Social partnership cast as villain?
It is a widely held view – and one that I share – that recent Irish prosperity was in very large part the product of the 1987 Programme for National Recovery, which was negotiated early in the third term of office of Charles Haughey as Taoiseach. This was a ‘tripartite’ agreement, i.e. between the government, the employers and the trade unions. This programme, together with the next two or so national agreements that followed at fairly regular intervals, laid the groundwork for Irish success by prompting major increases in the competitiveness and productivity of the Irish workforce. This in turn was partly achieved by bringing previously economically inactive citizens (mainly women) into the economy, generally at lower pay than that enjoyed by longer established workers.
If the 1987 agreement was a founder of the Celtic Tiger, it is the view of some that more recent tripartitie agreements have helped to destroy it. Yesterday it was revealed that a report into the Department of Finance had suggested that social partnership ‘did enormous damage to the financial system’. More significantly, it was also reported that Fine Gael’s Richard Bruton agreed with the criticism of social partnership, thereby perhaps signalling that a new government may abandon this particular mechanism.
I do not at this point have access to the Department of Finance report and so cannot judge the merits of what it is reported to be saying, but it is perhaps arguable that social partnership at some point stopped addressing economic progress and focused instead on ‘sharing the cake’ that was then still believed to be the output of the Celtic Tiger. Asa a result productivity and competitiveness declined.
It is not necessarily correct to conclude from this that social partnership las lost its purpose. It would however be fair to suggest that if it is to continue it must be re-calibrated to reflect our changed national circumstances. But there is, for me at least, no reason to conclude that we could not once again set out on the road to recovery through a social partnership agreement on the model of the 1987 Programme. However, this would have to be built on a recognition that pay and benefits and working practices that were appropriate in the apparent boom will not be acceptable now.