Damien English (Meath West, Fine Gael) | Oireachtas source

I thank People Before Profit-Solidarity for their motion and for this discussion. I recognise that the context in which we are having this discussion concerns the pressure that families and everybody are under at the moment to pay all of their bills due to inflation and increased costs. Some of those reasons are outside of our control as a Government but we are trying to respond with a number of initiatives across various Departments to ease that pressure and make a difference. I think we will all hope and agree that some of the external factors that have caused inflation will ease during this year. That will reduce pressure so that people can again pay some of their bills in different ways and invest for their future as well.

Long term, we believe in the concept that work must always pay and that we support anyone who cannot work for whatever reason. We must ensure that our system, through social protection supports and the Department of Health, in the majority of cases can assist families through difficult times. That does not mean that every family who needs help are found in the system. All of us here try to constantly find ways to beat that system and make sure that people do not get lost in it but get the help and support they need. In general, we will work on that.

While the context and most speeches are about the pressure that people are under, the motion calls for one process to deal with this matter, which is around an emergency review of the national minimum wage. That is something that is constantly under review and the decisions are generally made by July every year. The motion calls on us to ensure that this review sees an increase in the minimum wage and that the increase is adjusted to fully compensate for the erosion in buying power. Also, the motion wants us to ensure that the review is concluded and implemented by 1 May 2022. In general, we make a decision by July but I have outlined what is called for in the motion. It is not all of the other solutions that people have referred to in their speeches and I will focus mainly on the mechanisms of that process.

We have done this since 2015. I recognise that Deputy Nash was the Minister of State at the time but I worked at that time to bring forward legislation on the minimum wage and the Low Pay Commission. A process was set up. That brings balance to the conversation and has resulted in six consecutive pay increases, when it was recommended. Part of today's motion is that we must agree the term and the outcome of the review by the Low Pay Commission, which is not the way it is meant to work under legislation. I accept what the motion seeks to achieve but that defeats the purpose of having a balanced conversation. Most years, employers, employees, companies, workers and unions come together to converse and try to reach an agreement, which has generally been achieved over the last number of years. The Government has always taken on board that advice. I have an issue with that piece of the motion but understand the context of what people seek to achieve. I will not argue over that and we do not oppose the motion.

The Minister of State, Deputy Browne, detailed what we regard as the well-functioning system relating to national the minimum wage, which has secured six consecutive increases over the past six years, making it the second-highest national minimum wage in the EU. Over the past hour, we have heard a lot that would suggest this system is not working; I disagree. The system is working and we have a process to get to where we want to go. We can argue over the different places that we want to get to, but the system generally does work and has brought a fair bit of collegiality among the sectors to be able to implement those wage increases.

The motion calls for the introduction of "a system whereby the minimum wage and wages generally are index linked so wages at a minimum cover any increases in the real cost of living". We should remind ourselves that the standard way of measuring increases in the cost of living is by looking at the consumer price index measure of inflation. Between February 2015, when the Low Pay Commission was established, and July 2021, when the most recent report of the commission was submitted to Government, prices increased by 4.4%. In February 2015, the minimum wage was €8.65 an hour. In July 2021, the commission recommended a minimum wage of €10.50 an hour, which is a 21.4% increase over the same period when there was only a 4.4% increase in prices.

I am not saying that is something to shout about but I want to point out that the process the Deputies are asking for here might not give the return they want because it is linked to inflation, which is high at the moment but is not always high. The Low Pay Commission has gone beyond that rate quite a number of times in the past few years and we need to bear that in mind when trying to tamper with a process that has achieved six consecutive pay increases in recent years. In contrast, if, as the motion seems to suggest, the minimum wage had been indexed to inflation, it would have only increased by 4.4%. It would have only increased from €8.65 to €9.03 an hour, which is not something the party opposite would want, and the minimum wage would be €1.47 lower than it is today. To me, that would be a poor result. The system is working. Of course, we have asked the Low Pay Commission to go further and to examine the overall living wage concept, which we are also trying to achieve.

While the Members opposite are right that the increase in inflation in the last six months has reduced the impact of the increase in the minimum wage introduced this year, as explained by the Minister of State, Deputy Browne, these recent inflationary pressures are partly the result of temporary factors related to the pandemic, as well as energy costs, and they are expected to fade over time as things settle down. We recognise the pressures in the system because of Brexit and Covid. Therefore, if, as anticipated, inflation in future years is lower than in the past few months, tying the minimum wage to inflation would result in the minimum wage moving to a lower development path, not higher. I doubt that is what the Deputies want to achieve but we can look at that part of the motion again.

Further, it should be noted that since the establishment of the Low Pay Commission, not only has the minimum wage increased far faster than inflation, the share of workers on the minimum wage in Ireland has also fallen consistently. The share of workers on the minimum wage or less as a percentage of the total labour force has reduced from 9.3% in quarter 4 of 2016 to 6.8% in quarter 4 of 2020. Again, that fact was not borne out in some of the contributions here today, which give the impression it is a much higher percentage. While the Tánaiste and all of us in government are committed to increasing overall wages and packages for employees, we have to also recognise where it is at currently in a factual conversation so we can focus in on this. The motion captures it pretty well compared to some of the speeches, but we have to bear that in mind.

While the system in Ireland works, it also must be accepted that recent inflation is concerning; we are all concerned about it and we are trying to respond. As the Minister of State, Deputy Browne, noted, colleagues across government and Departments, along with their officials, have been tasked with developing proposals for a package to help families with the cost of living and the Government plans to finalise this package shortly. We know some of that legislation is progressing today and more will be done. It is a difficult time, no doubt, and families are under pressure. We all meet them every day of the week and we all know families who are under immense pressure. We have to try to find new ways to be able to support them and find the ones who need that help, which it is important to do.

The Government acknowledges there are too many workers on low pay in Ireland and it has been clear this is something it intends to address. This is reflected in the work of the Tánaiste in the past couple of years and I know that, as the leader of my Department, it is a particular focus of his. We are trying to strengthen working conditions and strengthen the pay of workers, and we see that across a number of areas. It is important to bear in mind that it is the aim of the Government.

The Government has been clear in its belief that a legacy of the pandemic must be better pay, terms and conditions for everyone, but particularly for those on low pay. We are committed, therefore, to honouring the commitment in the programme for Government to progressing to a living wage over the lifetime of this Government, along with legislation for sick pay. In 2021, the Tánaiste asked the Low Pay Commission to examine the programme for Government commitment to progress to a living wage over the lifetime of the Government and to make recommendations on the best approach to achieving this commitment, something all speakers have asked for in this debate. Following this request, the Low Pay Commission commissioned a team of researchers at the National University of Ireland, Maynooth to conduct supporting research on the living wage. The terms of reference for this research were noted by Cabinet in 2021. This research was to consider the policy, social and economic implications of a move to a living wage and the process by which Ireland could progress towards it and achieve it. The research was to examine international evidence on living wages, examining different calculation methods, examining the policy implications and outlining options for moving to a living wage in Ireland.

I understand that, in January of this year, the commission received the living wage supporting research report from the researchers at the National University of Ireland, Maynooth and the commission is currently evaluating this research. I further understand that the commission is meeting with experts and stakeholders in this area, such as Eurofound, the UK Low Pay Commission, business and employer representatives and representatives of the Living Wage Technical Group operating in Ireland. The commission’s report and recommendations on the progression to a living wage should be delivered by the end of the first quarter of this year. The Government will respond to the recommendations after the Tánaiste receives and considers the report. We are making progress in this area and, hopefully, we will be able to outline a pathway to achieving it very soon.

The Low Pay Commission has stated that it "understands that a living wage may be defined as the minimum income necessary for a single adult worker in full time employment, with no dependents, to meet his or her basic needs and afford a minimum acceptable standard of living". As such, moving towards a living wage would, by definition, cover the costs of living, the apparent aim of the Solidarity-People Before Profit motion. The motion calls on the Government to "introduce a system whereby ... the wages at a minimum cover any increases in the real cost of living". Work on achieving this is well under way. That is why we are at one on this and why we are not opposing the motion. We are trying to achieve the same thing. We have put in place a process to get us there, it is under way and we will have a roadmap setting it out in the coming months.

By progressing towards a living wage, the Government aims to maintain our well-functioning system while moving to ensure that wages cover a minimum acceptable standard of living that all in this House will agree to. Through moving towards a living wage, the Government will achieve what this motion aims to achieve, which is higher pay for low paid workers. It will achieve this constructively and through the Low Pay Commission, where, along with independent experts, there are an equal number of employer representative bodies and employee representatives. This allows for progress to a living wage to be made in a considered fashion, which works well in this country.

In progressing to a living wage, we need to recognise that many businesses have been badly affected by the pandemic and are struggling to pay existing wages. Likewise, many families are struggling to pay existing bills. We need to make sure that we proceed in a way that does not cause jobs to be lost in terms of the number of people employed or cause employees to have their hours cut. To do so would be counterproductive. What we are trying to achieve through our approach is a balance that recognises the pressures on employees and their families to pay their bills and make ends meet, while making sure we are able to continue to grow jobs and the recovery of this country.

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