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Tag Archives: croke park agreement

Anyone active in collective bargaining over the past few decades will be well aware of the offer and acceptance of “allowances” when the demand was for a pay increase. It is therefore ridiculous to categorise all allowances as some kind of luxury extra that can be cut without touching basic pay.

Any restructuring of the public service which fails significantly and very obviously to reduce inequality of income in the public service is a failure for the Labour Party.*

The final details have yet to emerge but all of the indications particularly over the past week suggest that the Croke Park 2 agreement has been poisoned by the conservative doctrine of “fairness”.**

It goes like this. Because it is planned to cut “allowances” for “frontline” workers, “fairness” demands that highly paid workers who don’t get allowances have their pay cut too. In other words, we are back to “sharing the pain” and leaving the structures of inequality intact. It is certain that rich public servants will be cut by proportionately more but clearly they are much more able to absorb small reductions even when these are expressed in impressive percentages.

It is of course a matter of the Labour Party being outmanoeuvred by market liberals and failing to reduce inequality but it is also a question of leftist acceptance of enormous levels of inequality while maintaining a vestige of credibility.*** Credibility is secured by talking about merely the richest 1% and arguing that it would be “unfair” to tackle one group of rich people unless all rich people can be similarly affected. Even opponents of Labour in government and those on the left whose ambition it is to destroy Labour effectively support inequality of income.
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* I am a longtime member of the Labour Party.

** https://colummccaffery.wordpress.com/2012/09/18/fairness-has-become-the-conservatives-shield/
https://colummccaffery.wordpress.com/2013/01/03/how-concerned-are-you-about-horizontal-fairness/
https://colummccaffery.wordpress.com/2012/10/08/inequality-of-income-can-labour-put-it-on-the-public-agenda-and-achieve-some-reduction-while-in-government/

*** https://colummccaffery.wordpress.com/2012/05/08/prioritising-public-spending-and-reducing-income-inequality-in-the-public-sector-a-motion-which-failed-to-make-the-agenda-for-the-labour-party-conference-2012/

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Here’s a motion which twice failed to get the support of ordinary members of the Labour Party and so didn’t make it onto the agenda for Conference 2012.

As a first move in establishing a priority list for current public spending, Labour marks the maintenance of public sector incomes above 100k p.a. and public sector pensions above 50k p.a. as the lowest priority. That is to say, in the event of any further reductions in public spending, Labour identifies the first cut:  a 100k p.a. income ceiling for public sector workers and a 50k p.a. ceiling on public sector pensions.

Here’s the argument:

Let’s be clear

This proposal has nothing to do with taxation. If taxes were raised or if a new rate of tax were introduced and if the money so raised meant that there would be no need of further cuts in public spending, then this proposal would be redundant. The point here is this: if there are to be cuts, what area of public spending is least important, what should be cut first? This proposal answers: if there are to be cuts in public services and/or the incomes of relatively poor people who depend on the state, then those cuts should be considered only after the incomes of the rich who are on the public payroll have been capped at an affordable and sensible but generous level.

 

The immediate background

Leaving aside revolutionary and populist posing, the bulk of expressed opposition to cuts in state spending has involved particular pleading.  Then our media – in making no demand that something constructive be said – have compounded the problem. Journalists and presenters fail time and again to ask the most obvious question: “If there must be cuts and you feel that ‘X’ has to be maintained, which areas of spending do you think are less important than ‘X’ and should be cut first?” The lack of stated priorities has ensured that cuts are spread and this has tended to copper-fasten existing deprivation and inequalities.

I have been arguing on FaceBook and elsewhere that the rich among our public servants are the least of our concerns and that income (to include pay, bonus, overtime, allowances etc.) and pension ceilings should be introduced before any other cut. While there has been negative reaction, there has also been support and some of the support has been to the effect that the proposition should be put to a Labour Conference.

 

A fundamental question for Labour at this time

Because revolution and populist posing must not feature in Labour thinking, a major and significant question looms, and it demands an answer now: What remains of Labour values when state spending must be cut? Two very old and basic Labour tenets begin to harmonise and form at least part of the answer. Firstly, while equality is central to Labour’s ambitions, the Party has been slow to emphasise the most crucial and controversial aspect of equality: equality of income or – at least – reduced inequality of income. The time is ripe to put that right. Secondly, Labour has always sought to defend the meagre incomes of the poor. Never was this more urgent.

A pay ceiling on public service incomes and pensions would

  • accept that money is tight and that we cannot have everything but that some spending is vastly more important than others, and lay down a marker that a start has been made to setting priorities for Irish public spending;
  • make savings in public spending such that vital services and the pay of poor and middle income public servants could remain untouched;
  • reduce the bizarre and shameful spectacle of rich people beside poor people on the public payroll;
  • place inequality of income on the public agenda;
  • make it clear that Labour in bad times and in good times is serious about reducing inequality.

 

Arguments against

There are of course arguments against. Actually there are basically just three arguments against:

i)             The fairness argument

ii)            The brain drain argument

iii)           The Croke Park argument

 

i) The fairness argument says that public servants should not be singled out and that nothing should be done unless all rich people are tackled. In a sense this is a “what about?” A “what about?” is very much a conservative position which hides opposition to a change by diverting attention to other – often larger – issues. In this case, limiting the income of rich public servants is opposed by diverting attention to the income of other rich people. In another sense it is a crazy distortion of the notion of equality because what it says is that it would be unfair to reduce the incomes of one set of rich people unless all rich people were similarly treated. That is to say, it is a demand that all RICH people be treated equally!

It needs to be emphasised that it is public money that is in short supply, that cuts are happening now and that clearly public sector pay can be cut. In other words, there is neither time nor compelling need to be concerned about other rich people.

ii) The brain drain argument takes two linked forms. It is said that a reduction in top pay among public servants would result in a flight of talent abroad or into the private sector. It is certain that some may flee. However, the idea of a mass flight is fanciful. There may – just may – have been a time when a dissatisfied public worker could walk and pick up a job in the private sector. That certainly is not the case today. Moreover, this is a familiar threat raised by the rich from time to time. Remember when bank bonuses had to be paid or there would be a flight of talent? It didn’t happen.

 

Another form of the argument suggests that a ceiling would prevent the recruitment of exceptional talent. This rests on an abuse of the word “exceptional”. A pay ceiling would not rule out exceptional pay for an exceptional talent in exceptional circumstances. It would control the income of numbers of ordinary, unexceptional, rich workers.

iii) It is pointed out that the Croke Park Agreement rules out a pay ceiling. This is true. However, it does not rule out talking about a pay ceiling. Moreover, the extent to which the CPA guarantees that a group of rich people stays rich needs to be discussed and addressed.

 

Summing up

  • Let’s face it: 100k or a pension of 50k would appear a king’s ransom to the ordinary people who are made to pay these rich people or whose services are cut to maintain them. No one could seriously argue that these ceilings are not generous.
  • A public servant or potential public servant so in thrall to money that they will not serve unless paid more than 100k is clearly “the wrong stuff”. Get someone who understands the meaning of public service!
  • We live today in the kind of times so strange and fraught that a proposal once thought unimaginably daring becomes ordinary and feasible.
  • While in government in a time of crisis and austerity, Labour desperately needs to rediscover its radical voice and fundamental tenets.
  • It is possible without upsetting the troika too much to use what sovereignty we have left to make a start on a less unequal society.

As a socialist and long-time member of the Labour Party I am very troubled by the Party’s present support for reducing the income of the poor and reducing public services. As I’ve said elsewhere, I don’t see much option to paying the chancers/bond holders as the troika ask us because I fear that failure to pay up might bring on greater misery. That leaves the state very, very short of money and moves one question to the top of the agenda: What are our priorities when it comes to reduced public spending?

I would prioritise the employment of teachers and SNAs, “free fees” at 3rd level, the maintenance of HSE services, the income of low paid public servants (not in that order and plus some others) way, way above maintaining the present income of those in the category, “wealthy” who are also in public service employment. If this priority is accepted, then we need to think at what level would a public service income ceiling need to be set in order to make the required cut without affecting the priorities listed above? I find it bizarre that while we can debate unpalatable cuts because we are in crisis, the question of solving or partly solving the problem by limiting ALL public service incomes to, say, 100k for workers and 50k for pensioners is – it would seem – out of the question. Jesus wept, 100k and 50k are generous. They would appear a king’s ransom to most of the people Labour has traditionally defended.

The Croke Park agreement will be cited against this proposal but it cannot be used to censor discussion. The problem with that agreement is that it defends equally the incomes of the rich as well as the poor among our public workers.

Right now we need to enlarge what we mean by “rich” beyond the 1% normally highlighted in leftist talk to at least the top 10% of income receivers. I think a problem for Labour and the left generally is that with a tradition of attacking just the 1% and a gut reaction of “let’s burn the bond holders”, they quite simply don’t have a plan B to make progress in the reduction of inequality when the 1% has us by the balls. What I’m saying is this: Ok, we may be forced to pay these international chancers but within the spending under our control, how can we move towards reduced inequality of income?