Written Answers. - National Minimum Wage.

Derek McDowell


82 Mr. McDowell asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the recent quarterly report of the ESRI which suggests that low paid workers have lost out in spite of recent national agreements; the steps, if any, she will take to deal with this problem; and if she will make a statement on the matter. [3502/00]

An integral part of addressing the issue of low pay is the Government's commitment to introduce a national minimum hourly wage. I have recently published the National Minimum Wage Bill, 2000, which delivers on the Government's commitment.

As identified by ESRI's quarterly economic commentary of December 1999 low paid employees have not benefited equally from our recent economic success. I believe that the introduction of a national minimum wage heralds a new era for employees subject to low pay, so that they get a better share of the fruits of our economic growth. It is estimated that some 160,000 low paid employees will benefit from the national minimum wage.
The issue of low pay has also been one of the main concerns addressed by the recent negotiations on a new draft national agreement, the Programme for Prosperity and Fairness. The agreement provides for pay increases of: 5.5% of basic pay in year one of the agreement; 5.5% of basic pay in year two of the agreement; and 4% of basic pay in the following nine months, or in respect of low paid employees at least £12 in the first phase; £11 in the second phase; and £9 in the third phase where the above amounts are greater than the amounts obtained by reference to the relevant percentage pay increases.
As stated in the review of An Action Programme for the Millennium, the Government aims to complete the implementation of the specific and ambitious aims as set out in the programme, through a balanced strategy of removing more of the low paid from the tax net altogether, by reducing tax rates and by ensuring that a large majority of taxpayers are subject to no more than the standard rate of tax.
The aim of improving the position of the low paid is given further emphasis in the Programme for Prosperity and Fairness. The Government and the social partners have confirmed their support for further tax reform and tax reductions to improve the position of all taxpayers, increase the real take home pay of those covered by the agreement, especially those with below average earnings, and develop the structure of the tax system to deliver benefits and focus resources in an equitable manner.
I believe that the implementation of the provisions of the Programme for Prosperity and Fairness and the introduction of the national minimum wage legislation will ensure that low paid employees benefit to a greater extent than in previous national agreements.
My colleague the Minister for Social, Community and Family Affairs yesterday announced a number of additional measures in the forthcoming Social Welfare Bill aimed at improving the position of low paid workers.