Labour Party taking Ireland on slow but sure journey to a fairer place


OPINION: FINTAN O’TOOLE’s diatribe against the Labour Party was long on self-righteous indignation, but short on facts, analysis or any sense of history.

The principal charge levelled against Labour is that Irish society is unequal. The data to which he referred does indeed show that income inequality widened in 2010, with the top 20 per cent of society increasing their advantage over the bottom 20 per cent. As a party in Government, Labour is open to constructive criticism. But how Labour can be blamed for the level of inequality in 2010, when the party was only elected to Government in March 2011, is hard to fathom.

O’Toole says that this Government’s budget made matters even worse, citing figures without attribution that claim the budget was unfair. One can only assume that these numbers relate to the ESRI’s in-house (Switch) analysis of the 2012 budget, which does not look at any budget measures other than income tax rates and social welfare payments. That analysis does not take into account many of the important redistributive elements of that budget, such as changes to capital taxes, and a levy on legacy property reliefs.

The article also neglects to mention that the budget protected headline social welfare rates, or that 330,000 low-paid people were taken out of the universal social charge net.

The most important economic fact of 2009 and 2010 is that, in January 2009, the rate of unemployment was 9.4 per cent. By December 2010, it had reached 14.7 per cent. That is what Labour inherited in Government. The question is: how do we deal with it?

The answer must start with jobs. O’Toole may believe there is a magic button that can be pressed. In the real world, we have to build up the economy again, create more and better jobs, and improve living standards.

In the speech that O’Toole derided, Eamon Gilmore set out the stages that we will have to go through to achieve economic recovery. We started with a major effort to restore Ireland’s reputation. That is now yielding dividends in terms of new jobs and investment. Next we need to see an improvement in exports. That is also happening – they increased by €3.7 billion last year. Thirdly we have to do more to boost the domestic economy. Here the Government has taken steps to bring a greater normality to the property market and is moving on the investment and stimulus agenda. We are also working to deal with mortgage arrears, which are undermining confidence and spending.

In the past year we have achieved a far greater degree of financial and economic stability, on which we can now work to build economic recovery. Do we wish we could move faster? Yes, of course we do. To criticise us on that ground might be legitimate. But to attack us on the basis that the debts of the banks have been nationalised is perverse – Labour was the only party in the Dáil to vote against the bank guarantee.

However, to reverse that decision now, when the debts of the banks have been largely repaid, would be cutting off our nose to spite our face.

O’Toole quotes me from Morning Ireland as pleading for understanding of “how well the Government has policed the agreement foisted on us by the previous government”. What I in fact said was in the context of our attempts to renegotiate with the European Central Bank the onerous repayment obligations of the infamous promissory note we inherited from Fianna Fáil.

I pointed out: “We are also dependent on the troika understanding the extraordinary sacrifices that the Irish people have made and how well the Government has policed the agreement foisted on us by the previous government. The ECB in particular has not yet come out in public to acknowledge that Ireland took a hit in order to prevent the contagion of the European banking system, and that we deserve some recognition for that, and I hope that the discussions that are concluding today in the latest engagement with the troika will see some further progress to add to the changes that we have made already.” Naturally, I stand by that aspiration.

Finally, O’Toole ignored those achievements that speak of the fairer Ireland we are working to build – funding for a national children’s hospital, ending the incarceration of children in adult prisons, the gradual extension of free GP care.

Labour’s purpose is not to restore the insider dealing and casino capitalism that brought Ireland to this pass. From the scorched earth left behind by Fianna Fáil, we are on a long and difficult road back to economic independence and sustainable growth – and a fairer Ireland.

Pat Rabbitte is a Labour Party TD and Minister for Communications, Energy and Natural Resources