Fergus Finlay: It’s not a cost of living crisis — we’re in the early stages of a huge battle

Government needs to bring us together, or the consequences will be devastating

Barnardos revealed that half of the parents they work with have had to cut back on social activities for their children; more than a quarter have cut back on heat; almost a quarter on electricity, and more than a third have had to cut back on clothes.

THIS is a battle, not a crisis. According to the Concise Oxford Dictionary, a crisis is a turning point or a decisive moment — sometimes a time of danger. A crisis demands immediate and decisive action if it is to be dealt with properly — and that action will nearly always be short term in nature.

The Government has dealt with the cost of living debacle as if it were a crisis. “Look at what we did,” is their most frequent refrain. And they did stuff, there’s no doubt about that. If this was a crisis, the stuff they did would have made a difference.

But it hasn’t. Because we’re not in a crisis. We’re not even in an emergency, because that too is characterised by suddenness. Every dictionary definition talks about the “immediate” action required to deal with an emergency.

This is different. We’re standing on the cost of living battlefield, at the start of a huge fight. It’s not short term, there are no instant decisions we can make that will turn corners. It’s a battle we’re going to have to fight with every resource at our disposal. We’re the foot soldiers, the government make up the generals. Hopefully, the generals will be as good as the soldiers. There will be too many casualties otherwise.

We’ve been there before. So actually we can predict what’s going to happen next.

In a press release issued by the Central Statistics Office last week, they said that today’s cost of living index had increased by just under 8%. That was the worst in 38 years — since the third quarter of 1984. What it didn’t say was that the third quarter of 1984 was the time we finally saw the beginning of an end to an inflationary spiral that had lasted, with very small respites, for more than 10 years up to then.

Inflation at almost 21%

Many of you wouldn’t remember those times. It started with a war in the Middle East in 1973 that led to an oil embargo. Critical shortages and long queues were accompanied by soaring fuel prices, and the rate of inflation started to take off.

In 1975, inflation was almost 21%. It hovered a bit below that figure for several years, and then reached 21% again in 1981. Another three years were to elapse before it began to be brought under control.

Controlling inflation then, at a time when the economy was stagnant, involved terrible costs. Unemployment more than doubled between 1980 and 1985, thousands of people were unable to keep up with mortgage payments, and Ireland became a country to leave. Those were dark and miserable years.

In the first inflationary wave, I was a trade union official. I spent my entire time chasing the rate of inflation with bigger and bigger pay claims. It wasn’t unusual to come away from the negotiating table having won a 20% increase. But all my members struggled with debt, and always the wage settlement had to be accompanied by “back money”. You were a success if you got them six months' back money on a pay increase of 20% — a failure if you got any less.

In the next period of inflation, in the early ’80s, I worked for a government that had been left a huge legacy of debt and mismanagement. Although it did ultimately get inflation under control, it had to deal with failing state companies, enormous emigration, and massively rising debt. And it had to do all that against a background of inexorably rising violence in Northern Ireland. That government was seen as having failed, and the struggle by thousands of people to get by was the main reason.

Struggle and humiliation

During both of those periods I was also a father and a working man, struggling to provide. I can still remember the humiliation of not being able to afford new school shoes for all my children — some got shoes in August, the others had to wait till October. I can still remember lying awake at night wondering would a mortgage payment go through. I can still remember the scrimping and saving my wife had to do to ensure we survived.

I’m telling you all this because it’s what lies ahead. The consequences of Putin’s war (the main though not the only cause) is a cost-of-living battle that will take years to win.

There is only one way to get through it. Together. I passionately believe the Taoiseach of this country should be calling everyone together now, telling them we’re in the battle of a lifetime, and agreeing what the priorities for our country must be.

I’m not talking about a televised address, where we’re all told about the need to tighten our belts. I think the Taoiseach should call a conference of key players together and keep them together until a plan emerges.

The traditional social partners should be there, naturally — the employers, the trade unions, and the farmers. But now is the time to listen to people who really know what’s going on on the ground, how people are beginning to suffer, and what needs to be done right now to prevent things from getting worse.

Barnardos, for example, published a seminal briefing document this past week. (I don’t work with Barnardos anymore, but I do know the communities they work in and the families they support. Barnardos’ people are a good example of the soldiers I referred to earlier that the generals would be wise to listen to.)

Alarm bells and red flags

They have said, based on authoritative research, that half of the parents they work with have had to cut back on social activities for their children; more than a quarter have cut back on heat; almost a quarter on electricity, and more than a third have had to cut back on clothes. That ought to be setting off loud alarm bells.

When they add that they know parents who have had to cut back on medical appointments or medicines for themselves or their children, the alarm bells should be accompanied by huge red flags.

Barnardos and other people who know the priorities intimately need to be seen, not just as part of the analysis, but as part of the solution. They have, for instance, proposed the creation of a hardship fund, to make sure that children aren’t going hungry or being deprived of school. It’s not that long ago in Ireland since we created a very, very large hardship fund for banks, so that’s not an idea that should be lightly dismissed.

What's your view on this issue?

You can tell us here

But my main point is that we’re not at some economic turning point right now, some place where short sharp measures can be put in place. We’re in the early stages of a huge battle, which will get worse before it gets better — this winter will be brutal, for instance. We have no choice but to try to fight this battle in solidarity with each other.

If our Government can bring us together, there’s a chance we’ll get through it. But if the Government relies on the stereotyped tired old solutions of the past, that have failed again and again over the years, only one thing is certain. The battle against inflation will drag on for years, and the consequences will be devastating.