Coalition gears up for next election after unprecedented challenges

Soaring energy and food prices, a housing crisis, a healthcare system creaking at the seams, a climate emergency, an ever-present pandemic, and now war, and even the prospect of worse.

When the three coalition parties sat down to thrash out a programme for government nearly two years ago, Covid-19 was the most pressing issue facing the country.

The biggest tasks involved protecting public health, getting people back to work and reopening businesses. “We recognise that the task is immense,” the tripartite agreement signed in June 2020 declared.

If the challenges were immense then, they are colossal now.

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"We are going to be hard-pressed to address all of that," a Fine Gael source admits when the list of what lies ahead is read out. But, they add: "There is a long way to go yet. Nearly three years. It is not insurmountable."

There is a view, particularly within Fine Gael given that the party has been in power now for 11 years, that the Government has done well on the catastrophes that are not of its own making: Brexit, the pandemic, and then Ukraine.

The handling of such issues will be remembered come the next election: “The people depend more on security and safety and something they can rely on,” a Fine Gael TD says.

That rosy view is not shared quite as much in Fianna Fáil. "People expect the Government to be competent," says one senior figure, adding that it's hard to declare how well one did in a pandemic that left such heartache behind.

And it has not worked before. Harping on about Brexit did not captivate the public in February 2020. It is not just in the military that leaders can win a battle but lose the war, after all.

Simple fear

Government backbenchers have a simple fear. If Election Next is fought on housing, or health, then they lose. Even privately, though, ministers tend to put on a braver face when asked the same.

The numbers speak for themselves, though. Nearly 900,000 people are on some form of hospital waiting list. Consultants say it could take up to 14 years to clear the backlog.

Meanwhile, at least 35,000 homes are needed every year, but only 20,443 were completed last year – even though the number of planning permissions has begun to exceed the annual needs, if they are realised.

All of this is without mentioning the economy, the childcare crisis, the looming pay sector talks, the new carbon ceilings and the uncertain future around the coronavirus.

Then, at the end of this year, a political first: the planned changeover of taoiseach and a potential reshuffle.

It cannot be overstated that with each passing week and month, anxiety levels rise over an end to the Garda investigation into Tánaiste Leo Varadkar’s leaking of a GP pay deal to a friend.

Last year, that concern was largely concentrated among the Fine Gael party faithful, but now members of Fianna Fáil and the Greens are wringing their hands, too.

“Fine Gael needs to have the Leo issue sorted,” says one Fianna Fáil TD bluntly, fearing internal pressures if it drags on much longer. The Greens agree: “It makes things complicated. There is genuine concern here,” said one

Yet politicians can do nothing. The gardaí must finish their work. Then, the Director of Public Prosecutions must decide what happens next. No one knows when one action will end, or when the other will even begin.

Despite this, and the widespread belief that a prosecution is impossible on the basis of everything known, the expectation remains that Varadkar will reclaim the office of taoiseach.

Reshuffle

So, that leaves the ministerial reshuffle to come.

Varadkar has given no thought to it, and will not before the end of summer, it is understood. But while he might not be thinking about it, almost everyone else around the Cabinet table is.

Advisers are jamming their ministers’ diaries full, conscious that their performance this year could determine whether they have a job next year or not. Whispers pass about who might be in, or out.

But all is just speculation now. So what could happen? When Micheál Martin becomes tánaiste, some of his TDs believe he will also take over at the Department of Foreign Affairs or Higher Education.

Either option leaves Varadkar with a headache, since it would mean a move for Simon Coveney or Simon Harris. Or, Martin could replace Varadkar in Enterprise, Trade and Employment. Far simpler.

The Department of Finance will switch over, however, since there is a belief that one party should not hold this portfolio and the Department of Taoiseach at the same time.

Minister for Finance Paschal Donohoe is also the president of the Eurogroup. His term there ends in January, so that would not stop him switching with Minister for Public Expenditure Michael McGrath, or taking up another role.

The question for Varadkar is: if you drop someone, who?

Minister for Higher Education Simon Harris is an able communicator and multiple polls show that he enjoys strong public support after his time in Health during the pandemic.

He also has a social media following of 500,000 across various platforms, which some politicians eye jealously. Demotion would give him plenty of time to think that bit harder about his own leadership ambitions.

If this was the start of the Government term, some might have put money on Minister for Social Protection Heather Humphreys being dropped, but her star has risen since then.

No one foresees a situation where Minister for Justice Helen McEntee, Minister for Foreign Affairs Simon Coveney or Paschal Donohoe could be dropped.

Options limited

With his options limited, it appears Varadkar may shake things up on the junior benches instead, demoting those who have failed to bat for the party in hairy moments and promoting those who have.

When politicians talk about the reshuffle, they often skip straight to health and ask: whither Stephen Donnelly?

Many senior people in Fianna Fáil believe Donnelly will be there until the bitter end – with a few believing that kind of written agreement exist between him and Micheál Martin, though there is no evidence of this.

Others expected to remain in situ include Minister for Education Norma Foley, Minister for Housing Darragh O'Brien and Minister for Agriculture Charlie McConalogue, but nothing is a given.

Within the Greens, most want their people to stay where they are. A reshuffle, even among junior ministers, would cause “more harm than good,” says one party member.

Before the reshuffle, however, an exceptionally difficult time lies ahead, where “cruel” decisions will have to be made, testing coalition cohesion like never before.

And it will be different to the challenges posed by Covid-19. This time, the anger will not be directed at an unknowable virus, it will land squarely at the door of the Government.

There is mounting dread about May 1st, when an increase on the carbon tax on home heating fuels is due to kick in, followed by an increase on the tax on transport fuels in October.

Billions of that revenue do go into a fund that targets fuel poverty and the people who are being worst affected by the crisis now, but the Opposition are ramping up pressure for a delay.

And such calls are easier to sell to the electorate. The demands on the public purse will only increase, but this week’s meeting of the Eurogroup gave an insight.

Increasingly uncertain

There, the message was that the path ahead is increasingly uncertain. The Irish public may be accustomed to such precariousness after the bailout and the pandemic, but this does not make the reality any easier to swallow.

Day-to-day living is going to only get harder and more expensive. European Union budget rules, relaxed for Covid, were due to tighten again next year, but that could be delayed.

Closer to home, however, the Government must reduce public borrowing and wean the economy off Covid levels of spending – which means an end to the massive interventions of the last few years.

Previously the Government stepped in, propping up companies and partially paying wages. “We are clearly not saying that now,” a senior source said, indicating that the taps are running dry.

Instead, the message will be: if the Government can help with all the new costs and challenges, it will, but it will not be able to mitigate them entirely, and it will not be able to insulate the public from shock in the same way as before.

That is a tricky message to sell in the face of Opposition cries for more. The fact remains that the war crisis has put the brakes on what was expected to be a triumphant return to a pre-pandemic economy in 2022.

Demands for higher welfare, higher wages and tax cuts in Budget 2023 will be a drumbeat this year, though the Department of Finance warns that lower growth coupled with higher inflation will put acute pressures on budgets.

The Greens fear that some of their major, long-range climate gains that will influence policy for a generation could be rolled back come election time when “people are worried about their seats. And it would be a shame,” said one.

New variant

This is set against an unclear future for coronavirus: what if a new variant emerges? What if, unthinkably, more restrictions are needed? Waiting lists were high before Covid-19, and spiralled during it.

Recently, Stephen Donnelly brought a document into a Cabinet health subcommittee meeting detailing all the work that must be done in the coming weeks and months.

A Cabinet colleague replied, “Well, you’ll be busy.” Given the spending squeeze, Finance argues that Health must stay within budget – a difficult thing to do when the HSE’s outdated financial systems are still not up to scratch.

Despite all of the challenges faced so far, the coalition has bedded down on a personal level quite well, with the important caveat that the really divisive part is still to come as inflation bites.

Some Green Party TDs find themselves bypassing their colleagues and bringing their questions and problems to the other two parties first, and vice versa, as unlikely alliances are formed on the front and back benches.

“To be honest with you, I probably get on with people from other parties better than I get on with people from my own party,” one Green source says, laughing. “I thought that it would be more conflict-based than it is,” they add.

There is huge admiration (even among party members who have clashed with him in the past) for the Minister for Children Roderic O’Gorman, given the scale of challenges he has faced.

He has introduced plans to reform direct provision, and give adopted people the right to access their birth information, which is something that many previous administrations failed to grapple with.

The jury is out on the response to the mother and baby homes fall-out, as many of the biggest parts of the plan are still being worked on, including a redress scheme which is still not set up and won’t be until potentially next year.

Has there been much push-back from Fine Gael and Fianna Fáil on the climate issues? The answer appears to be: not yet, or at least, not in any huge way.

“I don’t think they like the process but there is a recognition that we have run out of time and rope. There is no climate denial any more. When there is pushback, it is usually a focus on the impact on local communities, which is fair,” a Green Party figure says.

Harder view

Some Fianna Fáil and Fine Gael backbenchers take a harder view, particularly rural ones who complain that the Greens are being deliberately vague about some road projects and agricultural issues.

And the carbon budgets rises ahead will infuriate such TDs. Fine Gael TD Michael Ring has warned that he will oppose any cuts to agriculture emissions, while Fianna Fáil's Barry Cowen and Jackie Cahill oppose national herd cuts.

The thorniest moment for the Greens came when it looked as though some members might go overboard over the EU-Canada trade deal, known as CETA for short.

A failure to ratify would send out the "wrong message", said Varadkar. Last September, the High Court dismissed a challenge by Green Party TD Patrick Costello over the constitutionality of aspects of the deal.

He has appealed that. No vote can happen until the court is finished its deliberations. Even then, it could find go on to the European Court. This, at least, buys time for people who cannot agree.

So where do Fianna Fail, Fine Gael and the Greens stand on election preparations, faced with a Sinn Féin party that, without ministerial duties, has more time to think about such matters?

“Quite truthfully, everyone has been so busy with ongoing events that there just has not been that focus there,” says a Fine Gael insider, though both FG and FF are working hard to rebut Opposition charges.

The exchanges between Taoiseach Micheál Martin and Sinn Féin leader Mary Lou McDonald in the Dáil have also become increasingly hostile and sometimes personal.

‘Hot and heavy’

“It’s been hot and heavy,” says one Government source, who concludes that if the polls are right and an election was held tomorrow, “Sinn Féin would still need one of us to get into Government”.

Many see this as the future now for Fianna Fáil.

"Can you see that happening? Look at how Matt Carthy has talked about Charlie McConalogue. The way Eoin Ó Broin talks about Darragh O'Brien, and Mary Lou McDonald talks about Micheál Martin. After everything that has been said, can you really see that?" the source asks incredulously.

If the last two years have shown us one thing, however, it is that anything is possible.