Tommy Broughan (Dublin North East, Independent)

He was clearly misleading his colleagues, as was pointed out by Mr. David Begg in his analysis of an interview with Mr. Ajai Chopra of the IMF on "Morning Ireland" on 29 Nov 2010, which clearly showed the proposal to slash the minimum wage came from the Ministers for Finance and the Environment, Heritage and Local Government and all their colleagues.

However, this shameful cut in the national minimum wage is being used as a trigger to produce an internal devaluation following the banking guarantee catastrophe of September 2008. This means that the lowest income families and households will have incomes cut and social welfare benefits slashed. The reduction in the minimum wage is, therefore, part of a wider ideological policy of this Government. Fianna Fáil and the Green Party are cutting the minimum wage and targeting the lowest paid workers in order that social welfare benefits, in turn, can be further slashed and burned.

I welcome Fine Gael's support for the Labour Party's defence of the minimum wage, which we worked so hard to introduce, but the party also wants to achieve an internal devaluation by crushing the most vulnerable in our society and slashing social welfare rates. The identical proposal for €3 billion in social welfare cuts by Fianna Fáil and Fine Gael and their €6 billion austerity packages show that they continue to be the Jedward of Irish politics. Fine Gael also wants to slash core public services with almost 50,000 redundancies planned. However, while an internal devaluation is the Fianna Fáil-Green Party-Fine Gael aim, as Deputy Penrose outlined, prices have not dropped to match the decrease in wages and conditions.

In October 2010, it was reported that consumer prices as measured by the consumer price index, CPI, had increased by 0.7% in the year since October 2009. The CPI for November 2010 was also 0.6% higher than in November 2009. Deputies who do a weekly groceries shop - and I am one of them - will acknowledge that the cost of food remains relatively high, especially for families with children. The Central Statistics Office also recorded in November 2010 that housing, water, electricity, gas and other fuel costs increased by 9.2% compared to November 2009. There were decreases in clothing and footwear of 5.5% and of 3.3% in alcoholic beverages and tobacco but they are dwarfed by the increases in fuel and housing costs alone. There were also increases in the prices of prescribed drugs and medication and house and motor car insurance and the ongoing costs of rents, petrol, hairdressers, GP fees, entertainment and leisure services remained high. "Rip-Off Ireland" is clearly alive and well,. yet our poorest working families will have €40 per week less to cope with relentless rising prices.

Crucially, the Government has made no effort to control or lower prices for basic goods or services which is what most of the income of low paid workers is spent on. Why, for example, has it not tackled cartels in the liquid fuel, motor, medical and legal sectors that keep prices artificially high for these goods and services? Why are we slashing the minimum wage while actions against these outrageously sheltered cartels are long-fingered? One will not find them in the four year plan or next year's budget. They will be dealt with down the line, but the Government is prepared to cut the income of our poorest people while leaving our richest people escape.

It is grotesque, however, that the Government should use the device of an internal devaluation to allow Ireland to stay within the euro area by crucifying citizens living on the minimum wage and social welfare who are bearing the brunt of the so-called adjustment. As my colleague, Deputy Róisín Shortall, eloquently highlighted in this Chamber last week, who among us could survive on €297 a week on the minimum wage? How do we expect minimum wage workers to adequately feed and clothe their children when their already low wage has been cut by €40 a week and they have to pay the new universal social charge, one of the most shameful actions of the Government?

There has been no increase in the minimum wage since July 2008 and its real value over that period has been significantly reduced through the introduction of the 2009 income levy. For most minimum wage workers, a simple trip to the cinema is an unattainable luxury. One would have little or no change out of €50 after bringing a few children to the cinema and buying a few bags of sweets or an ice cream for them. However, the Minister of State is prepared to stand over this hypocrisy and madness. The Society of St. Vincent De Paul has reported a surge in calls for assistance since January with the number of calls up 35% across the country. The number is higher in urban areas, including by more than 50% in Cork and more than 40% in Dublin. The calls have been from low income and minimum wage earner families.

The Labour Party has continually highlighted - and does so again in this motion - that 116,000 workers or 6.6% of the total workforce already live below the poverty line and the working poor make up 24% of all of those in poverty. Cutting the national minimum wage also targets workers who have perhaps the strongest work ethic in the country. Minimum wage workers get paid a pittance for doing tough, grinding jobs, for example, cleaning, security and restaurant service that many in our society simply will not do. In the context of health care costs and the medical card, for example, these minimum wage workers would in many cases be better off not working and the Government is giving them such an incentive through its shameful performance on this measure. As the Society of St. Vincent de Paul has stated, "These are workers who pay for everything and qualify for nothing."

Many businesses and their representatives also agree that a reduction in the national minimum wage will not enhance competitiveness or create new jobs. The chief executive officer of Retail Excellence Ireland, Mr. David Fitzsimons, sent a briefing note recently in which he stated that he supports the Labour Party position that a reduction in the national minimum wage is "not necessary". Some of the loudest calls for reductions in the minimum wage came from elements within the fast food industry. Yet this is one of the sectors that is performing very well and making significant profits during the recession as people choose cheaper eating-out options.

The savage cut in the minimum wage contrasts strongly with the ongoing refusal of the Government to reform outrageous and unjustified high pay in the banks, semi-State bodies and particularly in the private sector. This week there was the fiasco of the proposed bonuses in AIB. It is grotesque that senior management in an organisation can earn hundreds of times the salary of the lowest paid worker in the same organisation. As Polly Toynbee noted long ago, the cancer of outrageous pay and bonuses comes directly from the private sector, and especially from the financial services sector.

Our sister party, the Labour Party in the UK, has proposed the establishment of a new high pay commission to overhaul the dysfunctional compensation system. There also clearly should be a maximum rate for public sector and semi-State salaries, perhaps set at €150,000. On a number of occasions in the past year I have called on the Minister, Deputy Brian Lenihan, to establish a high pay commission for Ireland to review compensation across the economy, not just in the public sector but also throughout the private sector. Of course, a high pay commission that examines and regulates pay in the public and private sectors could be a mechanism for curbing excessive salaries that may discourage dynamic and effective people from leading public sector positions.

In conclusion, the €1 cut in the national minimum wage is appalling and shameful, and must and will be reversed. It is designed to make the poorest workers in the country bear the brunt of the Government's crazy banking policy through an internal devaluation mechanism, which the Labour Party opposed from the start in September 2008. However, the Government has taken little or no cognisance of its implications for the poorest and lowest income people in this country. I commend Deputy Penrose once more on bringing forward this motion.

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