John Gerard Hanafin (Fianna Fail)

I welcome the Minister of State to the House and support the Protection of Employment (Exceptional Collective Redundancies and Related Matters) Bill 2007, the long title of which states:

Bill entitled an Act to make provision, consequent on the conclusion of the ten-year framework social partnership agreement 2006-2015 known as "Towards 2016", for the establishment of a redundancy panel and the reference to it of certain proposed collective redundancies and for related action by the Minister for Enterprise, Trade and Employment, including the obtaining from the Labour Court of opinions on the nature of proposed collective redundancies; to remove the upper age limit for entitlement to redundancy payments; to make consequential amendments of the Protection of Employment Act 1977, the Redundancy Payments Act 1967, the Redundancy Payments Act 1971, the Redundancy Payments Act 1979, the Unfair Dismissals Act 1977 and the Employment Equality Act 1998; and to make further amendments of those Acts to update penalties and for purposes of statute-law revision.

Social partnership has served this country well. It is not for nothing that we are internationally regarded as a leading light or that The Economist, a highly respected publication with a weekly circulation of more than 2 million, has rated Ireland as the best place to live for the past two years. Our neighbours in Europe look to Ireland as an example of what should and could be done. This Bill is part of this because the partnership was responsible for drafting it and every partner played a role in it. Certain groups may not have been happy with aspects of the legislation, such as employers who may have believed there would be too many protections, but the process has stood the test of time and is now in its 20th year.

Since 1987 social partnership has helped to maintain a strategic focus on key national priorities and create and sustain the conditions for remarkable employment, fiscal stability and a dramatic improvement in living standards which have benefited the people. The challenges facing us are no less complex or important than in 1987. Towards 2016 develops a new strategic framework to address key social challenges and focuses on the needs of all in our society. This approach will take time. The agreement sets out how we propose to measure and review progress over a ten-year framework period. It sets out the terms of the pay increases for the private sector and the public service over a 27-month period. While the total increase is significant, the benefits will be reaped by all sections of the community, which should be welcomed.

Social partnership has served us well in the past 20 years. It is a problem solving process which has evolved on the basis of the Government providing an arena within which the social partners, as stakeholders, engage in a flexible process of addressing immediate problems, while attending to long-term development. In this, the Government is firmly in the tradition of the European social model which values engagement with the social partners as an important contribution to better policy making and more legitimate policy outcomes. The results are there for all to see.

The dramatic transformation of Irish economic and employment fortunes in the past decade has reflected, in the judgment of the NESC reports, three main factors: a national policy and institutional framework which was consistent, highly focused on competitiveness and employment creation, innovation and problem solving; an export sector that was greatly expanded and increasingly concentrated in high value, high growth market segments; and the European Union, because it increased market access, created a level playing field through re-regulation, provided a relatively stable monetary environment and supported Ireland's infrastructural and social development. The most dramatic impact has been in the rapid growth in employment, drawing not only on those who were unemployed, especially long-term unemployed, but also women and others who had previously little expectation of finding meaningful, well paid work in the economy. Among them were many Irish emigrants who had returned and others who have enriched society by coming to make their career and home in Ireland.

We have done this in a way that has produced significant rewards for ordinary people. Easing tax burdens which had increased inordinately on the average worker has produced an outcome where, as the OECD has recently shown, the average worker with two children pays no net tax, while child benefit and other payments add almost 1% to earnings. Only in Iceland is a better deal on offer and only in Mexico and Korea do workers on two thirds of average earnings pay less tax after benefits. The social balance of our approach is reflected in the fact that single parents do better than anywhere else. Therefore, not only have we increased dramatically the numbers at work, their living standards have also increased at a striking rate.

The strategy we have pursued with the social partners has resulted in a very substantial increase in the revenue base of the State, facilitating a dramatic increase in public spending on a wide range of services and infrastructure in recent years. It is a remarkable feature of the economy that we have low taxes in tandem with significant social services. Long may that continue. Social partnership has played an important part in this.

We must address the problems of rapid growth in the economy which are all too familiar in the form of infrastructural and other bottlenecks. The Government has gone about this. If we react in the wrong way, the consequences will be immediate and severe. The pre-partnership era was almost unenlightened compared to our current experience but it was all we knew at the time. However, now that we have reached this stage, I hope the partnership process will continue and workers will continue to be protected through legislation. I am proud to be the representative of the Irish Congress of Trade Unions on the Labour Panel for Fianna Fáil in this House.