Analysis

Tuesday 29 July 2014

Shane Coleman: Good deal, Brendan, but don't expect any thanks from core Labour voters

Published 27/02/2013|04:00

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AFTER two years of talking the talk, Public Expenditure Minister Brendan Howlin this week walked the walk.

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The significance – and political courage – of a Labour Party minister overseeing a deal that will see pay levels fall across the public service by €1bn should not be underestimated.

The main criticism of Labour in government in the past was that it tended to put its own constituency – including the public sector – before the greater good. It didn't like taking the tough decisions in government and was more comfortable engaging in the protest politics of opposition.

That certainly doesn't apply here. Circumstances may have demanded it, but even still, Croke Park II is arguably as radical a departure for the Irish Labour Party as anything that was delivered by Tony Blair's New Labour across the Irish Sea.

A few months back, Howlin was lacerated, not least within the Government, for 'bottling it' on public sector allowances.

His argument then was that he had his eye on a wider deal. Many of us didn't buy it at the time. But he has now delivered. Howlin sacrificed that battle in order to win the war.

He and his negotiators did so with considerable nous. They couldn't offer anything in the negotiations except pain. But they skilfully managed to present their package of options as the lesser of two evils.

The view within the Government is that they were helped by last week's rally of frontline workers in Tallaght. Senior figures privately believe the 'frontline' unions overplayed their hand, irritating and alienating the rest of the public sector in the process.

Ensuring that bigger earners took the brunt of the pay cuts was also crucial in terms of the PR battle and, the Government will hope, when union members come to vote on the package. There will be arguments that there is nothing terribly radical or reforming in what is now being proposed.

One source close to the negotiations said the process represented the first time there had been "an under-the-bonnet assessment of public sector pay in Ireland and it wasn't pretty". It's certainly questionable to what extent Croke Park II actually rectifies that. The Government ceded considerable ground on its opening position, compromising on issues such as increments and the myriad of premium payments.

But that probably misses the bigger point. A little like Michael Noonan's deal on the promissory note, the deal achieved by Howlin was as good as could have been achieved and actually far better than had been expected. Besides, what could be more radical than a Labour minister cutting the public pay bill?

However, it's highly doubtful whether this political bravery will be rewarded electorally.

Even if public sector workers vote to endorse Croke Park II – and that is a pretty sizeable 'if' – they will do so reluctantly. There will be considerable resentment over what is the third cut in their pay in five years. This package might be considerably more nuanced than the across-the-board pay cut or pension levy introduced by the last Government. But that won't particularly impress those workers whose take-home pay is hit.

Nor will they be overly reassured by the Coalition's assurances that it won't come looking for more pay cuts. Labour's record on election promises doesn't help in that regard.

The reality is that public sector workers, virtually overnight, abandoned Fianna Fail in their droves after it cut their pay. Many of those votes went to Labour.

And there must be considerable concern that the same fate could yet befall the junior coalition party.

A short-term hit in Labour's poll ratings would seem inevitable. No political party ever won support by cutting voters' pay. The hope within the Coalition is that by the time the general election comes about, the country will be in a better place and that people will then see the benefit of such tough decisions.

Privately, though, some backbenchers worry that the national picture is of less concern to voters than their own individual personal circumstances. They fear that headline-grabbing deals on reducing the bank debt or exiting the bailout don't, and won't, matter to voters, who are too busy trying to make ends meet. With the property tax, water charges and further spending cuts still to come, the Coalition can only hope that this isn't the case.

Because there is an unmistakeable sense that the Government has crossed the Rubicon with this deal. It has been reluctant, in its first two years of office, to take deeply unpopular decisions. No more.

There's no more unpopular decision than cutting pay. And, having done that, there is no going back. The Government now has no option but to stick on this road. It has to be tough love from here on in.

That's almost certainly a good thing for the country's recovery, but not necessarily for the Coalition's chances of re-election.

Shane Coleman is the political editor of Newstalk 106-108FM.

Irish Independent

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