Pat Leahy: Fine Gael pivoting back to Brexit and Border realities

There have been two very important messages from the Government in the past 10 days, signalling sharp pivots on very significant issues.

At the end of last week, Taoiseach Leo Varadkar, perhaps unwisely gussied up in a dashing dinner jacket and black tie, told the assembled nabobs at the British-Irish Chamber of Commerce annual dinner that contrary to previous assurances, there might well be checks on goods crossing the Border after all; furthermore, they might take place “near the Border”.

Well now. As late as July, his Minister for Foreign Affairs was insisting any checks would not be “on the Border or close to it”; a few months before that, all Ministers were maintaining there would be no checks, no infrastructure, no nothin’, come what may. But reality has a habit of intruding on the best of intentions.

It may be unwise to take Varadkar’s latest intervention as the last word on the matter. The truth is that if there is a no-deal, the Government will do whatever it has to do to protect Ireland’s place in the single market.

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The only logical interpretation of the recent move is that the European Commission – with whom the Government is engaged in (very) private talks on the matter – is insisting on a rather more muscular regime than Dublin previously envisaged. These have not yet reached conclusion, though they will soon.

In Brussels, and around various member states, the checks are viewed as unfortunate, but necessary. One EU diplomat pointed out the entirely foreseeable consequences should substandard food products turn up in the European markets having come through an open border in Ireland – European markets for Irish food products would shut. “This is in your interest,” the diplomat shrugged. This is true, but it is little consolation to businesses trying to trade across the Border.

Single market

Choosing the single market over a frictionless border in Ireland is a choice that the Government really doesn’t want to have forced on it. But if it is, it will choose the single market first. Despite the lack of debate about it inside and outside government (though there has been chat at the very top of government on the issue for some time) that is a highly significant choice to make.

Choosing the single market over a frictionless border is a choice the Government really doesn't want to have forced on it. But if it is, it will choose the single market first

Sinn Féin – having apparently woken up to it – will remind the Taoiseach in the Dáil next week of his promise not to leave any citizens in the North behind. Varadkar’s response will be: blame Boris. The sudden admission about the checks was a window on that very big and profound choice.

The second pivot came via the beaming bonhomie of Minister for Finance Paschal Donohoe this week, when he cheerfully announced that there would be no significant income tax cuts in the forthcoming budget, now to be constructed with the expectation of a no-deal Brexit. Nobody was so impolite as to point out that the Minister had just trashed the centrepiece of the Taoiseach’s re-election platform, announced as such as far back as last year’s Fine Gael ard fheis. Those tax cuts for the people who get up early in the morning that Varadkar has been talking about since then? Sorry, that’s off the agenda.

The smarter Fine Gaelers realised a while ago that they need to re-establish their credibility on economic and budgetary management, monstered by the national children’s hospital, the escalating cost of rural broadband and sundry other mishaps. With an election now firmly in the middle distance – the Taoiseach wants next May, he says, but he might get one sooner – the party is running out of time to achieve that. The budget is one of the loudest political klaxons of the year, when ordinary people sit up and take notice of what politicians are saying. Fine Gael can’t afford to waste this shot.

Message of prudence

Expect prudence to be the message. There is some nervousness in Fine Gael about Donohoe’s apparent unwillingness – so far, anyway – to play the usual pre-election game of squeezing every last drop of spending out of the budget. But the nervous nellies in Cabinet misread the situation. When the next election comes, Fine Gael will not be in a battle with Fianna Fáil to promise the most goodies; it will be a battle for who can promise the most credibly. There’s a helluva difference.

When the next election comes, Fine Gael will not be in a battle with Fianna Fáil to promise the most goodies; it will be a battle for who can promise the most credibly

As ever, look to recent history for guidance.

While it is often cited as evidence for the short-sightedness of the electorate that they fell for Bertie Ahern’s promises in 2007, it’s not always widely remembered that while Bertie promised big, he didn’t quite promise as big as Fine Gael. It was just that the voters decided Bertie’s promises were more credible.

This is a vital battleground now before the next election – for credibility. Both big parties – and several of the smaller ones – will promise voters public spending increases, tax giveaways and so on, because that’s what they think the voters want. But among a crucial cohort of middle ground, economically motivated voters, the contest will not be about who can promise the most – it’s about who the voters believe.

The last Fine Gael-Labour government, having painstakingly and painfully established their economic credibility through the grim days of austerity, squandered it with a giveaway budget in late 2015 and an election campaign that promised as much as they possibly could. Voters were mightily unimpressed at the 2016 election.

Putting the kibosh on the promise of a big tax cut suggests that someone in the Government has learned that lesson. I wonder will they stick with it?