Welfare and minimum wage cuts go against 'decency'

BEGG ADDRESS:CUTTING THE minimum wage and basic welfare rates would cross a threshold of decency that should not be crossed, no matter how bad things are in the economy, Irish Congress of Trade Unions (Ictu) general secretary David Begg has said.

Addressing the Ictu’s biennial delegate conference in Tralee, he said that economists who have proposed as a solution to the economic problems the introduction of wage cuts, job cuts, reductions in the minimum wage and cutbacks in welfare and public spending must have ice water running through their veins.

“They seem indifferent to the consequences of their solutions,” he said yesterday.

Mr Begg said that wage cuts and welfare cuts would be highly deflationary in their impact. He said that he was not aware of any country that had deflated its way out of a recession.

He also said that there was no empirical evidence to show that pay cuts were widespread through the country.

He said that independent analysis carried out by the specialist publication Industrial Relations News had revealed that significant numbers of companies had increased pay in line with the terms of the social partnership agreement reached last autumn.

Mr Begg also said that the problem with the Government’s proposal for a major new subsidy scheme for companies at risk as its response to soaring unemployment was that it was ambiguous.

“We do not know how it will work. We thought we had a commitment to a €1 billion spend, but the Minister for Finance poured cold water on that the following day.

“It is too narrowly prescriptive in its application in that it excludes large sectors of the economy. While acknowledging the need for some element of targeting and the need for a sustainable scale of activity in each sector, we also have to give hope.

“For instance, although construction will contract, its share of economic activity cannot be zero. Apart from the employment implications, the country still has a huge infrastructure deficit which is a big drag on competitiveness. Nor can we be expected to accept a scheme which is a wage subsidy to employers and requires us to buy into the deflationary analysis,” he said.

Mr Begg said that the unions’ hope was that the Government’s position could be corrected because “if we want to influence policy on employment, pensions, repossessions and the other elements of the 10-point plan, the only way to do so is in dialogue with the Government”.

However, he said that by the same token this was true only if the Government was willing to act.

Mr Begg said that there had been criticism of the unions for constantly going back and forward to Government Buildings.

However, he said that if he was instructed by congress not to go again he “would be the happiest person in the room”.

However, Mr Begg added that “we have to have regard to the limits of the efficacy of street protests”.

Meanwhile, Larry Broderick, general secretary of the finance union IBOA, told the conference that up to 5,000 staff could face redundancy in the next 12 months as a result of restructuring in the financial sector.

“The people who will perpetrate those redundancies are the same senior management and boards that have caused the problems. We call on the Government, who have not only a financial responsibility but a moral responsibility, to sit down with this movement and talk about a strategy for this industry that protects jobs,” he said.