Dinny McGinley (Donegal South West, Fine Gael)
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Question 96: To ask the Minister for Enterprise, Trade and Employment his views on claims that the increase in the minimum wage will damage competitiveness and increase consumer prices; and if he will make a statement on the matter. [12062/05]

Tony Killeen (Clare, Fianna Fail)
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The parties to the mid-term review of part two of Sustaining Progress — pay and the workplace "agreed to request the Labour Court to review the National Minimum Wage and to make a recommendation to the Minister for Enterprise, Trade and Employment in accordance with the National Minimum Wage Act 2000, to apply with effect from 1 May, 2005".

In February last the Labour Court recommended that the minimum wage should be increased to €7.65 with effect from 1 May 2005. Subsequent to receiving this recommendation, the Economic and Social Research Institute, ESRI, was requested to undertake an assessment of the increase recommended by the Labour Court.

In its assessment, the ESRI concludes that the increase in the minimum wage to €7.65 can be implemented without a significant negative impact on employment and competitiveness.

On the issue of consumer prices, the ESRI has calculated that the increase in the minimum wage to €7.65 might add something in the order of 0.15 percentage points to the rate of consumer price inflation.