Unions warn of inflation threat to pay deal

Union leaders have said the partnership process is going through a "rocky patch", with increasing concerns about rising inflation…

Union leaders have said the partnership process is going through a "rocky patch", with increasing concerns about rising inflation.

The general secretary of the Irish Congress of Trade Unions (Ictu) David Begg yesterday warned of the impact that inflation could have on the Towards 2016 partnership agreement which was agreed last year.

"I think we will be under quite a lot of pressure to get some amelioration of that condition for people, however we achieve it," Mr Begg said.

He pointed to the announcement earlier this week by employers' group Ibec that businesses would have to pass on the cost of increasing food prices, which could rise by 10 to 20 per cent.

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"Ordinary people will say, well hold on a minute, if they have no choice but to pass it on, why should you have a level on wages and not on prices", he said.

The rate of inflation reached 4.9 per cent in December.

The partnership agreement allows for annual increases of 4.6 per cent over the lifetime of the deal.

Inflation for last year averaged about 4 per cent.

Siptu president Jack O'Connor said that workers could not be expected to carry the burden of inflation and called on the Government to address the problem through other measures to ease the cost of living.

The president of Ictu, Peter McLoone, told The Irish Timesthat the projected level of inflation for 2007 was higher by one or two points than at the time the Towards 2016 agreement was negotiated last year.

He also said that the statement by Ibec regarding increases in food prices was "all very worrying".

Trade union leaders set out their concerns regarding inflation and other issues to the Taoiseach, the Tánaiste and the Minister for Finance at a plenary meeting of the social partners at Dublin Castle yesterday.

Union leaders also expressed concern at the lack of urgency at implementing measures to improve standards in the labour market and in relation to the health sector.

Mr McLoone said unions were struggling to ensure the partnership model stayed relevant to their members and society in general.

"We are not in as healthy a state as we could or should be", he said.

Mr McLoone also said that there was concern at the speed at which measures to improve standards in the labour market were being put into effect by the Government.

The issue of labour market standards and employment rights were issues of major importance in the negotiations leading up the agreement of the new partnership deal.

A new national employment authority and new employment rights legislation are to be put in place by the Government.

Turlough O'Sullivan of Ibec said the "glass is more than half full" in relation to the economy.

"But at the same time I think it is important that we're aware that there are storm clouds out there. We still are over-reliant on consumer spending," he said.

Martin Wall

Martin Wall

Martin Wall is the Public Policy Correspondent of The Irish Times.