ANALYSIS:The Government has no intention of confronting semi-State companies over their lack of pay cuts
THE GOVERNMENT has backed smartly away from a confrontation with workers in semi-State companies over their immunity to date from pay cuts following suggestions at the weekend that the issue was about to enter the political agenda.
Having just imposed unprecedented pay cuts on public servants, the Government appeared to be stumbling into a confrontation with workers in the 23 semi-State commercials, including the ESB and Bord Gáis who have actually received a 3.5 per cent pay rise this year.
It began with media reports on Sunday over the anomaly in the treatment of those who work in the public service and those who work in the commercial State sector. The 300,000 or so public servants, including civil servants, teachers, health service workers and gardaí, have been hit successively with a pay freeze, a pension levy and now a pay cut.
In contrast, many of the 42,000 workers in the commercial semi-State sector have got a pay rise, avoided the pension levy and have not been subject to a pay cut even though they enjoy the same pension provisions as civil servants.
When asked about this situation on Sunday night on The Week in Politics, Minister for Finance Brian Lenihan said, while the RTÉ workforce had taken pay cuts, most others in the commercial semi-State sector had not. He said the issue would have to be examined, but did not commit himself to any timeframe.
However, Minister for Communications, Energy and Natural Resources Eamon Ryan took the debate to a new level on Monday morning, saying not only that the issue had been discussed by Ministers over the past year but that it would be discussed again at Cabinet yesterday.
To say that his Cabinet colleagues were taken aback would be an understatement. The item was not listed on the Cabinet agenda, which had already been circulated, and the prospect of opening up a dangerous new front horrified many Ministers.
The instant response from the union movement, which greeted with relish a potential battle with commercial semi-States like the ESB, where they have the whip hand, immediately concentrated minds of Ministers.
Noel Dempsey, Minister for Transport, came out of the traps to make it clear that he had no intention of trying to impose pay cuts on the semi-States under his control. He said Ministers should not get involved in the day-to-day running of the semi-States.
While Mr Dempsey did back Mr Ryan by saying that “everybody should examine what is going on in relation to pay rates”, and he emphasised the need “to restore competitiveness to the economy”, he made it clear the Government had no intention of seeking to impose pay cuts in the semi-State sector in the short term.
The longer term may be a different matter, particularly as some of the semi-States have major issues to sort out like under-funded pension arrangements. They can expect no bailouts from the taxpayer, and the issue is regarded in Government as one for the management and unions involved to deal with themselves.
While Ryan did reflect anxiety in Cabinet at how the pain of the recession was being felt across most areas of the public service while much of the commercial semi-State sector remained immune, his colleagues were taken aback at his timing.
Just when it appeared that the Government was about to get one of the toughest budgets in history through the Dáil with barely a hitch, the prospect of a confrontation with the unions that could lead to power blackouts and transport strikes struck terror into the hearts of Fianna Fáil TDs.
By the time the Cabinet met yesterday the wagons had been circled, and the clear line from Government was that the issue of pay rates across the commercial semi-State sector was going to be kept off the political agenda at all costs.
With the Dáil debating the legislation to give effect to the public service pay cuts and protests by public servants at Leinster House last night, another fight before Christmas was the last thing Ministers wanted.
Speaking in the Dáil last night, Mr Lenihan said he wanted to clarify the position. “Pay cuts in the commercial State-sponsored bodies like Bord Gáis and the ESB will have no impact on the public service pay bill because 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.”
He did say that he intended to bring proposals to Government to review the pay of the chief executives in the semi-State sector, but made it clear there was no proposal at present to reduce staff pay.
