by Peter Stafford (June 14, 2010)

The current debate about the Croke Park public sector pay deal reveals much about the state of the Irish economy, but it also reveals something new about the state of Irish policy-making.

Firstly the venue of the pay talks is significant. Whereas previous pay deals have been negotiated long into the night in Government Buildings under the auspices of Social Partnership, these most recent pay talks were held in a conference venue on the other side of Dublin amongst a vastly reduced number of participants. By choosing to limit the participants and change the venue of the talks, Government has finally buried Social Partnership a year after it died.

The emergence of Social Partnership as the forum for economic and social policy-making in Ireland is well known. Born in the 1980s as a simple wage bargaining process between unions and employers, Social Partnership aimed to reward workers with modest wage increases in return for industrial harmony. Previous locally agreed deals were seen as insufficient to cope with the problems facing emigration-riddled Ireland, so an over-arching multi-annual national programme replaced ad hoc transitory agreements. The Government simply refereed these national talks between employers and unions and gave them structure and authority. When the Programme for National Recovery expired in 1990, a broader-based group of Partners agreed on the second Partnership programme which expired in 1994.

In 1997, with the expiry of the third agreement, the number of participants in talks expanded to take into account the inputs of rural, community, voluntary and religious interests. In 2009, the debating table once again expanded to include environmental organisations, brought into Partnership at the behest of the Green Party coalition partners. These non-governmental organisations played little part in the setting of the wage rates, but their contribution to the general thrust of social and economic policy in Ireland was significant. Indeed, such was the increased complexity of organising an ever-larger number of contributors to the Partnership deals that a bureaucracy of Social Partnership developed within the Department of the Taoiseach – essentially a secretariat to co-ordinate the wishes of vested interests who now had direct access to the ears most senior civil servants in the country.

The National Economic and Social Council, the National Economic and Social Forum and the National Centre for Partnership and Performance were tasked by the Partners to produce reports, briefings, strategies and policy options to guide the deliberations of the now enormous Social Partnership meetings. It is in the development of these co-ordinating bodies that the first sceptics of Partnership made their voices heard. The main failing of Partnership was the need for agreement amongst all signatories. This meant two things. Firstly, Government selected potential Partners from only the moderate end of the NGO spectrum in order to ensure the smooth agreement of the programme. Other, more outspoken groups were brought into Social Partnership, with direct access to the heart of social and economic policy-making the reward for silence and moderation.

Secondly, it is clear that the Partners were paid-off or their demands sweetened through the judicious distribution of the exchequer surpluses. With enough money to ensure that the demands of almost every voice were met, Social Partnership during the latter stages of the Celtic Tiger was a mechanism to meet all geographical and sectoral demands for public investment, beyond the scrutiny of Cabinet or the Dáil. Taxes were kept low to satisfy employer demands. Wages remained high. Reform of agricultural subsidies was generally benign to farming interests, and task forces to improve social harmony appeased the community and voluntary sector without much effort.

That was until the money ran out.

In 2009, as unemployment rose, exchequer receipts fell and emigration returned, the interests of the Partners moved from careful consensus to direct opposition. The economy needed higher taxes, lower wages and reduced public expenditure, but it was impossible to make those cuts within a forum designed to facilitate the sharing of ever larger amounts of money. Any group who perceived themselves to be unfairly hit would simply drag out the talks as long as possible and then refuse to implement the agreement.

Stage managed walkouts have long been at the heart of wage bargaining but in 2009, Partners threatened to leave without promising to return to sign the agreements. At the end of 2009, the most secure agreement that could be reached between unions, government and employers was a vague transitional agreement on reform of public sector pay. In the recent recession, the scope of any Partnership agreements has reduced back to its 1987 core. Government returned to its role as referee between employers and unions.

“Social dialogue” has replaced Social Partnership, and sectoral bargaining at local level has returned. Wider social and environmental issues have been shelved, suggesting an inability of the policy system to deal with such complex issues in an absence of any resources. Disquiet amongst those excluded groups will become louder in future months as they realise that while the money which supported their demand was welcome, it was perhaps at the cost of any real reform. Grassroots activists might wonder what Partnership can deliver for them in the future. Charlie McCreevy’s mantra that if he had money he would spend it, and if he didn’t have it, he wouldn’t spend, it seems to be coming true for many organisations as government finds it harder to deal with the increased demands of vested interests who have been used to getting their way.

We can expect more stage managed walkouts amongst the handful of remaining Partners as the transitional wage agreements make their laborious process through the union conferences, but with government distracted by wider crises happening at exchequer and party level, it is unlikely that the Department of the Taoiseach – and its embattled minister – will have much interest in propping up a policy-making process which was, at best, a Celtic Tiger talking shop.