Mr. Michael Taft:

With regard to the loss of €13 billion of demand in the economy, we acknowledge in the submission that it is difficult to promote wages during a period of austerity, recession and stagnation without undermining firm performance. However, I would make these points. First, we are now at the beginning of a different type of position. We are seeing wage increases and a large part of this is because of trade unions working with their members in workplaces and negotiating pay increases. Second, employment is starting to rise. Third, the Government has ended nominal austerity. In other words, it has stopped imposing costs on both the household and business sectors. Of course, Unite and other trade unions have been saying that if it had done this much earlier, we might have been getting out of the recession earlier.

There are two processes happening which could vindicate the promotion of wages. First, we have a more promising economic and fiscal background. Second, we would make the point that where companies can pay a minimum wage or a JLC rate that is struck, they will be able to assist those firms which are unable to pay and, therefore, take a postponement under the minimum wage and JLC legislation. If firms that can afford to pay do not pay, they hurt a number of sectors. Obviously, they hurt the workers, who do not get the pay, they hurt the Exchequer, they hurt the wider economy due to depressed demand, and they also hurt those other businesses that are reliant upon the spending power of workers. In the first instance, we are entering a different economic and fiscal cycle.

Second, it is about ensuring that those companies that can pay the increase do so and, thus, help out those companies who badly need that spending power.