The €323m bill: How the fuel protests helped public sector unions secure a bigger pay deal

Gavan Reilly

In Politics by Numbers, broadcaster, author and spreadsheet stan Gavan Reilly takes a data deep dive into a political point of the week.     

THERE IS, SUPPOSEDLY, a plan for a demonstration-cum-rally in Dublin on Friday about the cost of fuel. I say ‘supposedly’ because the Facebook page which was credited with centrally organising the disparate protests of April had announced a plan for national gatherings, only to pare them back for reasons ill-defined.

The informal European Council is in town on the same day, which is both a reason to protest and a reason not to: one imagines the softly-softly approach of the Gardaí to the first gatherings in April may not be repeated when the heads of European governments are in town.

It’s entirely understandable why people would want to revisit the spirit of Easter. Even with the ongoing suspension of 32c in excise and levies, the idea of €2 diesel has become strangely normalised, a psychological Rubicon crossed. For some industries it will prove an unsustainable new reality.

But those who use diesel in their major industries are not the only ones who can be glad of the playbook established in the days after Easter. Whether they’ll admit to it or not, the public sector unions learned those lessons. They played hardball, and they won.

If you’re in doubt, look no further than the figures.

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The last public pay deal, as everyone knows by now, expired at the end of June. In happier times the preliminary talks on a successor would have kicked off in March or April, have a full draft successor deal signed off by May, and be approved in a ballot of workers by June. The new deal would be in direct effect before the last one officially lapsed.

Nobody quite knows if there were plans to hold similar preliminary overtures in March or April, but the post-Easter Uprising meant they certainly didn’t take place. Even then, the unions could smell blood. Outside a government-run forum for employer and worker reps on 17 April, Siptu’s Owen Reidy said unions had “seen a real change in the last week, and the sense that might is right had been delivered upon”. By the time preliminary talks finally occurred in June, the unions were so exercised – and so energised by the ‘might is right’ doctrine – that the first of them started to ballot on strike action in the first week of July.

What could have been

Imagine an alternative timeline in which there were no protests in April – or, at least, the protests were quelled by the government without escalating to blockades at ports, or urgent Cabinet meetings to sign off on supports. (Remember: the Cabinet meeting held on the Sunday was the first time ministers have met on the sabbath since November 2010, when they met to cede sovereignty of our fiscal affairs). Imagine, therefore, that the unions had not been given an incentive to play hardball. A deal may have been done by May or June.

This is crucial not just because of the industrial relations landscape, but the state of the economy at the time. The war in Iran had happened regardless and the cost of fuel was rising, but inflation had not yet set in at the rate it now has. In June and July the consumer price index had risen by 3.4% over the previous 12 months… and was falling from even higher rates in March and April.

It would stand to reason that a deal done in the relative peace of summer – without the unions being given an incentive to play tough, without a popular national strike, and without subsequent talks that temporarily collapsed – would not have included the pay rises that it did. If the unions’ largest goal is for workers’ pay to keep ahead of inflation, it simply would have been cheaper if the deal were done then.

While this is now the stuff of historical fiction (like one of those ‘what if Hitler won the war?’ series) there is, and will forever be, a downstream consequence to this. There is the obvious display that being unrelenting works. The talks collapsed after two weeks because even in the first of rising inflation, the government’s pay offer was in the region of 6% over two years. Unions walked out and now they’ve got 10.75% over two-and-a-half. Truckers blocked the ports and motorways and got massive cuts to fuel taxes – so much so that Ireland cut the excise rates beneath the EU’s prescribed minimums. Hardball works. 

But there is also a fiscal cost to the State, and indirectly to all of us. Say the deal was done in June and provided for pay increases of 3.5% across this year, instead of the 4% that will now apply. Then imagine next year’s was 3% instead of 3.5%. Pay across the two years would have risen by a cumulative 6.6%, instead of the 7.6% it now will. Not much on paper, but a lot in practical terms: the difference is €323 million.

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This is the point where you might like to read a punchline about how many children’s hospitals you could buy with €323 million. Awkwardly, our recent history with larger infrastructure means we might think €323 million doesn’t buy much. Tell that to the cabinet ministers who had all those fights with Jack Chambers over the allotment to their departments. Tell it to RTÉ, now dependent on an interim minister and a budgetary revision to get hold of its ‘missing’ €20 million.

The rising costs

That €323 million then becomes the starting position for 2028, when pay will rise by another 3% across the year. The cumulation of this should not be overlooked. Like compound interest, the increase in one year means the increase the following year is all the bigger. And when pay accounts for almost a third of the State’s everyday running costs, this all matters.

This is especially so when you realise that the above sums don’t factor in one other crucial aspect: the number of people who work for the State. Every time a minister promises more Gardaí, or more nurses, or more SNAs, the pay bill gets a little higher, irrespective of the rate of pay.

For the avoidance of misunderstanding: this is not a comment on the value of that worker, or their entitlement to that pay: many of them in frontline roles work damn hard for their money. Nor is it a critique of how much they are paid: private sector workers may be jealous of pre-committed multiannual pay increases, but they’d happily take the same commitment to the bank.

It’s simply an observation that the delay in doing the deal this year, and the more caustic climate in which the deal was eventually struck, means the arrangement is ever so slightly better for workers, and marginally more expensive for everyone else – and that these things all add up over time. A euro on a nurse’s wage is deserved, but a euro less for something else.

I doubt you’ll see that on a banner at a rally.

Gavan Reilly is the political correspondent for Virgin Media News and the host of Monday with Gavan Reilly, which airs every Monday at 10pm on Virgin Media Play and Virgin Media One.