Partners continue talks on new pay accord

A fresh drive against anti-competitive practices and profiteering has been proposed by the Government in the context of a planned new national pay agreement.

In a draft document circulated to the social partners yesterday, the Government has suggested a number of key actions aimed at improving competitiveness and reducing inflation in order to protect a pay rise of 7 per cent over 18 months under the agreement.

Among the Government's proposals are the implementation of reforms in the insurance industry to reduce the cost of premiums and to give a mandate to the Director of Consumer Affairs "to prioritise investigations in sectors where prices do not appear justified by market conditions".

Business, trade union, farming and community and voluntary sector representatives met at Government Buildings yesterday. The meeting was the first of three to take place this week on non-pay-related issues relating to the proposed "Successor PPF Agreement".

The partners are due to further discuss economic issues today under the heading "Building and Sharing Economic Development of Prosperity", while tomorrow the focus will be on equality and the social agenda.

Separate talks were continuing last night between public service unions and management on a modernisation programme to be introduced in return for benchmarking pay awards under the deal.

As for the non-pay-related issues, friction has already emerged in a number of areas, including the proposed introduction of energy taxes, to which IBEC is opposed.

Among the key taxation policies identified in the draft document was a commitment to "advance plans for a general carbon tax" in keeping with Ireland's international obligations under the Kyoto protocol to reduce greenhouse emissions.

In the area of competitiveness, the Government blamed a number of factors, including a weakening euro, a tight labour market and strong demand conditions for a rise in inflation. Such conditions, combined with "inadequate progress" on increasing competition and removing restrictive practices, "supported a bidding up of the prices of fixed factors such as property prices and rents and provided opportunity for unwarranted increases in some profit-margins, especially in some service sectors.

"Bringing inflation down as quickly as possible towards levels comparable with our trading partners' performance must be a top priority, if jobs are to be secured," the draft document added.

IBEC indicated yesterday that it was generally supportive of the thrust of the document but that certain initiatives may be opposed. In particular, the employers' group is due to challenge possible demands from the community and voluntary sector for an increase in corporate and other business taxes.

IBEC's general council, meanwhile, is to meet tomorrow to discuss the key issue of pay, proposals on which were circulated last week by the Government. The organisation is not now expected to announce a formal response to the proposals until a consultation process with its members is completed next month.

In a separate development yesterday, the Irish Farmers Association put down a marker, saying its participation in a new deal was "hanging in the balance". The association's president, Mr John Dillon, said it would not sign up to an agreement unless the Government gave a clear political commitment to address the farm income crisis.