Major pay increases would hurt social welfare payments, Varadkar warns

IBEC has criticised a private sector call for a 4% pay increase

Major pay increases would hurt social welfare payments, Varadkar warns

Social Protection Minister Leo Varadkar talking to the press in Dublin | Image:

A Cabinet minister has warned that major pay increases could be "repeating the mistakes of the past".

Leo Varadkar says increases to private sector wages could make Ireland less competitive and result in jobs actually being lost.

And as unions indicate plans for a 4% pay increase next year, he also warned about unsustainable demands.

"We have been here before. We did get to the point as a country - not that long ago, only a decade ago - where we became unsustainable in terms of pay levels, public spending in general and the level of borrowing that occurred.

"And we really need to make sure that we don't repeat the mistakes of the past."

He also says any extra increase to public pay will limit the amount available for welfare.

He adds that while the Government has some flexibility, it cannot satisfy everyone's wishes.

"That money's going to be limited - so the more money that is made available for public sector pay increases or public sector pay restoration does mean less money for services, less money for pensioners, less money for other people in receipt of welfare, less money for infrastructure and less money for tax reductions for people in the private sector".

"Absolutely no justification"

Business group IBEC has condemned what it calls "the crude opportunism" of the Irish Congress of Trade Unions (ICTU) private sector unions for the 4% across the board pay claim.

CEO of IBEC Danny McCoy said: "The majority of private sector companies have been awarding pay increases over recent years.

"There is absolutely no justification for cost of living increases of 2% while the consumer price index remains below 2008 levels, with no emerging inflationary pressures in the economy."

Meanwhile the Government has been accused of standing over an "apartheid" in the public sector.

The claim comes from Richard Boyd Barrett of People Before Profit - who says it should be illegal not to pay teachers on the same pay scale.

He told the Dáil the same discrimination would not be accepted in other areas.

"Any other category of discrimination against women, LGBT people, racial minorities is illegal.

"You have managed to impose this arbitrary discrimination on the basis of weather you happened to come into a profession before or after 2010 or 2011".