FG would renegotiate minimum wage cut

Fine Gael has said it will look to renegotiate the cut of €1 in the minimum wage announced in the Government’s four-year National Recovery Plan yesterday.

Speaking this morning, enterprise spokesman Richard Bruton said Fine Gael would tell Europe they do not "buy in" to the cut in the minimum wage and it would be prepared to make senior bondholders in banks take some of the hit for large losses at the lenders.

“The pay of a hospital consultant is €100,000 more than is paid in Northern Ireland… the minimum wage is probably €3,000-€4,000 more but the Government is proposing to bring in the minimum wage into the social levy, into the income tax net which will probably take €2,000 out of the minimum wage," he said.

“You do not start with the lowest paid in seeking to drive a competitiveness agenda.

"You start with people who are high up the tree, you look at utility costs, you look at the restrictive practises, you look at people who are overpaid, you look at rip off and that's what you confront first," he told RTÉ's Morning Ireland.

On the same programme, Minister for Foreign Affairs Micheál Martin said the issue of the minimum wage was one of competitiveness rather than public finance.

“The minimum wage is not about penalising people, we’ve the second highest minimum wage in Europe and what has been argued by analysts and employers is it now represents a barrier to jobs," he said.

"We’ve 13.5 per cent unemployment, it is too high, employers are saying repeatedly to all of the political parties that this is an issue that is acting as a barrier to jobs.

“I have no difficulty if Richard wants to renegotiate the plan but I think what he has an obligation to do is to put their plan up front and list the particular areas where they would either cut or tax because irrespective of the detail you still have to achieve at a minimum the €15 billion cuts over the next four years.”

On the issue of bondholders, Mr Bruton said while the Government cannot default on its commitments, “that's a very different thing from saying that bondholders in banks who made private investments in private banks are the absolute responsibility of the taxpayer.

"If there is a big hole in the banks that we do not know about we can't expect that the taxpayer is going to pick that all up," he said. "We have to take the view that people who invested and invested unwisely have the consequences under capitalism of losing some or all of their investment."

The Government has said subordinated bondholders in Anglo Irish Bank and Irish Nationwide would have to foot part of the bill for purging the lenders of soured loans. But it has insisted it will not force senior bondholders in banks to take a loss on their holdings because they rank on a par with depositers.

Mr Martin reiterated that the Government would not default on the banks senior debt. "No, and no one is asking us to," he said.

The Dáil is due to debate the details of the Government’s four-year plan later today.