News Analysis

Thursday 21 August 2014

Shane Coleman: Moment of truth arrives to see if Noonan and Howlin are up to job

Published 18/01/2013 | 17:00

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BRENDAN Howlin and Michael Noonan have together dominated the Government these past two years, but the two former teachers are facing their biggest tests yet.

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For Noonan, the coming months will go a long way towards determining how his tenure as Finance Minister is viewed.

He has probably done as well as he possibly could in trying to persuade the ECB & Co about the merits of renegotiating Ireland's bank debt. Anybody who believes that it is simply a matter of banging the table and hanging tough is being naive.

But Noonan, the political pragmatist, will know better than anybody he is fast running out of road.

Payment of the €3.1bn due on the promissory note on March 31 is simply unthinkable. No soothing words, no clever lines, no diversionary tactics will do this time. Noonan has to cut a deal. He has to bring home the bacon.

The stakes are almost as high for the other half of the finance double act. It's hard to know what to make of Howlin's tenure as Minister for Public Expenditure and Reform.

He was a surprise choice for the job. Nobody doubted his political skills or his competence and intelligence. But there were concerns he was too 'old Labour', too close to the unions, to be effective.

Initially at least, those worries were allayed by his no-nonsense and energetic approach that promised action and reform. Despite his tendency to overuse the phrase "trying might and main", Howlin came across like a man who realised this was his last time in Cabinet and was determined to make a decisive impact. Stories abounded of ministers, not delivering on the drive to reduce spending, being sent off with fleas in their ears.

Government deputies were hugely impressed. As Eamon Gilmore struggled to juggle his dual roles of Foreign Affairs Minister and Labour leader, Howlin became the man Labour TDs looked to for reassurance on thorny issues. Fine Gael TDs also liked what they saw.

But, perhaps inevitably, given the challenges involved, some of the gloss began to wear off. His much-trumpeted Comprehensive Spending Review didn't appear to amount to any more than an estimates process.

And while the Government delivered on its commitments to reduce the budget deficit, it was difficult to pinpoint much by way of reform or radical thinking.

Then there was the debacle over public sector allowances – undeniably Howlin's lowest point.

It prompted a resurfacing of the old concerns about his closeness to the unions. Unusually for Howlin, there were also questions about his political judgment. It may have been impossible to deliver cuts in allowances given how, in most cases, they had become part of core pay. But why raise expectations so high in the first place?

So with the jury very much out on Howlin's performance, a result from the Croke Park II negotiations is critical.

The target is ambitious – additional savings of €1bn on the state payroll in the period to 2015. Some of the proposed measures are very much opening salvos. Seeking compulsory redundancies for staff refusing to be redeployed surely falls into that category.

But if the €1bn saving is to be reached, it will have to include unpalatable measures such as public sector staff working up to four hours a fortnight extra and, probably, a reduction in premium payments.

The unions have expressed shock at the Government's opening position. Perhaps this is the normal public posturing involved in such negotiations – perhaps not.

There is a quiet confidence in government circles that Howlin has the union leaders onside. And certainly those leaders will be aware the alternative to an agreement – unilateral action from the Government to reduce the pay bill – could be a great deal worse.

But the challenge remains enormous: come up with a deal that will not only deliver the required savings, but which union leaders can sell to their members.

If Howlin can deliver that, then regardless of what happens before the next election, he will have left a significant reforming mark. But if he falls short, the consequences for him, the Labour Party and, arguably, the country, will be hugely serious. The next few weeks will tell a lot.

There is a confidence in government circles that Howlin has the union leaders onside... but the challenge is enormous

Irish Independent

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