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

I begin by thanking the Deputies for contributing to this Private Members' Bill on a living wage. I have been present for some of the debate and was following online before that. I thank Deputies for their contributions. The Bill the Labour Party has brought forward is timely in light of where we are with our own plans under the programme for Government. The Government, like many people in the House, believes a legacy of the pandemic must be better pay, terms and conditions for everyone but particularly those on low pay. As such, I recognise the Labour Party is now aligning with the Government in our commitment to progress a living wage over the lifetime of this Government. I am glad the Labour Party has joined us on this and that others contributed in a similar way in their speeches earlier.

The Minister of State, Deputy Troy, earlier detailed the well-functioning system we have in Ireland that has secured six consecutive increases in the minimum wage over the last six years and the second-highest national minimum wage in the EU. He also addressed the make-up of the Low Pay Commission and detailed how it is a fair and balanced body made up of an equal number of representatives with employee interests, employer interests, and independent voices as well. Therefore, its recommendations on how Ireland can best progress to a living wage should be fair and satisfactory to all sides involved.

Over the past hour we have heard much about how wages for those on low pay are insufficient. We have also heard how there needs to be greater increases in the national minimum wage to cover the cost of living. We have heard too of the pressure on businesses due to their increased costs over the last couple of years. Considering the standard way of measuring increases in the cost of living is by looking at the consumer price index measure of inflation, it is important to note that since the establishment of the Low Pay Commission in 2015, the national minimum wage has increased from €8.65 per hour to €10.50 in 2022. This equates to a 21.4% increase, and rightly so. It is something we all agree with. I recognise the Labour Party's involvement in that over those years as well. During the same time period, consumer prices have only increased by 7% in the six years to December 2021. Therefore, the national minimum wage has increased substantially in real terms over recent years, up to the end of last year. We are conscious of what has happened since then with costs and inflation as well. We are not content to settle for those earlier gains and will continue to work for better pay, terms and conditions and certainly to recognise the increases over the last couple of months but also where we are moving to over the last couple of years as well.

Rising energy prices have been one of a number of factors driving a rise in inflation since mid-2021. In February, the Government announced a €505 million suite of policy measures designed to support households, involving an energy credit of €200, including VAT, and a fuel allowance lump sum payment of €125. That was to go some way to try to deal with the pressures on the family budget over the last couple of months. While Members across the House are right to say that the increase in inflation in the last six months has reduced the impact of the increase in the minimum wage introduced this year, rising energy prices have been one of a number of factors driving a rise in inflation since mid-2021. In more recent times, Russia’s invasion of Ukraine has sparked further energy price increases and brought unprecedented volatility to international energy markets. That is feeding through to retail price increases for all households and businesses.

Once again, given that Ireland is a price taker on international energy markets, the Government has no statutory function in the monitoring or setting of these prices but we try to react with help and supports. The Government will keep the energy situation under close and active review and will continue to examine what measures are possible to manage the impact of rising energy prices for households and businesses and react accordingly. We will continue working with the European Commission to examine what else we can do to help to soften the blow to businesses and consumers, to keep costs down and to help people to manage their own budgets.

The Government is responding to this crisis and will continue to do so. However, given the extent to which these effects are being driven by developments outside of our control, it will not be possible to respond to every unfavourable price movement on global markets quickly enough to ease the pressure on people. It should also be borne in mind that some recent inflationary pressures are partly the result of temporary factors related to the pandemic and that these are expected to fade over time. If, as anticipated, inflation in future years is lower than it has been in recent months, tying the minimum wage to inflation would result in that wage moving to a lower development path rather than a higher one. We have to be careful about that.

Another point to note is that since the establishment of the Low Pay Commission in 2015, not only has the minimum wage increased at a much greater rate than inflation, but the share of workers on the minimum wage has also fallen consistently. The share of workers who are on the minimum wage or less as a percentage of the total labour market has reduced from 9.3% in the fourth quarter of 2016 to less than 7% in the fourth quarter of 2020. However, the Government acknowledges that there are far too many workers on low pay in Ireland and has been clear that this is something it intends to address as part of a wider series of reforms. Figures used today stated that 20% of people are on low wages. We accept those figures. Not all of these people are on the minimum wage, but they are on wages too low to allow them to pay all of their bills. We all want to work to improve that situation. The Low Pay Commission will continue to look into all areas of low pay including effects on employment and the impact of youth rates in addition to the ongoing work of examining a universal basic income.

The Government is committed to protecting low-paid workers, many of whom have continued to work in sectors providing important services throughout the pandemic. It is estimated that at least 135,000 people saw an increase in their wages due to the last increase in the minimum wage in January, with many others on slightly higher levels of pay also getting a knock-on increase. Ireland has one of the highest minimum wages in the EU. Recently released data from EUROSTAT show that, as of 1 January 2022, 21 of 27 EU member states have national minimum wages. In terms of gross monthly rates, Ireland has the second highest national minimum wage of these 21 member states. When adjusted for purchasing power standards, which is important, Ireland ranks in sixth place. We would like to do a little better than that if we can.

The living wage report is now under review. It has not yet been published but the Tánaiste has it and will bring it to the Cabinet shortly. We must await the recommendations of that report and examine how they align with the points raised in this Bill. However, as the Minister of State, Deputy Troy, has noted, this Bill is broadly in line with the objectives of the Government, which include a commitment to progress to a living wage over the lifetime of this Government's programme. We will therefore be able to continue to support it at the next Stage.

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