material in that area. It was clear from the recent talks that the Government had no vision about where the country was going. There was an over-emphasis on cuts without any wider vision and without setting down any principles for protecting the weakest, ensuring the economy was positioned for an upturn, that training and education would be available to those who had lost their jobs, the need for a stimulus package and all those wider issues. It appears to me that the Taoiseach took a decision last Friday to collapse those talks - it is something his predecessor, for all his faults, would not have allowed to happen - and he has plunged the country into very serious industrial relations problems for the coming year. What now is his position in regard to social partnership? For example, what is the status of the Towards 2016 agreement and the Towards 2016 review and the transitional agreement concluded in September 2008? Do these documents have any standing now?

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The Towards 2016 document which was devised some years ago was a ten-year framework which set out very challenging objectives for everyone in social partnership. The economic crisis that has enveloped every country around us clearly means that many of those objectives have to be modified or prioritised because they were based on a time when the foreseeable future was far less uncertain than now. That framework agreement remains in place.

I do not underestimate the level of disappointment about last week's outcome. There are issues, however, to which we will all need to return at some stage and in my opinion this is always sooner rather than later. It will be a question of how to allocate resources in order to maintain services for our people against a background of much tighter and straitened financial circumstances, of how to use such resources to the greatest effect. We are still going to have to find a way to deal with the issues being discussed last week because otherwise we put at risk the ability of the system to deliver to the people to the best possible effect, given the available resources.

From my point of view, it is unfortunate that an agreement was not possible. We had to provide for permanent reductions. There is a serious structural deficit that has to be addressed and it is about giving confidence to all sections of the community. There is wide acceptance by all sections of the community that we are all in a position where we have to cut our cloth to the current measure. We would do a disservice to everybody, including people who depend on public services, were we not to take the necessary decisions now to address the fundamental unsustainability of the current position.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

It is called social partnership.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

If the outcome of the discussions does not result in the certainty and permanency which are needed, one has to consider alternative ways of going about it. I do not take away-----

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

It is called negotiation.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I agree, but some negotiations succeed and others do not.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Not unilateral decisions.

Séamus Kirk (Louth, Ceann Comhairle)
Link to this: Individually | In context

The Deputy should allow the Taoiseach to continue without interruption.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

One proposal was referred back to the trade unions and then further discussions took place on the sectoral side. A further proposal was starting to emerge but it did not meet those tests, which is to be regretted, in my view, and people on the other side also regret it. There is the idea that, once negotiations are commenced, they have to end up successfully - that is what one always hopes for - but, unfortunately, sometimes one does not get there.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Maybe with a bit more time, if they had started earlier.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

With respect, a full divulging of the composition of the pay bill and all the necessary data was being exchanged for weeks in advance. It is all very well giving advice as to what to do a week or a month before but we had come to the substance of the issue and it was not possible to find an agreement. This is unfortunate and I regret it as much as anyone else because I had been working for it. I hope to return to working on it as soon as circumstances allow.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context

Last Tuesday morning, was a telephone call made to Mr. Peter McLoone on behalf of the Government to inform him that the Government had signed on for the measures which were contained in the proposals from social partnership, including the compulsory unpaid leave? I have my views on the logistical nightmare this provision would cause. As I understand it, these talks went on until 7 a.m. on Friday morning when it appears agreement was reached. With regard to the health service issues, the document clearly shows a recognition that numbers would decline in the years ahead against a background of reduced budgets and workforce numbers. It states the challenge, therefore, is not only to maintain the level, quality and safety of services, but to expand the range of services that can be easily accessed by patients and clients.

I refer to the Taoiseach's comment about providing more with less. There have always been serious difficulties in the health sector with regard to changes in rostering practices. Item No. 12 in the document refers to the introduction of an extended working day, covering the period 8 a.m. to 8 p.m., while item No. 13 refers to the introduction of five over seven rostering throughout the system. This would appear to be a pretty massive shift from the intransigence that was always shown within the health sector towards such change. I also understand that, during the negotiations, people in the education sector were actually offering new ideas to the Government. It appears that, for whatever political reason, these talks collapsed on Friday. I may be mistaken and I ask the Taoiseach to confirm it, but the union personnel say that Government had agreed the figures, that, from the perspective of the figures, their offers, in whatever way they were made up, met the demands of Government for 2010 and whatever bridging was to be there between 2010 and onwards was recognised.

It seems as if it was either internal politics or the impact of business outside saying this compulsory unpaid leave was a disaster or the reaction from the Taoiseach's own party at the meeting that seemed to cause a change of heart. Anyway, it is done now and it appears as if the social partnership model and structure that was in existence for 20 years, inadequate though it was in many respects, is now dead or certainly dead with this Government.

Will the Taoiseach confirm that an official call was made to Mr. McLoone to say that the Government had signed on for this proposal and it would be part of the process? It is obvious this would have included the support of the Taoiseach and the Minister for Finance. Did the Government accept the figures put through by social partnership? Was the collapse on the basis of 2011 or 2012? In view of the fact that the Government has consistently said that a more effective and customer-orientated delivery of public services is required - I agree - how does the Government intend to proceed to deliver on major public service reform when the structure which has been used for 20 years by Government is now dead and buried, at least with this Government?

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I reiterate that the Government met as a Government on Tuesday and I communicated thereafter to the trade unions the Government position. The first basic requirement was the quantum, the amount of money that would have been generated by this proposal in the first instance, was insufficient and, therefore, the Government would reserve its position in respect of all other aspects of it because we had not reached that point of the equation. We are all mindful of the work and effort of the people involved. When people say they would like to further develop the proposal to see if it can be moved forward, then we are open to this happening. By having that continuous negotiation and that further discussion over the days, we saw further developments taking place in sectoral discussions which are of benefit and of value and which provide, in my opinion, a basis for moving forward in the required transformation of public services. The intrinsic merit remains. It is also a case of necessity-----

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Goodwill does not, though.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

If I may reply to Deputy Kenny, the intrinsic merit, worth and value of that remains because it is against the background of much tightened financial constraints on Government - on any Government. The issue of having to provide new ways forward that will not only maintain services and improve them for service-users, where possible, but also improve the work and the environment of service-providers and provide the flexibility and the operational co-operation between departments would be of benefit. These are important matters which need to be considered for the future. It is a question of ensuring a permanent outcome and being able to identify at this point where the 2011 savings would come, knowing the change management agenda, as ambitious as it is compared to previous agreements. The amount of money that would unlock in 2010 would not make up the difference in the bridging mechanism to which Deputy Kenny referred. Therefore, certainty about where we were going in 2011 and subsequently was not achieved at that point.

The Deputy referred to the unpaid leave issue. I did not make any public utterances at any time last week. In the course of last Tuesday, the idea emerged from some comments I heard subsequently that the strike was not going ahead on the basis that a deal had been done. That was not the position. I do not believe that, in all the circumstances and on reflection, if people were in the same position again today that position would be advisable or regarded as wise because it created a context in the negotiations which made agreement even more difficult. The message seemed to be conveyed by some, not necessarily those who were in the prime negotiating position, that a deal had been done and it was only a matter of tying up loose ends.

Emmet Stagg (Kildare North, Labour)
Link to this: Individually | In context

Two junior Ministers were conveying the opposite message.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

As we know, that was not an accurate reflection of the status of negotiations at the time.

Martin Ferris (Kerry North, Sinn Fein)
Link to this: Individually | In context

I watched the events of last week and the Government did a good job of stage managing the collapse of the talks with public sector unions. Was the so-called revolt by Fianna Fáil backbench Deputies over the proposal for unpaid leave a real revolt? Did it not suit the Taoiseach? Did the Taoiseach support the unpaid leave proposal and, if so, what action did he take to persuade his backbench Deputies and party of its viability?

Does the Taoiseach believe the events of last week, specifically the revolt of Fianna Fáil backbenchers and the breakdown of the talks with public service unions, have undermined and compromised his position? Is it not hypocritical of those who revolted to sign up to extreme cuts in the social welfare payments made to the most vulnerable in society to avoid having any deal or arrangement with the public service unions?

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I do not agree with the Deputy's contentions or theories on this matter. The Government entered this process in good faith, knowing it was difficult for all sides to try to find a common agreement on the issue. On the issue the Deputy raises, the Government considered its position on Tuesday morning and conveyed what its position was. It confirmed that the amounts that were contemplated as savings by the proposal, as developed on Tuesday morning and put to the Government by the trade unions, were not sufficient to meet the requirements of the situation. This message was conveyed as was the message that our position was also reserved on all other aspects of the proposal.

The Government was prepared, and the unions were anxious, to seek to develop the proposal and it was right and proper that we would do so. Unfortunately, despite the good work being done in sectoral discussions the following day, the State must not only act as employer because the need for wide public acceptance of any proposal to come forward is also an important factor.

The issue relating to the unpaid leave aspect of the proposal arose because of the very restrictive mandate the unions had to contend with. In other words, they did not have a mandate to negotiate a pay cut. This issue was linked, therefore, to a proposal on a deduction in pay to be compensated for by subsequent unpaid leave days, albeit further negotiated over a longer period subsequently. This formed a consensus in the union approach in terms of how the unions would negotiate and could not be broken or de-linked. In addition to the inability to identify post-2010 savings that were adequate to meet the requirements of the situation, there were factors which meant that the certainty and permanence required did not eventually evolve.

Despite comments made during the course of the week, I do not believe there was any bad faith on any side in relation to the efforts that were made. Good efforts were made and good work was done. While it is regrettable that agreement was not possible, there have still been strategic gains from the work that was conducted and we will have to revert to these sooner rather than later. I understand, however, the level of disappointment there may be about the outcome.

Brian Hayes (Dublin South West, Fine Gael)
Link to this: Individually | In context

Will the Taoiseach place on the record of the Oireachtas Library the sector by sector draft proposals, which have been placed in the public domain by one side to the negotiations? Will he place the Government's side in the Library and submit the documents prepared by each Department which led to the draft proposals being made?

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I do not see what purpose the Deputy's proposal would have. What one should rely on is the work that has been put together and on which there would have been agreement had other things been worked through. There is an intrinsic merit and a worth to these documents that should not be easily forgotten and can form the basis of work for the future.

Brian Hayes (Dublin South West, Fine Gael)
Link to this: Individually | In context

Does the Taoiseach not accept, given the transformational nature of the proposals that were made, that the public have the right to this information? Those who maligned the process were excluded from it. We all have a right to know the scale of the potential agreement and to access the background documents surrounding the process. Placing this information in the public domain would help rather than hinder the process.

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The documents, as they emerged, do not require further background information. They set out the direction of reforms and transformation that could be contemplated in the right circumstances. As I stated, these circumstances can and should arise again sooner rather than later.

Séamus Kirk (Louth, Ceann Comhairle)
Link to this: Individually | In context

Before moving to the Order of Business, I ask Deputies to bear in mind that Private Members' time is scheduled to commence at noon.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context

While I accept the Taoiseach had to put certain matters on the record, he made some very lengthy replies.

Dermot Ahern (Louth, Fianna Fail)
Link to this: Individually | In context

Opposition Deputies kept asking questions.