Coalition talks down to wire as Ireland reopens
■ Pension funds proposal to help first-time buyers ■ Move to allow hairdressers to open on June 29 ■ Compulsory masks plan for public transport
AS Ireland emerges from an unprecedented lockdown, the focus is now turning to the formation of a new government that will decide whether to further accelerate the reopening of the country in the coming weeks.
Fianna Fail, Fine Gael and the Greens are scrambling to agree a deal that could pave the way for a historic coalition government to be formed before the end of the month, but they remain deadlocked over the State pension age, the 7pc emissions reduction target, and when to begin reducing the deficit. Last night’s declaration by Green Party deputy leader Catherine Martin that she will challenge Eamon Ryan’s leadership has further destabilised the talks.
The Sunday Independent can reveal a new pension scheme that would allow firsttime buyers to draw down a portion of their pension savings for a deposit is now being considered. The Fianna Fail proposal, outlined in policy papers seen by this newspaper, is broadly backed by Fine Gael. “Owning a home is wealth. It means you don’t have to pay rent when you retire, and therefore don’t need as big a pension,” a senior FG source said.
The policy papers detail the full extent of the pensions war that is hampering efforts to reach a deal. Fianna Fail is continuing to insist that the weekly State pension age cannot increase to 67 next year — a move being resisted by Fine Gael with the matter now likely to be referred to the party leaders. Leo Varadkar, Micheal Martin and Eamon Ryan will meet today in a bid to resolve several sticking points.
It can also be revealed that laws to make the wearing of face masks mandatory on public transport are now being actively considered by the Government amid concerns about the low level of compliance with current guidance that they should be worn.
Health Minister Simon Harris said yesterday he was “concerned” that many were not following advice to use face coverings on public transport and in confined spaces like supermarkets. Transport Minister Shane Ross said a law making them mandatory was now “high on the agenda in any discussions about public transport safety”. Face coverings on public transport will be mandatory in the UK from June 15.
The Government will also consider whether to reduce the social distancing rule from two metres to one metre for some areas of the hospitality sector.
It is also hoped that if the virus remains suppressed, the reopening of hairdressers and barbers can be brought forward to June 29. Small weddings with 25 or 30 people could be allowed from next month, but the Government is ruling out larger gatherings of 100 people, possibly until next year. “If you’re planning maybe a very small wedding in the 20s, maybe we’ll be able to get there,” Harris said.
Many of these decisions are likely to fall to the next government if it is formed in the coming weeks, with the parties facing a deadline of the middle of this week to finalise a deal that can be then put to members over the following 10 days.
There is growing concern among senior Green Party figures that even if a deal is agreed, it may not be passed by two-thirds of its membership. Fine Gael has become increasingly frustrated with the Greens in the talks, believing they did not present a credible plan for how to reach the 7pc emissions reduction target. “We’ve spent nearly a month trying to do all the work for them,” a senior source said.
There were several tense exchanges in the talks last week which led one senior Green to claim: “I’m pretty sure Fine Gael is trying to collapse talks but just don’t really want to be the ones seen to do it.” Another senior Green figure admitted this weekend it was 50-50 whether a deal would pass the party’s membership, adding: “I am not too sure if the entire negotiating team will sign off on this.”
Detailed policy papers submitted by the three parties involved in the talks reveal:
■ The Greens want a commitment that no one who incorrectly claimed the pandemic unemployment payment would be forced to repay it.
■ They also want to bring in new laws that would enable the State to recover unpaid child maintenance.
■ A radical overhaul of the tax and welfare system and the introduction of a universal basic income by 2025 has also been put forward by the Greens.
■ Fine Gael has raised the possibility of the next government increasing social welfare and the amount of the State pension if economic circumstances allow.
■ Fianna Fail wants to ban employee contracts that force people to retire at 65.
■ It also wants to increase welfare payments to lone parents and supports for carers and put a Minister of State for Disabilities in the Department of the Taoiseach.
■ The Greens and Fianna Fail want to phase out JobPath, the controversial employment activation scheme.
■ Fine Gael wants to link PRSI to better benefits including better sick pay and unemployment insurance, better childcare and further education while in employment.
■ A system of ‘‘returnships’’ which would support women on career breaks to raise a family to re-enter the labour market through training and education programmes.
While the parties are agreed on protecting core social welfare rates and introducing a State transition pension, Fianna Fail’s insistence on deferring the State pension increase next year is causing major difficulties.
In its policy paper, Fianna
Fail is also proposing that the long-planned auto-enrolment pension scheme be introduced and include a provision allowing first-time buyers to draw down some of their pension savings for a deposit on a new home. Fine Gael is open to the initiative and believes it could be expanded to allow people to draw down some of their pension savings to fund a career break or further education. “You’d want to have safeguards to make sure you don’t dip in [to it] too much,” a senior Fine Gael source said.
The outgoing government had plans to introduce an auto-enrolment scheme from 2022 with workers contributing up to 6pc of their wages, employers matching that amount and the State also contributing.
However, Fine Gael has scaled back the plan in its policy paper for the government talks, saying there will be a “phased roll-out — over a decade — of the contribution made by workers”.
Workers will be able to opt-out of the scheme, pension provider charges will be capped, and workers will have a range of retirement projects to choose from.