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In Dublin’s fair city

October 21, 2011

Just back from a quick immersion into Irish politics and economics.  Six members of the Commons Political Reform Committee travelled to Dublin for a one night stay, in order to swap experiences on our constitutional arrangements and also discuss the Irish economy and the crisis in the Euro Zone.

Political relations between Dublin and London are very strong…and probably warmer than either of us have with Belfast!  As well as a shared cultural identity we also have valuable trade links.  Britain accounts for 16% of Irish exports while they import 6% of our total exports.  That may not sound much but it is more than China, India, Brazil and Russia combined!  So the health of the Irish economy is important to Britain.  That is why I defended our bi-lateral loan to Ireland earlier this year.  Economic recovery in Ireland will help Britain’s recovery, as will stability in the Euro Zone.

Some more facts you may not know about the Irish economy – it’s the world’s biggest supplier of baby food and, er, viagra. Botox is made here and Dublin is also the headquarters for many leading companies.  And for all us social media nerds, it’s the European base for Facebook, Google, Yahoo and Twitter.

And of course, the Irish economy, like ours, is emerging from the financial crisis of 2008.  Ireland fell further than us and their budget austerity measures make Britain’s look half hearted.  I met the Minister for Public Expenditure and Reform, Brendan Howlin twice on the visit.  He’s a Labour cabinet minister in Ireland’s Centre Right-Labour coalition.  Ed Balls would benefit from a lesson in real fiscal tightening.  Irish public sector employees have all taken a 20% pay cut and seen an increase in their pension contributions.  They want to get the budget deficit down to 8.5% in the coming year and 3% by 2015, broadly the same projection as Britain.   The Irish have invented a new acronym for all this pain – FEMPI = financial emergency measures in the public interest.

We also met with other Irish ministers, members of Ireland’s Parliament (the Oireachtas) from both houses, council leaders, academics and the political editors of the main newspapers and state broadcaster RTE.  Ireland is in the middle of an election for the ceremonial role of President and two referendums, one of them on cutting judges’ pay.  Ireland’s written constitution leads to frequent referendums and we discussed the difficulties of conducting a campaign based on the issue to be decided, rather than misleading claims from those opposed to change…memories of our disastrous AV referendum in May.

Like us, they are considering what to do with their upper House, an indirectly elected Senate.  The Fine Gael led coalition intend to abolish it.  Like us they’ve been discussing reform for years.  Small countries like Ireland may not need a bi-cameral legislature, New Zealand gets by with one chamber.  As I’ve written elsewhere on this blog, I think we need a fully elected Senate to replace the House of Lords.

Finally, I intend to return to Dublin for a private short break.  It’s a beautiful city with warm and friendly people.  The Irish sense of humour is legendary and if you find yourself in a bookshop do browse through the book of insults for the politicians and “bankers who banjaxed a nation.”

15 Comments leave one →
  1. Dean permalink
    October 21, 2011 2:13 pm

    Picking up on a good point you make here: Can I ask your opinion on why our trade to the likes of China, India, Brazil, Russia et al is so low?

    I’m sure many of us have our opinions, some of which are a factor why we’re so interested in a certain 3 line whip on Monday, but I’d like to hear your opinion as my local MP.

    • October 22, 2011 1:44 pm

      Proximity and over a thousand years of shared history (and trading) must be the explanation for the importance of Ireland (plus Ireland opened up more in the 1960s and then after 1973 like us joined the EEC) but the weakness of the relationship with others is harder to explain! But it can’t be long before two countries with populations of 1 billion become more significant than one with 4.5 million. Our government has had recent trade missions to India and Latin America. The DPM’s fluency in Spanish is appreciated in the latter!

      • October 23, 2011 10:11 am

        Would you agree that the fact we (in the UK) do not actually have the right to negotiate free trade agreements with the likes of Brazil, Russia, China, India and (as actually shown back in 2003 when Blair had to famously decline an offer from the Senate) even the USA is more to blame as to why our trade with these nations are so small? After all, this power is entirely left in the hands of the EU to act on our behalf, and they tend to not exactly really keep us in mind when working on EU-wide trade deals…

        And I’m sure your eyes have just rolled and the thought of “Oh not another Europhile” has crossed your mind, but the fact is that this matter is a big deal to a lot of us voters and, well, the Lib Dems did kinda promise us a referendum on the membership of the Euro.

        **awaits stock reply regarding the Government not being the Lib Dems and this not being official Government policy**

    • October 23, 2011 5:54 pm

      The EU Trade Commissioner deals with tariffs etc within the WTO on behalf of all member states as we do not have variable tariffs within the EU. Trade deals (ie bilateral contracts etc) are a matter for member states…as numerous trade deals (some of them not very savoury, eg arms to various dictators) demonstrate. I suspect you are more of a Euro sceptic, I am a Europhile! I will write a separate piece on referenda on Monday.

      • Dean permalink
        October 23, 2011 10:15 pm

        You may be a Europhile, but you did join a political party which promised a referendum on EU membership….

        I am looking forward to your entry on the matter.

  2. robertjessetelford permalink
    October 21, 2011 4:27 pm

    Glad you had a nice trip, Stephen🙂

    What’s your position on uptake of referenda in the UK? Do you want more of them, and if so, on what issues do you think referenda are necessary? For instance, would you back a referendum on a proportional voting system, or would you be happy with just legislation to introduce it? (There was no referendum on lessening the number of MPs to 600.)

    I know you’re against recall elections because you told me so in a letter. Apparently this measure “…would give such electors the opportunity to displace MPs with whom they might simply disagree politically”. A strange position for an MP to take, considering that’s how MPs get in, mostly!

    You can find my response to your letter on recall elections here: http://robertjessetelford.com/blog/?p=208

    • October 22, 2011 1:47 pm

      I’ll probably do a separate piece on the EU and referenda on Monday.
      On recalls – I’m in favour of them where defined wrong doing is proven that is not sufficient to strip someone of office under existing law – our original call for this was at the time of the disgrace of Derek Conway. A new law in this area would clearly need to prevent vexatious, politically motivated petitions for recall.

  3. Philip Morris permalink
    October 21, 2011 8:47 pm

    Goodpoint made Stephen
    “Ed Balls would benefit from a lesson in real fiscal tightening. Irish public sector employees have all taken a 20% pay cut and seen an increase in their pension contributions”.

    How about a lead from the top and ALL MPs as well as top civil servants (those of over £50,000) take a 20% cut, after all taking a pay cut is not so bad, as it reduces your income tax bill. as well as pension controbutions.
    Also remove all M.P.s food expence claims, after all if M.P.s were not in Parliament would they not eat ?? So why should all Tax-payers pay so M.P.s can shop in Waitrose.

    Philip Morris

    • October 22, 2011 1:54 pm

      My point was that the Irish have gone for a really hair shirted version of fiscal austerity, with 20% pay cuts which yes included their MPs. In the UK we hear lots of bleating from Labour and their union paymasters about how pernicious is the Coalition’s programme, yet here we don’t have pay cuts – just a freeze for those on over £21k (so yes this includes MPs) and a £250 rise for govt employees on less than £21k pa.
      As for your comment on shopping in Waitrose on expenses (which I NEVER did), I don’t know where you’ve been in the last few years but the old expenses regime ended on 6th May 2010 and the specific claim for food shopping went about 18 months before that.

  4. rosemary permalink
    October 21, 2011 8:54 pm

    We so often hear this figure for our trade with the Irish versus BRIC, that I long to know, is it a Chinese whisper? Have you checked it, as a good accountant is bound to do?

    Good idea to call it FEMPI rather than “we are all in this together”, as it is slightly less likely to be sent up. Also it may be easier to effect elegant economies when you can export your social problems, and have been doing so for centuries. By the way, how many Irish (or other) “travellers” did you come across, just as a matter of interest?

    I’m glad the relations were cordial: they jolly well ought to be after what we have done for them! And after all that strutting about in Europe, looking down their newly international noses at us. I trust you don’t want us to go copying their presidency?

    (I’m allowed a little rant by the way, having so much Irish blood in me.)

    Now to what really matters: Monday’s debate. The case for a consultative referendum is very strong, and whatever the outcome, the government would still have an entirely free hand to propose whatever action it thought best. What are you intending to do?

    • October 22, 2011 1:56 pm

      Yes, the trade volume figures are correct! I’ll try to get the detail for you. On the EU – see my answer above to Rob.

  5. Peter permalink
    October 22, 2011 12:05 am

    Ireland is taking its problems very seriously which is really positive but I am not sure if another round of austerity measures can help the country. The previous ones have impaired the economy’s ability to grow and further measures will probably weaken its growth prospects even more.

  6. rosemary permalink
    October 22, 2011 10:39 am

    If you are exporting people rather than importing them, then you don’t need growth. Living within your means, and rediscovering social and political stability, and your own national identity, is something we could well do with ourselves now. The cycle is natural, and a period of dieback always follows growth, in nature too. But, alas, we have recklessly imported so many different nations, and our population figures have become so alarming, that our period of inevitable dieback may be fraught with tension and conflict. Or, like the thirties, it may yet become a period of social stability, despite the unemployment, as the excesses of the boom years become an embarrassing memory. We shall see.

    What is different this time is that so many women want work, as well as men, and young people of both sexes would find it very difficult to adjust back to one income per family, and the sober and careful economies that go with that.

  7. Paul Bemmy Down permalink
    October 24, 2011 1:32 pm

    Yet more proof that the “Political Class” don’t give a damn about the electorate with Cameron imposing a Three Line Whip on the EU referendum vote. Me thinks he’s getting too cocky and making the same mistake the last lot made in ignoring their traditional supporters. “Bigotgate” and the whole issue of ignoring the public over concerns at the levels of immigration, did for New Labour, and Cameron is taking a similar “head in the sand” approach. Now I’m all for a bit of re-distribution, but Europe has become just like our benefits system, where those who pay the most in, get the least out!

  8. October 24, 2011 6:46 pm

    re the EU – please see the separate blog I just posted.

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