Budget was all gloom – but a ‘Brexit bounce’ may see Leo go to the country
WE JUST can’t get away from Brexit! It has now pervaded every facet of present-day Irish society. Last week’s Budget brought the reality of Brexit home to every household in the country. Normally, an incumbent government going into their last few months before an election would have many goodies to give out in their final budget.
This was not the case last week. Indeed, if anything, taking everything into account, the average Irish citizen will be worse off as a result of Paschal Donohoe’s statement.
The ESRI didn’t pull its punches. It stated that everyone would be adversely hit by the Government’s failure to adjust income tax rates or to raise welfare rates. The minister himself had to endure tough talking from some members of the public who rang into the traditional call-in on Seán O’Rourke’s RTÉ radio show the following morning.
However, by and large, the public seem to have accepted that, while the Government’s coffers may be reasonably flush at the moment, a cautious budgetary approach needs to be taken because of the impending negative effects of Brexit.
Debacle
The Budget, as is normal these days, was already well leaked before the due day. What was different this time was that the two main parties, Fianna Fáil and Fine Gael, did not have too many issues to fight about beforehand.
Fianna Fáil seemed to be quite happy to adopt a relatively neutral position once they were sure Minister Donohoe was not going to deliver major tax and welfare benefits. No doubt they will ‘dine out’ on this Fine Gael omission on the doorsteps. On the other hand, the main opposition party claimed credit for extra public spending, especially hundreds of additional gardaí.
The day of the Budget announcement coincided with pretty gloomy soundings coming from London and Brussels. It seemed that we were definitely heading for a No Deal. But, as has happened frequently throughout this Brexit debacle, after dark clouds, sunshine inevitably breaks out.
The mood music coming out of the Varadkar/Johnson meeting brought a completely new dynamic to the Brexit negotiations. Within 24 hours, the EU and the UK were back in formal discussions.
All along, Irish Government ministers had been maintaining that the negotiations could not be handled on a bilateral basis, as between Ireland and the UK; they emphasised that they could only take place between the UK and the EU. And yet, clearly, as a result of the meeting between the Taoiseach and the British prime minister, we are getting closer to an agreement, albeit with the possibility of a further necessary delay in the deadline.
While the EU bureaucrats will be cagey about the outcome of the Varadkar/Johnson meeting, I’ve no doubt that they will adopt the attitude that, if it’s good enough for the Irish, then it’s good enough for them, provided the integrity of the EU internal market is preserved. It will take a Herculean feat to have a deal ready for the heads of state meeting later this week. For me, it was significant that while Taoiseach Varadkar was out commenting reasonably early, after the meeting, the British side, and the DUP, had gone to ground. The latter kept off the airwaves for over 24 hours. When they did appear, they reminded Johnson of their perceived pivotal voting position in Westminster. This suggested to me that they were beginning to realise the ground was shifting from under them.
There may very well be some within the DUP who might privately wish Johnson would go ahead and seal the deal with the EU, despite the fact that it may run counter to their long-held ‘red line’ position on customs.
Others will cry ‘no surrender’ no matter what. Earlier in these negotiations, the DUP was able to put a spanner in the works when Theresa May and the EU were close to an agreement.
Most observers doubt they will achieve this a second time. If the British are to move on the customs issue as reported, we can expect much reassurance on the constitutional position of Northern Ireland for the DUP from the British government.
These days, Westminster and Leinster House are politically light years apart. The difference between the landscapes couldn’t be more stark. Brexit has caused a political implosion in the House of Commons, while it has had something of a calming effect in our political scene.
Danger
Where there is similarity between Westminster and Leinster House is in the clear desire by both main opposition parties to have Brexit out of the way, well before the next election, in each jurisdiction.
Both see the danger in allowing the incumbent government to get an electoral bounce for safely navigating through the troubled Brexit waters.
Labour in the UK, and Fianna Fáil in the Republic, will wish to fight the next election on bread-and-butter issues. An election will probably happen sooner rather than later in the UK.
Johnson and co. are chomping at the bit. Here, we are due to have four by-elections in November. Undoubtedly, these will be troublesome for Fine Gael. Mr Varadkar has earmarked May as his preferred time to go to the polls. However, if, and it is a big if, Brexit is put to bed in the next few weeks, we can expect that Fine Gael will cut and run pretty soon thereafter.