No ‘big bang’ pay cuts reversal, Brendan Howlin warns

Minister for Public Expenditure Brendan Howlin has said he wants a "phased and structured" approach to the reversal of emergency financial measures and pay cuts imposed following the economic collapse.

There can not be a “big collapse or a big bang” in reversing pay cuts, Mr Howlin told the Dáil . “There will have to be a negotiated winding down of Fempi (Financial Emergency Measures in the Public Interest) if we are to sustain the gains we have made instead of putting them in jeopardy.”

The Fempi legislation imposed billions of euro in pay and pension cuts.

Mr Howlin hoped to have the first quarter exchequer returns available before starting pay discussions to establish “the capacity we have for these talks”.

But he warned that expectations about any discussion on the review pay rates and other reforms had to be “realistic”.

Fianna Fáil public expenditure and reform spokesman Sean Fleming had asked if the talks would be across public and private sectors or confined to the 280,000 public servants. He said it would be in everybody's interests to know by the time of the estimates in October "what the expenditure plans are for 2016" and that this would include public sector pay issues.

Mr Fleming said this would mean the talks would have to be concluded over the summer months, after the first quarter, to ensure real estimates in October.

The Minister told the Fianna Fáil spokesman that he hoped to finish pay talks before the estimates “so that we can have robust and real estimates presented to the House by the end of the year”.

He said the talks would be focused on the public sector alone and that “we are not going back to a national pay agreement”. The current pay deal, the Haddington Road agreement, runs until July 2016 and Mr Howlin stressed the focus remained on “maximising the provisions of that agreement in relation not only to pay but also to the long-term impact of reform and productivity measures, such as extra working hours and reduced leave entitlements”.

Calling for unions and workers to have “realistic” expectations, the Minister said “having worked over the last four years to restore the health of the public finances, the Government is determined that any outcome of discussions with unions is consistent with our overall fiscal position”.

He said he was “acutely conscious” that 2015 was the seventh consecutive year of no pay increases for public servants while there had been “two or three actual cuts in nominal wages, depending on one’s pay grade, which is unprecedented”.

Asked if he was giving back the billions of euro taken from public servants or just saying these measures are over and “we are moving forward”, Mr Howlin said “thank God the day will come when there will no longer be an emergency” but there would have to be a negotiated wind-down of emergency provisions with no “big bang” to jeopardise the gains made.