As Fianna Fáil and Fine Gael eye up potential coalition partners, Eoghan Ó Ceannabháin argues that a difficult election for the left will not necessarily mean an easy few years for the parties of the status quo.
After Friday’s General Election which sees Fianna Fáil (48 seats) and Fine Gael (38 seats) two seats short of an overall majority, the Irish establishment is satisfied that the status quo has been preserved, although it is nevertheless nervously casting an eye at the future. In the Irish Independent, Fionnán Sheahan writes that Fianna Fáil and Fine Gael have “failed upwards as voters see no plausible alternative”. An editorial, again in the Independent, proclaims that “In a world increasingly shaken by the winds of populism, the natural centrism of the Irish people offers a welcome buffer against uncertainty.” Others like Fintan O’Toole and Hugh Linehan warn of a “brewing storm” and “darker currents” that are stirring “beneath the vote for stability”.
It’s easy to see why they are anxious. It is just two years since Sinn Féin were riding high in the polls at 36%, causing consternation in the establishment. They emerged from this election as the second biggest party with 39 seats and 19% of the vote, way down from their high point in 2022 and down 6% from their 2020 election result. However, the underlying conditions that led to a surge in support for Sinn Féin still exist. House prices and rents continue to soar, while new homelessness records are set every few months. A so-called “giveaway budget” that provided some additional one-off payments did nothing to tackle the profiteering that is driving the cost-of-living crisis. And nurses in the INMO have just voted overwhelmingly in favour of industrial action as the staffing crisis in the health service continues.
Who does the Irish tax haven work for?
Behind the preservation of the status quo is an economy that is something of an outlier in Europe. The state’s budget surplus is now €25 billion. Ireland’s corporation tax receipts have exploded from €4 billion annually a decade ago to an expected €30 billion and is being described as a tax haven “on a par with the Caymen Islands”. A section of Irish workers does relatively well out of the tax haven. Around 12% of the workforce are employed by FDI companies at an average of €75,000 a year – well above the domestic average of €45,000. As Brian O’Boyle explains:
“All of this reminds us that the tax haven is a genuine partnership between US capital and the Irish establishment. It is also an industrial strategy that underpins the Irish ruling class more generally, as three hundred thousand workers have a direct material interest in the presence of FDI, while many more assume that high-tech jobs are beneficial to the country overall.”
Of course, the other side of this coin is the enormously inflated cost of everything. In particular when it comes to housing, the investment funds that were invited in initially by former Fine Gael Finance Minister Michael Noonan were attracted by so-called tax loopholes that were put in place purely for their benefit. Likewise, successive Irish governments have bent over backwards to facilitate the proliferation of data centres. When the Fianna Fáil-Fine Gael-Green Party government took power in 2020, data centres were already using up 12% of all electricity. In the space of one term of government, this has risen to 21%. Not content with facilitating tax dodging on a mammoth scale by the likes of Google, Amazon and Facebook, the Irish government has allowed them to hoover up electricity and water while ordinary workers suffer soaring energy prices and struggle to heat their homes. A section of Irish society might be doing relatively well out of this system – the rest are paying a heavy price.
Instability
The Irish tax haven model is inherently unstable. According to the Irish Fiscal Advisory Council just three companies are responsible for 43% of Ireland’s corporate tax receipts. The threat constantly held over the head of anyone who questions the tax haven is that “the corporations will leave”, taking their wads of cash with them. The economists who preach this doctrine see no alternative to putting all of our eggs in this basket and hoping for the best.
Indeed, there are warning signs now for the Irish establishment. Trump is threatening to introduce tariffs and reduce US corporation tax. If a few of the major US companies were to repatriate, it would cause a significant hit to Ireland’s tax take. There is also a crisis at Intel, a major employer in Ireland. On top of industrial action from the INMO, section 39 workers are also to be consulted by SIPTU about the possibility of industrial action.
Opportunities Lost
Although Ireland’s relative economic health was an advantage for Fianna Fáil and Fine Gael coming into this election, it was not automatic that they would waltz back into power. Indeed, their combined vote share of 43% is their lowest ever. However, turnout in working class areas was down on 2020 figures. Rather than blame those who didn’t vote, we should examine why this was.
Firstly, while there is a layer of society that is doing reasonably well out of tax haven Ireland, there is equally a disaffected layer of people who see no hope of change from the political system. In many areas, these people did not vote. In Dublin Central, many of them voted for Gerry Hutch.
The difference between this election and the previous two elections was that there was a real hope for change among these working class communities. In 2016, working class people were empowered by the water charges movement that was rocking the establishment and pushing back against the austerity agenda. In 2020, having forced Fine Gael and Fianna Fáil to work together for the first time in a confidence and supply arrangement, people saw the real possibility of a government without them, led by Sinn Féin.
In 2020, the new wave of support took Sinn Féin by surprise and they did not run enough candidates to take full advantage of their increased popularity. Since then, the party has attempted to follow a contradictory strategy of maintaining this working class support while at the same time presenting itself as a government in waiting and a safe pair of hands to the establishment. Mary Lou McDonald travelled to Silicon Valley to meet with business leaders; Pearse Doherty reassured big investors that Sinn Féin wouldn’t go after them; while Davy Stockbrokers’ own assessment of their meeting with Doherty was that Sinn Féin was “more New Labour than Corbyn Labour”. At the same time the party pulled back from housing protests and other mobilisations which would have drawn their base out onto the streets.
Another factor in Sinn Féin’s loss of support was the growth of the far right and Sinn Féin’s resulting vacillations over the question of immigration. Sinn Féin tailed the Government on this question. Their new policy sought to restrict access to asylum by declaring some countries “partially safe”, advocated for faster “processing” – that is to say deportation – of asylum seekers, and for new IPAS centres to be put only in places that “have the capacity to deal with them. They also argued for the ending of the “two-tier” system that prioritises Ukrainian refugees, not by giving all asylum seekers the same rights as Ukrainians, but by removing the rights of Ukrainians.
Immigration didn’t play as big a role in the electoral discourse as it did during the local elections in June. Only 6% of people cited it as their main concern. One reason for this is that Fianna Fáil and Fine Gael did not drive anti-immigrant sentiment in the way they did during the local elections. They had leaned on this excuse in previous months to distract from their decisive role in creating the misery in Irish society. With the decline of Sinn Féin’s popularity, they may have felt it wasn’t necessary this time.
The far right may not have seen wins electorally, but their organisational incoherence shouldn’t mask their success in shifting the political mainstream to the right. A key factor in enabling this was Sinn Féin’s dithering and tailing, as discussed above. By refusing to take this racism on directly, they have legitimised the migration ‘explanation’ for the crises in Irish society. The end result was predictable: confusion and demobilisation among a working class who hate Fianna Fáil and Fine Gael as much as ever but have less belief in being able to take them on, and a situation where migrants and people of colour are left feeling far less safe.
In the lead-up to the election Sinn Féin tried to present itself as the only possibility for a “government of change”, but was unwilling to rule out coalition with Fianna Fáil and Fine Gael and raise the prospect of a real break from the status quo. The next best thing – “vote left transfer left” – was only endorsed by Mary Lou McDonald two days before the election when she called on people to transfer to the Social Democrats and People Before Profit.
Mudguardism
The other parties of the centre left took a similar stance when it came to the prospect of an alternative government. The Social Democrats followed the same line that they would “talk to everyone” after the election. Likewise, the Labour Party set out its stall as wanting to talk to other parties of the centre left after the election, with a view to being in a better position to bargain with the Right when it came to a programme for government.
All of this contributed to a scenario where there was no empowered working class movement on the streets and also no prospect of an alternative left government on the cards to energise people. The Social Democrats and Labour have had a relatively good election and picked up seats, but this has come at the expense of the Greens, not Fianna Fáil or Fine Gael. The Greens, Labour and the Social Democrats came into the election with a combined total of 24 seats – they came out with 23 between them.
Post election, Ivana Bacik has continued with her plan to speak to “others on the centre left” and form a platform. If it happens, they will make noise about whatever progressive policies the right wing has conceded to, but in reality this will amount to offering up the centre left on a platter to Fianna Fáil and Fine Gael. Labour appears to be divided on the question. Marie Sherlock said Labour would only go into coalition with Fine Gael and Fianna Fáil as part of a centre left alliance. Alan “power is a drug” Kelly appears to be more keen to go into coalition whether they achieve an alliance with the Social Democrats or not. Whatever the tactical disagreements, it is clear that Labour cannot see itself as anything other than a mudguard for the right wing parties. Within its particular brand of debased reformism, it decries the idea of “shouting from the sidelines”, instead working to implement the Fianna Fáil-Fine Gael agenda while claiming to curb the worst of their excesses.
Will the Social Democrats turn out to be any different? Thus far, they have not propped up Fianna Fáil or Fine Gael. Among their ranks are ex-Labour Party and ex-Green Party members who were burnt by the experience of coalition. Although there is heavy crossover between their voter base and that of the Greens and Labour, a section of the Social Democrats’ base is more left wing and will not want them to join Fianna Fáil or Fine Gael in coalition.
The Social Democrats will need a two thirds majority vote from their membership to join a coalition government, which might make it seem more unlikely – but so too did the Greens in 2020. Some of their TDs, like Sinéad Gibney, are showing the same kind of willingness to jump in with Fianna Fáil and Fine Gael. This time it might be different, because the Social Democrats are “a committed group of experts in their field” who are “trying to offer the electorate something new”. The Social Democrats have 5 so-called “red lines” for joining a government – as if Fianna Fáil and Fine Gael might actually stick to whatever red lines they agree to in any programme for government.
Fianna Fáil and Fine Gael may prefer to go into government with a party, particularly the docile Labour Party. However, being only two seats short of a majority, they can form a government backed up by independents – this leaves Labour and the Social Democrats with very little leverage.
The “Noble” Greens
The old narrative that you cannot achieve anything unless you are in government is being heavily pushed by those contemplating coalition and by the media establishment. Backing this up is a kind of myth-making around the Green Party’s term in office which suits both the Greens and the establishment. The tale goes that the Greens did the noble thing by going into government, implemented their policy goals and were punished for it.
This does not bear up to the slightest bit of scrutiny. A majority of people have not turned their back on climate justice by rejecting the Greens. An exit poll showed that 51% believed the Government was not doing enough on climate. The Greens got 3% of the vote.
The truth is that the Greens implemented only the parts of their programme that were tolerable to Fianna Fáil and Fine Gael. This meant that they failed to meet their own inadequate climate targets and failed to tackle inequality. Fianna Fáil and Fine Gael then seized on these piecemeal measures to attack the Greens from the right. For their part, the Greens are convinced that what they have done is for the greater good, whereas in reality they didn’t deliver the climate action we need – they delivered us Fianna Fáil and Fine Gael instead. Worse still, in the minds of many working class people they have connected climate politics with ineffective neoliberal measures and a vicious right-wing government.
No Compromise with the Right: Build the Fightback
The inability – or refusal – of the broad left to provide a direct challenge to Fianna Fáil and Fine Gael means that the opportunity to remove them from power for the first time was missed this election. We are facing another 5 years of their rule, whether they make up the numbers with a handful of independents or with a “centre left” party.
This was a difficult election for the radical left. People Before Profit-Solidarity has dropped from 5 seats to 3. Other left independents like Joan Collins and Thomas Pringle also lost their seats. At the same time, People Before Profit-Solidarity’s national vote share increased compared to 2020, and was up in 32 of the 42 constituencies in which the party ran a candidate – not insignificant in the context of a much-reduced working class turnout which will always have an impact on the radical left. Behind the headline TD numbers is a more complex picture, then, rich in lessons and opportunities for socialists willing to take stock.
One example is Conor Reddy’s campaign in Dublin North West. He may not have made it in an extremely difficult 3-seater constituency, but his grassroots campaigning on issues like special needs and housing, combined with principled, big-picture politics, enabled him to nearly treble his result from 2020, taking 9% of 1st preferences with 2,900 votes. The advance of the left in that area and Reddy’s success in winning back alienated voters previously drawn to the far-right provides a practical rebuttal to those who say the left must pander to far-right-driven immigration narratives in order to grow.
The re-election of Richard Boyd Barrett in Dún Laoghaire and Paul Murphy in Dublin South West, along with the return of Ruth Coppinger in Dublin West, means that the radical left can still be a voice for workers and people power movements in the Dáil.
A Left Government will have its day. In the meantime, there should be no honeymoon period for the new government. The deep crises in Irish society remain, from housing, to healthcare, to the cost of living. The Irish State continues to facilitate a genocide in Palestine through the use of Shannon Airport and by allowing weapons to be transported through our skies. The Trump presidency could create serious challenges for the tax haven economy.
Nor should we buy into the establishment narrative that nothing can be done without being in government. The major victories of recent years – the Repeal referendum, marriage equality and the defeat of the water chargers – were all won by people power on the streets, defeating right wing governments. The radical left must now get back on the streets, into communities and into workplaces to build the fightback.