Backbench TDs furious with Cowen over deal
Tensions run high as Budget plans thrown into disarray
TAOISEACH Brian Cowen's plans for next week's crunch Budget were in disarray last night as a controversial deal with unions sparked fury within his own party.
Mr Cowen categorically denied any deal was done, but there was enormous anger among Fianna Fail backbenchers and discontent in coalition circles over the proposed agreement to protect public sector pay scales, pensions and permanent job status.
And there were recriminations against the unions for "over-egging" their claim of a deal being struck on reducing the public sector pay bill.
Any savings made on public sector pay are crucial to the €4bn in cutbacks the Government must make in the Budget.
The lack of certainty over the Government securing the full €1.3bn it is targeting from the public sector pay bill is delaying decisions on cuts in other areas.
Government sources admitted there were tensions between the Department of Finance and the Department of the Taoiseach over the budget negotiations. But they firmly rejected suggestions of a spat between Mr Cowen and Finance Minister Brian Lenihan over the cave-in to the unions.
Officials in Mr Lenihan's department are understood, however, to be much more sceptical about the possibility of being able to produce a deal than those in the Taoiseach's department.
Mr Cowen's decision to embrace a union plan to allow its workers to take two weeks' unpaid leave, rather than reduce their pay rates, sparked fury within his own party.
"Everybody is getting it in the neck and the parliamentary party is upset. Lenihan is meeting people tomorrow and I have no doubt it will come up," a party source said. "There is a sense we have let the unions off the hook. Everybody is wondering what's going on."
Despite tax and spending figures published last night giving some hope that the economy is stabilising, there was still mounting discontent for Mr Cowen to deal with as he aims to push through next Wednesday's Budget.
Coalition sources insisted that even if a deal was struck, then it would be part of an overall reform package and changes would have to be verified.
Talks between the public sector unions leaders and Government officials were continuing last night with a conclusion expected one way or another later today.
And there was still confusion over precisely how much the Government was going to cut from the public sector pay and pensions bill.
Mr Cowen claimed the Government was seeking savings "of the order" of €1.3bn, amid speculation the target had been revised down to €1bn.
He said a proposal to implement unpaid leave across the public sector did not provide the basis for an agreement.
Mr Cowen said: "There is no deal. That's clear."
And Mr Lenihan refused to rule out pay cuts in next week's Budget.
But the leader of the trade union movement ICTU insisted the "bones" of a deal with the Government to slash the state payroll does exist.
The Government was quite insistent there was no deal done with the unions. The unions were told their offer was not enough, a source said.
"The Government didn't cave in at all -- quite the opposite. They were told: no, that's not enough," the source said.
And there were outright denials of Mr Cowen and Mr Lenihan being at odds over the facilitation of the union demands.
"Brian Lenihan represents his interests as Minister for the Department of Finance. People would like to do a deal -- but not at any cost. There isn't a breakdown of relations. He doesn't do sulks," a source said.
Irish Congress of Trade Unions general secretary David Begg said he did not believe the "situation was lost as yet" and said he would be "seriously disappointed if anybody on either side lets the ball drop at this stage".