Bertie Ahern (Dublin Central, Fianna Fail)

We have had a number of discussions and meetings on inflation. The figure is higher than we projected in the late months of last year. There are a number of actions and issues under discussion. Primarily, the figures are coming through under two headings, energy costs and interest costs, which account for half the rate of inflation. One cannot exclude consideration of those two headings given their effect on pay, but without them inflation would be 2.1%. We have reactivated the anti-inflation group and it has been calculated that inflation will drift down as the year goes on. However, the current rate will be crucial to the way in which people view the current pay round. The Irish Congress of Trade Unions pointed out as much in our discussions last week.

Wage moderation is a powerful counter-inflationary tool. We must do all we can to ensure we do not price ourselves out of any of the issues. Most of the difficulties are coming from the two areas I mentioned. Looking at many of figures across the headings for the past few months, it is clear that electricity and natural and bottled gas registered zero price movements in March while liquid gas and solid fuel prices rose by 2% and 0.4% respectively. While in some cases natural gas prices fell by 10%, energy prices from the ESB have been extremely high.

While it is not clear what Jean-Claude Trichet and his colleagues in the European Central Bank will do on interest rates, indications are that there will be at least one more increase in 2007. We must do all we can to try to curb services inflation, in particular, which has increased to 10% or 12% in the past two months, which is extremely high. We must be careful in terms of wage increases and of fuelling the difficulties that exist although we have examined these in great detail. Inflation is high this month and will probably remain so for a few months and then pull back. That is the best estimate at this stage.

On inspectors, I accept what Deputy Rabbitte said — I did give him the wrong figure. Interviewing for new inspectors is currently taking place. I gave an update of the figures to the Irish Congress of Trade Unions last week. It will probably take until the end of the summer to get all the inspectors in place. The interview process is under way. The Minister for Enterprise, Trade and Employment, Deputy Martin, has given full details of the interview process to the staff and the advertiser. If I recall correctly, 42 posts require to be filled during the course of this year to meet the target set. The approvals have been given and the interview process is about to commence. I have been told it is hoped the required inspectors will be in place by the end of the year. Quite frankly, I do not understand why it should take that long. However, that is what I have been told. I would imagine that given the interview process is under way, it should be possible to have the inspectors in place during the next three months or so. The Department of Enterprise, Trade and Employment hopes to have all positions filled by the end of 2007.

With the social partners we have also outlined a number of other mechanisms. The employment rights compliance Bill will be published later this year and a director has been appointed to the National Employment Rights Authority, NERA, for which a management team is substantially in place. As I stated, seven new inspectors were recruited in March. I am not sure what the figure is for April but 42 more remain to be recruited.

The Minister for Enterprise, Trade and Employment, Deputy Martin, announced in February proposals on regionalisation of the labour inspectors. During the discussions with the social partners last week we also discussed section 14, Part II of Towards 2016 which requires that legislation be enacted to provide NERA with the power to establish joint investigations by the Revenue Commissioners and the Department of Social and Family Affairs. The necessary legislation has been prepared.

The Revenue Commissioners are monitoring bogus self-employment. I know that Deputy Rabbitte is familiar with this issue. An enormous effort is being made by the Revenue Commissioners and the Department of Social and Family Affairs in respect of bogus self employment. They are focusing most of their efforts on the construction industry. Finally, almost 4,500 employers were visited last year as part of the campaign to stop abuses and fraud in the social welfare system.

Decentralisation is moving forward on the agreed basis. This issue was not raised during the meeting with the Irish Congress of Trade Unions. We are following the basis agreed with the public service workers, namely, that decentralisation will be on a voluntary rather than compulsory basis. The movement of officials, although slow, is continuing. A great deal of progress has been made. Decentralisation has taken place to centres in Cavan and Clonakilty and other centres are moving ahead. This is being done on a voluntary, not compulsory, basis.

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