Author: paleoutlaw

BRITAIN PUTS THE CLOCK BACK

BREXIT. Occasionally an event of major significance occurs. After it things are never the same.  In Ireland we’ve just finished celebrating the centenary of one such event – the Easter Rising. Hiroshima was another, the fall of the Berlin Wall a third, Nine Eleven a fourth.  On June 23 arguably another such event happened when Britain, the world’s fifth economic power, voted – narrowly – to quit the European Union. As I write the shock waves internationally, not least in Ireland, show no sign of diminishing. A new, ostensibly gung-ho government is in power in London, determined to push through with exiting, a process likely to take several years.

The inquests and recriminations are well under way. Europe’s establishments and chattering classes, including in Britain itself, are baffled and dismayed. Britain was seen as a sometimes petulant but important partner, not only as one of the Big Four but also as providing an important counterweight in internal policy discussions, usually to be found on the side resisting further or speedier European integration. Its EU credentials were never in doubt even though it maintained a semi-detached position on key EU areas like the Euro and the Schengen common travel zone, stances it could more easily take given the financial clout of the City of London and Britain’s position as an island.

Britain’s increasingly vocal Eurosceptic wing, represented by UKIP and a sizeable minority within the Conservative Party, was ignored or discounted. Britain was regarded as too deeply embedded within Europe for trade, investment and social reasons, seriously to contemplate the leap in the dark that leaving constituted. The warning signs were ascribed to the same mixture of discontent, disillusionment, dissatisfaction with the status quo and vague xenophobia evident in a number of other member States, where right wing parties were starting to garner significant electoral support. All true, no doubt. What made the British situation unique was that, staggeringly, a country with little or no tradition of deciding important matters by referendum,  was asked to vote a simple yes or no on a proposal to undo involvement in almost half a century of  political and social construction and cooperation within Europe. The resulting Mother of all Protest Votes was then compounded by the (narrow) victors proclaiming there could be no going back on the result.

The “Why” has been parsed and analysed since. The philosopher Roger Scruton, in a brilliant article in Prospect Magazine, has traced the alienation of the English working class in recent years, and their feeling that, above all, their sense of identity was being eroded. In a striking phrase he has identified a vital flaw in the EU as it is: “the European people have not been merely SUBJECT  to a treaty, but GOVERNED  by it.” Add the hubris of a wealthy faction in Britain, convinced that the country would do better “going it alone.” As far back as 1994 a junior British Tory Minister explained this attitude in detail to me; depressing but prophetic. Taken together, and in a campaign notable for its chauvinism and churlishness as well as its deceitfulness, the mix proved a potent one.

The referendum outcome has shattered the comfortable Establishment near-consensus of a Europe moving steadily if slowly towards an “ever closer union” a vision which has sustained Europhiles for over half a century. This cosy vision has it that the then EC, when Britain joined  in January 1973, was  little more than a post-war free trade area between six members, with one or two transnational dimensions, in coal, steel and a limited number of agricultural products. It had aspirations to be a lot more, and wording in its treaties to allow for organic growth. And, over the decades, it HAS grown, dramatically, sometimes lopsidedly, changed its name and now comprises a shaky and incomplete union of five hundred million spread over twenty eight countries. It has established a zone of unprecedented economic and prosperity across Europe with landmark standards in human and related social rights. A queue of countries waits to join.

With up to twenty eight countries, each with its own national priorities and particular requirements, for the EU getting to where it is has not been easy. Progress has been slow and tortuous. There IS a common currency – the EURO, but not all twenty eight are members. There IS a Common Travel Area – Schengen – but again some countries -Britain and Ireland – are outside. There are serious differences evident over national attitudes to the Refugee problem. There is serious economic imbalance between the wealthier North and the poorer South, something exacerbated by the 2008 Financial Crisis. Yet overall the consensus has it that Europe has muddled through and worked hard at solutions. The various landmark Enlargements, culminating in the 2004 admission of the Central Europeans, are testimony to the vibrant European idea. And significant progress has been made in making the EU more democratically accountable, a process that is ongoing. Throughout, Britain has been an important and valued component in the evolution of the Union.

That vision now lies in tatters. What happens next is unclear. We are now in a kind of phoney war situation. The process for exiting the EU, stuck in as an afterthought as Article 50 of the Lisbon Treaty, must first be initiated by the UK, with afterwards a two year “sunset period” to complete the separating process. How quickly the new British government acts to invoke Article 50 remains to be seen. Teresa May has appointed Brexiteers to lead the exit charge, which could be a Machiavellian tactic, though others see it as filling the posts with what remained after the purge of the pro-Europeans.

Thus far these have made predictable noises about negotiating bilateral trade deals with third countries. Yet eight of Britain’s top ten markets, including Ireland, are EU or EEA members, accounting for the bulk of her exports. Britain already has thriving trade with all major third countries, on foot of existing trade deals negotiated by the EU Commission; whether any new deals will prove more fruitful or beneficial for Britain must be moot. There’s no pot of gold out there that the evil EU has been withholding. A lot of similar hard economic realities are likely to be aired in the coming months as the small print of Britain’s economic and social entanglement with the EU is picked over. And politically there’s Scotland, which voted 62% to remain, with every prospect of a constitutional crisis before long.

For Ireland the issues are profound. We have major concerns, quite apart from the economic ones which are potentially more serious for us than for the other EU members.  The Common Travel Area – a vital element in our bilateral relationship with Britain – is under serious threat. The EU’s one land frontier with Britain is within Ireland. Given the posturing of the Brexiteers over curbing immigration from the EU, that Border – and with it that special relationship – is now an issue. Arguably the Common Travel Area has sugared the bitter pill of Partition over the years and is part of the fabric underpinning the Peace Process. Is it possible that the casual passing whim of English voters will “do” for Ireland yet again? Perfidious Albion?

20/7

QUO VADIS BRITANNIAE?

I’m still trying to come to terms with the BREXIT outcome. The bald truth is that Britain, the fifth economic power in the world, the second in Europe, has signalled its intent to walk out of the EU. Can it be fixed? Can it be reversed? At this point in time this does not appear likely, but as the dust settles something may emerge. Some personal reflections follow.

I felt a waft of déjà vu last Friday morning as Britain woke up to the result. The whole establishment, the chattering classes, bankers, businessmen, even the Archbishop of Canterbury, came out solidly for a vote to remain in the EU. Sound familiar? Ring a bell? It was Ireland the day after Nice One and later after Lisbon One. To the dismay of the elite, the referendum result was not what had been confidently expected.

There the resemblance ends. In Ireland’s case the treaties as originally framed had been rejected but our membership of the EU was not at stake and there proved to be enough wiggle room, not to mention good will and anxiety to reach a deal on our specific concerns from our EU partners, to resolve matters. Cameron and the British government, however, have metaphorically bet the house , precipitating a crisis not just for Britain but for Europe itself. It remains to be seen whether there is any scope to undo the damage. An important element in Ireland’s case was the willingness of both sides to accommodate to reach a solution. Britain is currently leaderless, so one side is unable to engage, even should this prove feasible. The early indications are not encouraging.

It’s now Wednesday and , déjà vu again, the spectrum of reactions resembles that here – and in Europe – in the wake of our “No votes,” writ much larger of course but not dissimilar. On the BREXIT side, triumphant hubris, a chorus of anti EU sentiment and flat assertions that the vote was final, there can be no going back and no second vote. On the domestic losing side, numbness, dismay, disbelief, and a feeling of helplessness not helped by Cameron immediately choosing to fall on his sword. In Europe at the political level similar reactions of dismay and disbelief, with an obvious fear that the contagion may spread and encourage others to contemplate leaving. European leaders seemed asleep to the danger in advance, as the extent of panic among them as June 23 approached demonstrated. It was yet another example of the disconnect between Europe’s elite and the people. Some of the first public statements from Europe have not helped.

Several days before the Vote I wrote in my IAN column that the result was at that stage too close to call, noting that the latest polls were showing the Leave camp slightly ahead. I pondered whether the momentum – clearly with the Leave faction – would be halted by the hiatus following the murder of Jo Cox, and observed that the “Stay” campaign were mounting an Operation Stable Door. My gut feeling subsequently – wrong – was that the Stay side would win, based in part on the expectation that the undecided would plump in the end for the devil they knew. I also took heart from the poll analyses of experts and the bland assumption that an electorate would vote, even with misgivings, in their own best interest and take any promises from the Leave camp with handfuls of salt.

There was a particularly devastating assessment of Cameron by Max Hastings (who voted Remain) in the Daily Mail several days ago which painted up his limitations and tactical ineptness. Certainly a lot of blame must attach to David Cameron, in calling the referendum, in choosing to hold it when he did, in framing it as a simple In-Out choice only and then for running an inept campaign. It’s not as if a referendum was necessary, and indeed the result is only – theoretically – “advisory” rather than “obligatory.” But having decided on one, its terms and wording should have been set with care. Even with those particular dies cast, a more astute politician would surely have thought long and hard about the date, which was only announced in mid-February, without any pressure to hold the poll so early.

And Cameron should surely have reflected at the very least at how the political scene elsewhere in Europe was evolving. I wrote last week as follows: “ Little-England nationalism aside, the Brexit movement should perhaps be seen in the context of the sizeable and almost universal Europe-wide popular disenchantment with the way society is perceived to be evolving, with the existing establishment and party political dominance under threat from populists on both the left and right.” Cameron could hardly have been unaware, from his frequent meetings with fellow HOGs, and from those briefing him, including reports from British Embassies sur place, of the extent of this disenchantment, often inchoate but also often organised, and expressed in elections when opportunity presented itself, whether in Spain, Greece, Ireland, Austria and in state elections in Germany, and otherwise reflected in opinion polls throughout the EU. Did he think the British voter was immune?

So why do it now? Was it overconfidence? Cameron had a comfortable Parliamentary majority following his unexpected General Election victory last year. He had also the experience of the Scottish referendum in 2014 and perhaps thought, that having headed off the threat from the Scottish nationalists he could head off UKIP and the Tory malcontents by a short swift campaign, particularly having extracted, as he saw it, fresh concessions from Brussels. The concessions – cosmetic – fooled no one, while his reading of Scottish nationalism was myopic – symptomatic of his whole approach. Even the framing of the question – an “X” in the Remain or Leave box – was less nuanced than that in the 1976 vote (“ Do you think the UK should stay in the EC?).

Yet having decided to plough ahead with a vote, he and his government seemed content to run the campaign on autopilot, only waking up to the danger recently as the Leave campaign gained momentum. Again there are interesting parallels with the approach of the Irish governments to the first Nice and Lisbon referendums. Satisfied that the majority of the Irish electorate knew where there bread was buttered, Irish governments twice campaigned “softly” and paid the price, while their opponents hammered away on a few basic themes. On Nice it was a brutally effective poster campaign – “ You will lose Money, Power, Influence.” On Lisbon the opposition focussed on the partial loss of an Irish EU Commissioner and fears of involvement in a European army as well as playing on public unfamiliarity with the contents of what was primarily a technical tidying-up treaty. Again, ceteris paribus, sound familiar?

For Farage and Co. it was Immigration, over-regulation from Brussels and slogans about sovereignty and “getting our country back.” They also played on the basic unfamiliarity of the man-in-the-street with the EU and how its institutions worked. Moreover they could and did point to the Europe –wide disenchantment with governing elites and to the Brussels bureaucracy. The deliberate distortions and misinformation from the Leave side were deplorable. It was win at all costs. The EU was demonised, Britain’s net contribution overstated and the complexities of unpicking complex legislation and benefit structures minimised. A major platform plank, that the cash-starved NHS would benefit by billions annually after leaving has since been disavowed. Apart from that the Leave leaders post –referendum have confined themselves to bombast or to minimising the likely difficulties of any forthcoming negotiations. There appears to be no Plan B.

Cameron apart, the chattering classes have no shortage of villains or scapegoats, whether Farage or Johnson or Gove or the tabloid press which pandered to the deceitful and misleading campaign the Leave side ran. All true, but hardly sufficient to explain the results as with the assertion that Jeremy Corbyn and Labour campaigned less than enthusiastically for the Remain side. Which leaves those who voted Out. We are told that the old, the less prosperous, the less well educated and the racists all voted to leave.( In a particularly nasty aside the old are being accused of having ruined things for the young.) All apparently true, but again, why?

Immigration was clearly portrayed by the BREXIT side as a major issue and immigration from other member states (shorthand for the 2004 Accession countries) has been identified by Cameron as a reason for much of the leave vote. Yet I don’t see the 52% of the British electorate who voted Out as being racists or necessarily anti-immigrant. I have little doubt that, had the vote been 52%-48% to remain, those same chattering classes would now be preening themselves about the “ maturity” of the British electorate in rejecting Farage and co. and racism. Millions of immigrants have entered Britain since Powell’s 1968 “Rivers of Blood” speech and have been successfully, and on the whole seamlessly, integrated into British society. There have been incidents, certainly, but in terms of the massive multicultural influx into Britain, particularly after 1980, such incidents have been inconsequential. And indeed some of the more humorous T.V. interviews aired have been with immigrants or the children of immigrants who last week voted to leave the EU.

It seems to me that Immigration – or rather the perception that Britain was unable to control its own borders – became the lightning rod for a variety of grievances in Britain, rather as Irish Water did in elections here in 2014 and 2016. The last thirty years have seen the significant erosion of the great achievement of post war Britain – the Welfare State. This has been accompanied by the collapse of many of Britain’s traditional rust-bucket industries. Pressure on resources in health and education, limited employment opportunities and an obvious growing gulf between the rich and the rest have generated a sense of alienation and discontent, particularly in the lower socio- economic groups. The recent economic recession, increased taxation and reduced benefits fed into this.

With the 2004 EU Enlargement came the arrival in Britain of a million plus migrants from Eastern Europe (far less, incidentally, than the numbers who arrived in the twenty five years before from the sub-Continent, the Caribbean and Africa) , perceived to be willing to work harder and for less and also to be receiving state benefits. This could have been avoided, or at least postponed, had Britain chosen to follow the example of twelve of the other Fifteen, including Germany and France, in restricting workers from Eastern Europe for seven years. It’s worth pointing out here that of the EU three who allowed unrestricted access, while relatively few workers emigrated to Sweden, proportionately far more came to Ireland than to Britain. Even today the percentages of Poles Latvians, Lithuanians, Slovaks, Hungarians and Czechs living and working in Ireland are far greater than in the UK., though you’d never think it from reading the British tabloids. There’s an interesting “Compare and Contrast “ study to be done on this.

The new arrivals, highly visible, on the one hand, and the catalogue of what appeared an ever-growing number of EU regulations affecting everyday life on the other, melded with the other senses of grievance and alienation, with EU membership becoming an obvious blanket scapegoat for all these perceived ills. Cue Farage, Johnson and the others playing on these fears and on misapprehension and misunderstanding of how membership of the EU had benefitted and was still benefitting Britain. The vote last week was a protest one. It has proved to be the Mother of all Protest Votes!.

As to what to do now, no ready solution seems on offer. If indeed the Referendum result is considered to be irrevocable and not to be revisited, which at this point in time appears to be the case, lengthy and complex negotiations lie ahead. Whether these can be concluded within the two years specified by Article 50 once invoked remains to be seen, but this is technical and can surely be tweaked .Yes, an IGC could easily amend the time limit if in everybody’s interest. Alternatively surely the EC old device of stopping the clock could be used. The significance of Article 50 is that invoking it is the starting gun.

Any such negotiations will be of major importance for Ireland. From our national point of view the consequences of BREXIT are enormous, not only economically – Britain is our largest trading partner – but because of the Northern Ireland dimension, involving as it does the whole Peace Process, the land border ( the only one the UK has with the rest of the EU) and the vital Common Travel Area between the two countries. Will that survive? And how will it be regulated? What if Ireland were to become a back door for entry into Britain? And what of the Peace Process? A landmark success but arguably still bedding down. Noel Dorr has an interesting piece on the importance of this for Ireland in today’s Irish Times One Scottish columnist lamented what he referred to as the “casual vindictiveness” with which the English had voted. Most in Ireland would concur. And indeed, what will befall Scotland?

The formulae for getting around the Irish vetoes hardly offers a way forward, though if there could be agreement on the end to be achieved that would be a start. (In Ireland’s case there was a willingness on both sides to achieve the necessary compromise and none of the fundamental foundations of the EU were in dispute.) Here the first and perhaps fundamental red line, if and whenever any negotiations actually begin, appears to be for both sides the issue of free movement of labour. Could this be tweaked? A lengthy derogation perhaps? And what about EU citizens already in Britain?

If this issue could be sorted, by both sides showing willingness, it might be feasible to contemplate a new British government, with or without an election, taking the plunge on a second referendum. There are already signs of the “Oh Jesus” factor emerging – i.e. “ Oh Jesus! Did we really vote for that?” with the subtext that we might vote again. Wishful thinking? Perhaps. But Britain already has a major opt-out of arguably another of the EU’s cornerstones – Schengen. Right now there is a huge hole threatening in the fabric of the European economy, with possible worldwide consequences. The nature of the EC/EU has been to stagger on and advance crabwise; not ideal but practicable. We should be considering all options and agreeing on what is least-bad for all.

29/6/16

BANANA SKINS

First hearty congratulations to my old friend the new Irish Senator, Billy Lawless,  well known to Chicago’s  Irish community. I know you’ll do Ireland and the Irish Community overseas, including the Undocumented, proud.

How long Billy will serve will depend on how long the current government lasts. The jury is very much out on this as the new administration feels its way in its first weeks. What is clear is that there will be frequent “crises” with Dail defeats for the government  on banal populist motions with no legislative or practical effects beyond stoking  unrealistic sentiments of entitlement on  various issues. And, of course, taking up a lot of Dail time and energy as well as generating publicity for the usually leftist advocates.

Whatever about letting off steam ,  none of these  constitute “confidence issues” which could bring the government down. Banana Skins apart, any crunch is most likely to come on issues involving actual allocations of money  especially where there is choice involved or some need either to increase tax or reduce benefits. On this the current outlook is “so far so good.” The economic indicators are all positive  and  tax revenues buoyant, permitting – already – some allocations from the “fiscal space” wiggle room on which the last government , ironically, fought the election.  As long as the money keeps rolling in cuts can be restored and even modest improvements made, though nothing sufficient to meet even a fraction of the official wish list. October’s Budget should prove manageable  and perhaps indicative of the government’s life expectancy.

Yet Banana Skins internal and external remain a constant threat. Indeed by the time you read this one major external banana skin could have arisen, with certainly long term and possibly short term  effects on politics here. This is the June 23 British referendum  on leaving the European Union. As I write it is certainly too close to call, with the polls actually showing a majority in favour of leaving (Brexit). A surge in support for Brexit in recent weeks has caught the Establishment, in Britain, in Brussels and throughout the Union by surprise. What appeared until recently unthinkable could well become reality.

Should Britain  vote to stay in the result is likely to be close but settled for several years at least. Should Britain vote to LEAVE there would  obviously be particular important implications for Ireland. To name but a few: we are the only country sharing a land frontier, hence the resurrection of cross –border issues thought long buried, with possible implications for the Peace Process; Britain is our major trading partner and business connections are many; both countries are home to sizeable numbers of expats from the other and we enjoy a common travel area. There could be immediate currency fluctuations ( Sterling falling) which could sabotage our recovery.

For Britain the process of exiting would  take time (several years ), be complex and complicated and  involve inter alia negotiations  of  sectoral agreements across the spectrum of the EU  internal market, probably resulting in arrangements along the lines of agreements with Switzerland and Norway. There is universal acceptance here, and in Europe, that  Brexit and its aftermath  are likely to be disadvantageous for Ireland, possibly considerably so.

The appeal of Brexit to a sizeable proportion of the British electorate has dumbfounded the chattering classes across Europe. As I write an “Operation Stable Door” is being mounted by the “Stay” campaign even involving Taoiseach Enda Kenny  urging the Irish in Britain to vote to remain. The final week could be decisive.  Momentum has been with the Brexit side; whether the hiatus after the murder of British M.P. Jo Cox could change this remains to be seen.

Little-England nationalism aside, the Brexit movement should perhaps be seen in the context of the sizeable and almost universal Europe-wide popular disenchantment with  the way society is perceived to be evolving, with the existing establishment and party political dominance under threat from populists on both the left and right.

Potential domestic banana skins are beginning to emerge. The government has a date with destiny next year over the  Irish Water issue when the expert commission reports. In the interim there could be further trouble over  pursuing those who haven’t paid for existing water bills –  possibly  half of all households – with the responsible Minister  (Coveney) and the Taoiseach insisting on payment and threatening action on this. And nobody has yet posed the question what happens politically if the commission early next year recommends charging consumers for water.

The last government missed the warning signs over water and political antennae should have been  up. Yet incredibly until very recently the July 1introduction of a new system of charging for garbage removal seemed likely to slip by unnoticed. Anti- garbage- charge protests have a history with over twenty  people jailed in 2003. The protests then petered out,  and most garbage collection services were subsequently privatised, with charges inching up. The new system , based on weight, backed up by an EU directive and dressed up as preferable environmentally, was presented as being no more expensive. Fears that the garbage companies would gouge consumers with  doubling charges or worse have panicked the government. Action is pending to suspend the new regime. Watch this space.  Caving in to populist howls on any issue does not augur well for the government’s long term survival.

An undoubted looming banana skin relates to the head of steam building up  to repeal  the Eighth Amendment which in 1983 copper-fastened  the legal ban on abortion. Subsequent referenda modified  the total ban – by a very narrow margin in 2002 – by providing for abortion where there was a threat of suicide by the mother. The pro-choice lobby  are calling for the whole amendment to be revisited.  It was an electoral issue, albeit a minor one, and considerable interest has focussed recently on distressing cases involving  carrying non-viable foetuses to term (fatal foetal abnormalities). The Taoiseach’s position is that a “citizen’s assembly” is to examine all aspects of the issue and report to the Dail, for a promised “free vote”, presumably not until well into 2017. As always on this highly emotive issue, the devil will be in the detail of anything  put to the vote, with  differences among politicians already demonstrable, many  too coy to commit and the threat to the government’s survival evident.

There are other known knowns threatening. Following  settlement in a lengthy  dispute involving drivers for LUAS, Dublin’s light rail system, the message to unions is that persistence with unreasonable  wage demands is likely to be rewarded with an eventual  cave in by the official side. Sectoral relativities are prompting a rash of similar claims as well as demands for the restoration of wage cuts in the public sector ( a huge headache for the public finances) and action over  minimum wage levels. While these are unlikely to bring down the government, the political fallout, in terms of a steady drip of accompanying defeats on Dail motions cannot but be demoralising.

Then there are the true Banana Skins – the Unknown Unknowns. What else is out there in the long grass? Irish politics is never boring!

18/06

ENDA’S GOVERNMENT

Enda Kenny is assured of his place in history. Despite a disastrous election, which saw his party slump to 25% of the popular vote and win less than one third of the seats, he has become the first Fine Gael Taoiseach to secure re-election. He was elected Taoiseach with just over a third of the House supporting him (59 to 49) courtesy of an abstention agreement with Fianna Fail. Should his government, a fragile minority coalition including several independents, last a year Enda Kenny will become Fine Gael’s longest serving Taoiseach.

The agreement and the accompanying legislative parameters have been hailed as a signal victory for Fianna Fail and its leader Micheal Martin, since theoretically the plug on the Kenny government could be pulled at any time . However, without good cause this could backfire. There is, after all, a country to be governed and not wrecked. How long the new government will actually survive remains to be seen – the bookies and the early opinion polls favour one or two years. But with little appetite for a fresh election right now, in or out of the Dail, and barring a major banana skin like Irish Water or some unexpected economic upheaval, it could last until the end of the three –budget gentleman’s agreement with Fianna Fail.

The negotiations between the two main parties were hard and heavy, with most of the time and effort over what to do about Irish Water. This was hardly surprising. Without a solution, any future minority or coalition government would be hamstrung on the issue – toxic to legislators and a significant proportion of the electorate. Yet positions were entrenched, chiefly over the principle of consumers paying something, with a wide gap between what was regarded as reasonable. One commentator quipped that the Fianna Fail position appeared to be that only someone who had an elephant to wash daily in the back garden would be liable to pay.

The eventual fudge – to kick the can down the road by setting up an expert commission to ponder all aspects of water in Ireland and report back in about nine months to another committee, this time in the Dail, and then the Dail to vote after solemn deliberation – could have been sorted months ago instead of becoming a self-inflicted wound for the last government. Indeed the solution begs the question of why this detailed examination of what has been billed as the second greatest infrastructural project in Ireland’s history was not carried out in the first place.

While the disaster quango is effectively dead and buried with a stake through its heart, legacy and related issues remain. There is the ticklish issue of how to reward the 60% sheep who paid some or all of their water bills and also deal effectively with the 40% goats who didn’t ( one new government Minister has belatedly paid up). Watch the politicians tie themselves in knots over this one. There’s also the “me too” chorus being heard from the 120,000 rural dwellers who have paid for water for decades through local water schemes. There are the implications for the existing organisation and staff of any root and branch overhaul. And finally what everyone accepts to be the case – the need for major infrastructural investment to bring Ireland’s nineteenth century water supply system into the twenty first century and how the several billions required are to be raised in the absence of charging consumers.

Which brings us neatly to the issue of the new Programme for Government and how its aspirations and hostages to fortune are to be financed. It’s a weighty document – 156 pages, 16 chapters and an executive summary – but is conspicuously lacking in how its lengthy wish list could be financed. The document was drawn up having regard in the first instance to the prior Fine Gael /Fianna Fail agreement and then after negotiations with and attempts to bring on board various groups of independents, only some of whom seem to have bitten. The result is academically interesting as a lengthy check list of first world issues which we would all like to see addressed on the assumption of virtually unlimited resources and an ability to “freeze” certain issues while action is taken on others.

There are vague commitments to soak the high earners (who else?) – in order to “ensure the tax system remains fair and progressive” – an aim somewhat undermined by “not indexing personal tax credits and bands”. It promises further crackdowns and sanctions on cigarette smuggling and fuel laundering, and a commitment to improve “tax compliance.” There are also measures, parcelled up as altruistic “key public health interventions,” to increase duty on alcohol and cigarettes ( we are to be “tobacco free” by 2025, surely a fiscal oxymoron) and to tax “sugar sweetened drinks.”

All this is hardly the stuff to bring in the extra €6.75 billion promised for public services by 2021, let alone suffice to phase out the detested USC. And this is before investment in water and the many small print undertakings in the programme are factored in. Some hope is attached to an extra €4 billion available for capital investment apparently following a “redefinition” by the European Commission of Ireland’s “structural balance” which may help on the investment side. With fiscal limits now set by Brussels, it’s going to take particularly favourable economic developments over the coming years to generate the fiscal space just to tread water.

There’s a reality here that requires addressing. While health, housing, homelessness, crime and the curate’s egg nature of the extent of economic recovery were the main issues in the election, Irish Water was indicative, indirectly, of what is becoming a chronic issue in politics here – the unwillingness of the public to pay for the services they demand. The Left (5.5% of the vote) and Sinn Fein (13.8%) have cleverly stoked resentment about austerity while demanding more and better welfare payments and services to be financed from some limitless pot of gold accessed by punitive income and wealth taxes on those defined as wealthy as well as hiking corporation taxes. While this is manifestly unrealistic, the Programme has bought into some of this at least in its wish list.

Quite how the first Hundred Days of the government – in which much has been promised – will pan out is unclear and it’s as well to remember how the original Hundred Days ended. The housing and homeless morass will require years to sort out and a banana skin may be in the offing here as the number of house repossessions seems set to rise dramatically. Ditto the structural problems in the health service.

Overall, given budgetary constraints the scope for any initiative is limited and the government would seem fated for however long it lasts to continue the general approach of its predecessor, with effectively the independents who have bought in replacing Labour. Its duration will depend on its ability to negotiate some minor matters to keep the Dail happy and on having enough political nous and antennae to avoid calamities like Irish Water. Yet Enda Kenny remains as Taoiseach and may well prove as difficult to dislodge as Haughey. Remarkable.

17/05

QOU VADIS HIBERNIA ?

It WAS the Economy, Stupid – but the Micro and not the Macro. Ireland Inc. may be doing very nicely, thank you, our putative growth rate may be the highest in Europe and our circumstances dramatically better than five years ago, but very little of this cut ice with the Irish voters on February 27. Like its predecessor the Government was unceremoniously dumped, though this time without any obvious successor.

In fact its goose was cooked two years ago. The Local Election results in May 2014 mirrored almost exactly what happened last February, suggesting that three years was all the electorate needed to pass judgement. This after seeing off the Troika and and receiving concessions on interest rates payable on our debts and on the promissory notes early on. The perception in official circles may have been that the worst was over, but for the ordinary punter austerity was biting and the cuts causing outrage. I wrote at the time (“Mugged by Reality”) that the hiding the Government parties suffered rendered their chances of recovery slight – regardless of any new policy initiatives.

So it proved. We now have a stalemate with very few options. With the magic number eighty, the only viable majority government would be between Fine Gael (50) and Fianna Fail (44). There is historical baggage certainly, but, failing such a coalition, were all other attempts and permutations unsuccessful, including minority administrations by either, another election would beckon. Whether either party has the stomach for one so soon is unclear, but as I write there is little indication of the big two entering negotiations on a “Grand Coalition.”

Right now Fine Gael is seeking to negotiate some type of rainbow- style arrangement involving the minor parties (5 seats) and the 19 assorted independents. Sinn Fein (23) and the ten Leftists have painted themselves out of any coalition while Labour (down to 7 seats) is still shell-shocked. While there are Cabinet seats and Junior Ministries on offer the prospect of a stable administration emerging seems fanciful. Whatever about Independents being loath to precipitate another election, any divisive vote could bring the government down. The cautionary tale of the fall of the first Fitzgerald administration in 1982 when an independent withdrew vital support over a budget proposal to tax children’s shoes has not been forgotten . April promises to be particularly interesting .

The election post mortems have taken place. Much has been made – particularly on the Left ( 5.5% of the vote) and from Sinn Fein ( 13.8%) – of the fact that the two major parties for the first time saw their combined vote fall below 50% . Yet with less than one fifth of the votes cast going to these self-described parties of the Left – about what Labour polled in 2011 – and with many of the Independents rooted in the gene pools of the major Parties, rumours of their demise seem premature.

Fine Gael and Labour have both polled lower and Fianna Fail – long the dominant force in Irish politics – have bounced back appreciably since 2011. There is clearly considerable disenchantment currently with the traditional parties, but the big two have traditionally been coalitions across class and social divide and have also had the ability to absorb whatever small splinter groups to have emerged, while Labour has its own particular niche.

Cue the recent election. Fine Gael’s failings included political naivete, hubris, the wrong priorities, failure to empathize with public sensitivities, perceived indifference to issues such as homelessness and crime. There was general dissatisfaction with the health service, other legacy issues from the crash including the hangover from years of austerity and the palpable reality that most people – particularly the squeezed middle – are worse off now than eight years ago. To cap it all Fine Gael ran a woefully inept campaign – virtually the worst I can remember in half a century and equalled only by Fianna Fail’s 2011 fiasco.

For Labour, some or all of the above, plus guilt by association with Fine Gael. Its strongest card, that it preserved much of the core welfare payments intact, was undermined by clever, focussed and continued sniping from the left over broken election “promises.” Labour was never able to shrug off this charge even though the sniping was obviously politically motivated and so disingenuous in view of the country’s dire economic situation that only die hards on the anti –Labour left could parrot the “broken promises” line with a straight face. It had moreover oversold itself during the 2011 campaign with Gilmore’s fatuous “ Labour’s way or Frankfurt’s way “ remark and was on the back foot virtually from the off on that account.

In many ways it was the Crash Election Part Two , and, as in 2011, the incumbents paid the price. It was never going to be easy governing after 2011, but the Coalition did have several factors going for it. It had been gifted office. It enjoyed an extended honeymoon period in which all the blame could be lumped conveniently on Fianna Fail and/or the Troika. Most of the heavy lifting in terms of savage budgets had been done by Fianna Fail. Even the Troika budgetary targets could be passed off as force majeure.

That left the small print. Adherence to the Troika programme and targets promised a rapid economic recovery, which is now well under way at the macro level. But it involved increased and new taxation and cuts in spending. The taxes weren’t popular – the Universal Social Charge and the property tax in particular – against a background of public disgruntlement over bailing out the banks and not burning-the- bondholders. But they were accepted, given the general public recognition of the need to bridge the gap between government income and expenditure. The spending cuts were more controversial and proved critical.

In effect the Troika suggested the figures but not the details, which were left to the government . It was an opportunity. Sensitivity and political acumen – “cop on” – were needed. Neither were forthcoming. The cuts, particularly in Health, were ham-fisted, indicating a government woefully out of touch. Many discretionary medical cards were challenged or discontinued while vital home help and carers programmes were among those cut back. The mantra that cuts should be universal (why?) rang hollow against the simultaneous protection of sacred cows like Old Age Pensions, and Child Benefit (pruned slightly, but not taxed or means tested). And elsewhere the government showed itself no better than its predecessor.

There was still a chance had the lessons of 2014 been absorbed. But the sole strategy adopted was to plough on, lecturing on the need for stability to sustain the recovery which not all felt, while tinkering with taxation and benefits, Meanwhile issues of public concern (homelessness, crime and sick people on hospital trolleys) were ignored. Irish Water capped it all, becoming a lightning rod for public discontent. Water charges were an austerity too far, the institution itself perceived as an overpriced, overmanned new quango. The charges issue could have been solved – and buried – with some tactical thinking and minor adjustments in revenue elsewhere. Instead it became one of the issues which buried the government. Bon Chance!

20/3/16

A PEOPLE VOTES

Some very preliminary and personal thoughts on the Election (rather than on the prospects for the next Government).

The Election has certainly shaken up things though the evidence was all there in the polls, particularly the maverick one late on which caused panic in Fine Gael. There WAS no late surge, as many, me included, had thought likely. Both Sean Donnelly, with a proven track record of forecasting, and Ivan Yates, who was after all in a previous life a bookie, got it almost right on the day before the vote:

Donnelly ( accurate in previous elections) gave FG 49 FF 41 LABOUR 8 SF 22 ALL OTHERS 37. Yates gave FG 51 FF 39 LAB 7 SF 29 AAA/PBP 6 SD 3 RENUA 1 ALL OTHERS 22.

I doubt if the results are quite as earth –shattering as some of the more excited commentators are claiming. There has certainly been fragmentation of the old system, with support for the two major parties less than 50% this time around. Arguably, as, inter alia Gene Kerrigan has written, this election was the Second Crash Election with the legacy issues post 2008 casting a comprehensive shadow across the government’s record. Just as Fianna Fail were punished in 2011 for being deemed responsible for the mess,  this time around the Coalition got it in the neck for the residual austerities required by the rescue. Yet Fianna Fail did manage a significant bounce back so whether the two main parties will continue to languish at below 50% in future elections remains to be seen.

Sinn Fein continues its march, consolidating its working class support , including – according to analysts – significant numbers of blue collar unemployed males. Its share of the vote increased from 9.9% to 13.8%, its seats from 14 to 23 (and in a smaller house) . Interestingly, however, its 13.8% was roughly similar to its candidate’s share in the 2011 Presidential election and actually less than the 15.2% the party got in the 2014 local elections. It is no longer making inroads into Fianna Fail’s support.  The next election (whenever) will show whether its rise will continue or whether it has peaked at a certain level. As election day approached, successive opinion polls gave it less and less support.  What is indisputable  is that it has “arrived” as a major force in politics.

Renua bombed – which was fairly predictable –  while the Social Democrats received 64,000 votes and got all their three highly impressive candidates elected , together with several good shows elsewhere. They could be a force in future or alternatively go the way of a number of small parties. All three of their T.D.s are cabinet material. The Independents are either favourite –son style people  out for their constituents alone, or some with the potential to offer something nationally. It will be interesting to see how they – and the Social Democrats –  feature in the negotiating process over the next government.

The hard left – AAA/PBP – got an identifiable six seats with just under 4% of the vote – the same number as Labour ( excluding Penrose) though with far less votes -84,000 as against 140,898. The not-so-hard left got four seats with 31,365 votes, 1.5% of the total. Collectively hardly  the new dawn of a socialist Ireland. Targeted seats, high profile candidates and extremely good vote management and organisation brought its rewards. The water charge issue galvanised a particular segment of the urban working class. Whether this can be sustained and built upon in the long term only time will tell.

None of the commentators appear to have focussed on Voter turnout which, last week, at 65% nationally, was down by 5% compared to 2011. The low poll (the total voting was 85,000 less than 2011)  could have affected support for the Government, particularly Fine Gael.  Note that  Fine Gael’s last disastrous showing , in 2002, when they actually slumped to 24.5% of the first preferences – less than last week – coincided with the lowest national poll – 62.7% – at least since the War and probably since the 1920s. In 1987, also after a period in an austerity driven government, Fine Gael’s support fell from 37.3% to 27.1%. Significantly, in that election,  the new party – the PDs – garnered 12% of the vote while support for Fianna Fail was largely unchanged.

Labour lost out by small margins in a number of constituencies and could regain some of them next time around. Its core vote has hovered around 10-11% since the mid- 70s (1992 and 2011 were aberrations), and actually its performance in 1987, significantly coming out of the same government of austerity, was worse than last week, with only 6.4% of the vote. Plus ca change? Back in the Sixties, when Labour had somewhat higher support ( remember Brendan Corish in 1969, when Labour was on a socialist kick, and got 17% – “ Let’s build the New Republic”) it had a monopoly of support on the left. It has now significant opposition there. The issue of Trade Union support for Labour looks like becoming a live one –flagged already by Ogle, Coppinger and others.

It is often overlooked that , since the 60’s, and the Lemass era, when the country started to grow and experience modest prosperity, the electorate has almost always voted to “throw the bums out” by voting out the incumbent government next time around. The exceptions were Bertie’s three-in-a-row. Haughey “lost” in 1989 and clung on by going into coalition, and Albert was propped up by Labour in 1992 – for which Labour paid a price five years later. After five years of at best rather lack-lustre austerity government, however necessary, and having been gifted  the 2011 election , there was bound to be a voter reaction. Woe betide a government that frustrates the public’s expectations.

Apart from the “Recovery? – What Recovery?” sentiment, what undoubtedly helped undermine Fine Gael was that it lost the Emperor’s suit of clothes image of being more upright and upstanding than Fianna Fail. The “minor” matter of the McNulty appointment to the board of IMMA did incalculable damage to that image amid charges of cronyism. Albert’s remark that it was the small hurdles that brought you down comes to mind. Similarly Enda’s remark that the weekly cost of paying the water charges was about half a pint of beer was insensitive; it factors into 26 pints in a year which, to someone on  a low income, is significant. The whole Irish Water fiasco, plus the Medical Cards and health cuts also smacked of insensitivity.

Furthermore, having preached stability continuity and recovery, Fine Gael were seen, half way through the campaign, as panicking and shifting on taxation policy over its plan to abolish the USC. Coming on top of the “fiscal space” confusion this fatally undermined its claim to be the best party to manage the economy. However it was dressed up  the plan rang hollow, given the central importance of the charge in the Government’s finances. That Sinn Fein  should have pointed this out served to rub salt into the wound.

As I write, Irish Water is still the disaster that continues to give. The inelegant pavane we are hearing today around the issue of charges  and paying for them doesn’t inspire much confidence all round.  The arguments for a single authority appear to me unanswerable. There is one – though I don’t agree with the quango form with which we have been saddled. Let’s see what we can do with it, reforming or restructuring as necessary. But on the issue of charges it would appear that, one way or another, the people have spoken.

2/3