Ireland's largest union, SIPTU, has voted to enter talks on a new national pay deal.

The union held a special delegate conference in Dublin today.

Union leaders had called on delegates to support the talks. SIPTU President Jack O'Connor said there was now greater understanding from Government and employers of the concerns of workers surrounding job displacement and exploitation.

Some delegates had voiced opposition to entering the talks, accusing the Government of pursuing a deliberate policy of outsourcing. Others said there had been no real progress since last October on securing workers' rights.

The Government was also accused of covering up the numbers of temporary workers employed in Ireland.

SIPTU delegates also expressed concern about pensions, pay and child and eldercare.

Mr O’Connor rejected the suggestion that the social wage and non-pay elements such as pensions, social housing and health care had been eroded as a result of social partnership.

The executive of the Irish Cogress of Trade Unions meets tomorrow to ratify its decision to enter partnership talks.

ESRI calls for pay restraint

The Economic and Social Research Institute has called for wages in the public sector to be restrained in any new Social Partnership deal, but for wages in the private sector to be allowed as much flexibility as possible.

In its latest Quarterly Economic Commentary the Institute says the economy would be best served by holding public sector wage increases to below those agreed for the private sector.

It says public servants already earn significantly more than workers in the private sector, and have better pension arrangements.

The ESRI argues that pay restraint would save the taxpayer money without endangering the quality of public servants.

The ESRI quoted economic research showing the gap could be 13-20% on a like-for-like basis.

On top of this they say public service pension arrangements are far more valuable and more widely available than pensions for private sector workers.

Dr Alan Barrett of the ESRI said that one of the main benefits of social partnership is having the employers body IBEC at the table when the public sector wage bill is being negotiated.

He said this is because IBEC has a vested interest in limiting the growth in the public sector pay bill which ultimately has to be paid for by taxpayers.

The ESRI report says that public sector pay restraint could bring savings to the taxpayer without endangering the quality of public servants.

The report also urged that nothing be agreed in the partnership deal that would impede the ability of private sector employers to be flexible with regard to the wage increases they give to their workers.

The Institute also reports that the economy is growing at about 4.75%, with no downturn forecast for 2006.

Interest rates they say will go up by another 0.5% this year, but the impact of that on the economy will be marginal.

The Institute says it would have been better if the Minister for Finance had not given as much away in tax cuts and social welfare increases in the budget as he did because the economy did not really need such a large stimulus.

The also say they do not expect consumers to go on a major spending binge when the SSIA accounts start to mature later this year because the earliest participants are more likely to reinvest their savings rather than spend it.