Renewal of trust remains crucial to revival of national pay talks

The SIPTU president, Mr Des Geraghty, set the national pay talks on a roller-coaster last week when he pulled the State's largest…

The SIPTU president, Mr Des Geraghty, set the national pay talks on a roller-coaster last week when he pulled the State's largest union out of negotiations. Ever since, Government, union and employer representatives have been trying to regain their bearings.

Given the way the Budget had been tilted towards the better off, SIPTU, with up to a quarter of its members on less than the average industrial wage, had to do something drastic to refocus the debate. A price has had to be paid in terms of trade union cohesion, and it is only now that the Irish Congress of Trade Unions is beginning to restore cohesion to its ranks.

The mechanism for doing so has been its expert group on taxation, which is in discussion with senior Government officials about the various options for meeting the needs of the low paid. The group will report back to the ICTU executive this morning on progress so far.

With the Tanaiste, Ms Harney, joining the growing chorus of people who think nobody on the national minimum wage should be paying income tax, it should be plain sailing. The ideal Government scenario would be for the ICTU to accept a relatively modest adjustment in the PAYE allowance for this year's Budget, with a promise of more to come. Everyone could then get back into talks on a national agreement after the Christmas break had allowed tempers to settle.

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However, things are rarely that simple. For a start, there is some confusion over exactly what is on offer. Last week the Cabinet approved £125 million in "re-balancing" measures for low-income groups. Just how that money is to be distributed remains unclear.

Government sources said the money was intended for measures in next year's Social Welfare Bill. However, ICTU leaders were given to understand that a similar amount would be available to increase PAYE allowances. While £125 million sounds a lot, it cannot do both jobs. If every penny went on PAYE allowances, it would raise these by only about £500 a year.

The Taoiseach has given a commitment to the "community and voluntary" pillar of the talks that "new and additional resources" are to be made available in any successor to Partnership 2000 to tackle social exclusion. Father Sean Healy of the Conference of Religious of Ireland is not the sort of man who will let him forget.

It is unlikely that the social pillar, despite its threats after the Budget, will pull out of talks. Yesterday the general secretary of the Irish National Organisation of the Unemployed, Mr Mike Allen, said that with all its failings social partnership was still the best way to help the poor. The unions remain the linchpin of the process.

Ironically, Mr McCreevy defended his Budget strategy on the basis that he could not give them everything they wanted ahead of negotiations. Now Mr Ahern is having to promise them the world to get talks started.

It is called making up the trust deficit. The ICTU general secretary, Mr Peter Cassells, explained the post-Budget scenario succinctly when he said after leaving Government Buildings yesterday: "Everybody goes into the process with a fairly high level of trust. That is what has enabled us to have these national programmes. That trust has been badly damaged by what has happened."

What has happened also upset the usually carefully arranged choreography of events. To quote the teachers' leader, Mr Joe O'Toole, who is currently vice-president of Congress, issues are being "front-loaded" to the head of the talks.

These include calls for commitments from employers to promise flat-rate increases to the low paid and similar commitments from the Government over "early settlers". The latter are groups such as teachers and executive officers in the Civil Service who settled for low pay increases only to see nurses, gardai and other "late settlers" win substantially more.

Employers and Government representatives made it clear they were not going to do a David Trimble on this and jump first. The director-general of the Irish Business and Employers' Confederation, Mr John Dunne, raised questions about the "deliver-ability" of the unions in areas such as industrial peace. He cited the threatened strike by Aer Lingus pilots and ESB engineers as examples of the unions' failure to keep the troops in line.

Government negotiators are also understood to have been cool towards the notion of dealing with the "early settlers" outside some wider deal on change in the public service, including performance-related pay.

If the blockage is to be cleared, everyone will be required to jump together.

One problem is that the disorientating effects of Mr Geraghty's roller-coaster on ICTU leaders are still being felt. There are conflicting signals. While figures such as Mr Cassells and the chairman of the ICTU's public services committee, Mr Peter McLoone, are trying to put a coherent shape on things, others are still trying to map out the concerns of their own members, lest they be forgotten.

The MSF national secretary, Mr Jerry Shanahan, who represents mainly middle- to high-income earners in both the private and public sectors, has pointed out that tax breaks mean low-paid workers will not pay tax on the first £110 they earn each week, compared with £79 a year ago. He also argues that securing pay increases is a better way of improving the position of the low paid than tax breaks.

IBEC would disagree. While some low-paid sectors such as fast-food bars are insulated from foreign competition, others such as the rag trade are not.

Unions such as MSF have the industrial muscle to secure high pay increases in some sectors and want a new agreement that gives them the flexibility to do so. Tax breaks are more important to unions representing low income groups. SIPTU is a broad church with members right across the earnings spectrum. That is why it is seeking to clear the decks on the Budget with measures targeted at the low paid. Then it can go back and negotiate a flexible pay deal as well.