After Budget 2013, Labour's goose is surely cooked

Even though there are another three years to go to an election, the goose is already cooked for many Labour TDs. By Vincent Browne.

Michael McGrath, the Fianna Fáil spokesman on finance, responding to the budget on 5 December, said: "Fine Gael [in the cabinet discussions] showed that its absolute priority in the budget is to protect those who have most. We are told the Labour Party made valiant efforts to protect households dependent on social protection but, clearly, it has failed.”

Interestingly, at this point, Ruairi Quinn intervened to say: "Not so."

Even those of us who might be sceptical about Quinn's denials of having earlier signalled to a parliamentary Labour Party meeting that he had no confidence in Minister for Health James Reilly might be disposed to accept his word on this - ie, that Labour did not make valiant efforts to protect households depending on social protection.

McGrath went on to say: "The price Fine Gael wanted to extract for considering even a modest increase in tax for those earning more than €100,000 was to cut the most basic welfare payments. Fine Gael used the basic welfare payment of €188 per week as a negotiating chip to protect those earning more than €100,000 per year...

"In the face of this resistance from Fine Gael, the Labour Party capitulated and accepted the symbolic fig leaf of a so-called mansion tax that will affect a small number of people and bring in little additional revenue. Principles that are articulated in opposition are forgotten around the table of power."

It is incomprehensible that the Labour Party would have agreed to break its solemn and much-advertised election promise not to allow any cut in child benefit, let alone this cut - €10 a month for the first and second child, €18 for the third child and €30 for the fourth and other children - and to do so in a way that will cause further terrible hardship to those whom Labour purports to protect.

I suspect this budget debacle was engineered in the first instance by the attempt to stop the flood of cabinet leaks that marked the lead-up to the 2012 budget a year ago, by confining the deliberations to the four ministers on the economic committee: Enda Kenny, Eamon Gilmore, Michael Noonan and Brendan Howlin.

As Kenny and Gilmore are otherwise largely preoccupied, this left just Noonan and Howlin, both practised political disasters.

Noonan almost did in the Fine Gael party a decade ago, while Howlin - admittedly ably assisted by Alan Shatter - managed to lose the referendum on Oireachtas inquiries.

By the time other ministers became involved in the overall schema of the budget, I suspect it was too late to unpick the big decisions - particularly the decisions on PRSI, the household tax, respite care and child benefit - to protect the wealthy from increased charges or taxes. But perhaps this is a naive, benign assumption, and it certainly does not disguise the instinctual response of Fine Gael to the crisis: to afflict the afflicted and cosset the cosseted. Nor does it disguise the instinctual reflex of Labour ministers to remain in office almost at all costs, probably believing that this is somehow in the national interest.

An exacerbation of all this has been the disingenuous Labour claim that the budget involved a €500 million "wealth tax package", whereas the true figure is €114 million in 2013 and €174 million in a full year, as Michael Taft of Unite has shown. The situation was made even worse by Gilmore and Joan Burton telling us how difficult all these decisions have been – for them.

Róisín Shortall again made a telling point at Gilmore in her contribution to the Dáil debate on the budget. She noted how the tax relief on pensions costs the exchequer €2.5 billion annually, and around 80% of this relief goes to the top 20% of income earners.

Pointedly, she asked: "On what basis does the Tánaiste believe it is any way fair that a person should be able to receive a lump sum of €200,000 tax-free? What is the basis for continuing with a regime, given that many thousands of taxpayers and others, who cannot afford to make pension provision for themselves, are in effect paying for the significant tax-free pension lump-sums of some of the wealthiest people in the country?"

It is all very dismal for Labour - made all the more so by Mario Draghi, who made it clear on 6 December that it is very much Frankfurt's way, not Labour's way, as far the €30 billion Anglo promissory notes are concerned. Even though there are another three years to go to an election, the goose is already cooked for many Labour TDs.

But there is a modicum of hope.

Tom O'Connor, the political scientist, has shown evidence that a left-leaning majority might be emerging (including Labour among the left). He notes that, in 1987, the left was at 15%, in 1997 at 24%, in 2007 at 25%, in 2011 at 40% and, according to the Red C poll in the Sunday Business Post on 2 December, at 43% now.

It is not entirely improbable that the left (Labour, Sinn Féin, United Left Alliance and left-leaning independents) will be close to 50%.

That might be interesting - or it might, once again, be more of the same.


Image top (the Labour Parliamentary Party at the beginning of the 31st Dáil, in March 2011): The Labour Party.