John Dardis (Progressive Democrats)

I welcome the Minister of State, Deputy Killeen, to the House and I welcome the fact that the Leader of the House has organised time for these statements, which I believe are important. The argument, made both here and elsewhere, that the social partnership agreements diminish the powers of the Oireachtas and thus contain a certain undemocratic aspect have been dealt with effectively by Minister of State, Deputy Tom Kitt, and Senators Mansergh and O'Toole. They pointed out that such agreements are of their nature democratic because they incorporate the wider society. The valuable point about today's debate is that it is taking place when the talks are at an early stage rather than when they are over. It has been common practice for the Oireachtas to comment on the outcome of the deal rather than to consider the nature of what that deal should be. It is good that we should consider these matters now. In so far as these statements afford us an opportunity to put on record our view of agreements past and future, they are a valuable exercise.

Like others, including Senator Mansergh, I want to differentiate between the terms "social partnership" and "pay agreement". Although agreements on pay are an integral element of the partnership process, they by no means represent its totality. The Government, employers' organisations, the unions and the farmers all play a crucial role in the social partnership agreement, as does the previously mentioned fourth pillar — the social and voluntary pillar — which I will discuss later. The point is that we should not speak of the social partnership process in terms of pay deals alone. It is evident from the participation of the various partners in the talks on all previous deals that the social partnership agreements are much more than that.

Since its foundation in 1987, social partnership has formalised interaction between the Government and the social partners. Its fundamental objectives of implementing agreed change and providing a process for resolving difficulties have played no small part in bringing Ireland to where we are today. Although some people speak of social partnership as the only critical and necessary element in Ireland's economic transformation in recent decades, I agree with Senator Ross that social partnership is just one element. However, under social partnership we have not only consistently offered some of the world's lowest corporation tax rates but benefited from the reduced levels of personal taxation, with the State profiting from the resultant increased employment and economic activity and people benefiting from lower taxes. That we have adopted and met the Maastricht criteria should also not be underestimated.

All those developments have been of consequence, but social partnership has also provided a great social impetus. There was a realisation by the people of this country that things had to change. As others have mentioned, some of us recall vividly what life was like in the Ireland of the 1980s, 1970s and 1960s and how far we have travelled since then. People growing up today have no knowledge or recollection of those times but anyone who went to university in the 1960s, as I did, can recall that it was unusual for people to be able to stay in the country after they qualified. Thankfully, we have come an immensely long way since then and social partnership has contributed to that. Our levels of unemployment and emigration were previously so massive that we were described as an economic basket case and at one stage the World Bank was about to come in and take over the shop. The depth of depression and despair Irish people faced led them to realise that there must be a better way. The poorly-defined and poorly-structured environment for sustainable economic and social development was altered under social partnership so that development, although not created automatically, was made possible. Senator Ross is wrong to suggest that social partnership was not part of the ingredients for success.

I mention the social impetus for a specific reason, which is that we should not underestimate the power of the desire for change at that time. When the Progressive Democrats were formed in 1985, the party's purpose was to break the mould of Irish politics by giving Irish voters a new and real alternative and to give political expression to the deep desire for change that existed at that time. The party's formation coincided with the frustration at the country's dismal plight and poor economic performance. The move toward social partnership and pursuit of its objectives married well with the views espoused by the Progressive Democrats — that is still the case today — that people were sick of unemployment, poverty and immigration.

The Progressive Democrats view is that the best defender against poverty is a job — we are not unique in holding that view — and that the responsibility of Government is to provide a climate in which economic progress is made and people are given the opportunity to create their own wealth. We have seen what has happened as a result of that. As the Minister of State explained, employment has increased from just over 1 million to nearly 2 million. The more jobs we create, the more revenue is generated to develop public services, to assist the vulnerable in our society and to fulfil the social obligations that should apply in any caring society. That is our idea of social justice. Social partnership provided the environment in which that idea could become a reality.

However, the engine that keeps the process moving is competitiveness, as the Taoiseach mentioned in his opening address to the forum in Dublin Castle. Making Ireland a competitive place to do business as a small and open island economy became an objective as far back as the 1950s, when the then Secretary General at the Department of Finance, Dr. T.K. Whitaker, introduced new thinking and national planning. Although those of us who attended university in the 1960s remember painfully the examination questions we were required to answer about the first and second programmes for economic expansion, those programmes were seminal in creating an impetus in society to bring us forward to a wider and more embracing vision of Irish national economic life. We continue to pursue those objectives. For example, when the Tánaiste addressed the plenary session of the social forum last week, she wisely stated:

The central core around which partnership was built was the belief that a strong, growing, and dynamic economy was the key to providing job opportunities, rising living standards and improved social provision for our people. It recognised that as a small country our prosperity depended on our ability, as a people, to embrace change and openness rather than seek to shut it out.

Staying competitive means we must be ready to change and be flexible. Although the issue was not highlighted in the media, a key element in the latest budget is the fact that the Government is pursuing an essential strategy to provide for Ireland's future competitiveness by creating a third level innovation fund and by providing additional capital investment in third level education to underpin the development of a knowledge economy. The Government is playing its part to ensure we stay competitive and stay prosperous; it is reasonable to expect the social partners to play their part as well. Ireland's economy is changing. The make-up of our labour force is changing rapidly, as we all know. Not only do we have new people from other countries working here who are helping us to sustain our progress, but the workforce is changing in other ways. Although some people, including previous speakers, estimate that trade union membership accounts for some 30% of the workforce outside the public sector, leading commentators have suggested in the past week that the figure may be closer to 10% or 15% and it is falling. Claims that unions have attracted 15,000 new members in the last year seem impressive, but the context is that some 96,000 people have joined the paid workforce in that time. We have 2 million people in work in this country and their views are represented by unions to a much lesser degree than, say, back in 1987. The views of workers in the large multinationals such as Intel, Wyeth and Hewlett Packard, to which Senator Ross referred, cannot be assumed to be represented by union groups. This changes the dynamic of social partnership somewhat.

There are concerns about what we can expect from the social partnership process going forward. There are fears that pay agreements will provide, as was famously stated on one occasion, something akin to an automated teller machine for certain workers. Just as flexibility is a key element in remaining competitive, so is restraint. As the Taoiseach has stated "we have to price ourselves and position ourselves in a very challenging market". That market is increasingly challenging, particularly with regard to China and the Far East.

However, the crucial point is that we are involved in a race to the top, not to the bottom. Yes, we pursue competitiveness but not on the basis of poor wages, more casual labour, lower health and safety standards and poor work practices. None of those can be tolerated and a policy that is at odds with this view cannot be countenanced.

Before I conclude on the changing nature of social partnership, I will return to a point to which I alluded earlier, namely, the role of the social and voluntary pillar. Regretfully, discussions on the partnership process often neglect to mention the role and view of this grouping. Members of the House are acutely aware of the invaluable work undertaken by the groups in this pillar. They represent the aged, carers, children, the unemployed, the disabled, youth groups, charities and many other admirable organisations. The problem is their lack of effective sanction. If this pillar believes a proposal is unacceptable, there is no rush to Government Buildings in the middle of the night for crisis talks. The media do not camp outside awaiting announcements.

These groups cannot threaten strike action. They are not so organised and mobilised to use protest effectively, representing, as they do, the marginalised in our society. We must not equate social partnership with simply a pay agreement. To do so only serves to further exclude the social and voluntary groups and that would make everyone all the poorer.

I and the Progressive Democrats approach the upcoming partnership talks with confidence. Successful outcomes have been achieved in more difficult circumstances than those confronting us now. However, the concerns I have raised force us to consider how the process is to be approached. There must not be social partnership at all costs. The value of agreement must be based on an objective and clear assessment of the repercussions of not having that agreement. Agreement should be based on progress, not habit; on innovation, not routine and on what we strive to achieve, not what we fear to lose. I would be sanguine about not reaching a deal if those criteria are not met. It would not be the end of society and economic progress as we know it if we failed to reach a deal on this occasion. It would have been far more significant 20 years ago when the process began.

The National Economic and Social Council states:

Since negotiated policy is likely to continue. . . the quality of policy depends critically on the nature and outcome of . . . negotiations. Will they produce deadlock? Will the outcome be the lowest common denominator . . . with limited care for the public good? Or will negotiation involve the open-minded search for better solutions with a sharing of gains and costs?

It is infinitely preferable to have a deal but we want a deal whereby we can continue to make progress as we did in the past. I hope the open-minded approach I have explained will be part of the forthcoming social partnership process.

A key point is made in the NESC report on the strategy highlights for 2006 and it is worthwhile putting it on record. It is in a column entitled "Key observations" and under the heading "New understanding implies modified goals". It is a response to the changing nature of Irish society over the past several years. It states:

A modified picture of Ireland's situation demands that we state our goals in new ways. It suggests that our goals should be modified:

To focus more on GNP per head than the growth of total GNP;

To focus more on the overall employment rate and the employability of individuals than the absolute level of job creation;

To encompass not only export growth but also competitive advantage in a networked world economy;

To build on successful adoption and operation of advanced technologies to achieve much wider innovation in products, processes and organisation;

To aim less for targeted programmes for disadvantaged groups and more for the responsiveness and flexibility of publicly-funded services, securing adequate income and improving participation;

To build on successful control of a small number of large scale polluters and an improving waste management infrastructure, to achieve widespread adoption of environmental quality through more effective conflict resolution and governance.

That succinctly summarises what the talks should be about and how they should adjust to the changed circumstances of modern Ireland. I wish all the participants in the talks, especially the members of the Government, every success. I hope there will be a new agreement and that we will continue to build on the success we have enjoyed over the past 20 years.