Labour Party leader Eamon Gilmore was speaking at the MacGill summer school in Glenties
Speaking in Donegal tonight at the MacGill Summer School Labour party leader Eamon Gilmore said that we must learn the lessons of the past to build a new Republic.
The famous Glenties venue has been the centre for many important debates over the years but probably never as important than this year in focusing both the Donegal mind, but a country trying to grapple with unprecedented challanges.
Mr Gilmore’s speech:
The MacGill summer school plays an important role in Irish political life. It provides us all with an opportunity to step back from the day to day political contest, and to debate the bigger issues. To take a longer term view, of where we are as a country, and as a people.
That kind of perspective is not a summer time luxury, it is a vital necessity. Now, more than ever, we need a sense of direction. A sense of what we are trying to achieve, of what we are about.
It would be easy to be downcast at the scale of our problems. The economy is in deep trouble, and there are multiple crises to be addressed.
We are in trouble. But we have been in trouble before. We have had crises before, and we have dealt with them. More than that, we have shown before that, as a people, we can emerge from a crisis and build something new and better.
We are, if we choose to be, at a major turning point in the history of our country.
Over the coming years, we will be celebrating a number of centenaries that mark the beginning of independent Ireland. The Lockout, the Rising, the First Dáil – these were all events that took place as Ireland struggled to gain political independence. National freedom. In the forty years that followed, the first phase of the history of our state was devoted to consolidating that independence. Asserting our sovereignty through neutrality, building the infrastructure of the state, developing projects such as the Shannon Scheme.
It was a vital phase in our history, with many accomplishments, but it ended in crisis. A profound crisis – one which tested our people to the limit. T.K. Whitaker has described that moment in history in the following terms:
‘the years 1955-56 [he wrote] had plumbed the depths of hopelessness .One of the recurring series of balance-of-payments crises was overcome, but only at the cost of stagnation, high unemployment and emigration. The mood of despondency was palpable. Something had to be done or the achievement of national independence would prove to have been a futility’
And yet, from that moment of despair was built a national revival. It began, with the document Economic Development, and the First Economic Programme, which started to open up the economy. But opening up the economy, was only a prelude to broader change – to the opening up of society. Over the decades that followed, Ireland changed – or rather was changed – radically. Free education, membership of the European Union, the expansion of third level, the liberal agenda. The achievement of political freedom was followed by the achievement of personal freedom.
It didn’t happen on its own. It happened because people made it happen. People who were mortally sick of watching their brothers and uncles carry cardboard suitcases onto the boat to England, to work in labouring jobs and live in doss houses. People who had had enough of an over-bearing Church and an over-bearing society, and were prepared to demand change. People who saw that there was no contradiction between being fully Irish and being fully engaged with the wider world. For whom membership of the European Union was a conscious exercise of national sovereignty, and a practical way to pursue our interests on the world stage.
Now again, we are at a moment of crisis. Now again, we must launch a new stage in our history. Call it what you will. A new Stage, a third act, a paradigm shift, the Fair Society, or an expression that I find increasingly appealing, The New Republic.
We have an economic crisis, but it is part of a political and social crisis. The model that drove us since the late 1950s has been under pressure for some years. We built a strong open, exporting economy, but it was hi-jacked by property developers and speculators. We embraced the European Union, but we have failed to convince our people of the merits of that membership. We opened up society, and gave people greater freedom, but we have seen a coarsening of society in the wave of crime and death driven by drug crime.
Too often, our people were treated as economic units, not as members of a society, – subjected to poor planning, high house prices, inadequate services, and now left with the bill.
Our economic model was simply not environmentally or socially sustainable. Of our present housing stock, approximately one-third was added in the past 10 years, yet the environmental standards to which they were built were shamefully inadequate.
Despite the rising tide, Ireland has remained one of the most unequal societies in the developed world. In the prosperous times social welfare rates increased, but the opportunity to reform the social welfare system – to make a trampoline out of a safety net – was passed up. We did not grapple with our social problems with any degree of determination or vigour.
We suffered too, from a want of confidence and ambition.
In 2006, at the height of the boom, it was deemed acceptable for Government to set a target that illiteracy would be lowered to 15% by 2016. 15% – in other words it was ok that one in six children in disadvantaged schools would have reading problems.
The great opportunities to reform public services were missed. In 2001, Labour proposed universal health insurance as the means to develop a better and fairer health service. Since then, health spending has increased by €10billion euro, the policy of building super-private clinics has utterly failed and we are left with the bureaucratic monster that is the HSE.
So, the task that confronts us now, is a great one. But the scale of our ambition must also be great. To avoid another lost decade, by making the right decisions on the economy. But at the same time to launch a new phase in our History – to build a New Republic.
A Republic marked by both responsibility and expectation. Where the opportunities available to our citizens are matched by their sense of responsibility to the State and to each other. Where Government is exercised, not on behalf of a privileged few, but on behalf of the many. Where personal freedom is buttressed by social solidarity.
The first three building blocks of that New Republic are a return to full employment, a health service that is both excellent and equitable, and an outstanding system of free education. We must finish the educational revolution. We must establish, and vindicate, as an indisputable element of citizenship, the right to read.
The New Republic must be based on building a sustainable and enduring progress. A progress that reaches into all classes and regions of Irish society. That meets our global obligations on aid and carbon reduction. That marks Ireland out, not as the Klondike of Europe, but as the clean man of Europe.
That progress will not just be measured in material terms. The yardstick by which we measure the quality of our children’s lives, cannot be the designer brand on the back of their jeans. We will measure our legacy to them in the quality of their lives, the texture of their civilisation, their sense of duty to each other, and their contribution to the world.
To achieve this, we will need to pursue an agenda of reform led by reform of Government itself.
We cannot pretend that the difficulties we face are solely the result of the global financial turmoil, or of the irresponsible actions of a few.
We are where we are, because there have been profound failures of governance. This is the second time in a generation that Ireland has been brought to the brink of bankruptcy. Once, between 1977 and 1981, when a reckless and divided Fianna Fáil abandoned all restraint, and created a national debt that took a decade to resolve. Now again, after twelve years when an export boom was allowed to be turned into a property bubble, and the exchequer was once again turned into an electoral war-chest, we have an even worse crisis. We must ask searching questions about how that was allowed to happen, and about how the banking system was allowed to become so over-extended and compromised. We must end Government by clique.
But of course, we must begin by confronting the immediate economic crisis.
The crisis itself has three dimensions – the banking sector, the public deficit, and the crisis in the real economy – the loss of jobs and businesses. These three dimensions are inter-linked. Each affects the others, and each must be dealt with in parallel.
My chief criticism of the Government has been its almost exclusive concentration on the banks and the public finances, and the relatively limited attention that has been given to the real economy. That is a mistake. Every worker who losses their jobs, costs the exchequer at least €20,000 in taxes forgone, and social welfare benefits paid. Every person who losses their job is potentially another mortgage in arrears and another strain on the banking sector. The IMF was clear on this.
“The risks [they wrote] arise from the continuing interaction of slowing growth, financial sector stress and the state of public finances, with each threatening to pull the other down”.
So, we must have a strategy to deal with the crisis in the real economy, as well as the problems in banking sector.
I want to see more done to support enterprise. I want to see a meaningful scheme emerging from the social partnership talks that would help to protect existing jobs. That we would invest to save jobs, rather than bear the cost of unemployment
I want to see support being provided where employers create new jobs. Labour has proposed a time-limited PRSI exemption where a firm creates a new job, that is filled by someone on the live register.
I have also been arguing for a new approach to public investment.
With the fall in economic out-put, we must reassess our infrastructural requirements. Yet, we also know that there are very many infrastructural projects that could be carried out, which would yield a positive long-term return to our economy. There are hundreds of schools with poor quality buildings. There are urban regeneration projects that are ready to go, but unfunded. There are areas where water is not drinkable, and towns awaiting flood relief schemes.
We need a new assessment of the size of the capital spending envelope over the coming years and how it should be allocated. And we should be prepared to front-load that allocation. There is an opportunity to make those investments now, when there is spare capacity in the building sector, and tender prices are at an historic low. Investments with a social, but also an economic return, that will support economic recovery.
To drive this process, Labour has been calling for a new National Development Plan to be drawn up. We believe there is potential for some if it to be funded through National Recovery Bond, could potentially allow the Government to raise funds on more favourable terms than are available through money markets.
And we have proposed a State Investment Bank, that would play a key role in financing investment by the State, semi-state and private sectors.
For more than a year now, Labour has been arguing for a determined effort to be made in providing new opportunities for people who have lost their jobs.
It is simply not economically, socially or morally sustainable for the state to sit back and ignore half a million people on the live register.
There are a variety of needs, and there must be a variety of responses. We know, for example, that construction employment will not return to former levels, so there are construction workers who need new skills and training to find work in other sectors. The UK economist David Blanchflower has pointed out too, that a period of unemployment at the start of a young person’s career can have a lifelong effect on their career and earnings. So we need work experience programmes for them.
We must learn the lessons of the 1980s, and do everything possible to avoid the build up of a new problem of long-term unemployment. We must invest in the pool of skills and talent that will drive recovery.
Having half a million on the live register is a social emergency, and we should respond as such. We need a determined drive to put every resource at the States disposal to use. In my view, we should have a target of at least 100,000 additional training and work experience places.
As I travel up and down the country, meeting business people, many of them running small concerns, the number one issue that comes up is credit. The bank won’t listen. The bank won’t lend. There can be no doubt that dealing with the banking crisis is absolutely essential.
Where I differ from the Government on the best means of doing it
I opposed the blanket guarantee, because it was too far-reaching, and because it handed over too much power to the banks. Now, we see natural consequence of that decision, in NAMA. I do not say that NAMA won’t work – eventually. But it will only work after the state has taken on an unacceptably high burden of risk. The approach Labour has favoured, of temporary nationalisation, allows the bad loans to be dealt with, but at a lower risk to the state.
The three dimensions of the crisis must be addressed simultaneously, but also fairly. That is not an optional extra – it is a necessity. Because if it is not fair, it will not be credible, and credibility is central to success. For an economic strategy to work, people inside and outside the country must believe that it can work. Without that credibility, we will not restore the confidence that our economy needs to function, and that has deserted Ireland, both domestically and internationally.
That means that the burden of adjustment cannot be inflicted on any one group, at the expense of others, and certainly not on those least able to bear it.
This will be seen most obviously in how the fiscal crisis is addressed. There is a new mantra coming now, that we must base the adjustment on cuts in expenditure, rather than taxation. Frankly, that isn’t credible – the size of the problem is too great for that. I keep hearing that you can’t tax your way out of a recession – but you can’t cut your way out of it either. If Government embarks on a process of slash and burn in public services, then it will lack credibility, because it won’t be sustainable. Nor can you credibly argue that the tax code remain unreformed – that those on high incomes continue to avoid paying a fair share of tax, while taking the knife to social welfare and primary education.
This is where crisis must be turned into opportunity. The cuts that are required in public services will be painful, but they can and must result in a leaner and more efficient public service.
After years of campaigning by Labour, a Commission on Taxation has been established and will soon report. From that we must work to develop a tax code that promotes investment, puts a proper price on carbon, and is manifestly fair.
The report of the McCarthy group is a serious document and needs to be considered in a serious way. For a progressive political party, like Labour, achieving value-for-money in public spending is vital, precisely because we believe in public services.
Even if I disagree with some of the findings of the report, the fact that the McCarthy group could identify so much waste and duplication is quite a statement about the attitude to public expenditure over the past twelve years.
We know that there is a need for public sector reform. But what we need in is surgery, not butchery. If we try to roll back the clock by five or six years – to undo the recent expenditure growth, then we will fail. What we need is to look forward five or six years, and, through fundamental reform, build a leaner, more effective public service.
There is a huge agenda here, that requires the focus of a senior Minister for Public Sector Reform. The success of the Labour Government in 1992-1997 in driving through its agenda of legal reform, owed much to the concentrated attention given to this issue by a dedicated Minister – Mervyn Taylor, who functioned with a modest staff. The abolition of The Department of Gaeltacht and Rural Affairs, which I support, would open space for a new Minister for Public Sector Reform. That Minister should be given a clear mandate, and should make it their task to abolish themselves as quickly as possible, when the work is done.
The cuts agenda must not stand in the way of more fundamental reform. We will not re-build the health service unless we fundamentally change it, through universal health insurance. We will not reform local Government though arbitrary cuts, but by reform which sets out a clear division of responsibilities between local, regional and national level.
The objective must be enduring progress. Not another round of slash and burn, without reform, to be followed by a return to old ways once the immediate crisis has passed.
We are living through dark and difficult times. We are being confronted by failures of the past. We are living though a period which is visiting pain on those who deserve no share of it. We have difficult days ahead. And yet, there is still the potential. There is still the opportunity, that we will sit in Glenties a decade, or two decades from now, and say, that this was the hour when we began to build a New Republic.
