DANIEL MCCONNELL: Coalition on a collision course with the unions

Minister for Public Expenditure and Reform Paschal Donohoe. Picture: RollingNews.ie

The hardening of the stance from the Government in the face of union demands may not be popular but it is necessary, writes Political Editor Daniel McConnell

SO the Government appears to have discovered its backbone. But, just how long will it last and where will all this mess end up?

Having run scared for over a week since the Labour Court made its ruling about Garda pay, the coalition has taken a tougher line on the issue of public sector pay in the past 48 hours.

Much of the early unsteadiness was apparently driven by the fact the Labour Court decision “blindsided” many in Government, including Public Expenditure Minister Paschal Donohoe.

Senior Cabinet ministers claimed the Government had been “torpedoed” and “totally let down” by the Labour Court’s pay deal for gardaí .

Ministers speaking to me said they have been left in an invidious position, either to abandon the Lansdowne Road agreement or undermine the Labour Court.

“It has serious implications for the future so Paschal and his team are going to talk to Ictu and other bodies and try and address those issues. The Labour Court has brought forward a lot of things and while it is technically within Lansdowne Road but it has made serious difficulties for ministers and that was reflected around the Cabinet table,” said one senior minister.

“Nobody is happy that the Labour Court has torpedoed the Lansdowne Road agreement, but what is the alternative? The Labour Court has let the Government down.”

Yesterday, the Government press secretary described as “utterly without foundation” suggestions that the Department of An Taoiseach reached out to the Labour Court at the 11th hour and cleared the Garda deal — but it was certainly doing the rounds with some vengeance.

Enda Kenny
Enda Kenny

Such a scenario would have meant the Taoiseach’s department blindsiding its own Department of Public Expenditure and Reform, which is not unheard of.

Donohoe acknowledged yesterday that the final Garda deal offered by the Labour Court was “different” to the last offer put on the table by him and his department.

This has only served to bolster the impression of a last-minute intervention by Enda Kenny’s inner team.

The Government has, perhaps driven by the robust defence of the Lansdowne Road agreement given by Fianna Fáil leader Micheál Martin on RTÉ radio on Monday, found a resolve to take a stand against runaway demands from the public sector unions.

Siptu’s Jack O’Connor had put a deadline of today on Government to give a date for new pay talks.

As we learned last night, a two-week reprieve has been agreed, but his union looks set to ballot for industrial action anyway.

So with the Government on a direct collision course with the unions, just what is its strategy?

Does it have contingency plans if the strategy doesn’t work?

For his part, Donohoe has always insisted that Lansdowne Road is the “only show in town”.

Despite the Labour Court deal having consequences, he is insisting the deal fell within the terms of the Lansdowne Road agreement.

Now, it is fair to say that you would not get a majority of his own ministerial colleagues agreeing with him on that one.

They see it, as many unions do, that the genie is very much out of the bottle and that Lansdowne Road is dead.

One Cabinet minister yesterday said that the Government will have to soften its line in the coming weeks.

The minister said the ballot for industrial action, which is expected to be called by O’Connor today, means the Government will have to engage in talks in the next two weeks.

That statement was made in advance of the unions’ statement, which confirms that a considerable amount of contact has been going on between Donohoe’s department and Ictu.

Donohoe also insisted that collective discussions with Ictu is his preferred method of resolving the matter, with a meeting of his senior officials, led by his secretary general Robert Watt, and union leaders taking place on Tuesday evening.

Such meetings are to continue in the coming weeks but for now Donohoe is holding the line as best he can.

He set out a cogent argument that services will be protected as best as possible — but he can not guarantee it.

This is despite several other ministers, like Finian McGrath, saying he will not tolerate any reduction in services in order to fund pay rises to public servants.

Finian McGrath
Finian McGrath

Merely to stand still, Donohoe’s department figures that the cost of keeping services at the same level will grow by 3% a year up to 2021.

This takes account of decisions already made by the Government, the impact of known demographic pressures in a number of key areas, and possible other future requests for increased service levels in other areas.

In real terms, this amounts to between 8,000 and 9,000 additional employees per year.

Based on existing pay and numbers commitments, we will also return to the peak pay bill level in 2018.

It is estimated that by the end of that year, the State will employ 294,000 public servants with a pay bill of €17.2bn.

Donohoe has been criticised by Fianna Fáil for not being proactive enough in containing the expectations of public servants and for allowing the Garda pay row to get so close to the wire.

However, the main opposition’s party staunch support for the Lansdowne Road agreement is significant and should give the minister the courage to dig in.

Dara Calleary, Fianna Fáil’s public expenditure spokesman, said strict financial control of the public finances must be maintained.

“There is a €290m envelope for additional spending for next year. That is what is available. Any other spending will have to be met from existing budgets and that will impact on services. We don’t want to see any impact on services,” he told me.

Calleary’s comments were echoed by Donohoe’s department who could not guarantee frontline services will escape future cuts in order to meet pay demands.

Should that situation be allowed to happen, it would represent a travesty of the highest proportions.

Many will argue that the unions are simply doing what unions do, but there is a distinct lack of reality in their demands.

The hardening of the stance from Government in the face of those union demands may not be popular but is necessary.

Donohoe must be encouraged to hold fast, even if the prospect in the short run is strike action.

Speculation that the Government will agree to bring forward the timeline of talks is ultimately where this process will end up, but the taxpayer deserves more than to be sold out to the vested interests of the unions.

It is a time for mettle.

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