Mansergh warns employers not to abandon partnership

The Taoiseach's special adviser Dr Martin Mansergh, who is a Fianna Fáil candidate in Tipperary South, has told employers they…

The Taoiseach's special adviser Dr Martin Mansergh, who is a Fianna Fáil candidate in Tipperary South, has told employers they "have benefited hand over fist from social partnership since 1987".

They "should think many times before throwing it over, and also about effects on business confidence of a breakdown or abandonment of the process."

As the Taoiseach's policy adviser, Dr Mansergh's comments will be seen as reflecting Mr Ahern's own views on social partnership.

Dr Mansergh said social partnership had delivered exceptional economic growth, major cuts in income and corporation tax, one of the lowest rates of public indebtedness in the EU and "a generally benign industrial relations climate, with strikes mainly confined to the public sector, and days lost way down on what they used to be."

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Employers had also benefited from historically low interest rates, "copper-fastened by the euro", and "reasonable certainty" about future wage costs.

"Irish wage rates, taking productivity into account, have remained very competitive internationally. If they have risen beyond what was envisaged at the outset of the PPF [Programme for Prosperity and Fairness], it is as much because of very tight labour conditions and the laws of supply and demand as trade union militancy.

"More importantly, social partnership has enabled major national problems, many of which emerge at short notice, to be resolved by and large in a co-operative manner and in a balanced way that takes account of the legitimate concerns and interests of all the social partners.

"The last time social partnership was dispensed with was the disastrous period of economic stagnation, high unemployment and heavy public indebtedness in the early to mid-1980s.

"The employers' organisations might like to note that there are no social partnership arrangements in Britain, but the British government have just frozen tax bands and increased their equivalent of employers' PRSI, the NIC contributions, to the dismay of business there.

"In Ireland, in contrast, social partnership enabled the lifting of the employers' ceiling in 2001 to be adjusted in this year's Budget by a dropping of the rate to 10.75 per cent, which should not be reversed.

"As a result, the Irish economic and investment climate remains sharply competitive with its nearest neighbour," Dr Mansergh said.