FG and Labour’s master stroke will only sow the seeds for FF comeback

LET’S fast forward to Monday, February 28 … After a hectic weekend of counting, the last seats have been allocated. Voters have spoken.

Fine Gael and Labour leaders finalised their teams to negotiate a five-year programme for government. One likely government formation was a no brainer. FG’s sixty-something and Labour’s thirty-something TDs provide a clear Dáil majority. Neither party ever had a realistic hope of achieving 83 seats on their own. Both parties excluded possibility of government with Fianna Fáil or Sinn Féin.

This inevitable outcome was obvious since the 2009 local and European elections. Gradual further erosion of FF support only served to increase the FG/Lab majority. The amazing feature of the campaign was both parties succeeded in pulling off an incredible stroke. The blatant requirement of the electorate was to obtain some advance detail on their joint approach to policy. Chief strategists realised any compromise of individual postures would only weaken electoral appeal. Labour had to maintain left-wing credentials to prevent haemorrhaging support to Sinn Féin and far-left socialists. Regular references bracketing FG and FF together maintained clear blue water between them and blueshirts.

Labour learned from the Mullingar accord in 2007. Greater cooperation with FG resulted in them being regarded as “FG Lite”, merely a token mudguard of a bigger beast. FG wanted to stake out a constituency of middle-class and self-employed voters, who preferred spending cuts to tax hikes. For many months, they believed it would be impossible to avoid media accountability as to their merged policy position in office. How do you make a virtue out of your Achilles heel? Hey presto, vigorously attack each other on a daily basis on every conceivable issue. Just fill the daily news diary. Pointed mutual hostility at officer corps level would make convergence questions inapt.

It worked a treat. Separate stances allowed each party to maximise support, while minimising clarity on what taxpayers could expect between 2011 and 2016. The smoke screen of rows about television debates, the “Leo and Joan” show and variations on how to renegotiate the bailout obscured the realpolitik of the next administration. Like the Sunday Tribune wrap around, the cover was illusory. The subsequent inside content left a sour taste in the mouth of innocent voters. Deferral of resolution of differences meant the public needn’t be consulted for up to five years. Mission accomplished. The cynicism behind this concealment was breathtaking. Privately, highest echelons of leadership in both organisations knew there were core and non-core issues for compromise. These were to be resolved in private. Not in war time, but privacy of peacetime, prior to March 9 when the Dáil reconvenes. At that stage, spoils of conflict meant the tantalising prize of ministerial office and Mercedes would be in touching distance for the main players. The “national interest” (ie personal advancement) would justify the most pragmatism. It’s called stable government. Away from baying crowd and noisy vested interests, no external pressure could be leveraged. A month of sleeping separately could be abandoned to jump into bed together.

What will be the programme for the next government? Heretofore, under Fianna Fáil there was a well established formula — based on the adage: “If you don’t like my principles ... here are another set you might like.” Progressive Democrat and Green party manifestos were fed into the word processor and merged with FF data. Contradictory paragraphs would be worked on by mandarins with soothing platitudes. A review here, commission there and an Oireachtas committee to kick the can down the road on thorny disagreements. Ultimately, it was about bums on seats around the cabinet table. No newcomers to the hierarchy of FG and Labour should take principles too seriously. Otherwise, there’ll be paralysis.

The foremost issue will be amendments to the previous government’s four-year plan. Labour wants to spread it over six years. As a trade off, for IMF/EU inflexibility on the time frame, a Labour concession here may result in an FG compromise on ratios of expenditure reductions to taxation increases. This can be papered over by a deep determination to burn the bondholders. Fine Gael’s resolution to not increase income taxes will result in sharper increases in VAT and excise duty. Implacable positions on site valuation tax (Labour) and a new capital gains tax on the sale of the family home will both fall well short of additional revenue requirement of €1bn. Complexities involved will require acceptance for the programme at a Labour National Conference.

The future of semi-state companies like ESB & Eirgrid, Bord Gais and Coillte is most uncertain. Labour’s core support of public sector workers amongst these 30,000 employees prevents asset realisation. FG’s proposals for banking reform exclude the most prominent Labour proposal to establish a state strategic investment bank. Both agree on rapid closure of Anglo and Nationwide and early sale of AIB and EBS. Meanwhile, Fine Gael’s €120m mortgage relief proposal for the “negative equity generation” bites the dust as many irate mortgagees are excluded by not being first-time buyers or having purchased outside the period, 2004-2008.

THE silky skills of Michael Noonan and Pat Rabbitte massage and nuance most polar opposites. However, some issues are black and white. FG’s promise to abolish 145 quangos seems set in concrete. Civil service resistance to any irresistible force cannot be underestimated. Irrespective of government programmes from politicos, they can run any rationalisation plan into the sand. Sir Humphreys will relish the challenge of turf wars, having seen off the Bord Snip report. More tricky is the Croke Park Agreement. As the months evolved, savings in hard cash have not emerged. Members of the implementation body now seek to include pay and pension savings and job reduction numbers that were affected prior to last year’s deal. Do they take the IMF for complete eejits?

Labour and Fine Gael succeeded in minimal detailed exposure of their plans for the Departments of Health and Social Protection. Fianna Fáil bluntly promised €3bn in savings of welfare expenditure by 2014. An annual €20.9bn of social welfare costs is simply unsustainable. Other than rhetoric on fraud, no major reform or reduction in rates is advocated. HSE personnel face an FG axe of 8,000, while Labour is flexible on the recruitment embargo. The future of the National Children’s Hospital is uncertain. Reality on universal health insurance will require a second term in office. Labour’s enduring commitment to free third-level education and FG’s support for a “student contribution” are contradictory.

Alas, this brilliant electoral ploy was clever only in the short term. Eventually, it cultivates seeds of FF recovery. Failure to come clean with voters only results in a short honeymoon and subsequent deep unpopularity. The media will claim that FG and Labour were deliberately disingenuous. The public may have been conned once, but the prospects of a repeat will recede. The wraparound was too good to be true. Much better to have obtained a mandate for joint authority. The solo presentations, post poll bartering and ultimate pact could and should have been done in an entirely transparent manner. Fool me once …