IS THERE LIFE AFTER COALITION?

The party of James Connolly and Jim Larkin is facing its most serious crisis in its almost 70 years history.By Vincent Browne

Its identity has already been seriously undermined by e rise of the social democratic element within Fine Gael. Whatever remains of that identity is now further threatened by the fusilade of right wing measures being introduced by me Coalition Government to deal with the serious economic crisis and meet the Fine Gael election commitments. Labour's very survival, as well as the credibility of its new model, hinges on its capacity to resist the full impelementation of Fine Gael taxation proposals next January, or at ~e L on its ability to ensure that if the programme is implemented it is paid for largely through capital taxes. It is an issue of the gravest significance for the future of the Government, on the one hand, and the survival of the Labour Party, on the other.

But most of all the party's position in the constituencies is now so precarious as to threaten the future viability of the party. There are only 7 seats of Labour's total of 15 which could be regarded as safe. Three of its seats are in very grave danger of being lost at the next election and a further five must also be considered in jeopardy. Of the eight seats in danger, Fianna Fail threatens to take four and Fine Gael challenges for the other four.

There are only three constituencies where Labour is in with even a vague hope of winning additional seats. These are the three neighbouring Dublin constituencies of South East, South Central and South, all at the expense of Fine Gael. There is a real prospect of Labour being reduced to less than ten seats at the next election.

From the moment that Garret FitzGerald assumed the leadership of Fine Gael, Labour was in danger of being eclipsed by that party. Frank Cluskey was never able to pose a credible identifiable image for Labour, as distinct from Fine Gael. When he was forced to concede during the pre-election television debate that there were no fundamenntal differences between Fine Gael and Labour, which might encourage people to vote Labour rather than Fine Gael, he was, in effect, capitulating to FitzGerald's stronger identity and impact.

The identity problem was exacerbated by the collapse of Labour's organisation in the years when Cluskey was leader. It is perhaps unfair to blame Cluskey alone, for the decline of the party started immediately following the 1969 elecction, when the party won its highest national vote in its history (16.9%). It was then that Labour lost its sense of direction as well. Following its failure to win the 40 seats which its strategists predicted for it (it won only 18 seats, four less than it won in 1965) the party abandoned its noocoalition strategy and the socialist thrust of its policies.

Its participation in the 1973 to 1977 Coalition Governnment further weakened the party's identity. Frank Cluskey was forced to concede afterwards that the country was no more socialist than it had been previously. It went along with the emasculation of wealth and capital taxes and the abolition of estate duties. It failed to establish a national development corporation. Although some progress was made on social welfare, it was almost entirely wiped out by the economic recession and the high levels of inflation. And then, of course, Labour collaborated in the repressive poliicies of the Coalition, almost without demur.

There were other negative aspects to Labour's involveement in Coalition as well. Justin Keating discredited the party in the Bula affair and his general neglect of the prices issue. Brendan Halligan drew down ridicule on the party by his deception of the electorate of Dublin South West in the by-election of 1976. And then of course there was Conor Cruise-O'Brien.

Labour has always been ambivalent on the national quesstion. From the very beginning it couldn't make up its mind whether it favoured the movement for Irish Independence and then it couldn't make up its mind on the Northern Ireeland question. Because of this it opened the door to Fianna Fail to tap the strong republican and nationalist sentiment in what should have been Labour's natural constituency ðthe working class and small farmers. Conor Cruise-O'Brien heightened this ambivalence by his crusade against Irish unity and his denunciations of Irish republicanism.

Following the defeat in 1977, Labour opted for Cluskey as leader rather than Michael O'Leary (the first vote was a tie and Cluskey won by one vote on the second poll, with Liam Kavanagh, it is believed, switching his vote from O'Leary to Cluskey).

The Cluskey era was a virtual disaster for the party. No policy re-evaluation was undertaken. True, there were some excellent policies produced, notably on women, during this time but there was no overall assessment of where' Labour was going ideologically.

Organisationally the party was allowed to run down to an alarming degree from the point of view of a party loyallist. There was no serious attempt made to ensure that the party would hold on to its seat in Cork South West, for innstance, following the retirement of Michael Pat Murphy. There was no real effort made to win back the seats formerrly held by Justin Keating and Conor Cruise-O'Brien in Dubblin West and Dublin North East respectively.

Then when it became obvious, to outside political commmentators at least, that the party would be in trouble in middle class suburban areas of Dublin, such as Dublin West, Dublin South and, Dublin South East, nothing signifiicant was done to stem the tide away from Labour. '

Worst of all an internal row was allowed to jeopardise the seat of the party leader in Dublin South Central. Polls undertaken by the party itself suggested that Cluskey was going to be in difficulties if opposed by John O'Connell and yet no attempt of a serious nature was made to ameliorate O'Connell.

The opinion polls were all making it quite clear that Labour would be eclipsed by Fine Gael in the election and again nothing was done.

Instead several of the party functionaries went on junnkets abroad. Rivalries were allowed to develop and underrmined the credibility of the party - for instance Michael O'Leary was excluded almost entirely from the inner deciision-making of the party and he, in turn, made no secret of his displeasure of the way in which the party was being run.

In view of all this the result of the election was hardly surprising. The party vote was down by over one-third from what it had been in 1969 and 1973. They lost two seats in a Dail increased in size from 148 members to 166 and of course the party leader lost his seat as did two members of the inner coterie, which ran the party from 1977, John Horgan and Ruairi Quinn.

Whether Michael O'Leary made the right decision in joining the Coalition Government remains to be seen. He says that there was no option, given the disinteegration of the party's organisation and its complete lack of resources to fight another election within the immediate future. But it did mean the emasculation of Labour policies and, in particular, its concurrance with the Fine Gael taxaation plan involving a switch from direct to indirect taxaation, which ran entirely counter to Labour's policy.

Labour had proposed that the Government should artiificially reduce inflation through massive food subsidies, to ensure a moderate wage agreement, which would slow inflation and lead to the creation of employment. Instead the party was forced to agree to a strategy whereby inflaation was going to be quickened, through the switch from direct to indirect taxation, in the vague hope that the resulltant drop in income tax would encourage workers to moderate their wage demands.

That strategy was bad enough in itself but when the same taxation policy - i.e. exclusive reliance on indirect taxation - was used to deal with the enormous problem of the current budget deficit, the credibility of the Labour Party was stretched to breaking point.

The party is now faced with the prospect of further massive increases in indirect taxation to pay for the cut in direct taxes, the £9.60 to stay-at-home spouses and for a further bite in the still soaring current budget deficit. The overall impact on inflation of this strategy, if pursued, will be about 8% onto the existing inflation rate (independent experts have estimated that the increase in indirect taxes to pay for the cut in direct taxation and the £9.60, will reesult in 5% onto the inflation rate, a further 3% must be addded to allow for the further cut in the budget deficit).

Michael O'Leary is now saying that Labour will not tolerate more than a 3% hike in the inflation rate to pay for the cuts in direct taxes and the £9.60 and that other taxes will have to be imposed to pay for the remainder of this cost and whatever further inroads is to made into the buddget deficit. This line has substance to it for the common programme envisaged a cost for the tax package, far less than has now been estimated by the Department of Finance - O'Leary argues that Fine Gael got their sums wrong and will either have to amend its taxation proposals or else agree to a system of stringent capital taxes to pay for them.

On this issue hinges the entire credibility of the Labour Party. If O'leary agrees to the imposition in indirect taxes over and above that agreed in the common programme, then his personal credibility and that of his party will have been gravely eroded. Other issues, such as hanging, are of minor political consequence by comparison.

Even if O'Leary wins that battle, there is still a long way to go before he manages to turn the tide for Labour. He has adopted a more adversary posture within the Government than did his party or its former leader, Brenndan Corish, during the last Coalition. There are constant references to the Labour line in cabinet. Labour minissters meet separately - this never happened during any of the periods of the previous coalitions. And relations beetween O'Leary and the Taoiseach, Garret FitzGerald, are a good deal less cordial than those between Cosgrave and Corish or Costello and Norton.

O'Leary has made some attempts to start the organiisational regeneration of the party but he still had to enncounter serious divisions internally. He has managed to isoolate Brendan Halligan by the appointment of Paddy Dunne, from Halligan's constituency of Dublin North West, to the Senate. He has also isolated Cluskey's former closest aide,

Flor O'Mahony, who was 'elected to the Senate. He appoinnted the relatively unknown Michael Ferris as leader of the Senate over the heads of Mary Robinson and Ruairi Quinn and he scorned Justin Keating's claims for nomination to the European Parliament.

These divisive moves may be necessary to secure his posiition as party leader but they do weaken his chances of dealling with the daunting problems which the party faces. It is in debt to the tune of £100,000. As reported earlier (and analysed at greater length below), it is threatened with virrtually electoral extinction and there remains the problem of identity and ideological course - only Michael D. Higgins provides any input on the latter.

O'Leary's capacities should not be underestimated howwever. Although he has been afflicted with a playboy image which has undermined his personal credibility, he did make", a very significant contribution to the party in the 1965 to 1969 period, when he was one of those closest to Brendan Corish. His record as Minister for Labour was good - he sponsored a great deal of innovative legislation and he did manage to negotiate an excellent - from the Government's point of view - wage deal in 1976. He proved his electoral mettle by his performance in the European elections in 1979 when he won 34,511 first preference votes in the Dublin constituency. He also is a better performer on teleevision than Cluskey ever was. There is also a streak of firm determination about him. An example of this is his manaaging to pass his final Bar examinations last September in the midst of very pressing Government and party business.

In spite of this however, the prospects for the party look bleak: Electorally it is on a knife edge and the economic course of the Government is going to make it all the more difficult for Labour to survive with any credibility or idenntity in tact.