The Government was stunned by the late-night recommendation from the Labour Court that averted a dangerous strike by gardaí yesterday but at an unexpectedly high price. Ministers are now in a serious bind. Rejection of a Labour Court settlement would be unprecedented, but acceptance of it threatens a fundamental plank of its budgetary policy.
The viability of the minority Government has been put in question by the terms of a deal that go way beyond what it was expecting. It has the potential to lead to industrial chaos in the public service, and could even precipitate an early general election.
The Cabinet will have to reflect on the settlement terms early next week, but there is no disguising that if it accepts the recommendation it will lead to a more rapid increase in public sector pay than had been planned for in the budget.
That means that some of the spending earmarked for improved public services, increased welfare payments and overdue investment in infrastructure in the years ahead will suffer, with damaging long-term consequences.
The Government was damned if it did and damned if it didn’t make some concessions to keep gardaí on the streets, but it was not expecting the scale of the “black rent” proposed by the Labour Court.
It is too easy to blame the whole thing on the fact that the Government does not have a majority in the Dáil. It is worth remembering that the source of Ireland’s recent financial woes, and its current industrial relations problems, lie in the public service benchmarking process of more than a decade ago.
That exercise was overseen by a Fianna Fáil-Progressive Democrat government that had a clear Dáil majority and was under no serious political pressure to concede the kind of unsustainable public service pay increases it adopted with gusto.
General election
By contrast, the current Fine Gael-led minority Government has at least tried to stand up to the intense pressure it was placed under as a result of the unprecedented strike threat by gardaí.
What will happen next is impossible to predict, but if it does precipitate an early general election there is no guarantee that it would produce any significant change in the Dáil arithmetic.
If anything it could produce an even more indecisive result, but it might force voters to think about the options facing the country and generate a realistic political debate about such options.
Some Fine Gael TDs are becoming increasingly apprehensive that their views are being overwhelmed by pressure from Fianna Fáil – it has the luxury of influencing the Government from the Opposition – as well as the smaller parties and groups in the Dáil who are incessant in their demands for extra spending.
The fear of these Fine Gael TDs is that voters who elected them in the expectation of prudent economic management will become disillusioned if further concessions are made to public sector unions, leaving them with no platform to campaign on during the next election.
If the Government collapses in the face of a union revolt it will probably mark the end of “new politics”. There will be real pressure on the big parties to come together and form a stable majority government next time around.
One thing that needs to be repeated again and again because it rarely features in debate in the Dáil or the media is that pay levels in the Irish public service are significantly higher than those in the private sector – and that before generous pensions and job security are even taken into account.
Pay levels
Public servants naturally want to get back to the even better pay levels they had before the deluge but the only way that can come about in a manner that is sustainable is through an orderly and transparent system that links pay increases to growth in the economy.
If the threatened illegality of gardaí is rewarded there will be no incentive for others to take their place in an orderly queue and make reasoned arguments to support their case.
One silver lining at the height of the financial crisis was the manner in which the bulk of the trade union movement engaged with government in an exercise in social solidarity by accepting pay cuts but seeking to minimise their impact on the lower paid while protection those depending on social welfare.
Paschal Donohoe has established the Public Service Pay Commission to look at public pay comparisons with other EU countries and in the private sector. As part of its remit the commission will take the benefit of the public service pension arrangements into account.
In an ideal world this commission should be able to generate a fair and realistic discussion about public service pay, leading to sustainable increases in the years ahead. However, the current circumstances are the opposite of ideal.
The settlement proposed for gardaí sends a signal that industrial muscle is the only thing that counts.
If the common good is again trampled on in the scramble for advantage in the months ahead, the economic recovery which was so hard won could evaporate very quickly.
It would be ironic if, having come through a deep recession by accepting a range of tough disciplines, the country was to throw it all away because of a squabble among competing public service unions for the biggest slices of the recovery cake.