ANALYSIS:McLoone urges public servants and pensioners to mobilise against possible pension cuts, writes MARTIN WALL
THE SIGNAL by the Government that the traditional link between public service pay and pensions may be broken in the future has fuelled the anger of trade unions, already furious over the well-flagged plan to cut basic pay levels.
Last night the chairman of the public services committee of the Irish Congress of Trade Unions, Impact’s Peter McLoone, said the move on pensions “cemented” the Government’s decision to walk away from social partnership when it rejected the alternative proposal for cutting the public sector pay bill.
Currently, the pensions of retired public servants are linked to the pay of serving officials in their former grade. As existing staff receive pay increases, the pensions of those who have retired also rise. However, in the Budget, Minister for Finance Brian Lenihan said he wanted to review this arrangement and consider, in future, aligning pension increases to rises in the cost of living. He said that linking post-retirement increases to the consumer price index would reduce the estimated cost of such pensions by 20 per cent to €87 billion.
Mr McLoone said the announcement meant that “without any dialogue, let alone negotiation, tens of thousands of people are to have their future pension entitlements cut”.
“All existing and former public servants must now mobilise to protect their incomes,” he said.
Even before the announcement of changes to the pension arrangements, public sector unions were already furious over cuts in their pay levels. Although well flagged, there was no softening of anger when it emerged that no one would escape the net.
Under the Budget proposals, staff earning up to €30,000 will face a 5 per cent cut, while there will be a 7.5 per cent reduction on the next €40,000 and a reduction of 10 per cent on the next €55,000 of salary.
In effect this means that lower grade clerical officer staff will face pay cuts of 5 per cent. Those in the middle grades such as executive officers and higher executive officers in the civil service as well as the average garda, nurse and teacher will see a reduction of up to 7 per cent. Mr Lenihan said last night that TDs will see their pay reduced by 7.5 per cent.
The bulk of public service staff are in the low- to middle-earning bands. In the civil service about 16,000 are paid between €20,000 and €40,000, while about 1,300 earn more than €100,000.
The cuts aimed at the lower-paid groups were particularly criticised by unions. The CPSU, which represents lower-paid clerical staff, said cuts of 5 per cent for lower income public servants “represents a savage attack on their modest income and will be strongly resisted”.
Unite regional secretary Jimmy Kelly said: “Taking a 5 per cent knife to public servants earning only €30,000 will have a devastating impact on those for whom a wage equals food on the table and nothing more”.
The question now will be: how will the unions respond on the ground to the imposition of the pay cuts?
Their initial reaction would appear to be that the Government can forget about its reform programme for the public service. TUI general secretary Peter McMenamin put it bluntly and said “any transformation agenda is dead in the water in the current climate”.
However, Mr Lenihan, equally bluntly, appeared to link failure to introduce reforms with future pay reductions.
“I do hope they [the reforms] come back on the table. If everyone agreed they were worthwhile, then they were worthwhile. If everyone agrees that they could save money, then they might have the singular merit of avoiding further cuts in public service pay,” he said.
The unions had promised a long and sustained campaign of industrial action in the event of the Government introducing pay cuts, and their comments last night indicated this remained the position.
The public service committee of the ICTU is to meet today, and a clearer picture may begin to emerge on the nature and timing of any action.
Public sector pensioners cannot go on strike, so if they are to be “mobilised”, as Mr McLoone suggested last night, the campaign being planned seems likely to be broad-based, involving a number of strands of which industrial action is just one.