Sinn Féin’s high-wire act: courting big business and those ‘left behind’

As the voice of the Irish oil industry, Fuels for Ireland chief executive Kevin McPartlan is used to being targeted by climate activists on social media. But nothing compared to the onslaught he faced after disagreeing with Sinn Féin TD Rose Conway-Walsh on Virgin Media’s The Tonight Show a year ago, over whether carbon tax on home heating oil was an excise duty.

“When I got up the next morning, I had 200-plus Twitter messages from Sinn Féin supporters telling me that I was wrong,” McPartlan recalled. “I’ve never had any reaction as big as that. It showed me the party is incredibly well-organised in terms of its activists and membership.”

Sinn Féin’s advance in the Republic from the 2007 general election, when it secured less than 7 per cent of first-preference votes just before the financial crash, to top the charts in 2020 was driven by the party becoming a beacon for younger voters and those on lower incomes, worried, according to pollsters, about housing, healthcare and a feeling of being left behind in a growing economy.

The populist party’s support has only expanded since then amid a worsening housing crisis and, more recently, soaring living costs, to recently reach a record high of 37 per cent, according to a Sunday Times/Behaviour & Attitudes poll published last weekend, even as Government partners ramp up their rhetoric against it.

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Tánaiste Micheál Martin has said it would be “extremely difficult” for Fianna Fáil – polling at 21 per cent – to enter coalition with Sinn Féin, given its “anti-enterprise policies” and constant negativity towards the EU. Taoiseach Leo Varadkar, whose Fine Gael is languishing on 15 per cent according to the latest poll, has claimed “people in business understand” that Sinn Féin in power would mean “less business, fewer jobs, lower incomes”.

But while Gerry Adams famously said in 1979, as then joint vice-president of Sinn Féin, that the party was “opposed to big business, to multinationalism . . . to all forms and all manifestations of imperialism and capitalism”, it has more recently taken to courting enterprise – with its leader Mary Lou McDonald’s recently travelling to Silicon Valley, addresses to Ibec and senior party figures increasingly meeting business leaders.

“We’re used to different political parties trying to use the fear factor. Sinn Féin are pro-business,” said the party’s finance spokesman Pearse Doherty. “We recognise that we need to have collaboration between the State and industry.”

Sinn Féin in government won’t be anywhere near as radical as many might think. It’s going to ultimately disappoint many in its core support base who see it as the great white hope

Still, its plans to raise taxes on high earners prompted PwC Ireland, the largest professional services firm in the State, to prepare a slide for clients recently, advising them to speed up asset sales and boost pension pot contributions before the party grabs power. While the document, leaked last weekend, has not been widely issued to clients, it underscores how corporate Ireland is parsing Sinn Féin policies like never before.

With the next election due in March 2025 – though there has been speculation of a snap before then – the party faces a tricky balancing act in maintaining the support of those captivated by its left-wing agenda while convincing business there is no reason for alarm.

“Sinn Féin in government won’t be anywhere near as radical as many might think. It’s going to ultimately disappoint many in its core support base who see Sinn Féin as the great white hope,” said UCD politics professor David Farrell, noting that the party would almost certainly need a coalition partner to enter government.

Courting business

While Sinn Féin has wooed followers with plans to impose more taxes on high earners and commercial property investors, it has progressively increased interaction with business since the last election, according to public relations executives, lobbyists and industry figures, who mainly spoke on condition of anonymity for fear they might otherwise damage fledgling links. The courtship has heightened further in the past year.

“Quite a number of corporates are looking to understand Sinn Féin and have a dialogue,” said one senior public relations executive whose firm has set up meetings with party figures.

[ 2022: S&P sees ‘business-friendly’ Irish economy if Sinn Féin is in government ]

“Many would initially have feared that these guys were the barbarians at the gates. But the feedback is that they are much more pragmatic behind closed doors than they appear in public, even if we are not going to see any let up on populist rhetoric come the next election. Clients who have met them say they are sensible, pragmatic, realistic and recognise the needs of the economy.”

Another facilitator of meetings said: “There has been a marked change in Sinn Féin’s attitude to business in recent times. The engagements are being driven by our corporate clients who see that it’s highly likely Sinn Féin will be in the next government, and who want to look into the whites of their eyes.”

McPartlan, who was a director of food and drink with Ibec before joining Fuels for Ireland, said senior party figures have also acknowledged a need to evolve.

There’s a sense that Sinn Féin is very much in listening mode and there has been a general drift of their policies away from the left

“I’ve had it said to me by front bench people that they now realise they have to prepare to be in government and have constructive policy on what they would actually do, rather than saying what’s wrong with everybody else,” he said.

“I have gone into meetings with TDs and senators of other parties and you sometimes feel, when you walk in, that they don’t know who you are until you start talking. With Sinn Féin, you see the notes out in front of them. They’ve done their homework, they’ve read whatever you’ve sent in advance. And they want to ask about specific points. A lot of people underestimate them.”

“There are some exceptionally bright front-bench politicians in the party, but there isn’t huge depth below the star performers,” said a public relations executive who has been involved in the organisation of meetings – echoing comments from others. “But you will find that TDs who aren’t particularly impressive are set up with very strong assistants. The discipline in the party is extraordinary.”

[ Pat Leahy: The good, the bad and the ugly sides of Sinn Féin ]

Two-way street

Doherty said the increase in engagement has been a “two-way” street. “Businesses want to talk to us and get a sense of where Sinn Féin’s priorities are,” he said. “We recognise that without industry investing in the future, without them giving workers a fair deal, our economy is vulnerable and our society is weaker.”

Industry sources who were briefed on McDonald’s charm offensive in Silicon Valley in the US last September, where she met senior executives from the likes of Google and Salesforce and addressed business leaders, said that it went down well.

“They were fairly impressed by what they were hearing,” said one source. “US multinational corporates generally aren’t political outside their own countries and work with regime changes all the time overseas. But Irish SME-land is very different. It’s quite political, and people would have strong ideological views. Larger corporates are more about the policy; Irish SMEs are more about ideology. I’m not sure they’ve been won over yet.”

An Irish CEO of a local division of a US multinational said that board members of his parent group have been asking questions.

Many would initially have feared that these guys were the barbarians at the gates. But the feedback is that they are much more pragmatic behind closed doors than they appear in public

“I tell them this is a party that is very connected to the US. They are a US-business-friendly party,” said the executive, who saw McDonald and party vice-president Michelle O’Neill working events in Washington DC last month amid celebrations around St Patrick’s Day.

“Whatever about the rhetoric you hear in the Dáil, Irish political leaders are much more cohesive and consistent than we appear to be locally. They are all – including Sinn Féin – very on-message about the need to protect, expand and nurture investment into Ireland.”

McDonald set out her stall in the American Chamber of Commerce Ireland’s 2023 US-Ireland Business Report, launched in March.

“Winning FDI [foreign direct investment] and strengthening our business relationship with the US will continue as a key component of Ireland’s economic strategy. Inward investment must be complemented by the development of a new industrial model where Ireland’s indigenous sector can grow and thrive,” she said.

Our corporate clients see that it’s highly likely Sinn Féin will be in the next government, and want to look into the whites of their eyes

For Doherty, there is no contradiction between Sinn Féin’s reformist zeal and engagement with business.

“I believe we [will be] a radical government, although some of the ideas that we’re putting forward aren’t that radical – like building homes on public land, ensuring education at third level is free, and increasing research and development investment,” he said.

“But nobody who wants to see a radical programme by Sinn Féin wants business to be punished. They need to have a job, they need to have a fair wage, and they want to see investment.”

On the corporation tax front, Doherty said Sinn Féin is “committed to” the OECD process that will lead to a 15 per cent minimum rate for companies with revenues above €750 million – and a continuation of the State’s long-standing 12.5 per cent rate for companies below that threshold.

However, Doherty’s alternative budget for 2023 contained proposals like imposing a 17 per cent stamp duty surcharge on block purchase of residential property by institutional investors – even as the party is seeking to attract overseas institutional money to help fund a pledge to build 100,000 public homes over five years.

[ Mary Lou McDonald faces her biggest challenge yet, five years after rising to the top of Sinn Féin ]

The party also reckons it could raise a combined €1.3 billion by targeting tax credits and increasing employer PRSI contributions on individuals earning more than €100,000; introducing a 3 per cent solidarity tax on salaries above €140,000 and 1 per cent wealth tax on those with net assets above €1 million; and reducing the tax-friendly threshold of “gold-plated pensions” by €500,000 to €1.5 million.

Doherty has also vowed to abolish a lucrative tax-relief scheme for highly-paid multinational executives under the so-called Special Assignee Relief Programme (Sarp).

While Sinn Féin has not met ratings agencies that opine on the State’s creditworthiness, it has had “very good conversations” with the National Treasury Management Agency (NTMA), he said.

Discussions have not been about sense-checking policy ideas, he said, “but more about a sense of the appetite in terms of what investors are looking for in terms of Ireland”, as well as considering the State’s debt profile. Some big accountancy firms have also hosted Sinn Féin meetings with business, he said.

Harry Goddard, chief executive of Deloitte Ireland, said Sinn Féin has managed to settle American FDI in recent years. “I was over on the west coast in January 2020, and nervousness was at its peak,” he said. “And I was there last year – and they’d done a good job [in the meantime] in calming everybody down.”

“There’s a sense that Sinn Féin is very much in listening mode, and there has been a general drift of their policies away from something that was much further to the left to something that feels closer to the centre left,” Goddard said.

Balancing the books

Doherty said Sinn Féin in government will “balance the books” and ensure that “day-to-day spending is kept in line and on a sustainable footing”. But he said there also needs to be “catch-up investment” in areas like housing, which is impacting on the competitiveness of the country. IDA Ireland executives have said that the current accommodation shortage is an issue for business weighing investment in the State.

DBRS Morningstar sovereign ratings analyst Jason Graffam said his firm’s AA-rating on Ireland assumes its “credit strengths will endure throughout the political cycle”, when asked about the implication of Sinn Féin coming to power.

Investors in Irish banks, however, might face more uncertainty. Doherty said he would reintroduce a €500,000 pay cap across any banks where it has been lifted. The Government removed this restriction at Bank of Ireland in December after selling its remaining shares in the company, and signalled that it will act similarly with regard to AIB and Permanent TSB in time.

We’re used to different political parties trying to use the fear factor. Sinn Féin are pro-business

While the Government is expected to cut its AIB stake below 50 per cent this year, Doherty retains a view that it should continue to hold a majority stake. When asked whether he would, as finance minister, buy AIB shares to reverse any move to return the bank to majority private hands, he said: “I would have to look at all the options at that point in time – and where the bank is at that point in time.”

Spoken like someone who knows he may soon have to make tough calls.

Moderating positions

Sinn Féin has been moderating a number of policy positions in recent times, according to Farrell of UCD, and is likely to compromise on others in any coalition discussions, as it remains “focused on its core goal of Irish reunification”.

Symbolic shifts include moving in late 2021 to drop its long-standing opposition to the Special Criminal Court, a non-jury court that tries terrorism and serious organised crime cases and was previously used during the Troubles to prosecute members of the Provisional IRA; and party leaders paying warm tributes to Queen Elizabeth II when she died last year, which McDonald said reflected how her party’s relationship with the British monarchy has evolved.

“When looking at Sinn Féin, it’s worth considering how Fianna Fáil panned out,” said Farrell, of the party that split from the original Sinn Féin in 1926. “When Fianna Fáil went into government in the early 1930s, it was seen as quite extremist, but it gradually moved towards the centre ground.”