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Sunday 22 April 2018

Lenihan stands firm on pay deal for top civil servants

Brian Lenihan says there will be no U-turn
Brian Lenihan says there will be no U-turn

AENGUS FANNING

The government intends to stand firm on the controversial issue of milder pay cuts for higher-paid civil servants, Finance Minister Brian Lenihan insisted yesterday.

More than 6,000 higher-paid civil servants had their 12 per cent pay cuts significantly reduced because they also lost their performance-related bonuses as part of the government cutbacks.

Mr Lenihan accepted that the issue had caused a lot of anger among the lower-paid workers and their unions -- but he insisted that his original U-turn on the issue was fair.

For quite a few years the bonuses paid to higher civil servants had become part of their remuneration and he said that when this was explained to the Fianna Fail parliamentary party meeting last week, TDs who had raised the issue accepted that the way in which it was handled was equitable.

The debt crisis in Greece, Spain, Portugal and, to a lesser extent, Italy, has brought home the message that the government took the right steps in last December's budget, Mr Lenihan said.

"You don't have to go back very far to the time when we were being compared with Iceland," he said.

"Now you can see international commentators leaving Ireland out of their commentaries on the debt crisis and, in fact, praising us for the measures we took, however painful."

Mr Lenihan said that while the debt crisis in other countries was a serious matter, it had a beneficial side-effect for Ireland in that the weakening euro made our exports more competitive.

Mr Lenihan said that the essential thing was that there should be confidence in our economy and that investment should come in from abroad.

He added that it would be important to have a sensible agreement with the public sector unions if that was to be achievable.

"There are many thousands of public servants who do their work with great ability and conscientiousness, and they are anxious to get on with their jobs without disruption."

The EU and ECB presidents, as well as commentators in world media, had acclaimed the action taken by the government, he said, and this had a powerful effect in influencing opinion in the money markets and in the investment community.

"I accept that people have been very patient through very difficult times but it's all about confidence at the end of the day, and it is our determined purpose to restore confidence in us fully, both at home and internationally," he added.

Mr Lenihan said that the Exchequer returns last week were in line with expectations. It was true that taxation had fallen, but the reality was that the economy had shrunk, and there was nothing in the taxation numbers that was out of line with predictions.

It was true, he said, that there had been an increase in the numbers on the Live Register in January, but most of it was seasonal.

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