Nurses and mortgage holders hit by rising inflation as election looms.
The exchange below is between CWI member and Socialist Party MP, Joe Higgins and Bertie Ahern, the Irish Prime Minister at parliamentary question time in the Irish parliament
Socialist MP condemns “Alice in Wonderland” government policies
Joe Higgins (The Socialist Party):
Does the Taoiseach agree the first five percentage points wage increase over a 15-month period which is provided for in the social partnership document Towards 2016 has been wiped out before it has been implemented, given the annual rate of inflation for March registered at 5.1%? Can he give us one good reason why workers should tolerate being constrained to these wage limits when the Government has added more than anybody else to inflation with increases in utilities and public service charges running at 9.3%, and the Alice in Wonderland policy in regard to electricity prices implemented by the Minister for Communications, Marine and Natural Resources whereby the regulator, acting on Government policy, has massively increased electricity prices to consumers in order to bring competitors into the market so prices will go down some time in the dim and distant future?
My second question I have tried to ask many times over ten years but the Taoiseach has never answered it satisfactorily. As we are in the swan song days of this Dáil, does the Taoiseach agree he has no moral authority to take a cudgel to beat back the nurses in their demands for equality and for a decent wage when not once in ten years did he raise a voice or a finger to stop speculators, developers and big builders putting homes out of the reach of ordinary working people? The Taoiseach mentioned the knock-on effect of the nurses’ claims. Has he entertained the knock-on effects of profiteering in the housing market whereby, ten years on, a worker on the average industrial wage is scarcely able to purchase the doors and windows, let alone a house. In view of that, is social partnership not a sham which has added handsomely to the rocketing profits of big business at the expense of workers?
The Taoiseach [Prime Minister]:
It is in regard to consumer services, not local authority services, that inflation is running at 9.3%.
What about electricity?
The price of electricity is set. There was to be a large increase of 19%, but that was reduced by the regulator. The regulator, which is independent, must take all factors into account.
The regulator is implementing Government policy.
The regulator is implementing legislation passed here setting up the Commission for Energy Regulation to ensure security of supply and that we can keep our electricity and gas companies going. That is the job of the commission. For a sustained period the Electricity Supply Board was able to provide electricity with no increase in cost, but that changed because of the international position.
On the question of pay increases, I have already said to Deputy Rabbitte that it has happened previously that the rate of inflation matched the rate of the pay increase and that does balance out things in wage terms. However, there are other issues related to tax which weigh the balance in favour of the worker. It is never welcome that inflation should eat into pay increases. However, it has happened a number of times in recent years and we have been able to counter it. We must try to do so again to the best of our ability, and I believe it is possible. We did it in 2003 when we halved inflation in a very short period by combined action on the part of the Government, the social partners and relevant agencies. We can do so again. I do not agree with the Deputy’s theory. Without centralised agreements there will be a spiralling cycle of wage increases pushing up inflation, reducing the value of wage increases to workers.
The Taoiseach said nothing to the speculators.
On the property market, we have worked towards the position where this year we will build one third of the houses we built last year to bring supply and demand into equilibrium. We did nothing to encourage speculators other than to try to increase supply to enable people to get a house.
The Taoiseach did not raise a finger to stop them.
An Ceann Comhairle [Speaker]:
Allow the Taoiseach to continue without interruption.
Under social partnership agreements we have 600,000 more people working in the past decade. One third of the housing stock consists of new houses, and almost half of that went to first-time buyers. Deputy Higgins’ analysis does not add up. There will always be people who experience difficulty purchasing a house. The Government has put an enormous amount of resources into social and affordable housing and has made great strides forward. Some 17,000 households will now benefit from social and affordable housing measures this year and approximately 60,000 households will benefit over the three year period to 2009. Approximately 140,000 people will benefit under social and affordable housing schemes during the life of the next national plan. That is a significant proportion of those seeking social and affordable housing.
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