Mary Lou McDonald (Dublin Central, Sinn Fein)
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5. To ask the Minister for Public Expenditure and Reform his views on the recent statements by the trade union leadership with respect to a proposed increase of 5% in public sector pay, in view of improving economic conditions; and if he will report on the nature and extent of his contact with the public sector unions, to date, with respect to the forthcoming pay talks. [5861/15]

Mary Lou McDonald (Dublin Central, Sinn Fein)
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This question refers to public sector pay and the scope for increases in pay, and asks the Minister to report on the extent and nature of his contacts with public sector unions to date in respect of the forthcoming pay talks to which he alluded earlier. I reference in my question a proposed increase of 5% in public sector pay. The Minister will be aware that this was posited by the general president of SIPTU, Jack O'Connor. He also referred to the rolling back of financial emergency measures in the public interest, FEMPI, legislation and the introduction of a living wage. As I am sure the Minister is also aware, the INMO is seeking a full reversal of the cut of 7%, on average, that affected its workers.

Brendan Howlin (Wexford, Labour)
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As I have already indicated to the House, I want to enter into discussions with the public sector unions to discuss an approach to underpin the gradual wind-down of the FEMPI Acts.   The public service unions have indicated that they intend to make a pay claim if the economic circumstances permit, to which inevitably the Government would have to respond.  Any prudent Government will have to be looking at the potential successor to the arrangements we have in the form of the Haddington Road agreement.  In this regard, I have indicated that my preference is to have the first quarter Exchequer returns available to me before inviting the unions into talks so that I will have the most up-to-date information on the public finances. The economy is recovering, in no small part due to the contribution public servants themselves have made to keeping the costs of the public service pay bill at a sustainable level. I expect that their representatives will be strongly pressing for redress for their members. That is their job.

The emergency conditions that faced the Government on taking office in March 2011 have been brought under control now. The improvements in the public finances and our significant progress towards meeting our fiscal targets have enabled us to exit the programme of assistance and regain sovereign control over our financial affairs, albeit at some considerable cost. However, with control comes responsibility for the continued prudent and effective management of the economy to ensure that our State will not return to the days when we were required to avail of international assistance and cede control of our financial affairs to others. The Government is clear that any discussions on pay will take place in the context of the State's fiscal position and the pace of financial recovery for this year and next, as well as ensuring a sustainable fiscal position over the medium horizon.

There are strong indications that reviews of pay levels will take place across a broad range of private sector employers across the economy this year, and that is welcome - it is a sign of normalisation in the economy. None the less, it is important that expectations in regard to any discussions serve to retain the improvements in productivity and competitiveness that we have helped to deliver in recent times and that have been an essential part of the improvements we have made in the economy.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am sure that, in calling for prudent thinking and vowing not to allow the State go down the tubes and be imperilled in the way it was before, the Minister recognises that it was not working people who created that fiasco and calamity in the public sector and, for that matter, in the private sector.

The Minister says he envisages talks with the unions after the first quarter returns have become available to him. Can he be more specific? Does that mean he envisages entering into talks with them at the end of March or in April? Perhaps he could be a bit clearer on that.

The Minster talks about a wind-down of FEMPI. At what pace or in how many phases does he envisage this phased process? In a previous answer to Deputy Collins, the Minister referred to lifting the embargo, greater recruitment and flexibility in terms of the pay and conditions of new recruits, so he could have one person on a particular pay rate or two people on different pay rates.

I presume such issues and flexibilities, as the Minister would describe them, would be the subject of negotiations with the unions also.

Brendan Howlin (Wexford, Labour)
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From the very beginning, our approach has been one of discussion and agreement. Any proposals we have made on public sector pay and conditions have been negotiated with the public sector unions and agreed by vote, in contrast with the approach of the previous Government, which imposed changes arbitrarily. I agree entirely on the notion that working people and public servants in particular were not the cause of our economic collapse. A decision was made in this House to guarantee unsustainable bank positions. I voted against it, and evidence that has come before the banking inquiry recently has underscored the complete folly of the blanket guarantee. We came into Government to fix a broken economy and having worked might and main with the Irish people to achieve it, we do not want to jeopardise it. We are determined to allow people who have endured much and who have not had a pay increase for seven years to have a horizon in which we will get back to normal. However, it must be done in a sustainable way.

In my previous remark on recruitment, I did not mean people would do the same job on different rates, but that the skills mix could be different. For example, if a school had the capacity to hire one type of employee but would find two different grades more effective, I would like it to have the capacity. This is a work in progress.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank the Minister. In this spirit, when does he envisage the talks commencing? Can he confirm whether it will be March or April? He has set out his view that anything agreed will have to be sanctioned and accepted through the normal democratic channels of the trade unions and representative bodies. Can he be more specific on his idea of the wind down of FEMPI? We are on the same page about the fact that people have taken an enormous hit, particularly people on lower pay in the public service, of whom there are many, despite the propaganda at times that they are all coasting along on massive salaries. Although there is overpayment at the top, some people are struggling. What does the wind down of FEMPI mean and who does the Minister propose to prioritise? Will he start at the bottom with those who are struggling the most?

Brendan Howlin (Wexford, Labour)
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I have said I want to see the first quarter figures, which I will have at the end of March or early April. I hope to have the initial scoping discussions with the public sector unions in April. I do not know whether a formal pay claim will be lodged before it. I have indicated that I want to do it face up with the public sector unions, as I approached the Haddington Road agreement, so they will know where I am coming from. As I indicated to Deputy Fleming, I hope to have the discussions completed and balloted in good time for us to incorporate allocations for whatever is agreed in the 2016 budget line, given that the Haddington Road agreement runs out in 2016. As the Deputy knows, the Haddington Road agreement cut pay only for those earning more than €65,000. The vast bulk of public servants who earn less than this did not have their salaries cut, although many regard the request for an additional two hours of work as a pay cut. I was anxious to keep money in their pockets in so far as possible.