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

I thank Deputy Barry for his question and for the motion we discussed and debated yesterday. We went through the various mechanisms we can use to achieve the results he is seeking. The Government is keenly aware, as we stressed during yesterday's debate, of the pressures people are feeling as the rate of inflation and the cost of living increase. Many costs have increased sharply in recent times and those on lower incomes are being disproportionately affected. Ministers and their officials in various Departments have been tasked with developing proposals for a package to help families and businesses with the cost of living and doing business. The Government is finalising that package this week.

Since its establishment in 2015, the Low Pay Commission has been responsible for making annual recommendations to the Government on the appropriate rate of the national minimum wage. Again, this was discussed yesterday. Since then, the national minimum wage has increased from €8.65 per hour to €10.50 per hour between 2016 and 2022, which is a 21.4% increase. This compares with an increase in consumer prices of 7% in the six years to December 2021, demonstrating that the minimum wage has increased in real terms over consumer price increases in recent years. As I discussed with the Deputy yesterday, if we followed the proposals in his motion, they would possibly result in a lower minimum wage, which I do not think is an outcome he would recommend to anybody. The share of workers on the minimum wage in Ireland has also fallen consistently since the establishment of the Low Pay Commission, reducing from 9.3% in the fourth quarter of 2016 to 6.8% in the fourth quarter of 2020.

The Low Pay Commission is made up of an equal number of employer representatives, employee representatives and independent members which helps to provide a balanced view when determining an appropriate rate for the national minimum wage. In addition, the establishing legislation requires the commission to give consideration to a range of issues when arriving at a recommendation for the appropriate national minimum wage rate. These issues include the cost of living, competitiveness and the likely effect that any proposed recommendation will have on future levels of employment.

When considering increases in the national minimum wage during a period of inflation, the Government must be conscious of the need to avoid second round effects or a wage-price spiral. That being said, we have been clear in my commitment to improving pay and terms and conditions for everyone, but particularly for those on lower pay.

In 2021, the Low Pay Commission was asked by the Tánaiste to examine and make recommendations on the best approach to achieving the programme for Government commitment to progress to a living wage over the lifetime of the Government. The Low Pay Commission commissioned and received background technical research on the concept of a living wage. The commission is currently evaluating this research and is due to report its findings and recommendations to the Tánaiste in the coming months. These recommendations will inform the Government on the best approach to progressing to a living wage. In relation to the minimum wage, they generally will report to us in July and decisions are made after that.

Deputy Barry will recall that yesterday, during the debate, I discussed with him that we do not necessarily agree with his mechanism. We did not vote against the Deputy's proposal but the mechanism he put forward is a predetermined outcome of the work that the Low Pay Commission was set up to do. That is not necessarily the best way for the commission to go about its business.

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