The announcement also coincided with the first public indications of the intention to slash the minimum wage. This policy of simulated internal devaluation was to assuage the voracious appetite of the financial “markets”, restore “confidence” and bring about a quick recovery when it would be back to business as usual. They unleashed a war on working people. All the instruments of the establishment, so called academic experts, supposedly independent research institutions such as the ESRI, the mass media and of course the entire plethora of trade and business organisations, as well as the apparatus of the state itself were mobilised to eliminate opposition to the imposition of this quick fix.
Assimilation of maximum pain by workers and the poor would prove the quickest route to recovery they insisted. They neglected to point out the added advantage that it was also pretty much pain free for the rich.
We battled to highlight the absurdity of treating a gaping collapse in demand by brutal austerity. We reiterated our 10 Point Plan for a better, fairer way. We organised mobilisations, engaged in negotiations, lobbied and employed every other legitimate technique within our capacity. Despite all our efforts to bring about a basis for a sane way forward, the hawks of austerity had their way. Having successfully sabotaged last ditch negotiations in December 2009, the Government proceeded with one of the most savagely anti-worker budgets in the history of the state, ironically declaring that it would be the last of the difficult adjustments before recovery. Far from it – within a mere 12 months our national economic sovereignty had been forfeited and we were in the hands of the EU/ECB/IMF Troika and an austerity straight jacket.
The consequences are clear for all to see. Almost 15% of our people are deprived of the opportunity to work. More than half of them have already endured this misery for more than 12 months. The spectre of forced emigration has once again returned to haunt the landscape.
Parallel with the dire circumstances which have unfolded in this jurisdiction, things have not turned much the better for working people in Northern Ireland either. The defeat of the Labour Administration in the UK and their replacement by a Tory/Lib Dem Government which is as committed to austerity as the hawks who have inflicted misery here augurs badly for everyone in Northern Ireland. That Government has embarked on a retrenchment strategy envisaging a curtailment of £80bn over the next four years, with swingeing cuts in public services. This will mean a cut of £4bn in the North, entailing the loss 25,000 public service jobs and a further 15,000 ancillary jobs in the private sector. All told, this amounts to one-eighth of the total number at work.
Here in the South we were ultimately forced to adopt a rear-guard strategy to protect workers as best we could. Mass unemployment always shifts the balance from workers to employers. People will fight even in the direst circumstances, as so courageously demonstrated by the women in the O’Callaghan Davenport hotel earlier this year, otel earlierbut generally in recessions it is when people recognise that they have nothing left to lose. That day may well arrive, but it is not here yet. As in any war, when it is not possible to storm the ramparts of the other side the next best thing is to dig in, build fortifications and re-organise for a better day.
The protocol agreed with the employers in the private sector is an example of one such fortification. It protected existing collective agreements, requiring employers to comply with fair procedures on change while simultaneously preserving the opportunity to progress claims for improvements in pay and conditions in sectors we deem to be able to afford them.
The Croke Park Agreement in the Public Service is another example. Some members believed that we could have achieved a better outcome through ramping up the industrial campaign. However, it would have been presented as one-sixth of the workforce, which is paid from the public purse, acting at odds with the interests of everyone else in the country during a period of unprecedented national crisis, pitting worker against worker. The Government of the day came to the negotiation firmly believing that they had put through the last difficult budget on the road to recovery. Otherwise, it would never have conceded the guarantee of no further pay cuts and no compulsory redundancies. Our analysis was that the austerity plan would not work and we have been proven correct thus far. The terms also facilitate members acting through their Unions to influence the change process. It is critically important to use this framework to ensure optimum delivery of Public Services to our fellow citizens in a way which is compatible with the interests of workers.
Otherwise, the advantage will shift to those whose only objective is maximising profit through privatisation and unfair labour practices.
Our intervention in the general election earlier this year was another element of the strategy of building fortifications. We recommended voting Labour and transferring to other parties and individuals on the left. We did so in the hope of maximising representation reflecting the interests of working people and those who depend on public services.
We knew that a single party, monopoly Fine Gael Government or one dependent on a handful of hardline independents would be propelled ever further to the right, with devastating consequences for working people and indeed our entire society. It would be far easier to remain silent but we do not have the luxury of standing idly by.
The jury is, of course, out on the outcome. More than 200,000 of the lowest paid workers in the country have seen the disappearance of the legal protection of what little they had in terms of pay and conditions. We acknowledge Labour’s success in ensuring the preservation of the system in the Programme of the new Government, after it was offered up to the ECB/EU/IMF Troika by its predecessors.
We also know that it was then effectively declared unconstitutional by the High Court rendering things immeasurably more difficult.
However, it is absolutely critical that the promised legislation to protect these vulnerable workers is published and passed into law as a matter of the utmost urgency. We will continue to campaign vigorously along with other trade unions and progressive civil society organisations to this end. We will be rigorous in scrutinising the draft legislation when it emerges. We will make sure tens of thousands of low paid workers know the full story and which politicians are attending to their interests or otherwise. Cutting their pay will contribute nothing to economic recovery – indeed the reverse. Many politicians know this well but they are running scared of a well endowed business lobby focused only on maximising profit. This legislation will become the litmus test for Labour in Government one way or the other. I am confident it will not allow the lower paid to be fed to the wolves, because rolling over would constitute such a betrayal as to render them unworthy of the name of a Labour Party ever again.
There is also a great deal of disappointment at the drift towards the privatisation of state assets, notwithstanding all the lessons of the Eircom debacle. The vultures are circling in the expectation of picking up bargains at fire-sale prices. This challenge requires a sophisticated, thought out response, not a knee-jerk reaction.
Fine Gaels NewERA Policy envisaged whole-sale divestment. Labour managed to trim it back to a maximum of up to €2bn in non-strategic assets, and then only in circumstances where market conditions were right, in the Programme for Government. However, the EU/ECB/IMF team is now demanding a €5bn sale. The idea of the people of an island country on the periphery of Europe handing over control of their crucially important ports and airports or their capacity to generate and distribute energy or the utilities that are essential to sustaining civilised existence so that they could be asset stripped is absurd in the extreme. We will oppose this vigorously! Our objective is to ensure that all our strategic state assets remain fully within the control of the Irish people, so that they can continue to play a critical role in the development of our economy, and we will employ every legitimate means at our disposal to that end.
Budget 2012 beckons, along with the publication of a plan for the next 3 years, all against the background of the Troika Agreement. This will provide the context for the inter-play of interests as between those on top of society and the great majority of the people. Over the last few weeks, the annual autumn campaign for more austerity and misery has been rolling out again. The ESRI has been on cue as always, followed by Mr. Peter Sutherland of Goldman Sachs. These will be followed by a host of so called independent commentators. The perpetually ventilated, irrational mantra that taking money from poor people who must spend every cent they get in order to live, is good for the economy, while taxing those who can afford to stash large sums away in safe heavens is bad for it, will be repeated ad infinitum.
This year the message has a new twist. Seemingly, the misery plan is working. It is working alright, but only to the degree that it is doing what it was designed to do – which is to recover losses incurred as a result of reckless lending for the major continental banks. But it is not working, for the people who are without jobs, or those who are losing their homes or their businesses or the elderly parents who have to suffer the pain of enforced emigration of their loved ones.
Yes – The CSO figures for the first half of the year did show a small glimmer of light. But the Government must now ensure that it is not extinguished by the forthcoming budget. The history of recessions of this kind is the history of recurring false dawns and the consumer spending figures for August provide a sharp reminder of the scale of the collapse. Of course, the Government can choose to stick with the current course, entailing reliance on wage depression through mass unemployment, thus satisfying the narrow definition of competiveness so beloved of our employer organisations. Alternatively, it can opt to place an innovative investment programme for job creation and growth at the centre of policy.
Resources are limited, but there are ways around the problem. We have outlined a possible approach in our policy document ‘Investing for Jobs and Growth’ published last month.
This highlights the potential of the residue of the National Pension Reserve Fund. It seems the Government is acting on this, but it should be combined with up to €4bn which could be incentivised from private pensions funds through exemptions from the 0.6% levy to generate tens of thousands of jobs. The key is to find a way to replace any amount that is taken out of the economy in budgets 2012 and 2013, thus off-setting their deflationary effect. It will not be possible to disregard the Troika Agreement, but it is possible to reject the exhortations from the stock-broker belt, demanding even greater austerity at the expense of those least able to bear it. The room for manoeuvre is narrow, but the Government still has choices.
Then there is the question of the distribution of the burden of adjustment. Working people faired dismally in this equation under the last administration. 78% of the €20bn taken out over 4 budgets was at the expense of those who depend most on public services. Moreover, only €1 in every 5 of the remaining 22% in tax measures was specifically targeted at the stock of wealth in the country and the better off. Instead of squeezing tax credits and bands to the detriment of the lower paid and those on average earnings, people on incomes in excess of €100,000 per annum can afford to contribute a little extra. Parallel with this, the focus should be on raising revenue from unearned income above a certain level, instead of taxing work.
We cannot afford to continue to subsidise the pension contributions of those at the top income spectrum any longer. The threshold for tax relief on such contributions should be reduced from €115,000 to a maximum of €80,000 per annum. Wealth must be taxed, and we can no longer afford to subsidise private fee-paying schools for the privileged while ordinary people cannot buy school books.
Simultaneously, people must be provided with the confidence to spend. The savings ratio is now 4 times higher than it was in 2007. People are fearful of losing their pensions, their homes and their jobs. Action must be taken to ensure the preservation of the defined benefit pension schemes to which half a million workers have entrusted their savings. It is all very well for the Pensions Regulator and a few bureaucrats at the top of the Public Service to cover their tails with a bullet proof funding standard. But it is grossly irresponsible if the practical result is the winding up of schemes and the loss of their pensions for hundreds of thousands of ordinary workers.
A great deal of guff has been vented about the pension rights of pubic service workers over the recent past. The problem is not that the public service workers have pensions – it is that private sector workers don’t.
Equally, the nettle of the threat of home repossessions must be grasped. People must be ensured that they will not lose their homes as long as they are genuinely trying to do their best to service their mortgages. There is far too much handwringing about “moral hazard” for borrowers, but none about the moral hazards of reckless speculation.
When all the spin is disregarded, the budget will reveal the true character of the Government. It will become obvious whether it is one which affords parity of esteem to working people or whether it is little more than another committee of the rich.
The reality is that there is a deeper malaise here than incompetent governments, inadequate institutions, or even greedy bankers. The value system underpinning economic and social policy formulation since the political division of the island in 1922 is deeply flawed. It reflects the interests of the wealthy landed, business, and professional elites in the ascendency in the years which followed in both jurisdictions. It has equally failed working people and the majority of citizens on the entire island, and it has landed this Republic in the throes of its third catastrophic economic crisis in 60 years, with all its contingent unemployment, emigration and misery. We must embark on a new direction for Ireland in the context of the dramatically unfolding events in the world.
Even the most strident exponents of the Free Market now acknowledge that this is no ordinary recession but the most serious systemic crisis of the capitalist system itself since the 1930s. It did not develop overnight and it is not simply the outcome of some bad decisions on sub-prime lending or the reckless bonus culture which grew in the international financial services industry – although these phenomena undoubtedly exacerbated the problem.
No, this is the outworking of a process that has been underway for several years masked by an exponentially growing credit bubble and fanned by the systematic outsourcing of ever increasing proportions of productive capacity from the so called first world to the developing countries in pursuit of ever diminishing labour costs. This saw the collapse of the real purchasing power of the American middle class – camouflaged by the credit bubble. It is a demand side crisis. However, the economic orthodoxy of the global establishment, driven by the preoccupation of those at the top of the financial system with “getting their money back” and replenishing their balance sheets insists on applying supply side remedies, thus aggravating the problem rather than addressing it.
The day of reckoning for their policies is already upon us in Europe. Cruel austerity plans have dismally failed in Greece and default beckons imminently, with potentially catastrophic implications for the continental banks. The entire financial system is teetering on the edge as those at the top of the establishment dither between the alternatives, petrified by the danger of the domino consequences of a default on the one hand and electoral oblivion in their own countries on the other, if they pick up the tab. Every manoeuvre has been employed to avoid grasping the nettle but the options are rapidly evaporating because the alternative is too frightening to contemplate. Ultimately, the most likely outcome will involve some kind of co-ordinated European response – but it cannot be taken for granted.
Tragically, there are no indications that it will focus on investment and growth which is the only way out of the impasse. All the auguries suggest it will descend into further depths of austerity because the political landscape of Europe is dominated by the Right.
Their agenda is to rid European Capital of the impediments of the Post War settlement so that it can compete on level terms in the global race to the bottom. In this context, fundamental questions will present for all of us around the dynamics of the so call Euro Plus Pact and constitutional debt breaks.
A parallel scenario is unfolding in the USA. There the Obama Administration’s efforts to rejuvenate growth are being frustrated by the Tea Party Movement – a largely poor people’s movement acting in, and financed by, the interests of very rich people.
Unless Governments invest for growth the best we can expect from the global politics of austerity is prolonged recession or even depression, interspaced with recurring false dawns, extending over several years or even decades. Hopes that the system will rescue itself through growing demand in developing countries ignore the scale of the growth they must achieve to provide the purchasing power required.
Capitalism is experiencing one of the most profound crises in its history. The great irony is that it can survive only if it repudiates its most essential characteristic – exponentially growing inequality.
Yes – the survival of Capitalism is ultimately dependent on restoring the purchasing power of working people in the US and in Europe. This was clearly grasped by people like Franklin D Roosevelt (FDR), who also understood that the key to it is strong trade union organisation to ensure effective collective bargaining to redistribute wealth and restore purchasing power. F.D.R. understood this clearly and supported the Labour Relations Act (or Wagner Act as it was known) during the depression to provide a legal framework for trade unionism to grow stronger, equipping workers to engage in Collective Bargaining with employers. In subsequent years the legislation was emasculated by the political right and today one can graph the growth of inequality and the decline of the real economy in the US on almost parallel lines with the decline of trade unionism in that country.
So there it is. Trade unionism is key to the socialist transformation of society. However, it is also essential to the survival of capitalism. Of course, collective bargaining rights are not just an economic imperative. They are critical to healthy democracy, providing the key vehicle for working people to participate in the evolution of the workplace and society.
We withheld support for the first Lisbon Treaty referendum because the Government of the day refused to commit to legislation for this entitlement although it was enshrined as a fundamental right in the treaty itself. We supported the proposition the second time around only because the Leader of the Labour Party committed to write it into the law of this Country when returned to Government if the treaty was endorsed. He didn’t forget and thus for the first time in the history of our State, the Programme for Government clearly commits to legislating on this issue to ensure compliance with recent judgements of the European Court of Human Rights. Now the challenge is to convert it into effective law.
This will never be conceded easily by those at the top of society. Their thrust is all in the opposite direction – to a more brutal future. This space will have to be won through determination and hard work in both the political and industrial arena.
The difficulties faced by workers here on this island arise in the context of a bigger global picture. We are a component of the human race and we have an obligation to ensure that we do what little we can to assist those struggling against inequality and oppression elsewhere. That is not just about empathy. It is about solidarity, because their fight is our fight. Given our limited resources we have prioritised the plight of the Palestinians (victims of the greatest single injustice in the world) and the Colombian trade unionists (who we regard as the bravest people in the world).
Tyranny will be overcome. It will not come about overnight, but we can draw inspiration from the experience of the peoples of the vast continent of Latin America. There, every population suffered decades of extreme privation as guinea pigs for the neo-liberal experiment which was enforced with unprecedented savagery. All seemed lost, yet today virtually every country in that vast continent except one – Colombia, a dictatorship in all but name – has rejected that approach and embraced the policies of solidarity and the Left in one form or other. Their economies are growing again, inequality is diminishing and they are proving that there can be a future that works!
Everyone must play their part in their own country. Our responsibility is to organise the workers of Ireland. This obliges us to transform our own union and to work with other trade unionists to help transform the wider movement and we are doing it. For far too long resources have been concentrated on employers who recognise their employee’s right to organise. The field has been left open to those who do not, enabling them to do whatever they like with people. The end result is that they set the standard and it becomes lower and lower every day.
We are working to change that. Our transformation programme should take five years. We are determined to do it in three. We are one year in! We have put the skeleton in place. Now we have to populate it with new layers of workers. We moved from a horizontal structure to one which is entirely vertical. We must now move rapidly to establish the sub-sectors in every area that are envisaged in the new rule book.
We must adopt the rule change envisaging the establishment of District Committees across the island to facilitate union democracy and membership participation.
Our activists in Belfast and across the North have already moved ahead and they are spearheading a vibrant cross community organising campaign growing membership and participating energetically in the Trade Union campaign against the Tory/Liberal Democrat Government cuts. They will also be playing their full part in the campaign for a Bill of Rights throughout the entire island which was promised in the constitutional settlement.
Meetings to establish District Committees in Dublin, Limerick and Kildare will take place within the next few weeks. They will become the face of the union outside the workplace interacting with civil society, campaigning and organising on all the critical issues confronting working people in their communities. Over the next number of months we will also be putting in place unemployed workers groups to assist our members who have lost their jobs and to organise campaigns and agitate on the issues directly affecting them.
Delegates, things are not as they seem. Several sections have won increases in pay. Excluding the Construction sector where employment has collapsed and the traditional manufacturing sector, the union is actually growing again.
Vibrant Organising Campaigns are underway in Red Meat, Contract Cleaning, Hotels, Waste Management, the Community and Voluntary Sector and in the Construction Sector.
Despite all the despondency I have never lived through a period which afforded so much possibility of shifting the balance in favour of working people and those who depend most on public services. The global system which has relentlessly exacerbated inequality is in the throes of its most serious crisis since the 1930s. Power sharing is now at last established in the six counties. The old political see-saw in which two centre-right parties, reflecting the interests of the wealthy dominated politics here, has been shattered and the Left has doubled its share of the popular vote.
Things will never again be the same as they were. Our task is to play our part in ensuring they are far, far better.