Government set to stick to its hard line on nurses’ pay

Cars beeping their support for the strike; blanket media coverage for the nurses to make their case; “stand with nurses and midwives” trending on Twitter; patients, doctors, Opposition politicians and the public all falling over themselves to say they’re in the corner with the angels of mercy: this is a difficult line for the Government to hold.

Difficult for the nurses, too, of course. “Being on strike is miserable,” says one union official. Even more miserable on the coldest day of the year.

But the overwhelming sense among high level sources in Government is that the Taoiseach and the Minister for Finance will seek to hold the line. Indeed, Paschal Donohoe has been careful to ensure he has the backing of this boss at every stage of this process. One of Donohoe's formative experiences as public expenditure minister was being rolled over on the Garda pay claim in 2016; he opposed it, Government settled it. Whatever happens, he doesn't want to be left out in the cold again.

The Taoiseach’s pronouncements on the strike this week have been noticeably hardline; if Varadkar conceded now, his own words would be used against him in the future.

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And now that the strike has happened, the belief in Government is that it must be allowed – for a time at least – to take its course. That means there’s little hope of a resolution before next week’s planned stoppages.

Knock-on claims

There are fiscal and political reasons for the Government's hard line. Fiscal first: calculations in the Department of Public Expenditure suggest that the pay claim to bring nurses up to the levels of other specified healthcare workers would cost €300 million a year plus €120 million in reduced working hours.

But the even bigger threat is the knock-on claims that would ensue across the public sector. The Government knows that these claims would arrive because a) that is what has happened in the past and b) public sector unions have made it clear to the Government that they would lodge claims before the ink was dry on any deal with the nurses.

This would destroy Donohoe’s public sector pay deal, and his budget and spending ceilings for this year. All the signals at present are that he is unwilling to do this.

The political reason is directly related to this. As Varadkar made clear at his party's ardfheis, he intends to run the next Fine Gael election campaign – in part at least – on a pledge to cut taxes. This is what will separate Fine Gael from everyone else in the campaign. To do that in a way that will be believed by voters, he needs to maintain his administration's economic and fiscal credibility. That is already under severe pressure from the children's hospital fiasco and the criticism of his budget from the Fiscal Advisory Council. Conceding a whopping pay claim would severely undermine that credibility.

Two-stage settlement

Finally, officials in the Department of Health and the Department of Finance have also been examining their history. In early 1997, with a general election due, the nurses were threatening strike actions, and a windy government, via a Labour Court recommendation, conceded a pay claim which cost it more than £100 million – a huge sum at the time. It was immediately hit with knock-on claims which it had to resist. A few months later the Government lost the election.

One of the concessions the Government had made in 1997 was the establishment of a commission on nursing. When it finally reported, the nurses were dissatisfied with its proposals and went on strike in the autumn of 1999. The Government accepted Labour Court recommendations that ended up costing a further £100 million.

The example of a two-stage pay settlement has been cited in Government circles as an argument against conceding on pay now. If there is to be a pay settlement, better to have a commission (or whatever process) first, otherwise any pay settlement now will inevitably be seen as just an interim measure.