Nurses’ pay, Brexit and economic wobbles: here comes politics 2019

External threats loom against backdrop of bullish news about exchequer finances

Minister for Finance Donohoe knows that if he concedes the nurses’ claims, other unions will pile in the door with their own pay demands. Photograph: Nick Bradshaw

Minister for Finance Donohoe knows that if he concedes the nurses’ claims, other unions will pile in the door with their own pay demands. Photograph: Nick Bradshaw

 

Happy new year, everyone. Here are some things that I think will matter a lot in Irish politics in early 2019.

1: There is a battle on public-sector pay coming in the next few weeks. The first engagement will be with the nurses, who have already voted for strike action.

This is likely to be a pretty bitter conflict. The nurses clearly believe with some vehemence that they deserve more money, and anyone with experience of the health service can sympathise with the difficult working conditions they often experience.

But I think they will have a harder job making the case in the court of public opinion – where industrial relations battles are won or lost – that they are badly paid. According to the Department of Public Expenditure – which signs the cheques – the average pay of a nurse when allowances and premium payments are included is between €57,000 and €58,000 a year.

That is not a king’s ransom, to be sure, but in a country where the Central Statistics Office says average earnings are less than €40,000 a year, it’s not peanuts either. Graduate nurses start on €37,000, including top-ups. They have studied hard for four years, of course. In return they have received an extremely valuable and internationally sought-after qualification, which has been funded largely by the State. More than 80 per cent of nurses earn more than €40,000 in basic salary, the department says. That’s before you mention job security and pensions.

None of this is intended to dismiss the nurses’ case. People can make their own minds up on that. But the numbers are the numbers. So while the public instinctively sympathise with the “angels of mercy” (to lapse into tabloidese), I think that support – and therefore pressure on politicians – from a public that is in many individual cases not paid as much as the nurses is not guaranteed.

On the other side, the Government knows that if it concedes the nurses’ claims, other unions will pile in the door with their own pay demands.

The Government knows this because the other unions have made it perfectly clear to them. That would blow up Paschal Donohoe’s budget in the first quarter of the year. I don’t think he will be willing to do that.

Incidentally, the opening rounds over the coming weeks will take place during the period of maximum stress in many hospital emergency wards. How do we know this will happen in the emergency departments? Because it does every year.

Brexit

2: Brexit overshadows everything. The public pay battles of the coming weeks will take place while the Brexit drama plays out in Westminster. As that high-stakes psychodrama unfolds, the Government will come under intense scrutiny here for its own Brexit preparations. Most attention has been focused on the prospect of a hard border, and what the Government will or won’t do about it in the event of a British crash-out in March – an eventuality I still think is unlikely but certainly not impossible.

I expect the focus will broaden from the Border in the coming weeks. If the document the Government published late one night before Christmas is anything to go by, there is little evidence that the Government is anything like as prepared as it will need to be.

Take, for example, the preparations for how a no-deal Brexit in March would affect the supply of medicines and the delivery of health services.

There is almost no detail at all in the document. Instead, it doesn’t go much farther than telling us that meetings are taking place.

“The Department of Health is working to ensure a comprehensive and co-ordinated set of preparations . . .

“The secretary general has established a schedule of regular meetings . . .

“The Minister, Secretary-General and the Department are inputting to a wide range of Inter-Departmental and EU Commission fora . . .

“The Department of Health and its agencies have had positive engagement at national and European level . . .”

This is official government guff, on steroids. There’s not a word about what measures the department has actually put in place, or plans to put in place.

That is not to say serious preparations are not taking place. You’d hope they are. But if they are, you’d wonder why the Government hasn’t said what they are. The alternative interpretation is that the Government is actually months and months behind where it should be in preparing for a no-deal Brexit. If that is so – and two very high-ranking civil servants have suggested as much to me in recent weeks – then there is rather lot of catching up to do.

Economic indicators

3: Watch the economic indicators. The economy is performing remarkably strongly right now, and has been for some time. Strongest growth in Europe, bulging corporation tax receipts, unemployment down, incomes up, etc. We may be blasé about this now, but it underpins practically everything about the Government. Few Ministers and almost no civil servants, for example, believe that this administration could withstand an economic shock.

Right now, there is a curious combination of bullish news about the exchequer finances – especially on corporation tax receipts – and dire warnings about the external threats that are self-evidently growing. This will make managing the future pressures on the public finances more difficult, and more important.

This will be a tricky political balancing exercise for Messrs Donohoe and Varadkar. This minority government – with competing pressures from the Independents, an impatient new leadership in Fine Gael, a careful, wily Fianna Fáil and a Dáil in which it does not command a majority – has always been a bit of a high-wire act. I expect that character to intensify rather than abate in the coming months.

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