Sunday 4 December 2016

Cabinet at war: Labour wants Reilly out, FG caves in to 'mansion tax' and no dole cuts

JOHN DRENNAN and DANIEL McCONNELL

Published 02/12/2012 | 05:00

THE Government is at war three days before the most feared Budget in the history of the State, the Sunday Independent can reveal.

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Today, it can also be revealed that Education Minister Ruairi Quinn told a behind-closed-doors meeting on Wednesday that members of the Cabinet shared the view of Labour TDs that Health Minister James Reilly, was "not up to the job and should go".

An atmosphere of volatility has reached boiling point at Government Buildings, where Fine Gael and Labour ministers gathered this weekend in a bid to reach agreement.

The tension is undoubtedly exacerbated by a dramatic 6 point drop in Fine Gael popularity in a national opinion poll conducted last week.

"It's getting very late – and nothing has been decided yet," one panicked cabinet member said yesterday. Last night's cabinet meeting, called to finalise the Budget, began at 5.30pm and finished at 9.30pm, breaking up with many important issues unresolved. The meeting had been due to last for two hours.

At one point, Labour ministers left the meeting to confer among themselves while their Fine Gael counterparts stayed in the cabinet room. The flare-up in hostilities is the result of underlying ideological differences between the coalition partners.

The two ministers in the crosshairs are Dr Reilly and Social Protection Minister Joan Burton.

Labour wants to increase the Universal Social Charge by 3 per cent for those earning €100,000 or more a year. But Fine Gael says that would amount to a tax increase and Enda Kenny has vowed there will be no tax rises.

Fine Gael countered that if the Labour demand is to be accepted, then social welfare rates must also be cut. But Eamon Gilmore has vowed that there will be no social welfare cuts.

As a stand-off between the parties continues this weekend, insiders say that Mr Gilmore and Mr Kenny went into a side-conference where it was agreed that the USC hike would be changed to a "mansion tax".

Last night, the Sunday Independent confirmed that a higher rate of the property tax is to be applied to houses worth, it is believed, more than €1m. Government sources last night referred to it as a "property-related wealth tax." The deal struck has defused the row over social welfare cuts and USC hikes – which are now "no longer on the table".

There is, however, no doubt as to how the public feels in advance of a €3.5bn package of cuts and taxes on Wednesday – the fifth such austerity Budget in a row.

A Sunday Independent/ Millward Browne opinion poll shows that a clear majority of people genuinely fear that they will be unable to meet their financial commitments after the Budget.

Asked if they thought the Budget could push them over the edge, 56 per cent said 'yes', 29 per cent said 'no' and 14 per cent did not know.

Further breakdown shows that of the consumer-driven 35-44 age group, a massive 64 per cent fear the Budget will shove them off the precipice.

Negotiations between the coalition partners are still expected to reach a compromise agreement – but there is no doubt that huge tensions exist between the parties and that these will leave a mark.

Those tensions have been a running sore ever since the then minister of state Roisin Shortall resigned in September following a decision by Dr Reilly to locate sites for primary health care centres in his constituency.

The ill-feeling will be compounded by the Sunday Independent revelation today on Labour ministers' view of their cabinet colleague, Dr Reilly.

Mr Quinn yesterday failed to respond to seven queries from this newspaper about his comments to the behind-closed-doors meeting on Wednesday, in which he said that members of the Cabinet shared the view of Labour TDs that Dr Reilly, was "not up to the job and should go".

At the same meeting, Joan Burton decried the manner in which the Government set about its preparation of the Budget. She said: "Ministers are making decisions in a vacuum. Only two politicians and the civil servants know what has been proposed by each minister."

She added: "This is the most difficult Budget to date – it has been a very difficult process for me."

Later in the week, Ms Burton's annoyance turned to fury at the Fine Gael proposal to cut social welfare rates, which, it is understood, emerged overnight from the Taoiseach's office.

She had believed that she had finalised her package of cuts – only to discover "at the last minute" of the Fine Gael plan to put social welfare cuts on the table.

Meanwhile, Fine Gael is intent on protecting Dr Reilly from a Labour onslaught.

But in what many will interpret as tacit Labour support of an €8m cut to home-help services, Mr Quinn told the Labour parliamentary party meeting on Wednesday: "We cannot be seen to be looking for a head to roll."

There was strong criticism by TDs of what was described as Dr Reilly's "privatisation agenda" and cuts to home help.

Dublin TD Aodhan O Riordain described Dr Reilly as the "elephant in the room" and said he was "not up to the job". He added: "We are going to have to do something about him and soon. The guy can't do his job, (he) makes a mess of everything."

However, Mr Quinn urged those present to be "very careful now", adding: "We cannot be seen to be looking for a head to roll."

Addressing Mr O Riordain, he said: "But your sentiments are shared by cabinet colleagues. We need to close ranks. This cannot be leaked out of this room. We are on the long march. Remember, we are only 21 months in office."

Earlier in the meeting, Mr Gilmore said Fine Gael did not have the same "unanimity" as Labour on the abortion issue, adding: "We can't play this as a win for us at their expense."

However, Dublin TD Kevin Humphries, who agreed that Labour needed to be "helpful" to Fine Gael on abortion, added: "'Helpful' is a two-way street." In the context of Budget negotiations, Mr Humphries said: "Fine Gael need to be helpful to us and they haven't been to date."

Mr O Riordain said that if Labour "pushes too hard to get more legislation" on abortion Fine Gael "might look for a deal from us in another area. Let's manage the Budget first."

The revelations offer an extraordinary insight into the manner in which the Government works – specifically, the barely disguised contempt which exist in Labour towards the Health Minister, but also how Labour is prepared to compromise on this in order to stay in office.

The latest Red C Poll for the Sunday Business Post shows that support for Mr Kenny's party has fallen below 30 per cent since it assumed office in March 2011.

Fine Gael's party support now stands at 28 (down six) while its coalition partners Labour gains one and now stands at 14. Fianna Fail is up one to 20, while Sinn Fein remain unchanged on 17. Independents have gained four and are now on 21.

Sunday Independent

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