asked the Minister for Finance if he has taken any steps to resolve the dispute involving the Construction Industry Federation and the Government regarding compensation for the full increase in public contracts which has resulted in a decision by 3,500 members of the Dublin Branch of the Ancient Guild of Incorporated Brick and Stone-layers and Allied trade unions to strike; and if he will make a statement on the matter.
Ceisteanna—Questions Oral Answers - Building Dispute.
18.
The price variation clause which has been standard in Government and local authority building contracts since 1977 requires that in the absence of a National Wage Agreement wage increases claimed under the clause will not be allowable if they do not conform with Government guidelines on wages. The Government's guidelines on wages are the terms of the Public Service Pay Agreement. These guidelines have been issued to the National Prices Commission for price control purposes and are also used for the purpose of limiting increases in charges by, or Exchequer assistance to, semi-State bodies. I have followed suit in relation to Government contracts.
I am not seeking to stop the Construction Industry Federation from paying the second phase of the Labour Court recommendation on pay for building workers. This is a matter for the CIF and the unions to resolve. I am merely putting an upper limit on the amount which can be recouped in public contracts.
Does the Minister share our concern with regard to the threatened strike in the construction industry which has already been weakened by deliberate Government policy in relation to capital financing? Could he give an assurance to the House that he and other members of the Government will do everything possible to involve themselves in this dispute in order to avoid the continuation of a strike which would have very damaging effects on the construction industry and, consequently, on employment?
I share the Deputy's concern with regard to a strike in the construction industry. I hope the strike will not take place but, as I pointed out, I will not interfere in any way in relations between employers and workers in the construction industry. I am applying a guideline on the basis of standard practice which has existed since 1977 in terms of the allowable price variation in public contracts.
The Minister said he did not envisage any increase in public sector pay this year. Is he also going to adhere to that position in respect of contracts and the level of wage rates that will be appropriate to those contracts? If so, can he not see that that will give rise to strikes?
The Deputy is anticipating events. We have not fixed the appropriate guidelines for 1984.
Perhaps the Minister is withdrawing what he said. He has already indicated that he is putting an upper limit on the amount which can be recouped in public contracts.
I said that the standard price variation clause requires that, in the absence of a national wage agreement, wage increases claimed under the clause will not be allowable if they do not conform to Government guidelines on wages. I indicated earlier this afternoon, in a general way, what my approach on incomes policy is and which was set out in the Budget Statement. That is the approach which we will adopt this year and the Deputy may not infer from that or from the answer I gave to a question on public service pay any specific approach on my part to the operation of the price variation clause during 1984.
The Minister was quite emphatic earlier in relation to his approach to public sector pay increases this year, namely that the Government would resist them. If they are the guidelines — and that is a soft word in the circumstances — does that mean that the wage rates on public works contracts will be inevitably affected, which will give rise to an aggravation of the problem which Deputy Molloy asked about?
The answer is no. I will repeat what I said — in the absence of a national wage agreement wage increases claimed under the clause are not allowable if they do not conform to the Government's guidelines on wages. If there were a national agreement on wages, that could conceivably provide for a different situation in the public sector from that in the private sector.
Could the Minister indicate why he did not inform the parties to this agreement at the time it was made that this was the position? Does he realise that his actions now will force builders to break the contract which was made last year on the pay agreement?
I do not accept that is the case. Last August my Department informed the Construction Industry Federation of the view I would take in relation to the first phase of that agreement. Before the end of December I informed the interests concerned of the views I would take on the second phase. I made it clear last August that, while I was agreeing to include within the terms of price variation clauses the increase they had provided for the first phase of their agreement, I was giving no commitment at that stage as to the view I would take on the application of the second phase.
Did the Minister inform the Irish Congress of Trade Unions of his views?
I was asked a question by the Construction Industry Federation and I replied directly to that body.
Did the Minister subsequently inform the Irish Congress of Trade Unions?
No, I did not specifically inform the ICTU but I am sure they were very quickly made aware of the contents of my message to the Construction Industry Federation.