Ireland politics (Part 2)

Current Affairs
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Magic Money Tree, I’d say fair enough if they took the money they waste on those saintly NGO’s to repair them

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The cassidy’s should be shaken down for every cent they have before the state steps in.

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Redress should be given on the condition that those mad hoors in Donegal have their modified cars taken off them.

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Nothing magic about it. It’s a lovely tree though.

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FF up 6% , by God

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The Currency is the best news subscription I have. It’s excellent and I’d recommend it.

With Sinn FĂ©in leading in the latest opinion polls, Stephen Kinsella asks the party’s finance spokesperson to imagine himself as finance minister. From the unwinding of pandemic spending to preparations for a potential united Ireland, this is what Pearse Doherty said he would do.

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Pearse Doherty’s party is consistently polling as the most popular in the state. Sinn FĂ©in’s policies, its people, and its fitness for power are being scrutinised more carefully as a result. Rightly so. I spoke with Doherty this week on a range of topics important to readers of The Currency , both national and international. Ireland’s fiscal stance post-Covid, the issue of ageing and change, the need to increase taxes, supporting high-growth companies, the reunification with the North, and more.

We cover a lot of ground.

We begin with his first budget as finance minister, his clear focus on enhanced capital spending, particularly for housing and health, and his recognition of the clear need to alter taxes to cope with the fiscal pressures of our rapidly ageing society. Here, I was struck by the mini-estimates process his team go through to produce Sinn FĂ©in’s fiscal strategies. This process will serve them well if they get into government, though they will also have to deal with lobbyists, pressure groups of all kinds, the slings and arrows of sometimes truly outrageous fortune the Irish economy tends to suffer, and of course, the civil service itself. The reality of government is the need to decide, and in our case, to decide within a coalition structure.

We end with a letter he might write to his successor after five years in the role. It’s a famous tradition American presidents have, and I truly think our ministers should start the practice. In fact, I believe Paschal Donohoe will write such a note to his successor, perhaps the first government minister to do so. I was struck by the moment Doherty took to reflect. He wants his legacy to be small in number but significant in impact. Housing, health, childcare. Getting these right for the people matter to him. Of course, they’ll all need to be paid for. We talked about taxes, about Sinn FĂ©in’s adherence to a policy of an effective 12.5 per cent corporate tax rate, which implies keeping headline rates at the same level, while altering tax expenditures underneath, and the need to cope with an ageing population.

Ageing populations imply increased fiscal costs. Roughly speaking, health, social protection, everything gets more expensive the older your population is. For the week that’s in it, we talk about pensions and pension ages, but the wider problem of an ageing society somewhat eludes our discussion. The reality is spending will need to be paid for and there’s a clear recognition of this fundamental fiscal constraint.

No meeting would be complete without a discussion of the economics and politics of reunification. Here I wanted to get into the weeds a little. How Doherty sees the welfare and tax systems being integrated if he sits in the finance ministry as the form of that integration is chosen. The choices of where to start are fairly simple: Start from scratch; integrate one to another; or run in parallel for some time, with decisions to be made later on. This question is not asked enough or answered during the border poll debate.

Pick a simple example: Rates are much higher in the North. Welfare spending is lower. Health spending is higher in the South, when you add in the public and private sector spending. And the income tax system in the North is much less progressive. Doherty opts for a start-from-scratch position, which is admirable and brave. It also means a lot more is on the table in terms of the design of the fiscal architecture of the state. He makes the point that a concerted effort over years will be required by all arms of the state to find possible answers to these questions if we are to see a united Ireland that actually functions, and a border poll conducted with the full knowledge of everyone involved as to its likely outcome for them and for their families.

In this interview, Doherty answers my questions on:

Stephen Kinsella (SK): Your party is now on 32 per cent in the polls. That is a propitious number. I think it’s come quite some way since you joined the party?

Pearse Doherty (PD): Thanks Stephen, and it is great to have the opportunity to speak to The Currency . The trends for the party are quite strong in relation to polling in the last while. We’ve had three polls in the last fortnight which have recorded levels of support for Sinn FĂ©in above 30 per cent. And that is to be welcomed. We recognise that in the last election we had a significant breakthrough, but we also left seats behind us. We secured enough first preference votes to take in a running mate in some constituencies, but did not stand that person. We won’t make that mistake in the next election.

But we’re also very conscious that polls can go up and down. Our job is to convince the public that we have the solutions, that we have the ambition, and we have the team to deliver on that in government because that is exactly where Sinn FĂ©in wants to be. We want to be the next government. We want to deliver on the vision we have. Look, we have come a long way since many of us joined the party. When I joined the party, we were polling at 2 per cent in this state. We still had Section 31, where voices of Sinn FĂ©in representatives were not allowed to be broadcast on the air. But just over two years ago, the party was polling at a very different level. So we don’t take anything for granted. We are staying focused in relation to what we need to do and the solutions that we need to deliver. And we are ready for the next election whenever it comes.

SK: At the next election, it may well be the case, based on the current polling anyway, that Sinn FĂ©in would be the largest party in the state. And in that situation, you would probably be in a coalition arrangement. But it’s also probably the case that you will be the finance minister, which is a huge honour – very, very few people in the history of the state get to have that seal of office. So let’s just for a second assume you are the finance minister of the next DĂĄil. Take me through the character of your first budget? What would it look like? What are your priorities? How would you set our country’s fiscal policy relative to where it is now?

PD: That question really depends on the timing, because the budget that you would introduce needs to reflect where the economy is, and where the needs are and the demands are at any given time. So for the sake of this conversation, let’s just suggest that it is actually this year that I will be introducing a budget. The first thing we need to recognise is that we are still in a pandemic. We are coming out of it, but many individuals and businesses will require further support. So that would be a key priority in relation to the framing of any budget that I would bring forward. The second part, and probably this is a major difference between ourselves and the government, is we would significantly increase capital investment. And while we have been making that call for quite a number of years now, particularly to invest in housing and social affordable and cost rental housing – to double the amount of capital investment that’s happening at this point in time in that area – I think the commentary by both the ESRI and by the NTMA in relation to our capacity to borrow for that purpose would have very much strengthened our position. So we would increase capital investment significantly in that area, but not just in housing.

The third point: The budget for me would be about setting out the steps that need to be taken over a series of budgets to ensure that we have, for example, a better social security system. I think the pandemic exposed how our social security net was inadequate. Emergency and temporary measures had to be introduced.

So there is a need to reform that and to have a base on the income that you were earning, a portion of the income that you were earning up to a relevant cap. Some of this work is already underway within the party, and we’re currently having it costed by the Parliamentary Budget Office in terms of the proposals that we will be bringing forward as an opposition party. But as minister for finance, we would be hoping to implement those changes on a phased basis.

And then there’s other steps as well. So we have to look at the economy. We are not there at this point in time, but two years ago, one of the big pressures we had was in relation to the workforce. How do we ensure that more people are able to participate in the workforce? Unfortunately, the level of women who participate in the workplace is lower compared to European averages. And we would argue, as have others, that this is related to the high cost of childcare. So we have a plan, which would be introduced over a series of budgets, to actually provide a public option for childcare.

It is doing what the state did back in the 1960s in relation to secondary-level education, which is making it a public service on an opt-in basis – obviously, some schools didn’t opt in and that is why we still have some private schools in the state. And that may be the same case for childcare. So we believe that there’s steps that could be taken in relation to that.

The pandemic has obviously exposed some other areas such as the underinvestment in health, which would be a priority for ourselves both in relation to the ongoing work of dealing with the pandemic and its aftermath, but just as important is making sure that we have the investment to build the capacity into our health system that meets future needs and is based on international comparisons as to what is the capacity that is required within the state.

SK: Those measures, I think, would be very welcome. And I think you’d probably be able to do them all in Budget 2022. But what about Budget 2023? The European Commission has signalled that the fiscal rules will start to bind again. And so rather than spending an additional €15 or €20 billion this year, you might end up spending an extra €800 million next year assuming the economy continues to grow. How do you think about balancing the scissors of expenditure and taxation, in an economy with a very high stock of debt, where the flow of interest payments could rise quite rapidly over the next number of years and where certain sections of the population pay a lot of tax and certain sections of population pay less?

How do you think about those issues, in particular the composition of taxation? Because the massive difference for Ireland, relative to other economies, is that because we don’t borrow in our own currency, we are subject to a sort of a notional fiscal limit. How would you as finance minister balance the two scissors of expenditure and taxation, given that they’re going to be quite wide after the pandemic recedes, and the fiscal rules begin to bind?

PD: So there are two parts to that. In any budget that would be coming up at the end of the year, we need to look at the pandemic costs – they are one-off and can be isolated and ring-fenced because they are non-recurring. Then we look at capital investment. And we have to draw back on the comments of the NTMA in relation to their view of the ability to borrow, and the medium risk in relation to interest rates is extremely low.

So we don’t buy into the narrative which Fine Gael has peddled in terms of “look, we can’t borrow, we can’t do this,” to the point where we now have a housing crisis that is impacting, not just on the individuals who are looking for affordable housing or looking for rents that are fair, but has also impacted on businesses and our attractiveness as a place to invest. These areas are probably going to be more important in the future.

Also given the international tax environment in relation to corporation tax, we need to be able to ensure that we can enhance competitiveness and make Ireland an important and attractive place to invest, that the things that are under our control are under our control. So yes, we can invest in housing and borrow for that purpose.

In relation to the current expenditure, obviously Sinn FĂ©in’s view is that we need to reduce the deficit over the medium term. And therefore, we differ from the other political parties. If you listen to what Fine Gael has announced at their Ard Fheis, where they have a wide range of policies, announcements, some of them we would welcome. We don’t trust them. But some of them we welcome. And that’s obviously an example of the influence of Sinn FĂ©in and growth of Sinn FĂ©in has had on those parties, who don’t want to go into this space, but are now being forced into these policy spaces. And they plan to do this without raising any taxes. They plan to do this actually, by cutting taxes. And that’s simply not feasible.

So we have shown where taxation can be raised. And we’ve shown a number of measures. We’ve shown how we have to bring our PRSI contributions into a more European average, if we want the type of services that we want. So this is all about choices. We can continue as a state to operate on a low-tax, low expenditure model. Or we can, as Sinn FĂ©in would argue, believe that the state needs to play a greater role in childcare and education and housing. It can’t leave it to the market, because we have suffered as a result of that – leave it exclusively to the market.

And therefore, as a result of that, we need to have a different type of model in terms of taxation. So yes, employers’ PRSI will have to increase.

SK: That’s not controversial.

PD: Well, when we made that point before the election, Leo Varadkar suggested that it would scare off all investment. He’s now arguing the same thing. Businesses recognise that PRSI will increase. And when we look forward to our proposals, for example, in pensions, we showed how we could actually end tax incentives for what we would argue are gold-plated pensions. The standard fund threshold could be reduced where you actually would make a saving in excess of what it actually costs, net, to allow people to retire at the age of 65.

So if you’re planning to make changes in terms of expenditure, in some of the cases that will be offset by economic growth. But in others, we need to look at additional revenue, revenue raising, or closing some of the incentives that already exist. That’s what we have done in the past. And it’s what we would continue to do as finance minister.

SK: There’s a lot I can ask you about in terms of specific taxes. I think what we might do is, if there’s time, come back to discussions about wealth and carbon taxes, which I think are very important.

I don’t think anyone would disagree with the range of expenditure measures. I think the question, I guess, is having to close that gap at some point over a medium term, what’s the balanced growth path?

PD: Let’s just look at it. First of all, Stephen, all of our measures are kept under review every single year. So speaking as an opposition spokesperson – and I’ve had this role for over a decade – the process that we have within the party is, about two months ago, our team came together and looked at the needs for budget 2022. We sent out the parameters of that budget to each of our front bench offices. And as of yesterday, each office has had to submit their request for budget 2022 in a costed way, to my office, which will now be scrutinised. And we will look at the summer economic statement, look at where the fiscal parameters are, and then we will decide afterwards. So there is a lengthy budget process that we, as a lead party in opposition, are involved in. Some have made the point that they believe that there’s no opposition party in Europe that goes to this length in relation to providing costed alternative budgets.

Even if you look at the spring statement – which there are serious questions in relation to, because it’s basically based on no policy change – but if you look at no policy change, and look at the growth projection of the economy, even with no policy change, you will see a reduction in the deficit over a number of years. And then what you take on board is that the expenditure that you’re planning over that period needs to be offset by revenue-raising measures. And that’s what we’ve done each year. And we will continue to do it each year – the difference being in capital investment, where we believe that there is additional capacity to borrow for that purpose.

The economic challenge of demographic change

SK: During the election, Mary Lou McDonald made the point that on pensions in particular, the demographics will look after themselves. That is obviously not true. The question I would have for you, as finance minister, is how you think about ageing, and particularly about demographic change?

And so obviously, the party has proposals in relation to pensions. I’d love to hear them. But I think I’d like to hear more generally, how you think about the fiscal challenge of coping with demographic change. I don’t see it as being understood as widely as it needs to be. I don’t see it as being understood as the emergent problem that it clearly is, relative to the housing crisis. In my view, it’s at least as serious as the housing crisis. And I’ve written about this a lot. How do you think about this idea about an ageing population? The issue of demographic change, and the fiscal implications of that, and then your role, obviously, as finance minister in coping with those changes.

PD: Okay, thanks for the question. I think that’s a really important area that we need to focus on. Where I do reject this is where the government used this argument to say that we need to increase the state pension age to one of the highest in Europe, despite the fact that many other countries have a larger issue in terms of ageing than Ireland has.

We have not avoided this issue. Indeed, as I said to you before, we have been the party that has argued that we need to look at what is happening in terms of PRSI, you cannot continue to deal with this issue in the absence of making sure that the social insurance fund is adequately supported. And that’s why we have put forward proposals in relation to the increase in PRSI, which would allow for that fund to be in a better position.

And so when we argued, for example, in terms of retention about ensuring the right to retire at the age of 65, that policy came in at €127 million. Yet our proposal in terms of reducing the standard fund threshold, the savings to the state were in the excess of €350 million, in that ballpark. So we’re conscious that these decisions have consequences, not just short term, but also have consequences long term.

SK: Obviously, the €127 million is a point estimate, right? So that’s this year, but as the population over 65 rises, the cost rises.

PD: So that’s my point that there’s a long-term cost in relation to this. So while one measure more than double offsets the cost of ensuring the right to retire at the age of 65, and remember that €127 million estimate is based on the right to retire, but we would also introduce legislation that ends compulsory retirement at the age of 65. So we believe that many people will not want to retire at the age of 65 but will work on, and therefore wouldn’t be entitled to a pension at that age. It’s about the right to retire on a pension at 65. But separately to that are the proposals in relation to PRSI. And we’ve had a lot of discussion in relation to tax and marginal tax rates, we believe that there is an additional surcharge that could be applied for incomes, individual incomes, above €140,000.

What we’ve not had in the state is a proper discussion in relation to social insurance, and what are the appropriate levels. We don’t shy away from this. We understand that there is a demographic issue. We understand that that has to be paid for. We do believe that alongside all of that, and making sure we have the necessary revenue in terms of the Social Insurance Fund, we also need to have growth-friendly and family-friendly policies that allow for young couples to be able to afford a house, to start their family, to be able to afford childcare. Those are important issues as well, alongside issues such as PRSI and other offset measures.

“I think there is a simplified way to bring in an R&D tax credit for SMEs and for scale-ups. A similar situation exists in the North.”

SK: I’ve read all of the policy documents that the party has put out over the last few years. And I think one of the things that I like is that you talk a lot about SMEs, broadly, and the idea of supporting SMEs, broadly, being an important policy pillar. How do you think about high-growth firms? It’s a narrower set, but they’re obviously the ones that ultimately will go faster. What do you think we need? Or what would you put in as finance minister to see Irish firms scale up more often? So, more Irish firms scaling faster, if you like?

PD: I think there’s huge potential here in terms of Ireland, in terms of scale-ups and what I like, as somebody who is very much a believer in regional balanced development, is that many of these scale-up companies are happening outside of Dublin and Cork. They’re happening in towns and villages and rural communities. And that’s really, really important. They’re committed to those regions so we need to ensure that the infrastructure is there, the basic infrastructures like broadband and so on, so that we take that for granted.

But in relation to the supports that are required, I think there’s a couple of things that we need to see; more support in terms of investment in education, and some of the scale-ups which are linked to the likes of your CoLabs in Letterkenny, and what you have in Tralee, are really important where you have that kind of synergy between colleges, universities, institutes of technology and these companies.

But I think there’s a number of areas in terms of the taxation field that also need to be looked at. The department is currently carrying out a review in relation to the IIS where investment can be made into small start-up companies. I think that it’s really important that we recognise the opportunity, and indeed, the challenges of these scale-up companies. And that should be facilitated in those changes that we will see coming from the Tax Strategy Group.

Secondly, something that we’ve argued for, for quite a while, and we’ve been successful in one half of this, is that for quite a number of years, we have put forward a proposal that would see higher R&D tax credits for SMEs. That was legislated for in the Finance Bill, I believe, two years ago, and that’s to be welcomed. The second part of what we put forward at that time was that there had to be a better and easier way for SMEs to access that R&D tax credit. If you look at the expenditure of the state in R&D tax credits, it’s quite significant. It’s in excess of half a billion, I don’t have the figures, but I think it’s about €700 million. And a large proportion of that tax credit is going to FDI.

And you see that in different surveys that are done, for example, in relation to SMEs that are receiving research and development grants, that nearly half of them aren’t applying for the R&D tax credit. Some of them say it’s too risky, others say it’s too cumbersome, some of them are not aware of it. So I think there is a simplified way to bring in an R&D tax credit for SMEs and for scale-ups. A similar situation exists in the North.

That is what we have argued for, that we shouldn’t have a one-size-fits-all and we need to see additional support in that regard for SMEs and scale-ups. So I think those two areas, including the support in terms of education, are crucial for the sector in the future. But I believe that there’s a huge ability for us to grow here, with the necessary proper investment. If the same focus is put on it as has been put on FDI in this area, I think it could be a significant player in terms of economic activity in terms of jobs and exports into the future.

Tax sovereignty and an effective 12.5 per cent corporate rate

SK: I couldn’t agree more. Just as we mentioned FDI, it would be remiss of me not to talk about the mooted G7 changes. Obviously, a minimum effective tax rate has been Sinn FĂ©in policy for years. But how do you think about the G7 agreement? Would you go to 15 per cent? Would you go higher? I feel like the 12 and a half per cent is totemic in a certain respect. In our policy debates, it’s almost the first or second sentence every finance minister utters. So how do you think about it? Do you welcome the G7 agreement? How do you think about the rate? Would you change it? Just give me your thoughts on the corporation tax debate more broadly?

PD: Look, we’re a party who believes that aggressive tax planning by companies, who have exploited differences in our tax law and other jurisdictions, should be prevented, and those loopholes should be closed down with immediate effect. We’ve made those arguments for a long time now, in relation to the double Irish, in relation to the stateless companies; we have led the charge on that. We have produced the legislation, we have challenged Government at a time when they denied that there was any problem here and the problem was in the name, as opposed to that there was some problem in terms of our tax code and how it interacted with other tax codes. And we believe that that has caused us reputational damage. And it’s not just reputational damage, it’s that in negotiations, these things matter – how you’re perceived.

And we’re also a party who defends tax sovereignty. We believe that it is Ireland, and Irish elected representatives, who should decide on the tax rates that apply to the state. However, we recognise that some of these companies are working in a global environment, and therefore there needs to be cooperation. So we have supported the OECD BEPS process, and it will have a significant impact in relation to our taxes into the future. There has been an estimate by the Department of Finance in relation to the impact of Pillar one on the state’s finances, and they’ve estimated it’s €2 billion.

That has changed, in my view, with the G7 agreement and it could be possibly less than that, given the narrower scope of how they would apply this. However, there is a long road to go here. We would have to see the G20 and then the 139 countries come down at the OECD. Rightly so, different countries are putting their own national interests in these negotiations forward and Ireland should be no different. On Pillar one, we wouldn’t be raising many concerns.

On Pillar two, we would be making the point that 12 and a half per cent is an effective tax rate of 12 and a half per cent. Do bear in mind that we don’t have an effective tax rate of 12 and a half per cent. We’re very close to it, according to the OECD, but it’s not 12 and a half per cent. So an effective tax rate of 12 and a half per cent is what Sinn FĂ©in would be arguing for in these negotiations. We believe that that’s an appropriate rate that allows the state then, if it so desired, not that we would argue for this, but to increase the rate beyond that.

SK: But as finance minister, of course, you are the state.

PD: Yes, but we’re not arguing for that. What we would argue for is a 12 and a half per cent effective tax rate. That would allow for Ireland to remain competitive in this area but also, it rules out these large companies because not every company would come under this fold. It would only apply to companies that reach certain thresholds of annual turnover of €750 million. So it would ensure that there wasn’t aggressive tax planning or exploitation of different loopholes and tax legislation happening under our watch.

So that’s what we’d argue for. I think that there’s a need for Ireland to defend its interest in in relation to this. But I believe, as I said, that we have been damaged reputationally as a result of some of the practices that this state allowed to continue for far too long.

SK: Do you think being in government would change your approach of the Republic? As I mentioned, if there was an election today, you’d almost certainly be in a coalition of some kind, maybe with Fianna Fáil, or a bunch of smaller parties. So obviously, you’d have to face the reality of coalition government.

The different systems of the North and the Republic are obviously significant. And would you see the party itself changing in government, having to make the kinds of unpleasant unpopular, messy choices that any government has to make?

PD: Two points on that. First of all, we take absolutely nothing for granted. We’re conscious that in the last election, Sinn FĂ©in was the largest political party in the state and was kept out of government by the two parties who have shared power in this state for the last 100 years – in my view, kept out of government because they didn’t want to see the change that Sinn FĂ©in would bring about. They didn’t want to see the new type of politics that we would bring about. And I think that Sinn FĂ©in in a government that delivers becomes a point of no return because it shows very clearly to the public, as the public are becoming more and more aware, that there’s always choices in politics. So we take nothing for granted, even if we were to secure a larger mandate in the next election.

But the core question is government and the challenges of delivering in government. From our team here in Leinster House that has been a focus of each of our front bench team for quite a period of time now. It’s not just to deliver and develop policies, but it is to develop policies that we can deliver in government in a very short period, making sure that the change that we are committed to is deliverable. Now, we’re very conscious, depending on the outcome of the next election, that that would mean that you need partners to share government with, if it potentially means that, and therefore there’s negotiation. We were involved in those negotiations with some of the smaller parties in relation to government formation, and there was agreement reached in many of those areas.

But look, our party has shared government in the North in a different type of government. It’s not voluntary coalition, it’s mandatory coalition. We’ve shared government with parties that the public understand do not share, not only our views on the constitutional issues, but issues on rights, on equality, very, very difficult and challenging differences between ourselves and the DUP in particular. But there has been an ability for the executive, which is a five-party government, to actually deliver on some areas that it has under its control. That’s what government’s about. That’s what power-sharing is about. That’s what coalition is about, and we go into this process with our eyes open.

Our focus is – and we recognise that in any negotiations of government – you negotiate to your strengths. Therefore, our focus has to be to convince as many people across the state to vote for Sinn FĂ©in to make sure that we have the strongest possible hand when we go into negotiations in relation to a programme for government so that we are in a position to deliver on housing, that we are in a position to deliver on public services, that we are in a position to deliver on equality. More importantly, some of the measures that you’re looking at don’t cost anything. It’s about a different approach to government. It’s about making sure that different voices are heard. It’s about making sure that ordinary people’s voices are heard in the corridor of power. It’s about positions that you would be adopting at international level, for example, the recognition of the State of Palestine. These are important things as well that that would be brought to the fore in a Sinn FĂ©in government.

Health, welfare, FDI: One island, two economies

SK: I think that’s a very comprehensive answer. I do get a good sense of where you’re going to come from. The challenge of delivery is always there, of course, but again, sitting in the finance minister’s chair, you’re not responsible for delivery. Your job is to collect taxes and then hand them out. And then obviously, it’s your other front bench colleagues who have to deliver.

But one area that will be extremely important is that you mentioned calling for the reintegration of the two parts of the island in some systemic fashion. How do you see the tax and welfare systems being integrated? Would you start from scratch? Would you run them in parallel for some time? You know, I find this particular part of the border poll and reunification debate is curiously lacking in specifics. I find that it makes the discussion, almost – it’s not even theological, it’s teleological, right? You were never down to what would this look like on the ground.

For example, rates are higher in Northern Ireland. It’s a really simple example. So, assuming some process of reunification, do you increase rates here, decrease them in the North, equalise them over time? Let them run in parallel? You mentioned balanced regional development. The structure of the economy in the North is quite different to the one in the South, even leaving aside the FDI, multinational issue. They’re quite different structurally. How would you think about the process of integrating them? Like, how do you integrate very different tax and welfare systems?

PD: Stephen, that’s an excellent question and I recall, long before I was elected to Leinster House, sitting in the gallery and looking down at the Dáil chamber when Caoimhghín Ó Caoláin, at the time, was putting forward a motion looking for the government to bring forward a green paper on Irish unity to begin this discussion in relation to what Ireland would look like in a united Ireland. And it’s not just the topics that you have referred to, which need to be considered, discussed and planned out and mapped out as to how it would happen – but also how do you integrate two health systems? How do you deal with two transport systems? How do you deal with two social welfare systems, two taxation systems, two workers’ rights – all of these issues have to be planned out and dealt with.

It’s beyond the capacity of Sinn FĂ©in, or indeed any political party, to actually map that out. I think what we have seen in recent times is to be very welcomed where we’ve seen a number of individuals, academics, those in the ESRI like Seamus McGuinness and Adele Bergin who have done work in relation to the more detailed analysis of Irish reunification.

Some of the work so far has been focused on the subvention but it needs to go way beyond that. It is the civil service and it is the Irish state we need to lead out in that discussion in relation to the transitionary arrangements that are required in relation to Irish unification. I started off by saying, looking down to the gallery about 14 or 15 years ago, because Sinn FĂ©in has been very, very clear and consistent in relation to this. We need the Irish state to start to look at what Irish unification would look like. We are convinced, and I am convinced as an Irish republican, that we are going to see a poll for a unification, which is facilitated for under the Good Friday Agreement, within the next short number of years. It is my job and those who believe in Irish unity to try and secure a positive outcome in that poll. And if that were to happen, then there is a set scenario where Irish unification has to legally happen without any of the groundwork having taken place.

SK: Which would be a disaster!

PD: Absolutely. Well, first of all, the democratic wishes of the people exercised in a referendum is never a disaster.

SK: Well, no, on the problem of reunification, of course, people decide what they decide. But it would be irresponsible to say to people: “Vote for something, we don’t know what it’s gonna look like.” I mean, that’s Brexit, right?

PD: That’s my point. And that’s what we have said time and time again. This is happening. The train has left the station, there are changes that are happening in the North, any political party can see this. There is a momentum in terms of Irish unity. Anybody can look at the polls, can look at the age profile in terms of those that are supporting reunification. And they can see that this is going to happen and should happen as part of the Good Friday Agreement.

So then, we need to look at ourselves: Who has a role to play here? And the Irish state has a role to facilitate a proper grown-up discussion in relation to this. And you know, about three years ago, four years ago maybe, myself and Gerry Adams met with all the different party leaders looking for a committee on Irish unity to be established – an all-party committee. One was actually established, but Fianna Fáil and Fine Gael wouldn’t allow for the sub-committee to be given terms of reference. So there was no discussion ever on that issue.

We believe that there’s a number of things, pieces of the architecture, that need to be put in place. There should be an all-party committee on Irish unification to actually deal with this issue. As we said at the time, let’s move beyond the romantic notion of the four green fields and let’s actually start working in detail on what this means. We, as Irish republicans, believe it will be beneficial to citizens north and south. But that doesn’t mean to say it will be simple, or it will be without its challenges. So let’s set up an all-party committee. Let’s create a forum that is inclusive for civic society to participate. And the third thing is let the government put forward a green paper on Irish unity that starts that discussion on all the sectors including how we deal with an all-Ireland health system, how we deal with taxation, and so on.

Now, much of the issues – some of the issues have been resolved in terms of the Good Friday Agreement. Rights and entitlements and identities, they will transcend any changes in the Constitution. But we are making the point, and we’ve made this point privately and publicly: The Good Friday Agreement provides the basis for a referendum on Irish unification. When we have challenged the Secretary of State what the criteria would be for a border poll, he has made the point to me in the past that, if we were to trigger one without meeting the criteria laid down on the Good Friday Agreement, which is quite big, it could be judicially reviewed. The opposite can also happen. There could be a court action in the future forcing the Secretary of State to call that.

So, legislators and government need to recognise that work has to be done now in relation to what the planning is, so that there can be an informed discussion in relation to what unity looks like. But more importantly, as I believe we will succeed in a referendum, that we have that smooth transition on the other side.

The last thing that pointed us here is, we want that discussion to take place because we believe that that discussion will encourage more people to the view that Irish unity is a sensible proposition. If you look at the Scottish referendum – and I don’t suggest that you can draw parallels between two different referendums of two different jurisdictions – in Scotland, if you look at opinion polls before the referendum was called in that discussion took place the polls in Scotland, were showing support for independence at the low 30s, around 32 per cent.

When the discussion actually happened in a more detailed and thorough way, they came very close to succeeding in the independence referendum. And I’m convinced of the merits of Irish unity, therefore I believe that if the Irish state begins to plan and prepare for that, and that means not just themselves and the civil service, but also it’s supporting academics and different institutions to bring forward papers and discussions in relation to that – we’ve engaged with the Central Bank, I’ve had discussions with the governor of the Central Bank, that this issue now has to be considered by the Central Bank, just as areas of other financial stability are considered by the Central Bank. They need to start looking at this because this is a real live issue and one that in my view will happen. We will have a referendum within a very short period of time.

SK: I’m struck by two parts of your answer. The first is that this should have taken place a long time ago and I agree wholeheartedly. The second is that there are specific points of departure for this debate and some of them have to come around volumes, levels and quality of service delivery. And I’m struck by the fact that we still, after all this time, haven’t got a sense of how to integrate
 radiology services. There haven’t been any experimental or public administration pieces of research into this.

I believe what’s going to happen is in power, you will have to start this process and you will have to hand these committees their terms of reference as minister. Do you consider starting the entire discussion from scratch? Or do you push on the idea of finding some level of spending? Do you raise up the health spending in the South to meet that of the North? Do you decrease the welfare rates in the South to meet those in the North? These are the kinds of initial conditions that you as minister will actually be responsible for defining. I’m struck by the fact that what I’m hearing from you is you’d like to wait until others have kind of almost given you those initial conditions. Is that what I’m hearing?

PD: No. Not at all. First of all


SK: I’m sorry, is my question not clear?

PD: No, it is clear. I’m saying not at all on waiting until others give the criteria.

We’re the party who have been pushing the government, we’ve given them the criteria to actually do this. It hasn’t happened. And in government, if it hasn’t happened by that point, we would obviously commit to that.

SK: What are they? What criteria would you choose?

PD: Well, first of all, you would have to take this in segments. You would have to take the health service and how the health service could be integrated. So you’d make the point in terms of there’s very little work done in relation to this. Radiology is probably a bad example, because it’s probably one of the actual good examples of where there is cross-border work and integration in relation to radiotherapy centers like in Altnagelvin, which actually services the entire Northwest. There are other examples of where that type of integration and work has happened. Probably Altnagelvin is the best example of that. But they’re few and far between.

“It’s not a case of merging the North with the South. Irish unity provides us with an opportunity to reinvent ourselves.”

So you would have to look at this in terms of having two health systems. And in my view, it’s not a case of merging the North with the South. Irish unity provides us with an opportunity to reinvent ourselves, to look at the things that we have done well on either side of the island of Ireland, either side of the border, and try and do better. And that may be a very simplified message, but that’s the objective or the prism that you look through.

Then you have to look at it in terms of the costs. So you make the point, can you just raise social welfare benefits overnight to the level of the southern state, but maybe keep different tax rates in the North? It’s not as simple as that, because there are different housing supports in the North compared to the South. And so while you may have lower social welfare benefits, you have other supports that are different. So it is far more detailed.

SK: If you look at the Cofog [classification of the functions of government] spending, when you break out Cofog spending by category, social protection, spending of all kinds is lower in the North than it is in the South on a per-person basis. I agree with you, it’s more complex, but on a per-person basis it’s definitely lower. So you’re going to have to increase that.

PD: Yeah. Well, health spending here, if you take both public and private per capita, is actually higher as well than what is spent on the NHS. The point, Stephen, I’m making to you is this: Any political party does not have the capacity to carry out that type of analysis sector by sector and how you integrate health services and social


SK: I agree with you, but what I’m saying is


PD: What we need is the machinery of the state, of the civil service, to carry out this analysis and to commission the types of research that are required in a timely manner, that is well before a border poll.

And there are then numerous options in relation to what will happen on the other end. It is not envisaged that there is a referendum in the North and overnight a switch is flicked and everything changes to the South. That’s not what is envisaged. There will be transitionary periods, there will be periods of integration.

But you also have to recognise that we need to look at it from a fiscal point of view. If you look at the modelling, and we would like to see a lot more modelling done. In terms of Irish unity, the models that have been done so far have shown that there would be an economic boom, both north and south, in terms of economic growth, as a result of Irish unity. So that allows you to have additional resources.

There are roles, potentially, for the European Union to support Irish unification. And then there’s a whole negotiation that would have to take place with the British government in relation to some of the costs, some of the debts, some of the assets, that would pertain.

So there’s nothing simple in this, and we are recognising this. And this is why we have been saying for quite a considerable period of time that the state is the only organisation, in my view, that can actually lead out a proper, thorough, detailed debate in relation to how you do this over a period of time, but also that is able to nearly kickstart a wider debate and support other types of analysis, from academics and others in terms of how you integrate our health systems, how you integrate our social welfare system. Then you need to take this piece by piece.

Is it possible? Of course it’s possible. Has it been done in Europe? Of course it has. Germany did it. It can be done. It’s not beyond our


SK: I agree.

PD: It just needs to be planned. And it needs to start.

SK: There’s nothing in what you said that I disagree with. The only point of departure, I suppose, that we have is that you will have to decide those initial conditions.

And in fairness, I think you kind of did. You said, look, we’re just going to start with a blank slate, and assume some new version of the state. It won’t be a case of the South rising to the North or the North descending to the South or anything. We’re going to start from a tabula rasa and move forward. I think that idea of a new state is what is tantalising, I have to say.

I’m aware we’re slightly pressed for time. I want to finish with the same question from when I spoke to Paschal Donohoe. I think that there’s an admirable tradition in the United States: when presidents leave office, they write a letter to their successor. What I want you to do is, I want you to imagine that you’ve been finance minister for five years, what letter would you like to write to your successor? What do you think your legacy as finance minister might be?

PD: I hope it would be: Think big, look at a number of key areas where you believe that you can deliver serious change.

Stephen, you mentioned earlier that as finance minister your role would not be about delivery. I actually take a different view. I think as finance minister, you’re part of a team and a really important member of that team. So as finance minister, you’re making the resources available to deliver on housing, you want to make sure that it’s delivered on.

And so for me, it wouldn’t be about just keeping the status quo, it’d be about identifying two or three significant deliverable changes that are long-lasting and delivering them over a period of time and setting them in place that can’t be undone regardless of who comes behind you.

So, making childcare a public service, making the necessary investment in healthcare. And ending the crisis in housing. These are the three things. There are many others, but you have to prioritise a number of significant changes. And hopefully, after my tenure, if I ever get that opportunity and that privilege and honour to serve as minister of finance, I will have been able to be part of a team to deliver that. And my advice to whoever comes before me, if that opportunity were to arise, would be similar.

SK: Okay. Pearse Doherty, thank you very much for your time.

PD: Thank you.

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What have I told you about poll. Only morons answer polls you’re getting the opinion of morons.

I’m like a broken record

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Imagine you’re an old person. You’ve been locked inside for over a year with only Claire Byrne and George Lee for company. You’re shitting your pants about Delta+ but at least you’ve been vaccinated. Every night in your prayers you ask god to take care of Archbishop Holohan. Fianna Fail are your natural party. That has to be worth at least 20% of the voters.

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Set up a poll there and we’ll see whether or not you’re right

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There’s a lot in that. FF hold the key positions and if the choice is 50/50 they may edge towards protection their core voters.

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Actually just as I was writing it I started wondering if Michael Martin could be that cynical to just give the core vote whatever they want and fuck everyone else.

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If he was smart, he would.

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The problem is FF lose 2% of the core vote every year. How many people under 40 still vote FF?

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dont forget that its FF’s fault they have no medical cards and that it was FG & Lab that took them

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A lot of older, 60+ FFG voting types are seething that they were railroaded into getting the Astra Zeneca vaccine, which is now shown to offer less protection against the delta variant. In addition, there’s a longer period between receiving the first and second AZ doses and they’re even more apoplectic when they see younger folk fully vaccinated with Pfizer. That might hurt FFG’s vote.

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McWilliams had a stat from polls that are interesting. Split between people who own their homes outright, have mortgage and non home owners. Support for the goverment partys are around 70%, 30ish and 13% respectively.

Look at age, and vax status it is much the same. 2 different issues but a clear divide intergenerational. As I said on the covid thread the under 40s have been rightly fucked but the 55 plus generation. Rightly fucked by their selfishness and I’m alright jack position

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I actually agree with Elisa for once. Fair play to her for calling this out. Maybe the woke brigade might become more cynical of the media

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Comrade Wallace making waves in Beijing.

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If Comrade Wallace defrauded a Communist State as he did his own State he’d not be free to travel on junkets to juntas as he is now.

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I don’t think Xi would let Micka hand over a vineyard in Italy to his brother.

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