Electoral competition in Ireland since 1987

The politics of triumph and despair

Gary Murphy

• Publisher: Manchester University Press
• Year: 2016
• ISBN:
  9781784997830
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Comparative Politics
• Index: Politics & International Relations

This major new account of the politics of modern Ireland offers a rigorous analysis of the forces which shaped both how the Irish state governed itself from the period since 1987 and how it lost its economic sovereignty in 2010. This study comprehensively assess the last quarter century in Irish electoral politics from the time of the end of a deep recession in 1987 to the general election of 2011 where Ireland was ruled by the Troika and austerity was a by-word for both policy-making and how many Irish people lived their lives. It analyses why the political system in Ireland was unable to stop the country losing its economic sovereignty and why the Irish electorate kept returning to political alternatives which they had rejected in the past. Written in a lively and engaging style it offers rich insights into the politics of modern Ireland and how Irish citizens have lived through a period combining triumphant euphoria and deep despair.

1
Of constitutional and economic crusades: Ireland in the 1980s

A major achievement for the nation.

Charles J. Haughey on social partnership, 9 October 1987

I would deprecate any attempt to make this a political issue in the House because there are certain things that the parties in the House are united on and this is one.

Garret FitzGerald on abortion, 26 January 1982

Social partnership and the corrosion of intellectual thought

Since the collapse of social partnership in 2009, the model heralded by many politicians in the two decades since its inception in 1987 as crucial to the success of modern Ireland has become the whipping boy for much of the political and economic ills that stalk the landscape of the Irish state. In his introduction in 2006 to the then agreement Towards 2016 the Taoiseach, Bertie Ahern, pointed out that

Social Partnership has helped to maintain a strategic focus on key national priorities, and has created and sustained the conditions for remarkable employment growth, fiscal stability, restructuring of the economy to respond to new challenges and opportunities, a dramatic improvement in living standards, through both lower taxation and lower inflation, and a culture of dialogue, which has served the social partners, but more importantly, the people of this country, very well.

(Government of Ireland, 2006: 2)

In December 2008, just over two months after the infamous bank guarantee scheme, the Fianna Fáil–Green–PD coalition government presented to the public its plan to deal with the increasingly grim economic crisis of 2008. Informally titled the Plan for Economic Renewal – its more formal title was the cumbersome Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal – it was the government's response to six months of catastrophic economic news after over a decade of boom of which the twin processes of social partnership and EU membership were seen as pillars of the country's economic success. Amongst a number of initiatives, the plan called for heavy investment in research and development which would incentivise multinational companies to locate more such capacity in Ireland, ensuring the commercialisation and retention of ideas that flowed from that investment. Two months earlier, Minister for Finance, Brian Lenihan, had issued the 2009 budget which he described as nothing less than a call to patriotic action to face the deterioration in the government's fiscal position. The 2009 budget was introduced in, as Lenihan put it, one of the most ‘difficult and uncertain times in living memory’ where the global credit crunch had created turmoil in the world's financial markets, and steep increases in commodity prices placed enormous pressures on economies across the globe, including Ireland (Lenihan, 2008).

In the Plan for Economic Renewal the Taoiseach, Brian Cowen, renewed his government's commitment to social partnership, noting that it was the government's intention to work with the social partners on the development and implementation of the plan, which was consistent with the principles and vision underpinning Towards 2016, using the well-established mechanisms of the social partnership process. The Plan for Economic Renewal sank without trace, and social partnership in essence went with it when the trade union movement, amongst the greatest supporters of social partnership since its inception in 1987, refused in January 2009 to sign up to a new deal. A pay deal, agreed in September 2008 and linked to the social partnership process, was reached only after mammoth negotiations which were described as the toughest in the twenty years of pay talks since social partnership began (Irish Independent, 18 September 2008). When after the bank guarantee the government wanted to restructure the process, the unions said no.

It was all so different over twenty years earlier. Social partnership was born in crisis at a time when the Irish state had stagnated economically and when the panacea of membership of the EEC seemed nothing but a chimera. The heady optimism that accompanied entry to the EEC after the overwhelming yes vote in the 1972 referendum on membership had dissipated by the time of the 1987 general election. Recession had taken hold of the Fine Gael–Labour government of 1982–87 and a political depression took hold of its constituent parties. Into this breach stepped Charles Haughey and Fianna Fáil.

It was during this period of deep depression in the mid-1980s that the social partners, acting in the tripartite National Economic and Social Council, agreed a strategy to overcome Ireland's economic difficulties. Titled Strategy for Development (1986), this document formed the basis upon which, in 1987, the new Fianna Fáil government and the social partners negotiated the Programme for National Recovery. This would be followed by six other agreements. While in many ways these agreements did bring a certain economic stability to the Irish state they also left a deeply troubling legacy.

Although the Taoiseach, Brian Cowen, was insisting up to early 2009 that social partnership was alive and well, despite the trade union movement refusing to sign up to an economic recovery plan, the final death knell for the process came with the government's refusal in November of that year to agree to the trade unions' proposal for public sector reform in return for no pay cuts for public sector workers. With this act, the government had actually overcome one of the criticisms of social partnership and by extension sectional interest group activity, namely that it is an exercise in non-legitimate power, whereby the leaders of such groups are not publicly accountable and their influence bypasses the representative process. If the government had accepted this deal, it would, in effect, have indeed bypassed any democratic representative process. The main opposition to this deal came from backbench Fianna Fáil TDs (members of Parliament) who, at least some of them claimed, were merely reiterating the views of their private sector constituents. Moreover, this deal, if it had gone through, would also have confirmed the idea of interest groups and governments being engaged in a closed and secretive policy process, where the groups exerted influence through negotiation, and a deal that was not subject to any public scrutiny. But of course that is exactly what happened in the social partnership process between 1987 and 2009 under mainly Fianna Fáil-led governments.

One critical result of this was that the public was effectively excluded from the main nature of economic governance within the state. While trade unionists got to vote on whether their unions should participate in these agreements, and while one could perhaps plausibly argue that the electorate got to have a say on such issues at subsequent general elections, it nevertheless was the case that these agreements were negotiated in secret. Even within trade union circles social partnership remained a contested process. While the trade union leaders were enthusiastic supporters, the agreements were usually passed by a small majority (Adshead, 2011). At a more public level social partnership agreements were not open to any real scrutiny, with opposition parties, for instance, having no idea of what was going on with regard to these deals, notwithstanding the fact that on conclusion they would be legally binding beyond the outcome of general elections. The problem for the Irish state was that once social partnership had run its course the government had little idea of what exactly to do in terms of economic policy. Over twenty years of social partnership had led to a corrosion of intellectual thinking in Irish policy-making whereby no one in power seemed to have the slightest idea of how to get the Irish state out of the morass it found itself in from the middle of 2008. This vacuum of political thinking in many ways led to the famous bank guarantee scheme of September 2008.

What made social partnership agreements from 1987 onwards different from those of the 1960s and 1970s was that they were not simply centralised wage mechanisms but agreements on a wide range of economic and social policies such as tax reform and the evolution of welfare payments (O'Donnell and Thomas, 1998: 118). The social partnership agreements had evolved considerably from 1987, when the first agreement was developed strictly as a means of responding to a grave fiscal crisis. They developed into a strategy for facilitating steady growth and the inward investment that fuelled such growth, over a much longer period than was originally expected, and this strategy was clearly central to the successes of the Irish economy from the mid-1990s.

There remains a substantive debate about the exact nature of social partnership in Ireland. O'Connor (2002: 164) maintains that it was born in 1987 out of the then Taoiseach Charles Haughey's need to neutralise trade union opposition to a series of swingeing cuts in public spending implemented by his Fianna Fáil minority government. Allen (2000) claims that the whole concept of social partnership is a myth which has functioned mainly as a means of sustaining inequalities in the outcome of growth by incorporating union leaders into the process and reinforcing their control over the ordinary membership. For O'Donnell and O'Reardon (2000: 252), it is best described as the ‘formulation of a new concept of post-corporatist concertation’ as the range of interests represented in social partnership goes beyond that arising from functional interdependence between business and labour. This challenges the representational monopoly of the confederations on each side that one would find in a classically corporatist arrangement. They argue that new relationships have emerged between government policy-making institutions and interest groups at different levels, with the result that traditional conceptions of neo-corporatism, premised on the effectiveness and power of central government, are outdated.

For Roche and Cradden (2003: 80–7), both these approaches have faults, and they argue that social partnership can best be understood in terms of the theory of competitive corporatism. The resurgence in the 1990s of neo- corporatist social pacts in a number of European countries, including Ireland, differed substantially from superficially similar agreements in the 1960s and 1970s. The later agreements concentrated on pay deals that were consistent with the enhancement of national competitiveness, on sustainable levels of public expenditure, the reform of taxation and welfare systems, and the upskilling of the labour force. Previous aspirational policies such as managing income distribution gave way to the promotion of business objectives – particularly in terms of competitive advantage. To that end the social partnership pacts of the 1990s can be seen as examples of competitive corporatism, which has also been termed ‘supply side’ or ‘lean’ corporatism. Significantly, nine of the then fifteen members of the European Union – Belgium, Finland, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain – put in place social partnership pacts of this competitive neo-corporatist kind in the 1980s and 1990s (Roche and Cradden, 2003: 73). In that context Ireland's social partnership experiment since 1987 can be seen as one of a number of similar agreements across the EU. O'Donnell (2008: 97) has criticised this view, noting that Irish social partnership is but one case of a new approach to negotiated public governance that is emerging in many EU countries and at EU level where such approaches are ‘fragile and incomplete and sit alongside traditional public systems: hierarchical administration, centralised policy-making, adversarial industrial relations and, in varying degrees, clientelistic or ideological politics’. Moreover it is important to note that the type of tripartite agreement which is not rooted in strictly corporatist structures has the tendency to be ‘only as good as its last deal’ (Gallagher, Laver and Mair, 2006: 448). In that context it is significant to note that each successive agreement had become increasingly difficult to negotiate before social partnership, a bit like the Irish state itself, went bust.

The Haughey effect

The simple reality about social partnership is that it was a political construct driven by a singular politician, Charles Haughey, which aimed at bringing some stability to the Irish economy and political success to Fianna Fáil. Haughey's own view of social partnership was that it had essentially contributed to

initiating and sustaining the transformation of our economy from a near-disaster type situation in 1986 to a prosperous and progressive economy … There were, of course, other factors which assisted that transformation but Social Partnership from its inception and for twenty years has provided the essential bedrock on which sound public finances and progressive fiscal, social and economic policies could be firmly based. Should any proof of its basic soundness be required, it must surely be the number of individuals and bodies who have laid claim to its parenthood.

(Haughey, 2011)

And indeed Haughey was insistent that he was the founding father, architect and midwife of social partnership all rolled into one. The official memorial website devoted to his life and times notes that as ‘the driving force behind Social Partnership, he expressed mild amusement at attempts by others to claim ownership of this concept’ (Haughey, 2011).

According to Haughey, the stimulus and need for social partnership came directly from the near-disastrous state of the Irish public finances caused both by adverse economic trends, most notably the oil crisis of the 1970s, and by the application of unsuccessful policies during the 1970s and 1980s brought in by other politicians of course. The result was a spiral of high inflation and equally high interest rates, contracting output and unprecedented levels of unemployment. Haughey's critique goes something like as follows. High inflation, caused by external pressures, exceeded 20 per cent in 1975 and 1981 and, concomitantly, caused massive increases in public sector pay, thus greatly increasing the servicing of the growing National Debt. Aligned to this, social welfare payments had to be similarly increased because of inflation and also because of growing unemployment, which rose from 90,000 in 1980 to 227,000 in 1986. Then, sticking the boot into his own party and particularly his political nemesis from the mid-1960s until he took power in 1979, Jack Lynch, Haughey noted that the ‘transfer of the bill for domestic rates to the Exchequer was a further burden on the public finances in that period: in 1980 the cost to the Exchequer was €135 million’ (Haughey, 2011). Abolishing rates was of course at the heart of the Fianna Fáil manifesto of 1977 on the back of which Fianna Fáil romped home to the largest ever majority in the history of the Irish state. It did Jack Lynch no favours and he was gone as Taoiseach within two and a half years, to be replaced, much to his own chagrin, by Haughey, who in December 1979 had outwitted Lynch's chosen successor, George Colley, to become both leader of Fianna Fáil and Taoiseach.

In the same year the then twenty-nine-year-old Fianna Fáil backbencher Charlie McCreevy, at the beginning of his long and often controversial career, noted that: ‘the way in which the 1973 General Election was conducted, with both parties putting up their ideas on what they would do, led me to feel that in future elections there would be more of putting up the best goodies and seeing who would vote for them’. He went on to say that in the 1977 election, when both parties published their policies, he reached a different conclusion. Declaring that the document Fianna Fáil placed before the electorate was well-researched and caught their attention, he nevertheless noted that ‘our victory at that time gave us to understand that, whereas we may have won on 16 June, the attitude of the electorate was: If you do not deliver, when the next election comes around, the electorate will give you their answer’ (Dáil Debates, vol. 312, col. 672, 1 March 1979). Going on to praise the integrity of the Fianna Fáil government, McCreevy argued that they were setting about achieving their targets from the 1977 election, despite many ...

Table of contents

• Cover
• Half title page
• Title page
• Copyright page
• Acknowledgements
• Introduction: The conservative revolutionaries
• 1 Of constitutional and economic crusades: Ireland in the 1980s
• 2 Charles J. Haughey and the politics of coalition
• 3 The politics of changing coalitions
• 4 Tribunals of inquiry and the politics of corrupt influence
• 5 Fianna Fáil and the politics of hubris
• 6 Fianna Fáil and the politics of nemesis
• Conclusion: The politics of Troika Ireland
• Bibliography
• Index