Other Questions. - Minimum Wage.

Bernard Allen


6 Mr. Allen asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has received the report from the high level group set up to examine the implementation of a minimum wage. [7643/98]

Proinsias De Rossa


25 Proinsias De Rossa asked the Tánaiste and Minister for Enterprise, Trade and Employment when the report of the Minimum Wage Commission will be published; the reason for the delay; and if she will make a statement on the matter. [7576/98]

Billy Timmins


30 Mr. Timmins asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has received the report from the high level group set up to examine the implementation of a minimum wage. [7641/98]

Emmet Stagg


49 Mr. Stagg asked the Tánaiste and Minister for Enterprise, Trade and Employment the reasons for the unacceptable lengthy delay in fulfilling the Government's priority in An Action Programme for the Millennium of the introduction of a national minimum wage; when she is proposing to introduce the necessary enabling legislation; and if she will make a statement on the matter. [7675/98]

Michael Noonan


53 Mr. Noonan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has received the report from the high level group set up to examine the implementation of a minimum wage. [7645/98]

Ruairí Quinn


71 Mr. Quinn asked the Tánaiste and Minister for Enterprise, Trade and Employment when the report of the National Commission on a minimum wage will be published; and if she will make a statement on the matter. [5069/98]

Nora Owen


84 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has received the report from the high level group set up to examine the implementation of a minimum wage. [7703/98]

I propose to take Questions Nos. 6, 25, 30, 49, 53, 71 and 84 together.

Ms Evelyn Owens, the chairperson of the National Minimum Wage Commission, has indicated to me her intention to present to me the commission's report before the end of this month. I intend to publish the report as soon as possible and to bring forward quickly my proposals to Government on this matter. The report may come before the end of March, which is only a few days away. It is my intention on receiving the report to bring proposals to the Government on its recommendations and to publish the report at the same time. It may be useful if a committee of the House or the House itself were to debate the matter.

Can the Tánaiste confirm that the remit of the commission chaired by Ms Owens is to indicate how the Government's proposal to introduce a minimum wage is to be implemented, not whether it will be implemented? Has the Government set aside the resources which will be required when a minimum wage is introduced? Irrespective of the recommendations of the commission there will be costs involved in introducing a minimum wage — it has been indicated that home helps, for instance, receive far less than what is considered to be a minimum wage and if the provision is to be introduced for such people there will be a 100 to 200 per cent increase in health board budgets.

When I addressed the commission I asked it to recommend how the Government might introduce a national minimum hourly wage or wages — that is also in its terms of reference. However, the commission may well recommend a particular minimum wage and it is not precluded from doing so.

I expect the report will be comprehensive. The Commission consulted widely and it also consulted the social partners. The Government does not know what minimum wage might be recommended and we have not made provision this year in the Estimates for the introduction of a national minimum wage. Deputy Owen is correct that if a national minimum wage were to be set somewhere between £3.50 and £5 per hour for certain categories of work, the State, in its broadest sense, would probably be found to be one of the biggest defaulters of that hourly rate.


That is a poor indictment on the State. There is no doubt there will be costs attached to a rate being struck anywhere between the two figures I mentioned. Approximately 150,000 workers are currently covered by the JLC procedure, the Joint Labour Committee recommendations, which covers workers in several categories in the economy and rates from approximately £5 to just below £10 per hour. We must ensure that the way we introduce a national minimum wage does not cause wage inflation because if everybody regards their rate per hour as relative to the lowest possible rate or the rates below them, they may well argue that they are entitled to the differential of £3 or £4 between the minimum that applies under the JLC model and what they receive. We must ensure that does not happen because wage inflation would cause major problems in this economy, make us very uncompetitive and put pressure on vulnerable indigenous industries in particular.

In saying that the Minister sounds as though she is backing away from the agreed commitment she and Deputy Ahern gave last May to introduce a statutory national minimum wage. She sounds as if she is trying to have her cake and eat it which I do not believe is possible. The Minister mentioned the JLCs. Presumably Ms Owens and her committee will report in favour of the establishment of the statutory minimum wage. Does the Minister propose to introduce legislation along the lines Margaret Beckett has indicated in the United Kingdom, or has she given any thought to how it might be implemented on a statutory basis? In relation to JLCs, does the Minister see that system being used as the central plank of the new system and extending from that or does she envisage a totally new system along the lines of that operated in the United States? Has the Minister's Department undertaken any studies of the operation of minimum wages throughout the EU in countries such as Holland and France as well as the American experience? What lessons has the Department drawn from those studies given that US, probably the most effective and efficient economy in the world, has had a minimum wage system for many decades?

I am not backing away from the commitment in the programme for Government. I am simply saying we need to be careful in the way we go about introducing national minimum wages. I look forward to receiving the report from the commission next week to see how it recommends this should be done.

I have not personally examined the research in this area but the commission has and it has carried out its own research. We appointed a commission because this is such a complex issue. I felt the most appropriate way to do that was to appoint a commission of five persons representative of the various strands in our society, the social partners, the Chairperson of the Labour Court and two other members who have experience and strong views in this area. The commission consulted widely and carried out its own research but because the issue was so complex we had to extend the time originally given to the commission. We initially hoped it would report by the end of last year.

I am aware that minimum wages have applied in the United States for some considerable time. When I was in the US recently I saw notices displayed in some of the companies I visited and I understand the rate is approximately $4.30 per hour and is due to increase shortly to over $5 per hour. If we apply that rate in the Irish context it is just over £3. I do not know what the commission will recommend but it is the Government's intention to implement those recommendations in whatever way and as quickly as we can.

Major tax reform will be needed in regard to a minimum wage because a single person earns only £67 tax free. It was announced in the UK budget recently that every home should have a tax free income of £212. If we introduce a minimum wage it is important to implement tax reform and the Minister should have discussions on the net income with the Minister for Finance. I support a gross wage of £5 per hour but employees are concerned about the net income and major changes are needed in that regard.

We must ensure that in trying to deal with one problem — the exploitation of vulnerable workers in certain sections of the economy — we do not create another and extend the black economy. That is not the intention. Tax and PRSI have a major role to play in relation to this matter and we need to deal with the two in tandem. As Deputy Owen said earlier, for the State employees who are earning rates that would be regarded as below what might be a reasonable national minimum wage, there are financial implications that will have to be examined also.

I agree with the Minister that care has to be taken with the implementation of the legal minimum wage but will she indicate a time scenario to the House? Has work started on drafting the legislation? There was resistance in the Department to the notion of a legal minimum wage. Almost a year has elapsed in terms of the lifetime of the Government. The Government is fairly shaky and it might not be around for much longer. Will the Minister give the House an approximate date when legislation might be published to give effect to a legal minimum wage having regard to the fact that there is a serious low pay problem in this economy, substantial profits are being taken and low paid workers are not enjoying the benefits of that?

I cannot give the Deputy a commitment in relation to when the legislation will be introduced. The first step was to establish the commission to advise the Government on how best we can introduce a national minimum wage taking into account all the factors I mentioned earlier. I am not trying to be smart but the Deputy's party and the Labour Party were in Government in recent times and no commitment was entered into to introduce a national minimum wage and legislation was not forthcoming. The Government will implement in full the recommendations of the commission in relation to this matter as quickly, effectively and efficiently as we can taking into account the difficulties that arise in this area.

Will the Minister clarify that because she was unqualified earlier in her support. She said the Government will implement the recommendations in whatever way it can. Will the Minister confirm that the Government will implement whatever the commission recommends? If the Government does not like the recommendations, will it have the latitude to change the recommendations to increase or decrease the figure if the budget does not allow the Government to implement it? Is it not the case that the Department should have already commenced the preparation of the broad strokes of the legislation?

I am not aware what the commission will recommend. In fact, I cannot be certain it will recommend that we strike a particular rate. It may decide to leave that matter to the Government. I cannot give a blank cheque commitment notwithstanding the fact that I have enormous confidence in the commission because of its composition and the manner in which it has gone about its work. The commission is made up of a balanced group of people representative of both sides of the social partnership. The intention is to implement the findings of the commission bearing in mind that it will be expensive and will require substantial change. If a rate is recommended, and presumably it will be a reasonable rate, the State is perhaps one of the biggest defaulters and given what Deputy Perry said about the impact on industry and the effect on the tax and PRSI system, changes will have to be made but the commitment is to do that as quickly as possible.