THE GOVERNMENT will not attempt to reduce the pay of those working in commercial semi-State bodies such as the ESB or Bord Gáis, Minister for Finance Brian Lenihan made clear last night.
However, he announced his intention of initiating a pay review for their chief executives.
Speaking in the Dáil last night on the Bill to give effect to the Budget public service pay cuts, the Minister said that certain bodies were specifically excluded because of their commercial status or the nature of their mandate.
“Given the recent public discussion about pay rates in the commercial State-sponsored bodies, I want to clarify their 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,” said Mr Lenihan.
“With the exception of chief executives, the Minister for Finance does not control the pay of the staff of these bodies. They have not been covered by the public service element of pay rounds in the past and have taken an independent approach to controlling their pay bills, as happened in RTÉ where voluntary reductions were agreed by the staff or in the ESB, where there have been a number of voluntary redundancy schemes.”
He added that while these companies must be allowed to act commercially, and in accordance with the normal industrial relations process, the Government took the view that pay restraint was in the longer-term national interest to ensure competitive pricing for energy and other goods.
“But it is the market and the regulators that will impose that discipline upon those bodies,” he said.
The Minister said he was concerned about pay at top levels across the economy. “In this Bill we are addressing the pay of top public service posts. I propose to bring proposals to Government at an early date to review the arrangements governing the pay of chief executives of the commercial State-sponsored bodies,” said Mr Lenihan.
The Minister said that it was “with great displeasure” that the Government was bringing forward the first Bill to reduce the salaries of public servants since 1933. “Like the Government of that time, we face enormous challenges and our options are limited.” He said that the permanent cuts in pay would replace the temporary waivers of pay made by individuals including all members of the Government and secretaries general of departments.
He pointed out that in some cases individuals had volunteered to take a pay cut over and above that recommended by the most recent review body on pay. Ministers of State and the Leas Cheann Comhairle would have been due to take a pay reduction of 8 per cent but they had agreed to take a permanent reduction of 10 per cent.
The secretaries general of the Departments of the Taoiseach and the Department of Finance had volunteered to accept a 20 per cent cut although the review body had recommended 15 per cent.
The Bill also provides that the reduction in public service pay rates will not apply to the pension entitlements for public servants who have already retired or will retire before December 31st, 2010.
Mr Lenihan announced that he was reserving the right to extend that deadline. “A managed retirement rate for older and more experienced public servants over the course of next year, and beyond if necessary, will help avoid disruption of service delivery,” he said.