THE CABINET is to examine ways of reducing the pay bill of the semi–State sector, Government sources confirmed last night.
The move could involve extending the pay cuts announced in the Budget last week for staff in the public service to workers in commercial semi-State companies and agencies such as the ESB, Bord Gáis, VHI and the CIÉ group of companies.
Cuts of 5 per cent and upwards in public servants’ pay were announced in last week’s Budget.
The potentially divisive issue is expected to be raised at a meeting of the Cabinet tomorrow, although it is not yet on the formal agenda.
However, trade union leaders warned last night of serious industrial conflict if the Government moved to introduce pay cuts in the commercial semi-State companies such as the ESB, which are hugely profitable.
Eamon Devoy, TEEU general secretary designate said there would be “unholy war” if the Government touched the commercial State sector.
“There are people giving their life blood to secure the sustainability and profitability of these companies and now the Government wants to punish them with a pay cut. It is not going to happen,” he said.
The Irish regional secretary of the Unite trade union, Jimmy Kelly, said that any attempt to impose pay cuts in the commercial State sector would lead to industrial action in every shape and form.
Siptu president Jack O’Connor said the concept of pay cuts for staff in the semi-State sector was the logical consequence of the policy the Government had been advancing which was aimed at reducing wages across the economy.
He said that in State-owned companies which were facing difficulties and where jobs could be saved by the introduction of pay cuts – as in the case of RTÉ – the union had been prepared to negotiate an accommodation. However, he said that it would not be prepared to facilitate a “right-wing” pay reduction policy across the board.
Speaking last night, Minister for Finance Brian Lenihan confirmed the issue of pay cuts in the semi-State sector would have to be examined.
He also warned that further pay cuts for public service staff next year would be inevitable if proposed industrial action over the reductions announced in the Budget resulted in a deterioration of the State’s finances.
Asked during an appearance on RTÉ’s The Week in Politics for his view on semi-State company employees not being covered by the pay cuts announced in the Budget, Mr Lenihan said: “We have to look at all of this. I mean some of the semi-States like yourselves [RTÉ] have taken pay reductions.”
He continued: “Falling profits at the banks mean there will be far more pay restraint there. The Government has already outlawed bonuses and set a maximum cap on salaries.”
Asked specifically about the ESB, he said: “Again, that is something we can look at. I understand it won’t have a huge impact on the price of electricity. We’ve already opened a very substantial war on one front in the area and really we want to move away from having war to having constructive discussions.”
Spokesmen for Minister for Transport Noel Dempsey and Minister for Communications, Energy and Natural Resources Eamon Ryan, the line Ministers for most of the State bodies concerned, said meetings with management had not been arranged for this week.
Michael Faherty, of the National Bus and Rail Union, said last night it had agreed a cost-cutting deal with Dublin Bus just five months ago, and a ballot on a similar arrangement with Bus Éireann would be sent to the union’s members this week.
Any suggestion of further cuts would be totally unacceptable, Mr Faherty said.