We are where the Government brought us

Yesterday there was an all-day debate on the latest Government proposals on the Economy. I had a chance to speak and below is a transcript of what I said.

I begin by making a technical point. The Seanad is, of course, not being asked to vote on the measures introduced by the Government this week. I understand the Seanad’s constitutional position in respect of financial matters. It gives a slightly different focus to our debate. We are responding to the statement made by the Minister of State at the beginning of the debate. The advantage of that is that it gives us an opportunity to make more general remarks and give a more general account of where we are coming from on these issues. It is important to remind ourselves that we are not being asked to vote for or against the Government’s measures, which were passed by the other House a couple of hours ago.

I do not disagree with Senator Brady’s remarks, which are fresh in my mind, about the importance of not wallowing in a sense of blame. I agree that we will not make much progress on the grave issues before the House by wallowing in the past or immersing ourselves in petty finger-pointing. Having said that, it would be absurd to suggest that there is no room in this debate for an analysis or assessment of how we got here. I often hear Senators on the Government side using the phrase, “We are where we are.” I even heard Senator O’Toole use it today. That, and nothing more than that, is supposed to be the basis for discussion. It is suggested that we should confine ourselves to proposing how we should get ourselves out of where we are. I would amend the phrase slightly - “We are where the Government brought us.” That is where we are, and it should be the starting point. If we do not honestly analyse what has occurred, I do not think we can hope to achieve the public or social solidarity that will be needed to address these issues in the future. When one asks people to make sacrifices, one needs to have their support and confidence. If one is entirely silent on what has happened, that is not possible. People are not stupid. They are discussing among themselves how we got to where we are. The Government has to be clear on that.

I noticed a marginal reference in the Minister of State’s speech to mistakes having been made. It is like the first cuckoo in that it is the first acknowledgment of mistakes I have spotted in a Government speech over recent weeks. I may be wrong in that respect. The Minister of State touched on the construction issue in that section of his speech. The relevant section lasts just four or five words, but at least it is there. It is necessary. Perhaps the Minister for Health and Children, Deputy Harney, made some similar remarks in the other House last week. I am not entirely sure. The Government cannot expect people to come together in any serious way to support its decisions, or at least give it some space when making them, if it is not straight and honest about what has occurred.

I was slightly amused by Senator Brady’s defence of the construction industry. He suggested that we would not have had a Celtic tiger if it had not been for the construction industry. The problem, at least for the second half of the Celtic tiger’s life, was that we had a construction industry and very little else. We hear many jokes about the tent at the Galway Races - it is the subject of much teasing and slagging in these Houses - but it turns out that the tent may have been our economy for the last few years. We had little else. I do not suggest that other productive activities were not taking place. In terms of real expansion, however, there was little to show for the years after 2001 or 2002 other than what was attributed to the construction sector. That has to be analysed and assessed if we are honestly to consider our approach to this problem.

Before I explain the nature of the difficulty I have with the measures that were announced this week, I wish to make it clear I absolutely accept that if there are gaping holes, and the boat is going down, those holes have to be plugged. Unlike Senator Feeney, I do not think I would attribute courage to the Government for doing something it had no option but to do. I would not say that somebody was courageous for doing something if they had no choice other than to do it. If someone has to do something, how can he or she be said to be courageous when he or she does it? If one sees a tsunami coming in one’s direction, one will have to do something to block it. I am mixing all kinds of metaphors, nautical and otherwise, but I am sure the Minister of State will understand what I mean. Of course the Government has to do something, but what it has done this week is no more than one part of the picture.

The difficulty I have with the measures announced this week is that they are being undertaken in isolation. Before this week, the Government had done virtually nothing over the many weeks and months that had passed since last summer, when the storm clouds started to gather. Other parties made many proposals to the Government during that time. I am speaking only for my own party, obviously. Senator Regan can deal with his party but I can say, without fear of genuine contradiction, that no party has proposed more positive ideas for dealing with the economic crisis than the Labour Party. I have said this previously in the presence of the Minister. I do not claim that every one of my party’s policies or proposals stands up. The Government might not agree with them all, or find them all acceptable. However, I can assure Senators that they have been seriously thought through and tabled in the public domain by the Labour Party. I invite the Government to consider them.

While debates of this nature are very useful, they do not really give us an opportunity to scrutinise the detail of individual policies and proposals. I wonder if a means of providing for such scrutiny can be agreed at some point. If my colleagues on the other side of the House want to scrutinise or cross-examine the Labour Party’s proposals, I will have no difficulty with that. However, I ask them not to claim, as some speakers did earlier, that the Labour Party has not introduced any proposals. That is manifestly untrue. It is simply not the case. We have done so over and over again. The Government has indicated that it agrees with many of our policy proposals, even if it has not adopted them. We have proposed some constructive ideas. For the past 18 months, we have been talking about the need to ensure that small high-tech Irish companies can access capital. Deputy Gilmore made a speech on the issue in November 2007.

In May 2008, the Labour Party called for the establishment of a programme of investment in schools. As I recall it, a Senator on the other side of the House pooh-poohed the idea of providing for a schools expansion programme. It is now one of the things the Government plans to do. Last September, we made the case for a scheme to promote home insulation. Once more, it was scoffed at in certain quarters. The Government now appears to be moving in that direction, although as far as I am aware it has not yet made any specific proposals. In September 2008, we were arguing in favour of a medium-term fiscal strategy. I note that the Government adopted such an approach in January of this year. Last September, before the Government’s bank guarantee was introduced or the Anglo Irish Bank scandal emerged, we demanded a full review of the operations of the Central Bank and the Financial Regulator.

In November of last year, we called for a home guarantee to be introduced. At the same time, we proposed the introduction of an “earn and learn” scheme for people who have lost their jobs or have access to a limited amount of employment. Retraining should be made available to people who have part-time or short-term working arrangements.

We are all big boys and girls in here and I have no difficulty in withstanding criticisms of the policy proposals put forward by the Labour Party. We can deal with them in a robust fashion and sometimes our minds can be changed about matters we advocate, but I do not accept the suggestion thrown about that the Labour Party has come forward with no proposals when the opposite is the case. This has been widely acknowledged, including in an editorial in the Irish Independent of 1 December last in which the leader of my party was described as a person who has shown imagination and originality in his approach to the economy and proposals on it.

I would like to respond to a point made by Senator Boyle earlier in the debate. As always, he is thoughtful and he made some interesting observations with which I agree. He spoke about the involvement of politicians and the necessity for politicians to address a reduction of costs in our sector. I am not sure if he mentioned Ministers of State but he indirectly mentioned the question of expenses and so on. I agree with him on that. A number of speakers raised this point. I acknowledge that, of all his colleagues, the Minister of State present is the least culpable in this regard but he is here not on his own behalf but on behalf of the Government.

It is clear there are too many Ministers of State and the number ought to be reduced. It is not clear what some of them are expected to do in terms of the delineation of functions. However, I am much more concerned about the veritable infrastructure surrounding Ministers and Ministers of State that deals with everyday constituency queries. I have a problem with this not only from the point of view of the financial commitment the State has to make to it but from the perspective that it risks undermining our democracy. We have what I would describe as an infrastructure of people around Ministers and Ministers of State whose function is to deal with constituency queries. The Minister of State, Deputy McGuinness, used the extraordinary phrase, “A&E of the system” to describe the role of Ministers. Ministers’ armies of assistants in their offices deal with everyday queries and service individual constituency needs.

What people ultimately expect from politicians is for those of us in the Opposition at the time of an election to put forward proposals and policies for consideration by the electorate, who either vote for us or they do not. An outgoing Government similarly publishes a manifesto on how it will deal with this or that question of public concern, particularly the question of the economy, and people vote or do not vote for it on that basis.

It is simply not acceptable for the kind of structure of patronage and clientelism that has grown up around Ministers and Ministers of State to be funded out of the public purse. People are being asked to vote for people on the basis of the level of service they have given them in a constituency but the service they provide is funded out of taxpayers’ money. I know many politicians and many of them are admirable. We all deal with queries from our constituents and it is an important part of our work. I do not denigrate that. It is part of the way the system works, but it ought not to be funded in the way it is, particularly in the case of Ministers and Minister of State by large numbers of persons working in Ministers’ offices whose sole function is to deal with constituency inquiries.

If I were Senator Boyle, that is the area I respectfully suggest we should start to address. I wonder if he would be interested in bringing forward proposals on those issues, including the sheer number of Ministers of State currently in the system. He decried a lack of willingness to change the way we behave in a political system. That is one area we could quickly start to address. If there were such a proposal from Senator Boyle or his party or any other Member on the other side of the House, I, and I believe my party, would support it.

I wish to deal with the question of social partnership that has been raised by a number of speakers on the other side who are either labouring under a misapprehension as to the Labour Party’s view on social partnership or else they are being somewhat mischievous. I am sure it is not the latter, so it must be the former. Social partnership is a crucial element to our system and the way in which issues, particularly but not only issues related to pay, are negotiated with the trade union movement. I and other Members on this side have said it should not replace, supplant or be an alternative to the political system. The social partnership process should not be where the Government goes almost exclusively with its proposals, as appeared to be the case last week and the week previously when documents expressing the Government’s position were published for the social partners and put into the media but they were never tabled here. That is wrong. It does not constitute any criticism of social partnership for politicians to stand up in these Houses and say that we have a role to play, that we are elected Members of these Houses and our role should not be supplanted or replaced, in some sense, through a reliance on social partnership.

I heard speakers on the other side laud social partnership and remind us how important it is. It may just be a footnote but it is important to remind ourselves that the measures agreed in the other House today were rejected in the social partnership process. If the other side is so committed to social partnership, is it not odd that they were in any event prepared a number of hours later to go ahead with proposals that had been rejected in that system of which they proclaim themselves to be so supportive?

The difficulty with the measures announced this week is that they have been decided on by the Government, announced to the public, and agreed in the other House in circumstances where they are being dealt with in isolation. They are not being tabled and brought forward as part of a broader plan and strategy to get the country back to work, which is what we all agree we need to do. It is instructive to consider that the 120,000 people who joined the live register last year cost the Exchequer at least €1.3 billion in direct payments and almost another billion is tax forgone, costs which effectively wipe out the €2 billion savings announced this week. The difficulty I have with these measures is that it appears that the Government, rather than focusing on creating jobs, is focusing on taking money out of the economy and scapegoating, in particular, nurses, teachers and gardaí for the Government’s mismanagement. That is unfair. It is unacceptable that people in the public service, particularly low and middle income workers, should be scapegoated in the manner in which they have been.

Surely the key to this crisis is not how much the Government can take out of the economy but what it can create. We have been waiting for a glimpse of a strategy from the Government on job creation, turning the economy around, moving money into the system and dealing with the banking crisis. I believe it was Senator Daly I heard speak about the Labour Party balking in regard to the banks. I gasped when I heard it. The Government has now presented us with its fourth or fifth proposal for dealing with the banks but the situation remains unresolved. This is the Government which said there was no need to recapitalise the banks before altering its position and taking the action that even the dogs on the street saw was necessary. This is the Government which said the nationalisation of a bank would be a last resort. That has now been done in the case of Anglo Irish Bank.

The Labour Party did not balk at anything. We supported in principle the guarantee that was extended to the banks at the end of September 2008. However, we introduced amendments to that legislation calling on the Government to deal with the issues of executive pay, funding for small businesses and the other issues pertaining to the financial institutions which urgently required to be addressed. None of those actions has been taken. Far from balking, the Labour Party was entirely prescient in its approach to the banking crisis.

More :: Click here to view Labour’s Economic Recovery Plan from last September