Derek McDowell (Labour)

I will start on a positive note as most of my contribution will be critical, although not negative. I believe social partnership has had a vital role in the past 20 years in, first, getting us through the fiscal crisis of the late 1980s and, second, in doing a great deal to get us through the unemployment crisis of the late 1980s and early 1990s.

However, at some stage in the mid-1990s it started to become unstuck. While for a long time it was easy simply to trade off wage restraint against tax deductions, when we began to become more successful in dealing with the endemic and chronic problems of the late 1980s and when our problems became, as Charlie McCreevy once described them, problems of success, social partnership ran into difficulty. It is still in that difficulty. Social partnership has problems dealing with issues such as infrastructure improvements, innovation, upskilling, lifelong learning and so forth. Even though the social partners have little difficulty agreeing on these issues in Merrion Street, as happened with regard to housing on the last occasion, following through in terms of delivery and accountability is enormously difficult. Social partnership has been slow and generally unsuccessful in developing a process to do that in the past six or seven years.

The main problem with the process is not that it is undemocratic, although I will return to that point shortly, but that it is a top down process. It is all very well for Senator O'Toole, IBEC, the farmers and the fourth pillar to have their debate but it is still a private debate. It is still a debate between the 20 to 40 leaders of our community. It is crucial that they have this debate and we would be far worse off if they did not have it, but it is still a debate between the elites. There is a major hiatus in trying to translate the results of any agreement onto the shop floor of a factory or workplace. Individual employers who are not represented at the talks do not feel they have a particular obligation to deal in a different way or in a spirit of partnership with their workforce.

While we should point out that it is not a wage agreement, most workers continue to see it as such. If there is no decent wage increase built into the agreement, it is not passed and does not get through trade union conferences called to approve the agreement. Frankly, I do not have a solution to this. It would be great to be able to wave a magic wand so every workplace in the country is run according to partnership practices and values but that is not possible. The National Implementation Body is supposed to have some influence in this regard and we must also rely on the trade unions and IBEC.

There is a problem about democracy. Senator O'Toole was strongly of the opinion that the process does not marginalise politicians but it does. There is no question about that. I was the Labour Party spokesperson on finance in the Lower House and one finds oneself in a curious situation in one's relationship with the trade union movement. On the one hand, one is in the Dáil criticising what the Government is doing while, on the other, the other branch of our movement is in Merrion Street agreeing with what it is doing. One finds himself criticising while the other is agreeing so we meet afterwards over a pint and say: "What was that all about?" Generally, we agree and tell nobody.

However, this causes a problem. It particularly marginalises Opposition politicians but to some extent it also marginalises Government politicians. One is simply not part of the process. It is probably fair to ask whether one would want to be part of the process. Does the Opposition want to be bound into agreeing to certain things along with the Government? It probably does not but there is no question that one is on the margins.

I worry a little to hear the Taoiseach proposing that we have ten-year perspective on this. That only further marginalises politics. One is saying, in essence, that not only is the Government seeking to bind itself into something for the rest of its term, it is also seeking to bind its successors. It is agreeing to something on behalf of itself and the Government that succeeds it. That is another way of saying, effectively, that the view of the electorate does not matter because the Government will stitch everything up for the next ten years.

On the one hand, it is very easy to acclaim this level of consensus as a positive development. It is healthy and a good selling point if one can go to, for example, those contemplating foreign direct investment in Ireland and tell them what the arrangements will be for the next ten years. On the other hand, it marginalises both politicians and politics. It effectively means that the decision of the electorate in the next general election cannot affect most of the social and economic decisions of the next ten years, if we are to take the decisions being made in Merrion Street seriously. This is extremely worrying.

I can see the advantages of the process. Some issues, for example, housing, must be examined on a medium and long-term basis. However, the process is an easy way out for Government in that it allows it to claim that its performance cannot be judged after two or three years because there are another seven years to go. There must be some sense of perspective and I believe ten years is too long.

I will address the question of a race to the bottom because attention has rightly focused on it in recent weeks. It is a hybrid rather than an infrastructural, soft or specifically workplace issue. Many workers are becoming very worried about the race to the bottom. Undoubtedly, this concern influenced many of the people who came out to demonstrate during the Irish Ferries dispute. It is interlinked with the issue of migration. We should acknowledge the fact that an influx of workers, many of whom are prepared to work for low wages even though their skills, in some cases, would justify much higher wages, will affect the labour market. The entry of 60,000 to 80,000 such workers into the Irish labour market constitutes a major change in the market, which we should also acknowledge. We must monitor developments carefully.

There is some evidence in the tourism and construction sectors of casualisation, of people working as subcontractors where they might previously have secured full-time jobs and of more people working on the minimum wage than would previously have been the case. There is straightforward evidence of exploitation. In many cases, this involves illegal exploitation with a lack of adherence to industry norms and the minimum wage. On one level, the easy solution is more enforcement. The lack of unionisation in some sectors is a genuine problem. The responsibility ultimately falls to the Government to provide the labour inspectorate. This is the responsibility of the Minister of State at the Department of Enterprise, Trade and Employment. I understand that there are between 20 and 21 labour inspectors within the system, although I understand that at any given time, there are likely be fewer inspectors available and that the turnover of inspectors is high. As a first measure, we must increase the level of inspection so that, at least, we know what is happening. The Taoiseach's recent pronouncements lead me to assume that the Government is well-disposed towards this idea.

A few weeks ago the leader of my party, Deputy Rabbitte, made some comments in an interview with The Irish Times about measures that we might consider in respect of people from the new EU member states in central and eastern Europe. Nobody in the Labour Party is stating or has stated that we need to introduce work permits for these people, a measure I would never advocate. We must ensure that standards are maintained within our labour market, that Irish workers and standards of employment are protected and that we do not end up with a race to the bottom, which is typified by the Irish Ferries case. If this requires introducing further restrictions in two to four years' time, I will not shirk from doing so. It is important that parties such as mine, which has a proud stance on racism and immigration, state this. If we do not we do not properly represent the interests of workers who look to us for a lead on these matters. If we do not give a lead on these matters, others will.

We must clearly state that people from other EU states, who are clearly needed by the labour market, are very welcome to come here and that we will do everything in our power to ensure they are not exploited and that standards of employment and employment conditions are maintained. This problem will probably resolve itself over time. One would expect that workers from eastern Europe will eventually unionise and realise that through co-operating and joining Irish trade unions, they can do something to ensure they are not exploited. They will find their voice and eventually be granted access to the labour markets of other EU states. This is a crucial point and we do ourselves and immigrant workers no service by ignoring it. I hope this issue is tackled head-on in the weeks to come.

The issue of pensions, which is surely a long-term one, should be part of the review. A third-tier pension will be needed because simple private pension provision and the provision of the State pension as it currently stands will not be sufficient. It is very likely that we will need some type of mandatory provision. The level of public debate about pensions so far has been fairly miserable. We are all aware of the dangers, the demographic changes which are taking place and the fact that coverage is approximately 50%, but we have still not reached a consensus on what should be done in the future. A measure of consensus is important due to the long term nature of the issue. The social partnership process would do everyone a favour by at least taking up the pensions debate and running with it.

In his speech, the Minister of State mentioned how wonderfully the economy is performing, as Ministers invariably do in respect of these issues. I do not wish to detract from this because the economy is in a very positive state and no Opposition politician would say otherwise. It is also worth noting the report by the National Economic and Social Forum, which was published in the last few days and which was read by the Minister of State. It points out, in a succinct fashion, some serious vulnerabilities in the labour market, which are worth noting. It points out that Ireland is now a far more unequal society where the richest 20% of the working-age population earns 12 times as much as the poorest 20%. The report then points out that there is less equality of opportunity in Ireland than in any other European country. I understand that Ireland ranks 51 out of 56 countries in terms of equality of opportunity for women and accessibility to the labour market. There are considerable issues and vulnerabilities within the labour market which must be addressed and which are properly the business of social partnership.

I am generally supportive of the social partnership process. Unfortunately, it can, at times, lead to a fairly stultifying consensus but, as Senator Dardis observed, there is no credible alternative. I wish the current talks well.