Government, business too close: Relationship needs to be redefined

Not so very long ago any suggestion that all our governments, led by whichever half of the duopoly that has always run this state, are too close to business would have been dismissed with a shrug. A Brahmin from one tribe or the other would affect a worldliness to intimidate and silence, to close debate.

They would defend what is more an instinctive relationship than a deliberate, mandated policy. However, the argument is redundant, the evidence is, unfortunately, incontrovertible.

Our exploitative housing crisis is an example of what happens when business is left to its own devices. The tracker mortgages scandal is a subplot in that fleecing — as are arrangements whereby rescued banks will not pay taxes on profits for many years.

Food Wise 2025, which envisages a “65% increase in primary production” is another example of how business ambitions are seen as an unquestionable good. The taxpayer-funded greenwashing promoting that programme suggests even those advancing it have doubts.

The role of private-sector consultants in forming government policy, one of the greatest expressions of trust between an electorate and politics, has evolved in something absolute and remote from democratic accountability.

It also provides a convenient buffer zone between politicians and their decisions. The water charges fiasco was an example, the all-or-nothing lunacy of the National Broadband Plan (NBP), is this month’s example of what happens when a society places too much faith in business. That so many of these dramas are populated by the same actors adds to growing unease.

The role of consultants KPMG in what Robert Watt, of the Department of Public Expenditure, has described as “the unprecedented risks associated with this project” confirms that. Up to January, KPMG has been paid €11.33m for NBP work. Their influence carries more heft than any Oireachtas member.

That KPMG, in their role as banks’ auditors a decade ago, failed to sound alarm bells around shows that, to use a phrase from an MBA handbook, that we still have “learnings” to make. What expensive “learnings”.

It is, thankfully, not all one-way traffic as the EU’s determination to collect €13bn in taxes from Apple shows.

The same EU office has opened an investigation into the motor insurance market on suspicions the sector runs a cartel.

Whether the investigation confirms that widely-held belief remains to be seen but it does show that accountability can force its way into any relationship, no matter how comfortable.

That it took an EU initiative rather than an Irish one to look at insurance confirms the relationship between government and business is skewed.

Antitrust commissioner Margrethe Vestager is the driving force behind these consumer-championing interventions. Her efforts were recognised in a February poll when she got the highest, by some margin, approval rating of any commissioner, strengthening to the view that she will succeed Jean-Claude Juncker as president of the Commission.

Businesses, especially those running winner-takes-all cartels may not view that prospect with enthusiasm but they should as the alternative — a swing to extremism — is far less attractive.

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