In the midst of a mounting frenzy over the Central Bank’s plans to introduce new rules relating to mortgage lending, Rory Hearne offers a detailed and sobering analysis of the bigger picture housing crisis. Published in today’s Irish Examiner.

Providing solutions to the housing crisis have to be central to the forthcoming Budget. But the government needs to be willing to radically transform how the housing market operates in Ireland and reorientate housing policy to meet the needs of the majority of the population rather than the interests of the property development industry. It is surprising how much rising house prices are being celebrated as a new property boom in the media including interviews with buyers (often engaged in cash purchases) about how they are being ‘outbid’ for properties in wealthy Dublin suburbs.

Meanwhile the real housing crisis is affecting hundreds of thousands of households (who are mainly lower income). Fr Peter McVerry has described the growing ‘tsunami’ of homelessness on the streets of our cities and towns. Between January and July of this year 267 families became homeless in Dublin, including 549 children and some of those have been housed in hotels.

But the crisis is much, much, larger than these figures suggest. Almost 90,000 households are defined in housing ‘need’. The majority of these are living in private rented accommodation. Rapid rent increases in recent years (most significantly in Dublin) and the introduction of rent ‘caps’ by the Department of Social Welfare, has meant that more than half of those receiving rent supplement (40,000) have to top up their rent in order to get access to housing.

Then we must include the 132,000 households in mortgage arrears on their principal residence. The government appears to be just hoping they will sort themselves out somehow. But a staggering 70% of these households are over 720 days in arrears and the banks are silently, but steathly, increasing repossessions and evictions. In the first four months of this year the banks have issued legal proceedings in 3,093 of these arrears cases and 281 properties were repossessed further adding to housing pressure.

Overall then, approximately 262,000 (16%) of the total 1.6 million households in the state are in serious housing need. This doesn’t include those who are forgoing basic necessities to cover their mortgage or rent nor does it include those affected by substandard conditions in social housing estates throughout the country. This is not a crisis. It is an emergency.

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Why have the Irish not protested the crisis and austerity in Ireland?

People are debating why the Irish have not been more like the Greeks and Spanish protesting against unemployment, the bank bailouts, austerity Budgets and cuts to public services? This article delves into that subject and offers some suggestions as to why this is the case and some indications for progressive social movements in Ireland. Firstly, it provides a short overview of the history of protest in Ireland and how this, along with successful state strategies of control, and the decisions of key political forces of opposition have stopped us from protesting the biggest economic collapse in the history of our state. This article is based on my practical experience and academic research into the politics of protest*.

Austerity Kills

History of Protest in Ireland

Protest and opposition has had varying aims and forms and involved a range of groups and classes in Ireland. This has included the poor, working class, the Catholic Church, middle classes, tenant farmers, factory workers, women, teachers etc. Here is a snap shot of some of most well-known protests in the last three centuries of our history.

1840-1880s: Daniel O Connell and the struggle for catholic emancipation which involved ‘monster meetings’, where it is reported between 100,000 and one million people attended one such meeting on the hill of Tara.  There was also the Fenians, the Young Irelanders and the Land League in this period. The Land League fought for the right of tenant farmers to own their own land and organised resistance to evictions, withheld rent, and held monster meetings of tenant farmers with 15,000 to 20,000 reported to have attended some.

1890s-1920s: There were campaigns/movements/armed insurgency for Independence and alternative structures set up parallel to the colonial state administration including the Gaelic League and community co-operatives. Alongside and within these independence struggles was action by the working class for social rights, against exploitation for a fair distribution of wealth. Through trade unions and the Labour Party workers organised the 1913 Lock Out, a General Strike in 1918 against conscription, workers councils (soviets) in Limerick and Belfast in 1919, and a General Strike in 1920. Many were motivated by Connolly’s argument that an independent republic of Ireland would be worthless unless it was built on freedom from exploitation – a socialist republic.

1930s to 50s: The newly independent state was controlled by conservative middle class nationalists and the Catholic Church.

1960s & 1970s: Emergence of civil rights movements; particularly the ‘Free’ Derry (‘Battle of the Bogside’) in relation to housing discrimination against Catholics in 1968, there was the 1971 ‘contraception’ train involving former President, Mary Robinson, and others, then in 1978 over 20,000 people marched against the destruction of Viking Dublin Wood Quay and city council tenant held a series of rent strikes.

Early 1980s: The Dublin Council of Trade Unions organised the massive tax marches and general strikes with150,000 marching in Dublin in 1979. In 1980 350,000 attended in the probably the largest demonstration in the history of the state. There were also the Hunger strike marches in Dublin in 1981 and protests at the British embassy. In 1984 10,000 protested at the visit of US president Ronald Reagan protests. Between 1978 and 1981 anti-nuclear protests and festivals were held at Carnsore Point in Wexford. While in 1984 and 1985 the Dunnes stores worker’s held the anti-apartheid strikes and protest.

Then in 1987 the trade unions entered social partnership agreements with the Government led by Charles Haughey. The unions agreed to ‘industrial peace’ and wage restraint in order to achieve economic development in Ireland and to try avoiding an Irish ‘Thatcherism’ attack on the trade unions.

1990s: There were the on-going Dublin inner city drugs and poverty marches, the anti-water charges campaign from 1994 to 1996 and the X case abortion protests.

2001-2003 There was a significant working class protest against the inequality of the Celtic Tiger through resistance to the imposition of bin charges but social partnership dominated at a national level.

2003: Anti- Iraq war march with 150,000 in Dublin

2004: Anti -globalisation EU summit protests in Dublin & May Day protests with 5000 people attending

2005-present day: Corrib gas, ‘Shell to Sea’ community campaign and protests. The Jailing of the Rossport 5 led to thousands marching in Dublin. Also protests by Ringsend community against a proposed incinerator and similar in Cork.

2005: December. 100,000 people took part in protests and strikes across the country in support of Irish Ferries workers and against outsourcing and exploitation of workers.

2008: First austerity protests: Senior citizens protested against the withdrawal of the medical card

2009: In February 100,000 people protested at the Irish Congress of Trade Unions ‘There is a Fairer Way’ protests. A public sector General Strike was held in November and Community, youth and drug projects held a massive 12,000 demonstration in September.

2010: November 40,000 students march and 100,000 attend ICTU protest.

2011: Election of Fine Gael/Labour government. Ballyhea ‘anti-anglo debt’ protests start, Occupy Dame Street commences, Vita Cortex workers organise their ‘sit-in’ occupation, and the Roscommon Hospital Action campaign protests.

2012: Over 50% non-payment of the new household charge. 15,000 protest at pre- Budget march against austerity, teachers protest over cuts and salaries, in Waterford 15,000 march against hospital downsizing.

2013: In February 80,000 protest across the country in the ICTU organised ‘Anglo Not Our Debt’ protest.  Public servants oppose then agree to Croke Park wage agreement, the Wood Land League protest against sale of our Forests, Special Need Assistants, parents and teachers protest education cuts.

Understanding Protest in Ireland

This short snap-shot of protest in Ireland reveals a number of features of the nature of protest in Ireland and helps explain our (lack of) response to the crisis since 2008.

This history demonstrates clear evidence of significant protest and rebellion. For example, Ireland’s population is 4.6 million, France’s 65 million and the UK 63 million. This means that the 100,000 people on the streets of Dublin marching against austerity are equivalent to 1.5 million in Paris or London, so ours are relatively, extremely large.

However, given the extent of oppression and famine as a British colony and then poverty and economic stagnation as an Independent state culminating in austerity and crisis in recent years, it is surprising there hasn’t been a lot more rebellion. This can be explained by the various strategies adopted by both political forces and individuals in Ireland. There is evidence both of strong solidarity and extreme individualism.

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In the clouds

Ahead of what is sure to be another harsh budget tomorrow, there have been a number of news stories announcing the creation of new jobs in Ireland.  The timing of this is of course strategic, offering a glimmer of hope in what promises to be another bleak winter of public service cuts and tax hikes.  The unstated message here is that austerity policy is working; that if we can weather the long winter of discontent the coming spring will be blooming with the new economic opportunities that are slowly beginning to grow again through the permafrost left by the Celtic Tiger’s collapse.

Leaving aside the pertinent issue of the crippling debt that Ireland carries, this message is still deeply problematic and the economic policy that it valorises is rather depressing.

But first: what of the jobs themselves?

The first of these stories was the announcement by the Government that Shannon Airport will be separated from the Dublin Airport Authority by the end of the year and merged with the landbank of Shannon Development next year to form a new State-owned company “NewCo”.  As the Irish Times report, “it was announced that two Shannon-based companies had signed memorandums of understanding to create 1,000 jobs within three to five years in the area on the basis that Shannon would be separated from the DAA” and that up to 3,500 new jobs are expected to be created through the venture.  According to a statement by Fine Gael TD for Clare, Joe Carey, “NewCo… will drive the development of a world-class aviation industry at Shannon, as well as working with tourism and enterprise agencies locally to the benefit of the wider region”.  This all strikes me as more than a little opaque and I’m at pains to see the evidence that splitting Shannon Airport from the DAA will have a decisive impact on its economic prospects in the absence of other market factors that have little to do with economic policy.

The second story, that US cloud computing company Dropbox are to set up their international headquarters in Dublin, was a little more conclusive.  The company’s decision will initially bring in just over 40 jobs, but this number is expected to increase once the company gets up and running in Ireland.  Part of the media allure of this story is that U2 front-man Bono, who was an early investor in the company, was instrumental in persuading Dropbox to come to Ireland.  Dropbox’s Sujay Jaswa is quoted in the Independent as saying: “Bono has been a great investor for us, and he and the Edge were very persuasive in their arguments for setting up in Ireland”.  Meanwhile, Bono himself suggests that “This smart and innovative company will find a smart and innovative workforce here in Ireland, with a creativity and commitment second to none. The Irish Government worked hard on this, and the IDA played a blinder”.

Bono’s comments are particularly telling.  In his rather patronising spiel, the Irish Government comes across as a sales team with the IDA as their star player.  But I can’t help but get a vague sense of an aura of incredulity emanating from Bono; it’s as if this was a game he had expected his team to lose, but by sheer guile and tenacity they pulled off the unforeseen victory.

There is something unsettling here that takes us back to problematic nature of Ireland’s economic policy.  The image that Ireland presents to the world is of a confident, creative, educated and innovative place, “the best small country in the world in which to do business”The hope is that by projecting this image, companies like Dropbox will come and invest here and, by virtue of the employment they create (if not the taxes they pay), Ireland can grow itself out of recession.  Meanwhile at home the budget does the dirty work of austerity hidden from the global spotlight, further eroding public services in areas such as Health and Education, and with them any substantive basis underlying the image of Ireland that the Government likes to project to the world.  And as the structural foundations of the state become weaker, the nation continues to practice the increasingly precarious policy of reliance on foreign direct investment.  The fact that in 2006 U2 moved part of its business to Holland to avail of a lower tax rate makes Bono’s ambassadorial role in brokering the deal with Dropbox seem all the more apt.  He makes a suitable figurehead for the casual indifference the Irish Government gives to the incongruity between its external image and internal policies.  When weighed against the deadening barrage of cuts that the last few budgets have brought, the small victories that these stories highlight, rather than signalling new growth from the ground up, seem more like small kites floating through the clouds, oblivious to the frosty landscape of despair below.

Cian O’Callaghan

Quiz time… Question: Who said: “I’m not going to be tied down with numbers”?

Answer: Brian Lenihan, Ireland’s Minister for Finance.

Recap: RTÉ’s last night (Thursday November 4th) special Prime Time was dedicated to the upcoming budget, which will be announced on December 7th. We all know by now that it will be a painful one; the government has already made clear that we can expect €5.5 to €6 billion ‘adjustment’ as part of a 4-year plan to save €15 billion. Although we know that the €6 billion frontloading will be painful, we know very little about how we are going to feel the pain, and how painful it’s going to be for different people. As of now, the government has indicated that the bulk of it will be spending cuts (about €4.5bn), with tax increases kept to a ‘minimum’ (€1.5bn). But what is going to be cut, who is going to be affected most …etc are still unknown variables in the equation. And Brian Lenihan, who was interviewed on Prime Time last night (not live though), did not give much information on that, while presenter Richard Crowley and other guests on the programme spent most of the on-air time speculating on how the cuts and taxes would be distributed. Brian Lenihan was just keeping in line with the decision of the government not to publish the details of their 4-year plan in the coming days as it was initially planned, and to leave it to the end of the month, after the (long-in-the-waiting) Donegal South West by-election that is to be held on November 25th after the High Court ruled on Wednesday (November 3rd) that the 18-month delay for this by-election was ‘inordinate’ and unconstitutional – a ruling that the government is appealing. As noted by the Irish Times in today’s edition, “the Government is hoping to minimize internal dissent by leaving as little time as possible between the publication of the plan and the budget on December 7th”. In other words: no debate please. ‘Democracy’ you said?

Irish Times - Front Page -5/11/10

So Brian Lenihan kept mum on the details of the ‘plan’ and of the upcoming budget in particular, on Prime Time last night. One thing that he clearly stated though was that “[he was] not going to be tied down with numbers”. Not tied down by numbers? A Minister for Finance??? The comment came as a reply to Richard Crowley asking about future government’s borrowing and the high level of (over 7% at the moment, compared to average levels of 2 to 4% across Europe). Brian Lenihan attempted to dismiss the question as he said something like “we have enough in the government’s coffers to keep the country going until the middle of next year, so no need to borrow”. Until the middle of next year? Wow, phew, I feel much better now, I thought we were about to run out of money, but we have until the middle of next year. The presenter insisted with his question though, and mentioned that sure the government was going to need to borrow again around February-March, because we will need money (you know, to keep the country running after the middle of next year), and asked something along the lines of “what will you do if the interest rates remained as high?”, insisting on the fact that they may be as high as 8% (and, as admitted by Taoiseach Brian Cowen, they are not foreseen to be lower than 6.4% in 2011). That’s when Brian Lenihan replied: “I’m not going to be tied down with numbers”. (I know, I’ve written down that quote several times already, but I just can’t get over it…. A Minister for Finance in charge of the budget who says that he is not going to be tied down with numbers?!? Americans would add something like ‘WTF?!?’ here – not meaning to be rude, but I feel that expletive sounds about right here, I reckon that’s how many people would feel hearing that). So, just wondering, does that mean that all these numbers that have been dropped on us like bombshells lately (€35bn, the cost of the Anglo-Irish debacle; €15bn, the size of the hole in the government’s account; €6bn, the planned ‘adjustment’ in the upcoming budget …etc) should still be taken seriously? Or does that mean that Brian Lenihan does not feel tied down with these numbers either and that it may well be that Anglo-Irish will cost, say, €50bn rather than €35bn? (after all, at the end of 2008, less than 2 years ago, it was supposed to be ‘just a few billion euros’… and it kept going up after that). The bottom-line is that ‘accountancy’ (literally) has been banned from the government’s lexicon and Brian Lenihan made it clear. Again, as he said, he is not going to be tied down with numbers…

There was plenty of other stuff in Prime Time last night, but that one quote was what stayed in my mind for hours then, because it is so scarily exemplar of how the current government approaches the issue: we have a plan … but not really (because we know we might not stick to it, plus, we’re not really good with numbers) … but we don’t want to talk about it (again, no public debate please).

Delphine Ancien

Lorcan Sirr and Conor Skehan of DIT have recently argued that the present budgetary cuts are being made in the absence of a plan.  It is difficult to disagree with their argument.  Unfortunately all of the political parties seem to proceeding on the same basis.  Making budget cuts is not the same as making a plan.  A budget should be designed to support a plan.  In Ireland’s case slashing the budget is seemingly the plan and supports no strategic initiatives other than to hopefully cut the deficit.  What should be happening is a rapid reworking of the National Development Plan – linking up sectoral and spatial plans – to produce a reasonably coherent pathway to 2014, with a realignment of budgets to support that plan.  At least that would mean that what spending and investment remains has some strategic goals and there is a roadmap as to how Ireland is to proceed back out of the crisis it has created for itself.

So far, no political party has produced a master plan, with an associated budget, for addressing our multiple problems.  No-one has come up with a coherent set of interlinked policy initiatives that if followed will stabilise the economy and get it working again, addressing in particular the issue of job creation.  The starting point is always the size of the cuts to be made, not what kind of Ireland do we want in 2014 and how can we achieve that goal whilst making cuts.  What we have instead is soundbites, ad hoc responses, wish-list so-called strategy documents with no plans of implementation, milestones or planned financial investment, and no sense that there is a captain at the helm who has a decent map and an organised crew to first get the ship seaworthy or second to know where it is sailing to.  The idea at the minute seems to be to get the wreck across the ocean without hopefully sinking and be damned where we land.  All the time, over half the passengers are haranguing the crew whilst putting forward no coherent set of alternative measures.

The opposition parties at this stage need to set out their stall clearly.  To date they have hidden behind the excuse that they do not want to set out their approach without seeing the budgetary figures.  This is simply a delaying tactic.  The budget should not be driving their plan.  Vision and sound policy initiatives should.  They can tweak the plan in relation to the budget available.  But the plan has to be more than a budget.  They should come up with the plan and see if they can finance it, not vice versa.  If they really feel that they should be running the country then they should have the confidence in their ideas to set them out and argue for them.  By failing to do so, we are just prolonging the political charade and reinforcing the adhocism of Irish politics and policy making.

Regardless of political party, can we at least start the next four years on the right footing?  If all we are doing is slashing and burning with little rhyme or reason, with no sense of its long term implications or how what is left will deliver the ship and course we need, then in four years time we’re going to be in a far worse state than we are now, because we’ll have positioned ourselves in the wrong place, most probably without the apparatus to get ourselves back on course.

Can we have a four year plan please, not simply a four year budget?

Rob Kitchin

In the run-up to Budget 2010, many estate agents reported potential buyers holding off on purchasing a new home in the hope of some change or incentive to aid their investment.  While a significant number of Sale Agreed signs appeared in suburban neighbourhoods, sale completions were on hold pending the outcome of the budget.

Granted Budget 2010 extended mortgage interest relief for first time buyers to 2017, but effectively the budget did nothing to stimulate the housing market (more…)

In a recent post I alluded to the deep philosophical problems associated with NAMA.  The aim here was to highlight the relationship between democracy and inequality when discussing the role of the state in modern democratic systems. The problems alluded to can also be applied to the recent budgetary announcements; particularly the lack of concern with reducing inequality. On the contrary, it seems that the government is intent on the reverse. The welfare cuts announced in the budget reinforce and deepen rather than reduce inequality. Strikingly, this is referred to as ‘making hard decisions’ in the ‘national interest’. Clearly then, ‘making hard decisions’ is more or less analogous to reinforcing and deepening inequality. (more…)

The public sector has been hit hard in the last year and the impact of the latest budgetary cut is now being realised across the country. The pain will be a lot more acute in some areas than others. The latest round of salary cuts are as follows:

• Public sector pay cut of 5 per cent on first €30,000 salary, 7.5 per cent on the following €40,000 of salary and 10 per cent on next €55,000
• Permanent pay reduction of 15 per cent for public sector workers in higher pay bands earning more than €200,000; 12 per cent for €165,000 to €200,000; 8 per cent for those on €125,000 to €165,000

Nearly 420,000* of those at work in ‘06 were employed within the public sector (21.75%). Levels of public sector employment varied throughout the country with many rural and peripheral counties, particularly in the north-west, having a much higher rate than the national average. Counties Sligo (29%), Leitrim (26%) and Donegal (26%) had the highest rates with Limerick City (19%) and Carlow (19.5%) the lowest. The rate within Dublin (4 administrative counties) was above the national average at 22%.

The highest pay reductions are due to slice into the salaries of those at the top end of the public sector, the severity of the cuts are less for employees further down the pay scale . Over 7% of the public sector were classed as ‘employers and managers’** in the 2006 Census with a further 9.4% classed as ‘higher professionals’. The spatial distribution of this group of higher earners is very much skewed to the Dublin commuter belt in the east of the country with additional pockets outside our other major cities. The ‘lower professional’ group make up 37.5%, ‘non-manual and manual skilled’ are 31% and the ‘semi-killed and unskilled’ make up an additional 13.69%.

Regardless of a public sector employees existing level of salary/socio-economic group, this budget will hurt. Certain cohorts could find themselves in real financial difficulty in the coming months – for example: parents (reductions in child benefit) who are owner occupiers of a new property with heavy mortgages (probably approved on a higher level of income than they are now receiving) and who also commute to work by car (prices have already gone up by 5c per litre) will certainly feel the full effects of the governments cost reducing measures.

Tough times ahead for the public sector worker. Taking one for the team is difficult, let’s hope there arent too many casualties. Still, steady employment is a rare thing at the moment.

Justin Gleeson

* Census 2006 Volume 7 Principal Economic Status and Industries

** Data from Socio-Economic Group (SEG) in 2006 CSO PoWCAR

Namantology

noun.

1. The branch of social science that deals with the study and critique of Nama
2. The totality of social scientific and lay knowledge concerning Nama

Brian Lenihan announced welfare cuts of 760 million in yesterday’s budget. This is referred to as ‘making hard decisions’ in the ‘national interest’.  It’s hardly a ‘hard decision’ to attack the most vulnerable and least powerful individuals in society. On the contrary, those individuals tend to have more restricted access to sources of private power, resources  and political interests than more privileged counterparts. Moreover, the percentage cuts outlined  are greater than they appear because they do not take into account the fact that the Christmas bonus has already been removed for welfare recipients; effectively a c. 2% cut has already been implemented without yesterday’s announcements.

Government Expenditure 2009/10

Government Expenditure 2009/10

What’s most striking though from the Estimates of Receipts and Expenditure for 2010 is the projected increases in spending in a huge number of government departments (see image). The government expects an increase in net voted current expenditure of c. 3 billion between 2009 and 2010. While the increase can be accounted for by an increase in expenditure within the Department of Social and Family affairs (largely, one presumes, due to projected  expenditure increases on unemployment benefit), one wonders whether more ‘belt-tightening’ could have been achieved in other government departments and whether welfare cuts, in particular, could have been avoided? Of course, other real alternatives exist but even within the narrow ideological framework adopted by government, perhaps the misery being heaped on the most vulnerable could have been avoided.

Enda Murphy