Public sector pay: Varadkar at pains to make unions feel loved ahead of election

Analysis: In inviting unions to talks, Government is indicating it will act

Minister for Finance and Public Expenditure & Reform, Paschal Donohoe   has been emphasising the €200 million cost of public sector pay increases. File photograph: Gareth Chaney/Collins

Minister for Finance and Public Expenditure & Reform, Paschal Donohoe has been emphasising the €200 million cost of public sector pay increases. File photograph: Gareth Chaney/Collins

 

The argument about bringing new entrants in the public sector up to the same salary levels as those who were in employment before the economic crash has already been decisively won by the trade unions.

In inviting unions into talks later this week, the Government is indicating a willingness to act.

While broad political consensus on the issue encompasses all of those who have a say in the Government’s budgetary policy, there are differences on how quickly pay levels can be restored.

However, waiting until 2021 - as the Government has maintained is its policy - increasingly looks an impossible position.

Fianna Fáil, whose support is needed to pass budgets, is seeking to rebuild its support amongst the public sector, and Finian McGrath, the Independent Alliance Minister of State, says so-called “pay equalisation” is a “red line” for him in this October’s budget.

Government figures acknowledge the issue must be settled, but are uncomfortable about doing so at a speed that will eat up too much of the available resources in coming budgets.

McGrath has argued that it is possible for Minister for Finance Paschal Donohoe to entirely solve the problem in one budget but, according to government sources, Donohoe has been emphasising the €200 million cost of making the policy move.

Nevertheless, Donohoe and Taoiseach Leo Varadkar are at pains to make sure the unions feel loved as they seek to build a big political tent ahead of the next election.

Jack O’Connor, the former Siptu president and now Labour party general election candidate in Wicklow, says the opening of discussions means the Government has already moved.

“But the leopard doesn’t change its spots,” he said. “They (Fine Gael) are still a right-wing party.”

Nevertheless, O’Connor believes Varadkar and Donohoe “need to reach out to all sectors, in particular the trade unions”.

“I think Fine Gael are positioning themselves where Fianna Fáil once was. They are the bigger party and they are trying to do the catch all aspect. Varadkar I would see as being much more like Bertie Ahern than Enda Kenny ever was.

“I have dealt with him a good deal. He is a very, very astute politician. He adjusts to the public mood and we are now in post-crisis Ireland. I would expect that he and the people around him want to define Fine Gael not as a centre right party but as a catch all party.”

Donohoe is also “very astute politician, but on the right”, according to O’Connor.

“They didn’t get up one morning and have this road to Damascus conversion,” O’Connor adds. “They have to be able to make space to do enough of what the trade unions are looking for while being able to splurge on tax cuts.”

Fianna Fáil is seeking to re-establish itself as the friend of the public sector, and party leader Micheál Martin and a number of his frontbench spokespeople were conspicuous attendees at the recent run of union conferences.

The party has loudly declared itself in favour of pay equalisation and Fianna Fáil sources had, in recent weeks, privately said they accepted pay equalisation could take a number of budgets - most likely two - to pull off.

However, since the teacher conferences at Easter, party figures have become coy about outlining an exact timetable and say they must await the outcome of internal policy discussions within the party.

It is likely Fianna Fáil will wait to see what transpires at the talks between unions and the Government before taking a definitive position.

Some union sources say their members have not forgotten that it was the Fianna Fáil-Green Party coalition that first introduced the measures to reduce pay for new entrants - designed to bring down the wider pay public sector pay bill in the long term - during the worst of the economic crisis.

But unions reject claims that they, in essence, swallowed the lower pay regime for new entrants when they accepted wider pay cuts introduced in 2010.

The decision to cut new pay, they argue, was a unilateral one by the then Fianna Fáil-Green Party coalition. Since a recruitment embargo was in place up to 2014, relatively few people were affected until more public sector workers were hired.

Since 2014, it has become a much more politically potent issue, particularly amongst teachers, who make up a large portion of the post-crisis recruits. However, with 19 per cent of the public workforce now on lower rates, equalising pay levels has become a huge issue for most public sector unions.

Nevertheless, if traditional solidarity between generations was seen to have failed in 2010, enough noise has been made since the economic turnaround to firmly place the reversal of the controversial cuts on the agenda.

The measure of the success of this campaign is the fact that the only remaining argument is how and when pay should be increased, rather than if it should be done at all.

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