Martin Mansergh (Tipperary South, Fianna Fail)

Many points have been made. Senator Twomey may have many good reasons, from his point of view, for opposing the section but I do not think the disallowance of an amendment which would be unconstitutional because the Seanad does not have the power to increase Government expenditure is one. He may have many other reasons for opposing it.

Senator Burke, no doubt tongue in cheek, raised the issue of Anglo Irish Bank and prefaced every sentence with "I presume" and may I say, in the politest and most diplomatic manner possible, that in each instance he presumed wrong. We discussed the position of Anglo Irish Bank yesterday when points were made on whether it should be included in the pay reductions and on the consultants it uses. It is the intention of the Government to apply pay reductions in the public service pay bill for the purpose of saving approximately €1 billion. However, the pay reduction applies to public servants. Commercial State-sponsored bodies are not included. The pay of those bodies is funded through their own commercial efforts. With the exception of chief executives, the Minister for Finance does not control the pay of the staff of these bodies. They were not covered by the public service element of pay rounds in the past and the bodies have taken an independent approach to controlling their pay bills. The same is true of Anglo Irish Bank, which is run on an arm's length commercial basis by the board, albeit having been funded by the Exchequer.

More to the point, at present the board is overseeing a full cost review of the bank which will seek to reduce costs in all areas of the bank's operation, including pay costs. As Senators are aware, the bank recently introduced the first phase of its redundancy programme, targeting up to 230 departures from throughout the bank. Accordingly, and this is the key point, staff at the bank do not have the security of tenure associated with public service employment. If one was to treat them like public servants or state that their status is that of public servants, they would expect the same degree of security of tenure and I do not see in all the circumstances that could be reasonably argued.

In addition, Anglo Irish Bank recently submitted its restructuring plan to the European Commission. The plan considers all options for the future of the bank and a detailed evaluation of the plan is now under way. The process will involve extensive consultation and dialogue between the Irish authorities, the European Commission and the bank to agree a restructuring plan for Anglo Irish Bank which will achieve the best possible outcome for the State from the process. The outcome of the restructuring plan process will determine the future of the bank, including its required staffing levels, staff retention and redundancy objectives, and the bank's pay levels will be determined by the board accordingly.

It is clear that any future strategy for Anglo Irish Bank will involve further redundancies at the bank and further cost reductions. In seeking to reduce its cost base, Anglo Irish Bank is acting in a fashion similar to other commercial State bodies which are planning their way out of present difficulties. To start treating the staff as public servants would cut across these vital processes for Anglo Irish Bank and for the State as a shareholder in the bank. For that reason, I will not accept that proposition.

With respect to Senator Alex White, the amendment may be based on a misreading of table 1.