ICTU leaders send clear message on inflation

Measures to deal with inflation "are at an advanced stage" and will be finalised for approval at next Tuesday's Cabinet meeting, the Government has told the Irish Congress of Trade Unions.

ICTU leaders made it clear that price controls, reduced inflation rates and compensation for workers' lost earning power in the next Budget would be needed to avert a renegotiation of the Programme for Prosperity and Fairness.

The Government, which has still to consult the Irish Business and Employers Confederation, told ICTU the new measures would include "a vigorous programme of price monitoring" and the removal of restrictions on competition in areas such as groceries and the licensing trade.

The office of the Director of Consumer Affairs, Ms Carmel Foley, will be given extra resources to "name and shame" businesses which overcharge. This is in addition to resources already announced for the Competition Authority.

It also said last Thursday's package targeting housing costs would stimulate supply and "address the negative impact of speculative activity on first time buyers".

Extra resources for public transport and child care were also promised.

ICTU leaders appeared satisfied as they left Government Buildings yesterday that the Taoiseach, Mr Ahern, the Tanaiste, Ms Harney, and the Minister for Finance, Mr McCreevy, had taken their concerns on board. But they adjourned their monthly executive meeting earlier in the day so that it could be reconvened at short notice, if next week's measures do not match expectations.

IBEC director general Mr John Dunne said yesterday he expected to meet the Government shortly to discuss the measures and warned that the organisation had reservations about price controls. He also advocated the retention of the ban on low cost selling under the Groceries Order and warned against introducing measures which could "put more juice in the system".

SIPTU president Mr Des Geraghty described yesterday's discussions as "very constructive. We would feel they are committed to a package of measures to tackle the problem and we left them in no doubt of the seriousness of the situation".

But IMPACT general secretary Mr Peter McLoone felt "the jury is still out". People would want to see practical measures. "All the talk in the world won't help. It's practical measures that are needed now to bring the headline inflation figure down."

The Irish secretary of the ATGWU, Mr Mick O'Reilly, a longstanding opponent of national agreements, said: "The Tanaiste spoke a lot about measures to promote competition to reduce prices, but that's still a medium term thing. We need something in the next few days".

"Everybody's in the wilderness now," said Public Service Executive Union general secretary, Mr Dan Murphy. The Government had "to reduce inflation figures straight away", introduce greater competition and compensate workers for reductions in living standards through the December Budget.

ICTU general secretary Mr Peter Cassells said that at the executive meeting yesterday the priority had been to ensure the living standards of workers and people on fixed incomes were protected. "We conveyed to Government that this must be done by controlling prices and bringing down inflation."

A cut in VAT has been urged by the Irish Farmers' Association which has sought a meeting with the Taoiseach to discuss the impact of inflation on agriculture.

IFA President Mr Tom Parlon said he would be insisting on specific action by the Government involving a cut in the standard rate of VAT from 21 per cent to 17.5 per cent.