The writing is one the wall for the Labour party which saw the reality of voter confidence in Meath East where it secured a paltry 4.5% of the vote, and a couple of days later the scales fell from its eyes when a national poll put the party at 7%. The party is deeply unpopular for a variety of reasons, not least the breaking of election promises but more practically the desertion of weaker sections of society which put their trust in the Labour party to protect their interests.
The outlook is not good either. None of us has a crystal ball to predict the economic conditions in the State in 2-3 years but the official forecasts from the Department of Finance are sobering. There will be 13% unemployment in 2015 and the bailout agreement with the Troika requires €3.1bn of additional budget measures in 2014, followed by an additional still €2.5bn in 2015 and an additional still further of €2bn in 2016 and we’ll still have an annual deficit of €5bn after all that.
Fine Gael has prevailed in the Coalition and the budgets in 2011 and 2012 were regressive and hit the weaker sections of society. The main tax increase in the last budget – the increase in PRSI which the IMF said in Ireland’s case was an income tax – hit the lower paid particularly hard. Right now, we have the Alice in Wonderland of the (Labour) Minister for Public Expenditure and Reform claiming that Croke Park 2 won’t affect the gross pay and allowances of workers on less than €65,000 whilst the 24/7 Frontline Alliance has very clearly shown that it will have an impact of 3-11.4% with the elimination and cuts to allowances. A staff nurse will see a 11.4% reduction in gross pay and allowances, whilst a €200,000 manager will see a 7.3% reduction. What Fine Gael wants, Fine Gael gets.
Does the Labour party think that as the next general election hoves into view that Fine Gael will throw it a few bones at its own expense? Seriously? Fine Gael tantalizingly close to an overall single party majority will suddenly devote itself to Labour’s core constituency in 2015/6? To paraphrase Michael Bailey, “will they fuck”.
This morning, one of Labour’s three MEPs resigned from the Parliamentary Labour Party. Nessa Childers has frequently taken a contrary position to the party, notably in her opposition to the appointment of Kevin Cardiff to the cushy role at the European Court of Auditors after presiding over a Department of Finance which withered during the crisis, topping it all with overseeing a €3.719bn error in the national accounts in 2011.
Nessa Childers joins the Labour party chairman, Deputy Colm Keaveney who had a rancorous falling out with the Parliamentary Party central command after last year’s budget. Deputy Keaveney joined former junior minister Roisin Shortall along with deputies Tommy Broughan and Patrick Nulty and was soon after followed by Senator James Heffernan. Willie Penrose who resigned his junior ministerial fold in 2011 in protest at the closure of Columb Barracks in Mullingar has done his penance and returned to the welcoming embrace of the PLP. The central corps of Labour TDs must now be weighing up the realities of the last two weeks and the likelihood of the next two years, and the writing on the wall must be clear.
The two options available to Labour to save its skin would be a resignation from government or an election of a new leader who will be more forceful in pushing the Labour agenda in the Fine Gael dominated coalition. Would Eamon Gilmore whose ministers, with the exception of Brendan Howlin, will be over 65 at the next election really resign from government?
The next meeting of the Central Council of the Labour Party is on 18th May, 2013 when any one of the 67 members – of which only five are TDs – can propose a motion of no confidence in Eamon Gilmore and should the motion be passed by 45 of the 67, then Eamon is out.
This morning’s resignation by Nessa Childers tips this eventuality from a possibility to a probability.
UPDATE: 6th April, 2013. It seems that the second of the three Labour MEPs, Phil Prendergast is poised to challenge the direction taken by the Labour party. As well as “personally” wishing Nessa Childers well yesterday, the MEP for the South constituency has tweeted ” I’d prefer to move forward with the party but something has to give at leadership level” It is not clear if the “giving” involves a change of leadership or just a change of direction by the existing leadership. It is just over 13 months from the next European (and Local) elections, and a cynic would point to politicians saving their skins in the face of a wipeout and loss of office. That said, Nessa Childers has taken contrarian positions for well over a year, and her stance on Kevin Cardiff in late 2011 got her into hot water. The third Labour MEP Emer Costello is keeping her own counsel for the time being, but all three are staring at defeat in 13 months unless there are some major changes internally in Labour.
NAMA Wine Lake 
“To paraphrase Ray Burke, “will they fuck”.”
That was actually Michael Bailey to James Gogarty.
@Paddy, thanks! Corrected.
@NWL, It was a memorable quote but it wasn’t from Ray Burke. It was about him. See transcript from the Tribunal below:
Now, let’s go back to that famous, or should we say, infamous trip to Mr Ray Burke’s house. On that fateful day in June 1989– the date of which no one who was there can remember – but could well be Bloomsday for all we know, there were so many characters wandering around Dublin with brown paper envelopes full of money in their pockets.
Gogarty
I know you solicitors are getting well paid for this – thirteen hundred or thirteen hundred and fifty a day, but would you ever get on with it for God’s sake – you’re giving me a pain in the face, so you are.
JohnGallagher S.C.
All right. Now, Mr Gogarty, who drove the car to the meeting in Swords with Mr Burke?
Gogarty
Mr Bailey. It was a Mercedes, a dark grey Mercedes
JohnGallagher S.C.
Where did Mr Murphy sit?
Gogarty
He sat in the front with Mr Bailey.
JohnGallagher S.C.
And where did you go when you got to Swords?
Gogarty
Well, I sat in the back of the car and Junior was in the front of it, and I had the envelope in my pocket and we were going along, and I don’t think there was a whole lot said, but I said that – I remember saying that – would we get a receipt for the money, and Bailey said: ‘Will we, fuck’.
Later on at the Tribunal when Mr Colm Allen for the Baileys cross-examined Mr Gogarty he brought up the topic and said:
Colm Allen S.C.
You allege that Mister Michael Bailey said, if you excuse the rather rugged language: ‘Will we, fuck’.
Gogarty
That’s right.
Colm Allen S.C.
I presume, Mr Gogarty, that it wasn’t an invitation.
Gogarty
I beg your pardon?
Not too sure if I agree with the line..”what FG wants, FG gets”
There was a memorandum of understanding signed with the Troika, was there not? Property tax, water charges, Property price register etc etc. Whilst the Troika did agree for “room for movement” as long as the outcome was the same there is only so much movement one can do, i.e. if a bottle of vodka in Spain is 14 euro, and 34 euro in Ireland… it’s not as if FG can put another 5 euro on that bottle so as to protect the lower classes.
I for one… do not believe Ms Joan Burton or Mr Colm Keavney will make a shred of difference to Mr Gilmore. They are just window dressing. They may like to think that they will make all the difference to the LP numbers, but that misses the point.
Labour’s problem is that their electoral base is made of sand. In times of austerity the sands were always going to shift.
Had Labour positioned themselves to be middle class and upwards orientated than their poll readings would be different today.
The fact is that the Labour, and FG, senior people have no intention of going before the electorate again.
Their pensions are secure and there is no chance of reelection for them.
Basically they don’t give a damn and by towing the Troika line will, after a decontamination period, will get cushy numbers in some Quango.
There is no hope.
A rump of Labour may well split. The interesting part about it is that this rump may attempt to take the party infrastructure with it, particularly the local infrastructure. If it takes that, it might end up lasting more than one or two general elections.
The remainder of the Labour party, lead by a Gilmore-esque figure, will survive. There are enough smoked salmon socialists, Irish Times readers, and wild eyed students from wealthy backgrounds to keep the Labour party hanging on by a few seats indefinitely. Eventually it will manage to claw its way back. I mean, for God’s sake, FF have returned from worse.
FOREIGN DIRECT INVESTMENT
A negative impact on the above was the reason Labour told us they wouldn’t introduce a tax for people earning above €100,000.
Now, to save their skins they’ve somersaulted and are actively looking at introducing this.
Which is more disgusting – the initial sell out of a core principle, or the self-serving u-turn to save themselves.
Utterly repulsive.
“The main tax increase in the last budget – the increase in PRSI which the IMF said in Ireland’s case was an income tax – hit the lower paid particularly hard.”
Low to middle earners in Ireland pay almost no income taxes, even now, by comparison with their equivalents in UK and elsewhere in Europe. Putting up income taxes on this group, steadily and over time, is an essential part of restoring fiscal sanity to the country. Income taxes on higher earners in Ireland is, by contrast, already higher than elsewhere in Europe. I think NWL is actually quite aware of this, but the blog has taken a populist, evidence-light turn in recent months…
“Right now, we have the Alice in Wonderland of the (Labour) Minister for Public Expenditure and Reform claiming that Croke Park 2 won’t affect the gross pay and allowances of workers on less than €65,000 whilst the 24/7 Frontline Alliance has very clearly shown that it will have an impact of 3-11.4% with the elimination and cuts to allowances. A staff nurse will see a 11.4% reduction in gross pay and allowances, whilst a €200,000 manager will see a 7.3% reduction.”
Er, no. Brendan Howlin said that the “core pay” of those on less than €65k wont be affected, including if they are willing to work an hour or hours extra as required by the agreement for their particular sector. That is correct and not at all Alice in Wonderland. But for workers who make a lot of money from lots of hours of premium overtime payments, their income will take a hit as the premia are cut, quite correctly in the current climate: overtime feasting needs to come to an end. As for allowances, I seem to remember some NWL criticisms of failures to address outdated allowances in the past. But now that something is being done about it …
“overtime feasting needs to come to an end”
Indeed it does, as does paperwork pushing, conference convalescing, and professional fee gouging, particularly legal and finance fee gouging, mostly at PS teat.
Seamus Coffey has done a good analysis of how gross income and net income have changed for different income levels during the crisis.
If you are a believer in percentages, the inference is obvious.
However, if you ask the most basic question i.e Why is it that a bankrupt country can afford to pay some of its citizens extravagant salaries, without need or requirement to do ‘overtime’, then you may form a different view.
I suppose the L’oreal view will always prevail when it comes to governments deciding its own remuneration level and those of its collegiate classes.
http://economic-incentives.blogspot.ie/2013/04/net-income-changes-since-2008.html
Perhaps when the tax “avoidance” schemes for the higher paid are abolished then Government might consider taking Ottos advice .Statistics can be slanted to fit whatever case one is trying to make
Until a left-wing party makes and fulfils a commitment to study the effects of inequality in Ireland, and to end that inequality, the left means nothing.
The austerity measures currently being imposed by the government parties create the conditions for a vicious economic cycle, in which low growth exacerbates the economic crisis, leading, in turn, to deepening debts and the eventual acceptance of the insolvency of our banks and financial institutions.
Our so-called bailout is a striking condemnation of Gilmore’s leadership. “Labour’s way, or Frankfurt’s way”. What a farce. What has taken place is not the bailout of Ireland. Rather, the Irish government has agreed to the demands from international financial markets that all the resources of the state be deployed to ensure that all Irish debts and financial assets held by banks and financial institutions are paid in full, at the expense of the Irish people. It was not Ireland that failed and required a bailout, but the holders of Irish debt – the european and international banks. They were rescued by our government – of which the Labour Party is a member – at the expense of its supporters. It deserves what it will receive at the next election.
Our so-called Labour Party imposed “austerity” is only the beginning. Our European “partners” are demanding not just a limited period of austerity, but the destruction of our entire social welfare system.
Rats and ships…..
“but the destruction of our entire social welfare system”
In what sense has our social welfare system been destroyed? It’s been very largely untouched, no?
It hasn’t been destroyed yet, but it’s about to be. How do you support a high cost social welfare system and balance the budget and at the same time pay interest on our debts to our new financial masters without growth? You can’t. It’s all about to change.