PIECE OF CAKE 1711 CVIII

PIECE OF CAKE – NOW FOR THE HARD BIT

Leo Varadkar’s first Hundred Days as Taoiseach (actually 120, from his election on 14 June to his first Budget on 11 October) have gone smoothly. He even emerged unscathed from Ireland’s recent brush with Hurricane Ophelia – one of those “events” which can unhorse the most assured rider. Echoing Basil Fawlty, now comes the hard bit!

Dr Varadkar has already chalked up one signal achievement as Taoiseach, lancing the boil of that disaster that just kept on giving – Irish Water – with his decision to repay in full all those who actually paid their water bills. At a stroke this ended the hand wringing and indecision which plagued the political scene here since paying for water emerged as toxic several years ago. A line has been drawn under the issue. End of! Which is just as well, with several major matters simmering and the need for the government to stay focussed and not distracted. Brexit, and the timing of the next election are looming, while there is likely to be considerable distraction in any event over the referendum on the Eighth Amendment, signalled for mid-2018.

The brouhaha over Irish Water, which saw the Left cleverly construct a populist platform garnering significant support across the broader community was in a way Ireland’s echo of the Brexit vote, the Trump election and the continued electoral support across Europe for populist parties. Here, frustration over years of austerity, higher taxes and diminished disposable income crystallised into opposition over one extra imposition. In the context of this discontent we are perhaps fortunate that there was no referendum here similar to that in Britain. If and when a deal IS agreed between the EU and Britain, that possibility may yet have to be faced.

Quite what will happen over Brexit remains unclear, with only seventeen months remaining before Article 50 kicks in and serious negotiations not yet begun. British policy blows hot and cold, reflecting, as well as disarray among the Tory government, the lack of any clear advantageous course for the UK to follow – something obvious to all but the most diehard Brexiteers. The EU stance currently is best summed up as a determination that Britain will not have its cake and eat it, as Boris Johnson whimsically remarked a year ago. For their part some of the British hardliners remain steadfast that ultimately Europe will cave in as its trading links with Britain are too important to be let fail.

For Ireland, the country with the strongest trading and other links with Britain, and facing potentially the most serious consequences, the outlook is not good and the issue will clearly concentrate Leo Varadkar’s mind in the months to come. How to proceed, essentially in the dark, is not easy. The government thus far has eschewed making preparations for a hard Brexit, involving as it would recognition of some form of renewed border between the two parts of Ireland. The Taoiseach has stated firmly that Ireland will not help Britain devise a border that “we don’t want.” All sides are agreed, and have stated, that some solution must be found to prevent a renewed Border happening, but pious words and aspirations are one thing, the grim prospect of Britain falling out of the EU, without agreement, if talks collapse, quite another . The deadline for a neat exit seems increasingly unrealistic. Perhaps some stopping the clock process – at which the EU is very good – could be applied. Seen now, the near disaster for Ireland that a collapse of the negotiations would mean still seems unlikely, yet the clock is ticking. The next couple of months could prove decisive one way or another.

The clock is ticking also towards the next election. The current arrangement between Fine Gael and Fianna Fail was for three budgets, with Fianna Fail, which can collapse the arrangement at any time, holding the whip hand. The Taoiseach’s one ace is that he can, should he so wish, call an election. We have so far had two budgets , the recent one a steady-as-you-go “neutral” budget which might well prove to be the election budget Crucial is how Fianna Fail judge the government’s (and, therefore, the Taoiseach’s) performance and prospects in deciding if and when to pull the plug. A continued improvement in the economy, with no banana skins, could see support for the Government rise, something Fianna Fail will wish to avoid. Currently the opinion polls are showing no discernible trend, beyond some gradual drift back in support to the two major parties. Fine Gael and Fianna Fail are still close in the polls and, while the vagaries of the vote in individual constituencies could swing a number of seats, the professionals in both parties will be loath to gamble, given the fickleness of the electorate.

At this point any banana skins seem unlikely to be strictly economic ones. The economy is doing well, full employment is close, the forecast is for a break-even budgetary outcome and modest but actual tax reductions will kick in in the New Year. However, there remains the construction industry, important for the economy and with accompanying social and political ramifications. With the industry slow to recover and the spectre of the 2007 crash still haunting, very few homes are being built, and virtually no social housing at all. The result has been a steady rise in the declared numbers of homeless families, an issue which has now become a political and media hot potato, with attention focussing in particular on the several thousand children now housed temporarily in hotel accommodation.

There is no quick fix. Houses and apartments take time to build, from planning to signing off. Meanwhile, with demand exceeding supply for existing properties, prices are surging for those who can afford to buy and a head of steam is building up to loosen the purse strings on borrowing. At present the Government is holding firm, determined to avoid another property bubble. Handling this and the homeless issue will test the Taoiseach’s mettle. Something needs to be done – but what? And how to avoid the hot potato becoming a political football, with the opposition upping the stakes. Varadkar needs to get his own mandate and, with historically low interest rates and anxious backbenchers, he may well have his hand forced.

Another factor comes into play. The Taoiseach has already promised a referendum on the Eighth Amendment (Abortion) in May or June next. However it pans out, the campaign and debate promises to be emotive, fractious and contentious, with the outcome unlikely to be as decisive as that on Same Sex Marriage in 2015, when, effectively no side was the loser. There is no telling what collateral damage could accrue to politics and politicians here as a consequence. Additionally, several other, minor, referendums have been signalled for late 2018, on blasphemy, directly –elected mayors and the role of women in the home, none issues likely to stir passions. One suggestion is that they could be held on the same day as the next Presidential Election, also due in late 2018. All these cost money and effort and risk turning off the electorate. Poll fatigue may well push the General Election into 2019.

21/10

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