Pat Leahy: Fine Gael must reassert its economic credentials

Elections over, results parsed, dust settled: politics now enters a new phase, dominated by preparations for a general election that is likely to occur just as soon as Brexit permits. Until then, the phony war.

The thing about the phoney war in 1939-1940, of course, is that it was a period of intense preparation for the actual war. And so the parties who use this period most productively are those who will prosper at and after the election. For Fine Gael, that means one thing: rebuilding economic credibility. If it does not, it is hard to see how the party wins the next election.

Fine Gael has been at considerable pain all week to stress that it is delighted with the election results, over-compensating for an early sense of deflation at the news it would not overhaul Fianna Fáil in the local elections.

Leo Varadkar, ever a student of politics, has often ruminated upon the career of Bertie Ahern

It’s true that results weren’t a disaster for Fine Gael: but nor did they provide the encouragement hoped for. And privately senior party figures acknowledge the worrying signs.

Pat Leahy: Ten lessons from the local and European elections

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Local results will dictate timing of general election

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Pat Leahy: election results could make or break Varadkar and Martin

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Pat Leahy: Fine Gael’s spendthrift role reversal with FF

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Bluntly put: there is not much evidence in the election results that Fine Gael is on course to win the next election and plenty to suggest it might not be.

Discuss this with those of a blue hue and sooner or later (with most, sooner) they’ll come back to the economy as the strong card of Fine Gael. Inevitably someone will tell you “it’s the economy stupid”. To which the correct answer is: it is, but not in the way you think it is.

Popularity vs victory

The analytical model of politicians and others in the political class tends to be heavily coloured by the politics that obtained when they came to political maturity. Tony Blair and Gordon Brown sucked up the lessons from Margaret Thatcher that it was better to work with a market economy to win the political middle ground than rail about its excesses.

The succeeding generation of Conservative politicians, led by David Cameron and George Osborne, privately worshipped how Blair’s centre-ground pragmatism begat his election-winning coalition; between themselves, they called him “the Master”.

So Leo Varadkar, ever a student of politics, has often ruminated upon the career of Bertie Ahern. The lessons from that particular roller coaster are manifold. One of them is also attested to by Blair’s example, and it’s this: unpopular governments can win general elections – but only when voters give them credit for a thriving economy. But getting the credit for a thriving economy is not the same thing as being in office when the economy is thriving.

Many voters do not believe that Fine Gael is central to the economic recovery and don't believe that the recovery would be endangered by Fine Gael's absence

So Blair, first elected in that summer of political change in 1997, won in 2001 and again in 2005, long after the sheen had gone off the New Labour project, but when voters grumpily acknowledged the material benefits that sustained economic growth – under the administration – had brought them. The latter victory – an oft-forgotten fact, this – was achieved after the Iraq War which has so tarnished his legacy.

Ahern won his third election in 2007, a decade after he first rushed to power, not by being popular but because voters believed the economy was safer in his hands. Despite the questions about his personal finances that dogged that campaign, voters decided they cared more about their own and the country’s finances that they did about his.

And in both the Blair and the Ahern example, voters mistrusted the opposition. I’ll come back to that.

Remarkable performance

The present government has effortlessly achieved the unpopularity that awaits all administrations in power for any length of time in modern politics.

It has combined this with presiding over a remarkable economic performance that routinely posts the best growth rates in Europe and just this week reported the lowest unemployment rate in 14 years. How to explain this apparent contradiction?

Here’s how: many voters do not believe that Fine Gael is central to the economic recovery and don’t believe that the recovery would be endangered by Fine Gael’s absence.

This is not just about recent controversies – though they are certainly part of the picture. It’s also about the Government’s insistence that even where sudden unforeseen costs arise – broadband, the children’s hospital, the nurses’ pay settlement and so on – that no other spending plans will be affected.

It’s also the negative judgments of the Government’s own watchdog, the Fiscal Advisory Council. And it’s about Varadkar’s plans for a whopping tax cut as all the while public spending growth zips along.

The disconnect in the public mind between the economic performance and the Government’s management of it is the missing link. And unless it is restored, Fine Gael cannot credibly hope to beat Fianna Fáil by a sufficient margin to guarantee them the leadership of the next government.

Conversations with a succession of senior figures recently suggest that there is a growing awareness of all this at a senior level in government. It is less clear that there is a settled view about how to address it.

One way to re-establish economic credibility is to pick some fights on public spending, though it’s not clear the Cabinet has the stomach for that. Another is to attack Fianna Fáil’s historic record on the management of the public finances.

The first option is a lot harder than the second. It’s also likely to be more effective. It’s clear, I think, that having Fine Gael Ministers trumpet Fine Gael’s fiscal prudence is not going to work. The public takes more notice of deeds than they do of words. That suggests a difficult pre-budget period to come.

So expect warnings about a Brexit impact on the economy. Brace yourself also for many reminders of Fianna Fáil’s past sins. The first is self-evident. On the second, voters might be more impressed with a commitment not to repeat them.