McGrath 'not sure' new pay deal can be agreed

Minister for Public Expenditure and Reform, Michael McGrath T.D. at a press conference this afternoon following publication of the End Quarter 3 2020 Exchequer Returns. Picture: Leah Farrell / RollingNews.ie

The country is facing the threat of industrial unrest as public expenditure minister Michael McGrath warned that a new public-sector pay deal "simply may not be achievable”.

In an interview with the Irish Examiner, Mr McGrath warned of a “messy and problematic” fallout should a deal not be agreed.

In his most direct comments to date on the issue, he said the Government would “have to deal with the fallout” if a deal cannot be struck.

“We'd like to have one, I think it would be valuable and desirable,” he said. "But I'm certainly not saying that, come what may, we will have a new pay deal. It simply may not be achievable.

“And if it's not achievable, then we have to deal with the fallout from that, which could be messy and problematic. So I think there's value for everyone in having the certainty of a deal, but I am equally realistic to know that may not be possible.

“Any deal must be affordable and sustainable and it remains to be seen whether that is achievable. I'm not sure that it is. I would like it to be, but I think the next couple of months will tell its own story.”

Union sources have said there is a realisation that there is little or no money to play with, and there is an acceptance that any suggestion of a pay increase for 300,000 public-sector workers in 2021 is very unlikely.

Sources have said any deal would have to at least give a signal as to when pay increases would begin again, but stressed there is a realisation a deal is in the national interest in preventing industrial unrest.

Mr McGrath also hinted that a shorter deal is a possibility.

“There is value in having a shorter agreement where we have certainty on both sides, and nobody has to give away too much because it's only for a defined period of time — I think there is some potential in that space,” he said.

Asked about the equity of such a deal when so many private-sector workers are in threat of losing their jobs, Mr McGrath said he is not going to play the 'public sector versus private sector' card.

“I don't think that that is fair because workers in both environments are in very different circumstances,” he said.

He also defended the controversial payment of the last 2% pay increase at a cost of €264m under the current deal which expires at the end of the year, saying it was the right thing to do and it is also a recognition of the role played by public servants since the start of the pandemic.