Gerald Nash (Louth, Labour) | Oireachtas source

I will repeat what I said earlier and what I have been saying since this concept first started to evolve under my aegis. The ESRI report pointed out in 2006 that there was a danger and a fear, certainly in the business community, about infrequent large step-changes in the national minimum wage. We are modelling this system very closely on the model that has been applied in the UK since the late 1990s, with some changes. If one looks at that model, one will see that the frequency of the annual review certainly assisted in business planning. It is a matter of record that it has been adjusted incrementally, and annually, upwards in the UK without having any adverse effect on competitiveness, job creation, or on the operation of businesses. The process is very clear in the legislation as to what happens, how it happens, and the function of the commission. The commission has very strong representation from those who have an interest in the interests of employers and those who have an interest in the interest of employees. I think everybody brings something positive to the table in that regard. They will look at evidence-based data and information to allow them to make recommendations.

This is a much stronger, more evidence-based, and objective system than has been in place previously. Members of the House will be aware that under the current legislation it is open to me, as Minister with responsibility for this area, to simply make a recommendation to Government colleagues without consulting anybody and to unilaterally decide what the rate of the national minimum wage will be. Most people in this House are fair minded and reasonable people and while we might have views on what the rate of the national minimum wage should be, I do not think that anybody would want to impose anything on anybody without having consulted them in a democratic fashion and using evidence, because best practice and policy making requires us to collate the evidence and discuss the issues concerned with those who are most widely affected. We are doing this.

This is an important institutional change for this country and I think it is a very important step change in how we do business and should be seen, as I said earlier, as one of a suite of measures to address issues to do with dignity of work and dignity at work. I hope that all of these measures will outlive all of us. This approach, broadly speaking can, will, and does have the support of the business community. We are ensuring that we will have a recommendation in time to allow, for example, the Minister for Finance and the Minister for Social Protection to prepare for any adjustments that would need to be made to the rate of the national minimum wage well in advance of the budget. I envisage that it will be a matter of months before the Government will introduce the rate because there is a process set down in terms of the period from which the recommendation is made to me and bringing it to Government. That recommendation needs to be made, to the best of my recollection, within three months, so that there will be a sufficient period for planning and for the Government system to react and adopt any recommended change and to take account of that change and how it will interact with the tax and social welfare system, which is very important for people who are existing on low pay.