National pay talks - This is not the time for self-interest

IT HAS been a considerable number of years since the national pay talks took place in an atmosphere of such distrust and division.

That division has been deepened by the bitter sniping between unions and employers of the past few weeks. The gap between what the unions want and what the employers say they can, or will, pay is significant. That gap might even be insurmountable and this round of talks may well collapse in the autumn.

The Government, both as an employer and as guardian of the national purse, is between that rock and hard place that comes around every few decades. We — unions and employers — are at the end of an economic cycle and may have developed expectations that cannot be sustained. Some fall in living standards looks to be inevitable, especially in households carrying significant personal debt.

This apprehension is strengthened by the expectation of up to three interest rate increases in the next year and that oil and food prices will continue to rise.

All in all a grim prospect, and such a change from the affluence of recent years. We are already seeing the reality of our failure to copper-fasten decent, modern infrastructure or first world health and education systems during the days of plenty. We have cuts at schools, colleges and hospitals, services curtailed and teachers losing their jobs. The knowledge-based economy seems to be heading down the foggy, pot-holed road already travelled by decentralisation. By throwing money at problems rather than resolving and reforming we have dug an even deeper hole for ourselves.

It is hard to see how we can work our way out of this mess without a virtual pay freeze in the public sector and there’s no point in pretending that won’t happen, in some shape or other, in the private sector.

One of the things that just cannot happen is that unions achieve pay rises for public sector workers only and that taxes are increased to pay for this inequity. Private sector workers will not even consider this as they have been conned by benchmarking. They have already paid for an increase in public service wages on the promise of reform that has not materialised.

Public sector reform is not the only thing that must be confronted. As Taoiseach Brian Cowen pointed out some days ago too many of our executives have paid themselves masters-of-the-universe rates while running moderate enough companies.

So, we are facing challenging times. We have a damaged economy that cannot satisfy the demands being placed on it. We have profound inequities causing deep resentment and services are being cut already. There is also the matter of our place in Europe — our greatest challenge lest anyone thinks otherwise — and all of the other problems every other country faces.

If is unfortunate that Mr Ahern’s “naysayers” were right and that his core policy of compromise has made a significant contribution to getting us where we are.

When Mr Cowen was elevated we were assured he was the man for the times ahead; that he had the toughness and intellectual capacity to lead this country through a recession. Now he has his chance to show he can be a leader rather than a facilitator. At these talks he needs to cajole and to take a stand.

It might only be window dressing but deferring politicians’ pay rises would give him an authority he lacks at the moment.

Let us hope all participants might be equally selfless and have the capacity to see beyond their self-interest.