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Dáil
‹ Leaders' Questions

Low Pay Commission recommendation

Summary

Brendan Howlin criticises the reported 10-cent minimum-wage increase as inadequate and incompatible with reaching €10.50 promptly. The Taoiseach defends the independent commission’s economic assessment, including Brexit concerns, and says the Government will consider its report.

Today is the day on which the Low Pay Commission is required by law to report. I gather from media reports that this report was considered by Government today and will be published this afternoon. The media reports made clear that the Low Pay Commission has recommended an increase of 10 cent per hour to the minimum wage. It is fair to say that this is a disappointing recommendation for the thousands of low-paid workers in the Irish economy. For a full-time worker, this would translate to just about €200 per year, hardly enough to lift a family out of poverty, we will all agree.

The establishment of the Low Pay Commission was a progressive move and the issue I raise here today is no reflection on the membership of the commission. Instead, I will focus on the Government's role. In the UK, its Low Pay Commission has been tasked with raising the minimum wage to at least 60% of median earnings by 2020. That was the specific target given to it by the British Government. During the general election, that was the policy that my party advocated. We expected to see the minimum wage rise to €11.50 an hour by 2020, an increase of approximately €5,000 a year. The programme for a partnership Government, published by Fine Gael published with its Government partners for this term, was less ambitious than what the Labour Party set out during the election, but it still included a commitment that it would support an increase in the minimum wage to €10.50 an hour over the next five years. Unfortunately, it appears the Taoiseach has not done anything to achieve that target set out in the Government programme. Instead of achieving a level of €11.50 within five years, if we continue at the current rate of recommendations today, we will not see that target reached until 2029.

My questions are straightforward. Why has the Taoiseach not changed the terms of reference for the Low Pay Commission to mandate it to deliver an increase in the minimum wage to at least €10.50 an hour within the five years set out in the programme for Government? Will the Taoiseach agree to implement such changes so that the Low Pay Commission will have a mandate before it produces its next report?

In light of the recent work that has confirmed the consensus on the living wage to be approximately €11.50 per hour, will the Taoiseach revise the commitment in the programme for Government to reach that level?

Comment on this
Enda Kenny The Taoiseach Fine Gael

I thank Deputy Howlin for his question. The Low Pay Commission is an independent entity set up by the previous Government to bring a structure and a realism to claims for increases in the minimum wage. As the Deputy is well aware, the Low Pay Commission was set up because of the nature of the way claims were being put forward prior to that. The former Minister of State, now Senator Gerald Nash, did much work on that with the former Minister, Deputy Bruton, at the time.

The Government was interested in having a low pay commission to bring about independent objectivity. One of the first decisions of the previous Government was to reverse a cut in the minimum wage that had been brought about before, and it increased the wage by 50 cent. This is an independent entity. The Government approved the publication of the report today, 19 July, and the Minister for Jobs, Enterprise and Innovation now has three months to consider the implications of the report before coming back to the Government in September. There is a minority report, as the Deputy is aware. There are nine members on the Low Pay Commission and three of those had a different view. The report must be considered carefully by the Government.

As Deputy Howlin is well aware from his own experience, the Low Pay Commission values its independence and would not want to be in the position of being directed. The €10.50 rate referred to in the programme for Government was an indication of what might be achieved over a five-year Government. Whereas the recommendation is for an extra 10 cent per hour, this is clearly an indication of how seriously the employers and specialists in the area view the implications of the decision from the British referendum on EU membership. They have made their judgment and I consider taking the possible implications of that into account.

The Minister for Jobs, Enterprise and Innovation will consider the report in its entirety and has three months to come back to the Government. She will do so in September. As the Deputy is aware, we favour having a position where work is seen to pay and there is an incentive for people to go to work. That is always a consideration that must be taken into account as well.

Comment on this

I have a very direct question for the Taoiseach. Does he believe that a raise of 10 cent per hour, or a 1% increase in the minimum wage, is adequate? Does he accept that it will be impossible to meet the programme for Government commitment of a minimum rate of €10.50 per hour in five years if progress is made at that pace? To achieve even the €10.50 per hour rate, as opposed to the €11.50 living wage rate, a fresh mandate is required to be given by the Government, so will the Taoiseach agree to give that mandate?

Comment on this
Enda Kenny The Taoiseach Fine Gael

As I stated, the Low Pay Commission was given a mandate to make recommendations based on the economic position as it sees it applying in this case. It made a recommendation of 10 cent per hour, or approximately €3.90 per week. Clearly, if that progress was followed on a yearly basis, one would be waiting a while before reaching €10.50, never mind €11.50.

Comment on this

It would be 2029.

Comment on this
Enda Kenny The Taoiseach Fine Gael

The commission, in its independence and wisdom, has taken into account the possible implications of Brexit. If the position were different economically or known to be very different, it may have made a different recommendation. The Minister for Jobs, Enterprise and Innovation will consider the report in its entirety and come back to the Government. I take the Deputy's point but I also feel the Low Pay Commission made it perfectly clear-----

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----it is an independent entity and it values its independence. It feels free to make the recommendation, taking all these issues into consideration before producing the report, which has been published today.

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