Taoiseach Brian Cowen T.D. giving the oration at the annual Fianna Fáil Wolfe Tone Commemoration in Bodenstown, Co. Kildare, on Sunday Oct 18, 2009.

Taoiseach Brian Cowen on Tuesday signalled that cuts in public pay and pensions are being considered in the preparation of Budget 2010, which will be presented in December. Also on Tuesday, IBEC, the business group, said that while immediate and major cuts in public expenditure were necessary, the Government must also take decisive action to support employment and get the economy going. IBEC said that the absence of such a move would prolong the crisis and add to long-term unemployment. It called for a substantive Irish jobs stimulus package.

Earlier on Tuesday, the Taoiseach met the social partnership group of union and employer representatives to discuss the prospects of an economic recovery agreement.

He later said in the Dáil: “Like the leader of the Labour Party, we believe public sector pay and pensions need to be controlled.”

On Monday, Eamon Gilmore, agreed in a television interview that the overall public sector pay bill would have to be reduced in the budget.

“In light of the scale of the adjustment that is necessary, reductions in those areas have to be part of the equation. The manner in which that is achieved can be the subject of further discussions. There is no doubt that the scale of adjustment is such that this issue cannot be avoided,”Cowen said.

ICTU, the trade union congress, is due to publish today, details of its campaign of opposition to cuts in pay and public services, including preparations for a national day of protest for Friday, November 6th.

The almost 200,000 people who lost their jobs in the past year, are unlikely to attend.

Meanwhile, in a letter to the Taoiseach, sent in advance of talks this evening, IBEC said it was very concerned at the lack of action by the Government to preserve and create much needed employment. It said that while, understandably, short-term funding concerns preoccupied Government in the early part of 2009, now was the time for a substantive jobs stimulus package. This could be done within current budgetary constraints.

IBEC Director General Danny McCoy said: "The jobs crisis is threatening Ireland’s social and economic fabric. Too many jobs have been lost and too many viable businesses are struggling to survive. Right across Europe governments have taken steps to protect jobs, in what is the most severe recession in recent times. The Irish government must do the same.

In the letter, IBEC said that Government should use the money it is already spending, largely through social welfare, where this interacts with the labour market, to protect those in vulnerable employment and to help support new employment. IBEC called for the Enterprise Stabilisation Fund and Employment Subsidy Scheme to be broadened and better resourced, the urgent introduction of a Government-backed export credit insurance scheme and measures to alleviate pressure on exporters to the sterling area.

"Business has a preference for tackling the jobs crisis through a partnership approach, but this must focus on supporting employment, reducing costs and improving competitiveness. Pay increases in 2010 are unrealistic and so a formal suspension of the pay terms of last year’s national agreement is needed as a matter of urgency. If consensus cannot be reached, business will take its own decision on how best to proceed in the absence of an agreement," concluded McCoy.

To make its case, IBEC needs to produce more specifics than the foregoing.