Other Questions. - National Minimum Wage.

Breeda Moynihan-Cronin

Question:

49 Mrs. B. Moynihan-Cronin asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will make a statement on the arrangements regarding the minimum wage agreed with the social partners during the talks on a new national agreement. [3506/00]

The Tánaiste recently published the National Minimum Wage Bill, 2000, which delivers on the Government's commitment to introduce a national minimum hourly rate of pay. Subject to the passage of the Bill through the Houses of the Oireachtas, the Tánaiste will set the initial rate of the national minimum hourly rate of pay at £4.40 from 1 April 2000.

In the recently negotiated draft national agreement to succeed Partnership 2000, the Programme for Prosperity and Fairness, the social partners agreed to recommend to the Government that the national minimum hourly rate of pay be adjusted to £4.70 from 1 July 2001, and £5 from 1 October 2002.

Section 12 of the National Minimum Wage Bill, 2000, permits the Minister for Enterprise, Trade and Employment to review the national minimum hourly rate of pay. Where there is in existence or proposed a national agreement which contains a recommendation in relation to the national minimum hourly rate of pay to apply for the duration of the national agreement, the Minister for Enterprise, Trade and Employment must accept, vary or reject the recommendation within three months of being advised of the recommendation. The Deputy can take it we will not ignore the recommendations of the social partners. I commend all those involved in the talks in bringing about a successful outcome to this issue.

Does the high level trade union delegation that went to see the Taoiseach in the days before Christmas to try to persuade the Tánaiste not to publish a rate then, as she sought to do, betray some kind of lack of commitment in the Department to the very concept of a national minimum wage? Will the Minister of State not accept that the rate now proposed has long since been overtaken in the marketplace? Is he aware, for example, that McDonalds is advertising jobs at £5 per hour, yet the Minister purports to tell us that the Government's idea is that we will reach that figure in the year 2002? Surely the whole purpose of the national minimum wage is undermined if it is fixed at that level.

I do not accept any of those criticisms or that there is any lack of commitment to dealing with this issue, when one considers the rates in the United Kingdom, for example. The best approach to this always was to process it through the system of social partnership and the Tánaiste and the Taoiseach are as committed to that system as is Deputy Rabbitte. The Deputy will be aware that my party introduced this system of partnership in 1987.

It is a successful economy. The approach in the new agreement is to ensure that the fruits of this economy are shared by all. As far as I am concerned, I welcome the proposed treatment of low paid workers through taxation policies and the introduction of the minimum wage. Rates that rise from £4.40 per hour to £5 per hour on 1 October 2002, combined with other measures which will support lower paid workers, are appropriate. This is a successful economy and one should not discuss the minimum wage in isolation from the other supportive measures for lower paid workers.

Can the Minister of State explain the quaint language in the PPF, as it is now known, with regard to the groups "recommending" to the Government? Is a Government decision now required to fulfil that paragraph in the programme?

The language used is that they would recommend to the Government. The Minister must accept, vary or reject the recommendations. The social partners put in the effort and commitment to make a recommendation but legally it is the Minister of the day, that is, the Tánaiste who will follow through on it—

Is it a Government decision or the Tánaiste's decision?

The Tánaiste recommends it to Government but it will be a Government decision.

How can the Minister of State say that the Tánaiste is committed to processing this matter through the social partnership process when three days before Christmas she sought to gazump the talks by publishing a rate of £4.40? That led to a high level deputation from the trade union movement going to meet the Taoiseach which was, happily, successful in persuading her to back off.

How can the Minister refer to criticisms when it is a matter of fact that the minimum pay commission set the rate of £4.40 19 months ago on the basis of what was then two thirds of median earnings? Two thirds of current median earnings is already in excess of £5. When McDonalds is paying £5 per hour, how can the Minister say that achieving £5 per hour in 2002 will be of benefit to low paid workers?

I support the minimum wage. What additional revenue will the State secure under the current tax regime? I believe it will be considerable.

The 137,000 rate of unemployed will increase under the minimum wage.

Clearly, there were different views among the social partners on this issue. We heard the views of the SFA and I also listened to one debate between Deputy Rabbitte and Mr. Delaney and others. I will not accept that the Tánaiste was not in favour of this measure although we can argue all day about what the Tánaiste had in mind with regard to nominating or not nominating a figure, which is the Deputy's argument, prior to the matter going into the partnership system. It has gone through the system and the Government is committed to this process and will follow through on it. There are other measures where the Government is clearly shown to be supportive of lower paid workers and anxious to protect and improve their position in the next three years.