TRADE UNIONS will "refuse to engage" in social partnership negotiations if the Government pushes ahead with signalled public sector pay cuts, a senior trade union leader has warned.
Former Irish Congress of Trade Unions president Peter McLoone, who leads the Impact trade union, expressed concern yesterday at the manner in which negotiations were being conducted. As well as criticising possible pay cuts, he said "there is concern that Brian Cowen's agenda is simply to see what the unions can do to assist in the saving of an extra €2 billion, and then to just bank that".
Strong resistance to the Government's plan for cuts in the public pay bill - either through pay cuts or job losses - was also expressed yesterday by Ictu general secretary David Begg. He said if the Government cut back on wages "you will have a compounding effect and deepen this deflationary spiral. It would be wholly the wrong thing to do. Certainly, we wouldn't go down that road."
Speaking on RTÉ's This Week, Mr Begg called for "a sensible compromise" between cutbacks in public services and pay, tax changes, and the length of time "over which all of this is done".
He warned a Government-ordered pay cut for State employees would offer private employers the green light to impose even tougher cuts.
The Cabinet is to finalise an initial €1 billion in cutbacks next week, even while social partnership negotiations with unions and employers are under way. Taoiseach Brian Cowen has ordered the Cabinet to meet at least twice next week, following his return from a visit to Japan.
Unions and employers were to reply this week to Mr Cowen's call on them to present their own ideas on how to deal with the economic crisis.
Ministers are currently drawing up a list of savings that could be made to meet part of Minister for Finance Brian Lenihan's demand for €2 billion worth of cuts to be ordered by the end of the month. The decision to focus on securing €1 billion worth of cuts from next week's Cabinet meetings appears to be an effort on the Government's part to force concessions of a similar amount from the social partners.
A number of options are being considered, including a drop in National Development Plan spending below the €8 billion-a-year promised over the next five years.
Meanwhile, Minister for Education Batt O'Keeffe signalled a possible return of third-level fees.
Mr Cowen has pledged to restore order to the exchequer's finances over five years, arguing that a quicker cure could cause more damage, but even that longer timeframe does not avoid the necessity for harsh action now.
Voluntary and social groups, including anti-poverty campaigners, will hold preliminary talks with Department of the Taoiseach officials today, while farming leaders will attend on Thursday.
Minister for Transport Noel Dempsey said at the weekend that €2 billion had to be cut from State spending "within weeks", and this would have to include public sector cuts.
"There are only three areas we can get that, that's pay/pensions, cutting services or cutting numbers in the public service or a combination of all of those," he said.
The link between public service pensions and existing pay levels could be broken, Government sources have said, while the €1.6 billion contribution to the National Pension Reserve Fund is also at risk, at least in part.
Calling for a general election to eject "a failed Government", Labour Party leader Eamon Gilmore said a change of government was necessary to help stimulate the economy.
