| 4.1°C Dublin

Daniel McConnell: Survival of Coalition now hangs in balance


LABOUR’S WAY: A lot of Labour TDs have complained that Brendan Howlin's strategy of talking tough and threatening pay cuts at key junctures backfired

LABOUR’S WAY: A lot of Labour TDs have complained that Brendan Howlin's strategy of talking tough and threatening pay cuts at key junctures backfired

LABOUR’S WAY: A lot of Labour TDs have complained that Brendan Howlin's strategy of talking tough and threatening pay cuts at key junctures backfired

Last Thursday night, myself and two friends, who just happen to be public servants, met. One works for the HSE and the other works in a semi-state agency.

We sat in the busy Dublin city centre establishment, the Oval, indulging in a binge of jollification, as we addressed the issues of State.

They accused me, as they always do, of being an intolerant right wing 'Tory Boy'. Private sector effort and taxes that pay for their elitist, cosseted positions, including their guaranteed jobs and pensions, came my response.

We've been having the same divisive debate for years now, and it is always great fun. But there is always an edge in the debates, because while we may exaggerate our positions for effect, deep down, we each believe we are right.

So, when we turned to the issue of the rejection of the second Croke Park deal by a majority of public sector workers, the question was asked how they voted. It was fascinating to find out that one had voted Yes and the other had voted No.

The first Croke Park deal was an unmitigated disaster, an act of economic treason, that has utterly failed to deliver anywhere near the scale of reform promised, was my contention.

While the second deal is far from perfect, it began to address the chronic legacy issues that have blighted the public sector and Brendan Howlin deserves considerable credit for at least trying to tackle the problem. At last, the age-old failure to properly protect the taxpayer, who is often forgotten in this context, was being addressed.

But it was important to explore exactly why they voted the way they did.

The one who voted Yes said it was his belief that the deal was progressive, and that those at the bottom were protected to a large degree. He quibbled that there wasn't enough reform. He said that as a member of Siptu, he was disgusted that his union had rejected the deal.

But why did my other friend vote No, given that he himself was not greatly affected by the planned cuts or reforms.

He said he couldn't stand over the huge cuts being forced upon nurses and gardai, and he argued passionately that these two groups work often unsociable hours, and in the case of the gardai in highly dangerous situations, for relatively low pay. He said had they not been so unfairly targeted, then he would have supported the deal. But the sharp reduction in premium pay meant it was a bridge too far and he voted it down.

The two lads both cogently articulated their respective positions and to me they cut to the heart of why the deal failed.

Going into the formation of the new deal, Howlin was conscious that a one-size-fits-all approach, as in Croke Park I, was not sustainable. Such an approach was no longer tenable as it was unjust and unjustifiable given it protected the highest-paid hospital consultant the same as the lowest-paid cleaner.

To counter that, Howlin and his officials, led by Robert Watt, sought to tailor the document to be sector-specific, but in doing so fed the narrative that some sectors would unfairly be hit, as in the gardai and nurses mentioned above.

A lot of Labour TDs, both rebel and loyalist, have complained that Howlin's strategy of talking tough and threatening pay cuts at key junctures backfired. This too is a view shared by ordinary public sector workers.

"When he came out with the seven per cent cut thing, I said, right, shag off. Labour minister threatening pay cuts. I said you need us more than we need you and I voted No," said my friend on Thursday.

The truth was, given how fractious the negotiations had been, complete with walkouts by INMO boss Liam Doran and others, the result was always going to be a close-run thing.

But ahead of last Tuesday, Howlin, Watt and all in Government felt that it would pass with a small margin, largely because they believed Siptu members would approve the deal. The largest union's rejection of the vote by 54 to 46 per cent confirmed that the unthinkable was possible. None of the big four unions Siptu, the INMO, the ASTI or the INTO, supported the deal.

In the aftermath of the defeat, red-faced Siptu president Jack O'Connor said the vote was defeated because it was seen as unfair to ordinary workers, while the rich have escaped largely untouch-ed since the crash of 2008.

"The result reflects the degree that public sector workers are profoundly aggrieved at the way in which they have been required to shoulder the lion's share of the burden of the adjustment since this crisis erupted in 2008, while wealthy people in our society are seen not to contribute anything remotely to the degree that they are capable of," O'Connor said.

O'Connor went on to say that if the Government proceeds to legislate for the seven per cent pay cut Howlin previously threatened, there would be dire consequences.

"I want to urge the Government not to proceed to legislate for pay cuts because it will precipitate a major confrontation. There are lessons in this for everyone," he boomed.

Back in Leinster House, the rejection of the deal certainly has focused the minds of an already weary and battered Labour Party, still licking its wounds from its humiliation in the Meath East by-election. It is an imbroglio Howlin and his leader Eamon Gilmore could easily have done without.

Having spoken to over 20 members of the Labour Party since the deal was rejected, it is clear that the option to legislate is no longer open to him.

TD after TD, senator after senator, loyal and rebel, almost in unison have said under no circumstances will they support legislation which cuts the pay of public sector workers.

The strategy from Howlin has been to bunker down and say nothing in terms of offering hints as to what his next move is likely to be.

Undoubtedly, Howlin is politically weakened and isolated by this defeat. He has even had to reject accusations of being a "Thatcherite" minister, which will cut deep for a proud Labour man.

The defeat also feeds into the larger narrative of what exactly is Labour achieving or even seeking to achieve in government. Rebels such as chairman Colm Keaveney, Roisin Shortall and Patrick Nulty have repeatedly called the party leadership's soul into question, but they have effectively exposed Gilmore, Howlin and their fellow ministers for their failure to defend core Labour values at the Cabinet table.

Given the refusal of Labour TDs and senators to countenance legislating for pay cuts, the most likely outcome is some form of a renegotiation of the deal.

A further complication for Howlin is that the figures in the Book of Estimates for Government spending, published last week, are based on the assumption that the deal would have passed, so as it stands, the Budget is €300m over.

This fact has fuelled speculation within government circles that unless a renegotiation is successful, then some form of a mini-Budget will be needed to bridge the gap that now exists, and there is precious little appetite for that.

Another measure under strong consideration is a blanket freezing of all incremental or length-of-service pay increases.

Since the Sunday Independent first reported that the State had been paying over €250m a year in pay increases during the worst economic crisis, the topic of increments has become a hot political debate. Howlin has been loath to even consider touching them as he argues that they largely benefit lower-paid workers.

That is true, but his defence of increments came into question when it later emerged that more than 3,000 people who earn over €70,000 in the public sector are being paid increments. But now he may have no choice but to call a halt to them.

Fresh calls from within the Labour Party to reinstate its budget demand of imposing a higher Universal Social Charge on income earners over €100,000 have already been rejected by Fine Gael ministers.

All eyes will now turn to Tuesday's Cabinet meeting where the Government's next move will be decided. Without question, this is the greatest test the Coalition has yet had to face, and it is not overstating it to say that it has the potential to pull down the Government much sooner than people think possible.

Irish Independent