Ireland: Stormont Executive’s new budget – nice for the bosses but what’s in it for workers?

Last week the Executive in the North of Ireland presented its budget. It has been presented as a budget that will create jobs, improve services and reduce poverty. A closer look reveals tax concessions and incentives for the bosses and cuts in jobs and social spending and increased taxation for the workers. They are preparing social turmoil in the future.

In March elections were held to the new Stormont assembly in the Six Counties. As could be expected the bulk of the votes went to ethnic-based parties, Paisley's DUP, Sinn Fein and so on. At the time Tony Blair boasted that these were the first elections where "bread and butter" issues were at the heart of the electoral campaign.

He was of course lying through his teeth. The voting pattern was sectarian-based. The differences between the DUP and Sinn Fein were not on policies at all. The new Stormont assembly was elected to form an Executive that would carry out policies decided in London.

It had already been agreed that the vote would simply decide who would get First Minister, Deputy First Minister and the other local ministries in a power-sharing executive. Voting for Sinn Fein or the DUP or any other of the main parties did not involve choosing between different policies on healthcare or education, for instance. How could it be otherwise, if the parties elected were going to form a coalition government anyway?

Last week the budget for the North of Ireland was finally published. Mr Robinson, the Finance Minister, in presenting the draft budget, proudly announced that, "This budget comes with the proud stamp: ‘Made in Northern Ireland'." In reality the budget was made in London, transported to Belfast and packaged for local use. The essence of the budget is no different to Gordon Brown's economic policy for the rest of Britain.

Big business in Ireland is delighted with the budget, which means workers should beware. One of the proposals in the draft budget is to freeze industrial rates at 30 percent. The spokesman of the Northern Ireland Manufacturing Focus Group, Michael Wightman said, "We're relieved and delighted that we've been listened to by the Stormont executive..." How much the Executive is listening to the majority of ordinary working class people across the religious divide is another matter.

If we take a look at some of the proposals and the economic situation as a whole we can see that Stormont is not listening to the people who live in the North of Ireland. One of the largest increases in spending has been allocated to the Office of First Minister and Deputy First Minister (Paisley's and McGuinness's office). It is to receive an average increase of 5.9% over the next there years, while Health only gets 3.8%, barely keeping pace with inflation. It is clear that spending on healthcare for ordinary working class people is not a priority.

Even the Health Minister in this Executive, Michael McGimpsey, has highlighted the fact that there is a huge gap between the level of spending on the health service in Northern Ireland and spending in England. At the moment the gap amounts to £350 million, but if it continues at this rate, by 2011 the gap in funding will be £650 million. This problem is further compounded when we consider that life expectancy in the six counties is lower than in the rest of the UK. One would think that in such conditions Stormont should be getting a lot more funding for the health service.

The Executive has presented the budget as increasing spending on health, because it provides for an average annual increase of 3.8%, but this is barely more than the rate of inflation. The real situation can be deduced from what The Irish News reported on October 26: "Senior nursing directors have raised concerns that proposals to target more than 600 nursing jobs... could impact on patient care and frontline nursing posts."

The minister also promised that 6500 jobs would be created by 2010 ... in the private sector. However in the public sector it is clear they are aiming at cutting jobs. The Minister of Finance says he wants to see a slimmed down and more efficient public sector, and he will announce cuts in civil service jobs over the next three years.

The civil service union, NIPSA, has already announced that it will oppose any "unfair and unjustified" civil service job cuts. The union has explained that we could be seeing thousands of job losses in public services as a result of this announced draft budget. In January in fact cuts in public service are to be announced.

At the moment the media is praising the Executive for its stand on public service "efficiency". But how can the public service be efficient if it is going to have a smaller workforce? The two don't go together. What they mean by "efficiency" is in fact "cheaper" which means cuts in spending and a worsening of the services.

Thus, the thousands of job losses in the public sector are a certainty, while the creation of the 6500 private sector jobs is an unknown. It all depends on the economic cycle and how it affects the six counties. Already in some private companies there is talk of job cuts.

While healthcare is to get an increase barely above the rate of inflation, other departments are facing an absolute cut. This is the case of the Department of Culture, Arts and Leisure and the Department of Employment and Learning, as well as the Department for Social Development and the Department of the Environment.

Interestingly, however, the Department for Regional Development and the Department of Enterprise, Trade and Investment are to get increased spending. This is an indication that the whole programme is geared to promoting and funding the private sector. The fact that they have put a cap on the rates for industry is part of all this. On the same day the draft budget was announced, the "Chuckle Brothers" [as they are jokingly referred to these days], First Minister Ian Paisley and Deputy First Minister Martin McGuinness outlined 23 Public Sector Agreements to "generate wealth, stimulate investment and create an environment for new private sector growth", as The Irish News put it.

Everything is geared to promote and develop the private sector, and yet the greed of the capitalists is unlimited. In spite of all these generous proposals, they are still calling for more tax cuts for the rich. The Belfast Telegraph put it thus:

"As this newspaper has argued, something of the magnitude of a cut in corporation tax will be required if the economy is to be put on the new trajectory which is needed... The ball is in Gordon Brown's court, but he must respond generously to the appeals of the fledgling Northern Ireland assembly for a tax break." (October 26, 2007)

And while they demand tax cuts for themselves, they are preparing to put even more pressure on their workers. Philip McDonagh, chief economist with Belfast business advisers PwC indicated what is to come when he mentioned the need to close "the productivity gap with Britain" as well as "increasing overseas investment". To achieve this increase in productivity they are going to have to squeeze the working class with longer hours and lower wages, casualisation of labour and so on.

As if all this were not enough, there is also the question of the famous water tax. Until now the water rates have been included in the general rates that all householders pay. But for some time they have been planning to separate the water rates so as to issue a separate bill. This provoked widespread protest among all workers, Catholics and Protestants alike. The slogan many raised was "Don't pay twice". This issue was causing concern to both Sinn Fein and DUP leaders.

The problem wasn't that they disagreed with the new tax; the problem was how to sell it to their respective electorates. To sweeten the pill, the government in London allowed for the introduction of the water tax to be postponed.

Now a further sweetener has been added. Robinson in outlining the budget announced that the regional rate would be frozen. The thinking behind this move is both very clear and also very cynical. Robinson gave the game away himself:

"We need to ensure that each household sees the full benefit of this in their rates bills over the next three years as we introduce the new arrangements for increased contributions from households towards the cost of water."

The cold calculating cynicism comes out clearly in his next statement:

"If we also were to introduce parallel increases to regional rates bills, no matter how small, at the same times as we are phasing in the new water arrangements [note that he can't bring himself to call it a water tax!], we would be seen as giving with one hand and taking away with the other."

Another sweetener was the extension of free transport for older people.

But even the rates freeze is not all that it is made out to be. Only half of people's rates bills are made up of the regional rates. This part of the bill is levied by central government. The other half is fixed by local councils, who will continue to have the power to put up the rates. So rates bills will continue to rise.

Then in the financial year 2009/10 water charges are going to be phased in. Their tactic has been clear: sit out the wave of protests over the water tax, wait till it dies down, freeze the rates temporarily to make it easier for people to bear, introduce the water tax, and at the end of the three-year period families across the six counties will find themselves with growing rates and water bills. Thus, while discounts are granted to big business, ordinary working class people will have to foot the bill.

Alan Bridle, writing in The Irish News, (October 26, 2007) explained the real situation: "...the populist decision to freeze domestic rates and postpone the introduction of water charges until 2009/2010 may, in time, be considered a matter of regret as revenues will need to be found from elsewhere, particularly in 2008/2009."

Thus, behind all the rhetoric about being "Made in Ireland" and all the supposed benefits flowing from this budget, lies a cold and calculating bourgeois elite, planning how to unload the burdens of the economy onto the backs of the working class.

In all this, whatever minor criticism this or that party in the coalition has made, they are all united. The budget was approved unanimously by the Executive. The two major parties, Sinn Fein and the DUP were the most outspoken supporters, of course. Gerry Adams was over the moon! He said the budget embraced "equality" and that it was a significant advance". Yes, we could add that it embraces "equality of suffering" for Catholic and Protestant workers while it advances the interests of the capitalists.

This budget in fact offers ordinary working people very little. It is very concrete in the measures that serve the interests of the bosses and abstract and vague when it comes to the interests of the workers and poor. Like their friend Tony Blair before them, the ministers have promised to eradicate child poverty. Under Blair the level of child poverty hardly moved an inch. The Stormont Tony Blairs say they will remove child poverty by 2020.

Today 100,000 children in the North of Ireland live in poverty. How can this be eradicated with a programme of cuts in public services, cuts in civil service jobs, handouts to the bosses and increased taxation for the workers?

An indication of the real nightmare facing working class people is the housing situation. The regional Housing Executive recently published its annual report which revealed the highest level of housing stress in the North of Ireland since the 1970s. There are more than 36,000 applicants on the housing waiting list and of these around 20,000 are classed as being in "housing stress". The waiting list is the highest for 30 years.

One might be comforted, or the Stormont Executive might be comforted, if this list were going down. But no, as Brian Rowntree, chairman of the Housing Executive, said, "In the last five years the number of applicants in housing stress has increased by almost 60 per cent to 19,703 from 12,449." The number of homeless has also increased from 7,374 to nearly 10,000.

These figures would indicate that what we have is growing poverty levels at one end of the social spectrum. Thus all the talk about reducing poverty levels is just so much froth to make the budget look more appetising.

Poverty is clearly growing, but at the same time we have an "economic boom". In this sense the situation is similar to all other capitalist countries. We have a boom at the expense of the working class. While the bosses make profits, the workers are squeezed, public sector companies are privatised and jobs are cut.

We read headlines that say that the "Celtic Tiger" has moved north. The Celtic Tiger was a term used to describe the 26-county Republic of Ireland in the south. There is talk of "more disposable income" in the north now.

The indications are that a section of the population is feeling the effects of this boom, particularly in Belfast. Some of the foreign companies based in the south have either opened up shop in the north already or are thinking of doing so, now that the "climate for business" has improved. An indication of the effects of the boom is seen in some of the neighbourhoods that would once have been considered slums. Many of the houses now have new windows, doors, etc. A section of the population has retired into its own private world and is trying to enjoy some of this boom and leaving the mainstream politicians to get on with it.

In fact, it is on this boom that the temporary stability around Stormont has been built. Without the boom none of all this would have been possible. The question that has to be asked is: how long will all this last? Already in the south the economy is giving signs of slowing down. Earlier this year figures were released that revealed house prices in the Dublin area had fallen by 10%. The world scenario is not too promising either.

The effects of the boom may be reaching some parts of the north just as the world economy is beginning to show signs of stress. In this context the promised 6500 new jobs in the private sector may prove unrealisable. Thus we could be seeing cuts in the public sector accompanied by job losses also in the private sector and on top of all this increased taxation for ordinary working class people. It will be more of the same. Ratepayers have seen their bills rise by an average of 62 per cent since 2002. This pressure will continue.

The workers of the North of Ireland clearly indicated they wanted peace and that is why they supported the 1998 Good Friday Agreement. The British government, the Ulster unionists and Sinn Fein have managed to patch together an agreement. They are now collaborating in applying economic policies that cannot meet the interests of working people.

For now the workers have accepted the agreement. They voted massively for the main parties that backed the agreement. But now the workers are waiting for the "peace dividend". What is in it for them? As we have seen above, very little, if nothing at all. The glue that is holding all this together is the genuine desire for peace among a large majority on both sides of the divide and the economic boom.

The problem is that once the boom ends - and end it will, as all booms do - unemployment will start to grow again, living standards will be hit, public services will be in decline, poverty levels will increase even more.

In the workplaces this will provide an opportunity for increased trade union militancy. We have already had the recent dispute of the teaching assistants that involved workers from all religious and ethnic groups. As we have seen, NIPSA is already threatening action against possible cuts in public sector jobs. The conditions are being prepared for a renewed wave of class struggle.

However, beneath the surface we also have the ever-present threat of renewed sectarian conflict. It is actually a fact that after the Good Friday Agreement sectarian attacks increased. The so-called "peace walls" (now known as "interfaces") have also increased in numbers - and in height! They have not solved the sectarian strife; they have merely subdued it. It is still simmering below the surface and could erupt again in the future.

This Executive, with its policies, is preparing the ground for renewed conflict in the future. In that sense the Good Friday Agreement has achieved nothing. Genuine Marxists opposed the Good Friday Agreement, because we understood that in the long run it could not work. What it has done is to institutionalise the sectarian divide. Sectarianism is built into the very power-sharing mechanism of the new Stormont Executive.

The one positive thing about the post-Good Friday Agreement situation is that working class people on both sides of the divide have been forced to think things through. The mainstream political leaders on both sides have in essence "betrayed" their own people. Sinn Fein has given up the struggle for a united Ireland and the DUP and other unionist parties sit in the executive with the "Devil himself", as Paisley would have described the Sinn Fein leaders in the past.

This situation opens up possibilities for a genuine Socialist alternative to be posed before the workers of the North of Ireland. Organisations such as the Irish Republican Socialist Party are trying to develop that alternative, while at the same building links and dialogue with Protestant working class based organisations. The time has come to cut across the sectarian divide. The enemy of the Protestant workers is not the Catholic worker and vice versa. The enemies of the Protestant and Catholic workers are the capitalists who, while they wine and dine together, maintain the sectarian divide to their advantage.

James Connolly, that great Irish revolutionary socialist explained long ago to Irish freedom fighters in that often quoted phrase:

"If you remove the English army tomorrow and hoist the Green Flag over Dublin Castle, unless you set about the organisation of the socialist republic, your efforts would be in vain. England would still rule you. She would rule you through her capitalists, through her landlords, through her financiers, through the whole array of commercial and industrialist institutions she has planted in this country and watered with the tears of our martyrs. England would still rule you to your ruin, even while your lips offered hypocritical homage at the shrine of that freedom whose cause you betrayed."

He understood that the solutions to the problems of the Irish workers could only be found in the struggle for socialism. It is to that tradition that we must return.