The Government faces the first major challenge to its pay policy as SIPTU calls for a review of the Programme for Prosperity and Fairness in the light of growing inflation. SIPTU president Mr Des Geraghty wants higher wages and/or increased tax credits and social welfare to compensate for the erosion in living standards.
The executive of the Irish Congress of Trade Unions is expected to endorse the SIPTU position when it meets next Wednesday. Yesterday, ICTU's general secretary Mr Peter Cassells wrote to executive members informing them of SIPTU's request for a special review of the PPF and telling them that ICTU's powerful general purposes committee was recommending the start of immediate negotiations on the December budget.
ICTU's executive will meet a day after the release of inflation figures for June. These are expected to show the consumer price index rising even faster than the 5.2 per cent for May. Mr Geraghty said yesterday that a review was "urgently required" because of the failure of the PPF to deliver low inflation. The Government had made only "feeble efforts to control inflation" and the Irish Business and Employers Confederation had failed to confront members exacerbating the problem by profiteering.
SIPTU is responding in large part to pressure from members, some of whom have only received the last 1 per cent due under Partnership 2000. Simultaneously with Mr Geraghty's public statements yesterday, a circular was sent to shop stewards and branch activists telling them: "Withdrawal will not of itself improve living standards and it certainly will not correct the trend in inflation. Ultimately, hard choices will have to be made."
A Government spokesman rejected the criticism yesterday, saying that, besides introducing controls on drink prices, an extra £40 million had been allocated to childcare provision and a consumer awareness programme had been introduced. He added that the announcement by Musgrave's that it was reducing the price of milk by 5p a litre was an early indication that supermarkets were taking seriously the warnings of the Taoiseach about the dangers of profiteering.
While the Government had anticipated there would be a call for a review of the PPF, due to inflationary pressures, official sources expressed concern that it had come so soon. The pay terms of the PPF only began to apply from April 1st and many trade unionists are not due to receive increases until October 1st or January 1st.
IBEC's director of human resources Mr Turlough O'Sullivan accepted that there had been "a certain amount of opportunism" by a small number of businesses but said the vast majority had behaved responsibly. He rejected the prospect of a pay review outright.
"An agreement is an agreement", he said.
He called on the unions to take a longer-term view of national agreements. "The track record shows they have delivered. They have had their hiccups and blips but people should not be panicking."
However, he did not rule out concessions in the Budget to compensate for inflation. However, this is unlikely to find favour with the unions. The Amalgamated Transport Workers Union leader Mr Mick O'Reilly was the first to welcome SIPTU's stance and is to publish a policy document calling for indexation of pay and welfare increases later today.
Inflation is expected to be top of the agenda when the social partners hold their next meeting towards the end of the month.
