Willie Penrose (Longford-Westmeath, Labour)
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Question 150: To ask the Tánaiste and Minister for Finance his views on the recent report of the Public Service Benchmarking Body recommendation of no increases for the vast majority of public servants and the negative impact this may have on industrial relations harmony; and if he will make a statement on the matter. [2312/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Benchmarking Body has produced a report in accordance with its terms of reference. It is agreed between Government and the trade unions that the best approach to ensuring that individual public service grades are paid appropriately, is to compare all aspects of public sector jobs with their private sector equivalents.

Public service pay should neither lead nor fall behind market rates generally. Benchmarking provides that assurance, and is applied on top of the standard terms of national pay agreements, which apply in both the public and the private sector. Benchmarking, therefore, is an insurance policy for public service workers that they do not fall behind.

Given that the first Benchmarking Report established that an average 8.9% increase was required to restore reasonable parity with the private sector, and given that pay increases in the private sector have tended to reflect the terms of the national pay agreements since then, there should be no surprise that further increases are not generally warranted at this point. This is particularly the case given the increase, in relative terms, of the value of a public sector pension over what prevails in the private sector.

It was always envisaged that there would be issues to discuss after the Benchmarking Report in the context of the forthcoming pay talks. That will now happen. It is, however, scarcely credible that people will approach those talks on the basis that they have an entitlement to a higher increase than would otherwise arise simply because their salaries have not fallen behind the private sector over the past five years.