TENSIONS OVER budget cuts in Cabinet have increased following the resignation from Government of minister of state for housing Willie Penrose over the closure of his local Army barracks in Mullingar.
Mr Penrose, the first minister to resign from the current administration, directed his anger at Fine Gael Minister for Defence Alan Shatter yesterday when announcing his departure outside Leinster House.
Mr Penrose, Labour TD for Longford-Westmeath, was the so-called “super junior”, entitled to sit at the Cabinet table but not to vote on decisions.
Referring to Mr Shatter’s assertion that the closure of four Army barracks would save €5 million a year, Mr Penrose claimed the Government’s comprehensive spending review, to be published shortly, would back his contention that no savings would result. “I understand a comprehensive spending review didn’t indicate that [saving]. That’s what Minister Shatter said; I have to say I’ve a totally different view on that context, and I think I’m on reasonably solid ground,” he said.
Meanwhile, employers’ rebate on redundancy payments will be reduced from 60 to 30 per cent under proposals by Minister for Social Protection Joan Burton to take €50 million off her departmental budget. Ms Burton has tabled the cost-saving suggestion at Cabinet and to a special Labour Party parliamentary party meeting on the budget, arguing that the current situation makes it easy for profitable companies to relocate from Ireland at a time of growing unemployment.
Employers may currently obtain a rebate of 60 per cent of statutory redundancy payments through the Department of Social Protection.
Ms Burton has to make approximately €700 million in cuts in next month’s budget, and her latest proposal is projected to save €50 million in 2013. The plan is likely to be strongly opposed by employers’ groups, along with her proposal that employers will have to pay the first four weeks of staff’s sick pay. The latter proposal, intended to apply to the public and private sectors, could save €150 million the year after next.
Speculation on Mr Penrose’s replacement last night centred on Dublin Minister of State Róisín Shortall, with Cork TD Ciaran Lynch being mentioned as a candidate to fill her position. Mr Penrose has also resigned the Labour whip.
There was no public division between the Taoiseach and the Tánaiste on the issue, with both Enda Kenny and Eamon Gilmore expressing regret at Mr Penrose’s resignation but standing firm behind the decision to close the barracks.
Mr Kenny told the Dáil he had received the letter of resignation from Mr Penrose with regret, but emphasised no job losses were involved in the barracks closures in Mullingar, Clonmel, Cavan and Castlebar.
Some 540 soldiers and civilians will be redeployed to other barracks as a result and the empty barracks will be sold.
Mr Gilmore said: “That proposal has now become a decision of Government and I suppose consistent with his [Mr Penrose’s] opposition to it he has informed me that he intends to resign.”
One Labour source last night claimed Mr Penrose’s resignation could have been avoided if Mr Shatter had been prepared to compromise. However, he admitted that senior Labour Ministers were not prepared to “go out on a limb” for him on what was seen as a relatively minor cut in overall budgetary terms.
There was little sympathy for Mr Penrose from Labour’s Coalition partners. “Tough decisions ahead. Barracks aren’t one of them,” Dublin Fine Gael TD Alan Farrell tweeted yesterday.
A number of Labour councillors in Mr Penrose’s constituency are also expected to resign from the party. Mr Penrose (54) has been a Labour member for 42 years. Last September, he revealed he is suffering from prostate cancer, which will require treatment for 12 months.
Taoiseach says no jobs lost in Army barracks closures: page 6; Dáil reports and analysis: page 7