Delivering on Health - IMPACT Conference

22 May 2002

IMPACT Conference Cork, 22 May 2002
Address by David Begg, General Secretary, Irish Congress of Trade Unions

 

Since taking up the position of General Secretary of Congress last September I have had the privilege of working closely with IMPACT on a number of issues of importance - Aer Lingus, The Health Strategy and the Carers' Dispute for example. IMPACT is a very impressive organisation, highly professional and considered in everything it does. It is widely respected both within the trade union movement and within Government circles.

I would like to thank you for your contribution to the work of Congress, particularly your General Secretary and Deputy General Secretary who are members of the Executive Council and in Peter's case, also the General Purposes Committee.

On a more personal note, IMPACT was very supportive of the international development work I was involved in during my time with Concern and I want to express my appreciation for that too.

Because your membership spans such a wide range of professions and activities within the public sector I would like to take this opportunity to share some thoughts with you about the role of Government in the economy.

But first perhaps I should say a few words about the fraternal exchanges which have been taking place between IBEC and ourselves over the last while. They have, as you know, been complaining about wage drift and the consequences of same for competitiveness. They have, in fact, indicated quite strongly that they want out of partnership.

It is a fact that the PPF was a good agreement and that pay increases in Ireland are running ahead of the general trend in Europe. But if you consider that we are in eleventh place in the EU wages league it becomes clear that this recent improvement is only making up lost ground. If you also consider that over the 15 years of partnership the share of national wealth going to profits had gone up from 31% to 50% then employers have little to complain about.

By any standards the conditions for competitiveness in Ireland are very favourable. Business has had the advantage of:

  • A 25% devaluation of the Euro which allows us to sell goods into Britain and the US at a great advantage;
  • Very low interest rates;
  • Capital Gains Tax which was reduced from 40% to 20%;
  • The lowest corporation tax regime in Europe;
  • The lowest social insurance costs in Europe.

It is a good and necessary thing to have a competitive economy - even though I think some of the taxes on business are too low - but we have to ask what is it for? A country is more than an economy. There is no merit, in my opinion, in creating economic conditions that simply make the rich better off. We must surely strive to distribute the fruits of prosperity so that they benefit everyone.

I have said many times over the past few weeks that I am in favour of social partnership. It is not because I think it is necessary for pay determination. Public service unions will have to negotiate with Government as an employer whether or not there is a successor to PPF. But it is because the process embraces a whole range of issues that influence the economy and the quality of life that it is of value.

It is also crucial to the implementation of structural changes in the economy. The entire health strategy statement, for instance, is predicated on a partnership approach.

In any event we will not be taking a formal position on this matter until the Autumn. If we receive an invitation from the incoming Government to participate in talks on a new agreement then we will convene a Special Delegate Conference to decide our approach.

IMPACT has a very significant proportion of its membership in the health sector so you are crucially involved in the delivery of the new health strategy. Congress has publicly stated its support for the health strategy on the grounds that it is the product of a wide consultative exercise and as such must be deemed to reflect the collective wisdom of all who work in the sector.

Congress has to take a very broad perspective in the matter of health policy. On the one hand 80,000 union members are employed in these services and their interests are very important to us. On the other hand we also have to defend the interests of the bulk of our membership and their families who are users of the service. In truth there is no real dichotomy here because everybody who works in the service should want it to be of high quality. I mention this point merely to establish that we represent both a provider and a user interest in respect of all public service.

I set out our view, which was informed by IMPACT and the other health service unions, at some length in one of a series of lectures organised by the Office of Heath Management. In the course of the lecture, however, I did enter one major caveat, the willingness of Government to commit the necessary financial resources to deliver the strategy.

Let us consider for a minute the hill that has to be climbed to bring the health services up to an acceptable level:

  • The cutbacks implemented from the late Eighties onwards have left us with a legacy of erosion which I think the public is not fully aware of;
  • A 21 per cent reduction in hospital beds in 1987 plunged the health service into a state of decline which got worse as the years went on;
  • As the economy took off from 1994 onwards the population began to increase as people returned from abroad to take up jobs here. This population increase of 14 per cent overall has been concentrated particularly in Dublin although it has affected other parts of the country as well;
  • Paradoxically, advances in high tech medicine have saved lives but have increased the numbers of people with a high dependency on quality medical care;
  • An increasing elderly population by definition places extra demands on a health care system.

The ramshackle nature of areas of our health service today is the result of a long period of inadequate investment during the 1980s and early 1990s. Today we stand at a level of expenditure which is 6.8 per cent of GDP. It is the same as the UK but less than Germany at 10.3 per cent and France at 9.3 per cent. For those, by the way, who extol the virtues of US medicine as against European, it is interesting to note that according to the January 12th issue of "The Economist" the World Health Organisation rates France as the best of 191 countries. The US spends 13 per cent of its GDP - 3.7 per cent more - and comes 37th. Ireland ranked 19th in the survey. In real money terms Ireland ranks 10th in the European spending league. Germany, Luxembourg, The Netherlands, Denmark, Belgium and France all devoted over $2000 per capita, PPP to total health expenditure. The figure for Ireland was $1,534 PPP.

Having regard to the investment gap we have to make up and the differences in real money terms between ourselves and the better European performers we will have to spend a lot of money over the next few years. Professor John Fitzgerald of ESRI estimates that it will take 7 per cent of our national wealth each year for the next ten years to bring our total public services and infrastructure up to the level of the EU average.

Whether we can achieve this or not depends on our economic performance in the first instance. The downturn in the economy has had a marked effect on our public finances. From a strong surplus over the last few years the Department of Finance is now predicting a deficit for the next two years.

Although the level of public spending in Ireland has increased over the last couple of years it is increasing from a low base and stands at about 33 per cent of GDP. The EU average is 47.5 per cent. I recall Ken Clarke saying during last year's election for leader of the Tory Party that you cannot hope to provide reasonable quality public services for less than 40 per cent of GDP.

Indeed, it is interesting to note that the British Government, which faces similar problems with the NHS, has begun to face up to the funding issue. In the recent budget they increased the equivalent of employers' PRSI specifically to fund the NHS. By contrast our Government cut employers' PRSI to the tune of 387 million Euro per annum in the last budget even though we have the lowest social insurance taxes in Europe. This was a very serious error of judgement that should be immediately reversed by the new Government. It was the result of pressure by the employers' organisation IBEC which we know of, thanks to the freedom of information act which revealed details of the meetings involved into the public domain.

Having raided the public purse it is extraordinary that IBEC sees no contradiction in warning the Government against implementing the outcome of the Benchmarking Review Body. All parties to the PPF - Government, unions and employers - freely entered an agreement to set up an independent Benchmarking Body to scientifically compare jobs of equal value in the public and private sectors. There was no compulsion on anybody to enter the agreement but, having done so, they must leave the Benchmarking Body to conclude its task without trying so crudely to influence it by public statements.

I have to admit that I find it profoundly frustrating that our economic system has such a distorted view of the value of different professions. Take for example the banking sector. The Irish Times last week carried an article about the reward packages for AIB executives. The Chief Executive Mr Buckley had a salary of €502,000 in 2001 together with a range of bonuses, profit shares and share options that brought his total package up to €685,000. Yet failures at AIB's American subsidary, AllFirst, nearly wrecked the bank. How is it that astronomical salaries, beyond what anyone could possibly need, are considered acceptable and even necessary for some jobs? How is it that these jobs, even when they fail, are considered to be so much more valuable than the work of sustaining life and caring for the sick? Why is it that granting the means of providing a decent livelihood for people who have such a vital role exercises the minds of our top economists and business leaders to such a degree? How is it that every institution charged with economic forecasting finds it necessary to warn workers against wage claims but never to comment on the increasing share of national wealth taken by profits?

The Benchmarking Body is scheduled to report in June. I have no idea what they will recommend but I hope it will be satisfactory. You may expect, however, that between now and then every liberal market economist will be out in the media explaining how the deteriorating state of the public finances will not permit payment. I warn you to expect this and I warn you that our task of delivering a satisfactory outcome on benchmarking will not be easy because the public finances are not as good as they were (although they are not as bad as some commentators are making them out to be either) and a new Government may be tempted to play hardball on the strength of a fresh electoral mandate. But Government, for its part must understand that a huge amount of credibility on the trade union side has been invested in Benchmarking and any rowing back on the agreement would be very damaging to industrial relations in the public service.

But, at the end of the day, this comes down to the value society places on having decent public services. The health strategy calls for the employment of thousands of additional staff in all disciplines over the period of its implementation. Without those people the plan will fail and they will not be motivated to work in the health service unless salaries and conditions of employment are as good as they can get in the private sector. If we as citizens of Ireland want a health service as good as the best in Europe then we have to pay for it - and that means paying health service staff what they are independently judged to be worth. The same principle applies right across the public service.

In the past few years I have travelled extensively in the developing world. Apart from the poverty and destitution, which are all too obvious, what you see very often when you engage with Government is that many countries are no more than shell states. What distinguishes them from Western countries is the absence of an institutional framework of public services.

We take our public services so much for granted that the very concept is devalued in the currency of public discourse. We do not consider the crucial contribution that they make to our every day lives in so many ways:

  • Because of Environmental Health Officers, when we buy a few slices of ham in the local shop we can be reasonably sure that no bluebottles have made their home in the slicer;
  • We rely on Pollution Officers to protect us from unscrupulous private contractors who dump rubbish, under cover of darkness, in our fields and quarries;
  • How may tragedies like the Stardust have been avoided because our Fire Prevention Officers have made proprietors observe the regulations?
  • When we send our children to school we can be assured that the School Secretary will look after them and call us if they are ill - even though she may have 500 other kids, their parents, their teachers and the Department of Education to look after as well.

Across a tremendously wide range of essential activities that impact directly on the quality of our lives - from laboratory staff working around the clock in the fight against Foot & Mouth last year to our municipal employees labouring in the sewers every day to keep our lavatories working - our society owes a lot to our public servants.

Despite their invaluable contribution to our society (or maybe because of it) public servants are often a popular target for criticism. This criticism can come from a variety of sources: vested interests who dream of an economy without tax inspectors and a building industry without planning officials; political opportunists who try to con taxpayers into believing that there is such a thing as a free lunch and that they can have better services at less cost and of course that old reliable, the gaggle of overpaid stockbroker economists who queue up on Morning Ireland to faithfully echo their masters' voice by attacking the public service pay bill. I think its time we had a special benchmarking review to measure the contribution of stockbrokers and their economists and put a value on their work!

But I also want to make it clear that I believe that efficiency and effectiveness is just as important in the public service as it is anywhere else in the economy. Taxpayers are entitled to no less. As a matter of fact I believe that the best antidote to policies of privatisation of public services is to make them so good that they command the support of the public. Those of us who want a strong role for Government in the economy should lead the drive for continuous improvement right across the public service.

It is possible to have a good health service, just as it is possible for us to have good schools, good housing, good childcare and good public transport. We are a comparatively well off country and we have choices about how we share out that wealth. We will be told, of course, that we do not have choices because we cannot do anything that might affect competitiveness. Competitiveness is important to the overall wellbeing of the economy but what is the point of being competitive if the population at large sees little benefit from it? We are in danger, as a nation, of allowing ourselves to be talked into a situation where everything is subordinated to the needs of the economy, where the rich get richer, where inequality in society increases and where the quality of life deteriorates. We could convince ourselves that increasing crime, increasing suicide amongst the young and social disintegration is inevitable. We would be wrong to reach such a conclusion. We do have choices if we chose to exercise them.

This, of course is not a unique dilemma either for our country or our time. Shortly before he was assassinated Robert Kennedy articulated similar concerns in a speech at the University of Kansas in which he said:

"Even if we act to erase material poverty, there is another great task. It is to confront the poverty of satisfaction - a lack of purpose and dignity - that inflicts us all. Too much and for too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things.... The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile".

I would like to conclude by sharing a few thoughts with you about the future of our movement. Our priority must be organisation, particularly in the private sector. When you discount the self-employed, the Army and the Police, there are about 1.4 million workers who could be in Congress affiliated unions. Our current affiliated membership in the Republic of Ireland is 550,000.

IMPACT has an impressive record of growth - from 26,021 members in 1991 to 42,989 in 2001 - an increase of 17,000 or 65 per cent. It is a remarkable achievement of which you can be justifiably proud.

In the next few weeks I intend to put a strategic plan before the Executive Council of Congress. It will have as its cornerstone the recruitment of new members to the trade union movement. To succeed it will require unions to co-operate with one another - something we have not been very good at. To be frank we have to change our perspective. In the last couple of years the cohesion of trade unionism has been dogged by membership disputes, in one case causing the expulsion of an affiliated union from Congress. These disputes have consequences beyond their immediate environs. My experience is that they tend to influence the industrial relations environment even in other employments where the protagonists have members. This is certainly the case with IMPACT and SIPTU although I recognise that officials of both unions have worked very hard to avoid this contagion effect and to improve relations. My point is that we have a serious challenge ahead and we must focus all our efforts on organising the unorganised.

After all, the mission of trade unionism is to achieve social cohesion and justice. The primary instrument for achieving this is the organisation of workers in unions. It is the collective strength that derives from organisation of people that allows us to act in the market to effect the distribution of wealth.

Our values are important too especially in this age of avarice, consumerism and individualism. We believe all human beings are morally equal; that all life chances should be as equal as possible; and that social justice is a condition of liberty.

Trade unionism offers the possibility that ordinary working people will be given the economic strength that gives meaning to the choice of a free society. The movement is the repository of a hope that society can be organised in a way that ensures that greatest sum of freedom, the highest amount of real choice and, in consequence the most human happiness.