The most radical social welfare in decades – We can’t afford to get it wrong!

Social Welfare reform and a single welfare payment for all people of working age must address poverty traps, access to supports and services and the availability of jobs

The Minister for Social Protection, Joan Burton, has signalled the most radical change in the social welfare system for decades.  She proposes to replace seven of the most important payments with a single payment rate and common conditions for eligibility.  This process has already begun with the changes to eligibility for the One Parent Family Payment and payments for those on Community Employment schemes. The Department has also signalled that detailed proposals will be put to the Troika in March.

EAPN Ireland supports the general principle of a single payment on condition that the correct services and supports are put in place.  Equally, we are not opposed to activation measures if these supports and services are in place and if appropriate work is available.  However, as the Department itself has acknowledged, to make such changes in current conditions risk pushing some of the most vulnerable people in the country further into poverty and creating even greater poverty traps preventing people taking up work.

Background to these proposals

In November 2010 the Department of Social Protection published a Report on the desirability and feasibility of introducing a single social assistance payment for people of working age The overall proposal is that everyone age 18-64 years on this social welfare payment would be directed to the support or services they need in order to return to work or other education or training opportunities. The report proposes that all payments be aligned to the Jobseekers Allowance payment and apply to all new applicants for social welfare supports whether they be a person with a disability, a lone parent, qualify for farm assist, etc. The report proposes that carers not be included in the single payment but recently there are suggestions that they will be excluded.  

The 2010 report clearly states that the changes should only be brought in if they reduce poverty and social exclusion for people and make work pay. It also recognises that the development of supports and services is necessary to this.  It outlines clearly the major loss of income for most groups provided separately under the current system.

Since the report was published there have been consultations with different organisations including those representing people affected by the changes. It is clear from these consultations that while no organisation is opposed to the introduction of a single working age payment there are major concerns particularly in relation to the capacity of the state to provide the necessary supports and services and in relation to the current lack of jobs and opportunities for people to take up.

Therefore, organisations, including EAPN Ireland, have asked that no changes are made that would reduce the current level of current income supports until such a time that the services and supports outlined in detail in the report are put in place.

EAPN Ireland proposals to Oireachtas Committee

The Oireachtas Joint Committee on Jobs, Social Protection and Education is now preparing a report on the single working age payment.

The Europe 2020 working group of EAPN Ireland (membership below) has made a submission to the Joint Oireachtas Committee.  The submission makes it clear that we support the idea of a single social assistance payment for all people of working age, provided that the necessary services, supports and pathways to employment are put in place.   

The Department’s 2010 report which laid the basis of the current proposals for a single payment acknowledges that, without policy changes in other areas, most people moved onto Jobseekers Allowance will suffer a loss of income.  The Minister needs to spell out how these supports and services will be put in place before changing the payments or eligibility criteria. 

We are concerned that changes have already been made in Budget 2012 and that an implementation plan will be presented to the Troika in early April without any clarity on how the concerns expressed in the Department’s own report and in consultations will be addressed.

The current system allows for appropriate policies to be developed over time to meet the needs of particular groups. It would be a negative step from a policy point of view if the appropriate responses to group needs are lost in the implementation of a new single payment based on a simple template of Jobseekers Allowance.  

The services and supports in place to address the needs of those currently on the Live-Register are already under pressure and the National Employment and Entitlement Service which is being established will also not have the resources to address this. Adding even greater numbers to this system, including people facing a complex range of barriers, will only overburden an already struggling system, which is in the process of reform.

It is clear from our members’ experience and from studies that the vast majority of those who would be impacted on by the introduction of a single payment want to work but are prevented from doing so due to the barriers outlined in the Department’s report.

We are concerned that if the reforms are not correctly implemented they will increase the negative attitude towards groups such as lone-parents and people with disabilities who are often attacked, despite the evidence, as being unwilling to work.

There are currently very limited jobs available. The reforms to the welfare system must therefore go hand in hand with a strategy to create decent jobs. 


Poverty Traps

It is vital that any changes to the system remove, and do not deepen, poverty traps.

We have a number of very specific issues and concerns.

  • The Department of Social Protection’s 2010 report clearly acknowledges the loss of income for different groups if the single payment is introduced without other changes.  The current differential supports were put in place precisely to cover costs of services and supports such as childcare. The loss of income under the proposed changes would in particular apply to carers, to those in Community Employment and those going to work who qualify for income disregards. If the services and supports are not provided it will result in poverty traps for these families forcing them to meet these costs from more limited resources or to leave or not to take up a job or a place on a Community Employment Scheme.
  • Income disregards play an essential role in addressing the cost of services related to going to work for those receiving these payments. This includes the cost of childcare and afterschool care for lone parents and the costs incurred by having a disability such as transport.  As highlighted above, the loss of income disregards will immediately impact on the capacity of people to be able to take up employment. In this situation the changes might appear at first hand to be a saving for the Department but the actual impact would be to act as a barrier to people moving off social welfare supports and is therefore an actual increase in costs to the state.
  • While a reform of the means testing system for secondary benefits would be welcome, the introduction of a single payment based on Jobseekers Allowance would result in the loss of secondary payments for people under some of the existing payments. This would include the Household Benefit Package and free travel for people on Disability Allowance, Carer’s Allowance and the Blind Pension. The loss of these supports would be detrimental for the people affected in light of the extra costs of disability.
  • The role of Family Income Supplement (FIS) needs to be explored as it could help to overcome some of our concerns.  However, member organisations are aware of major waiting times to get this payment so if it does become part of the single working age payment support system, it will need to be easier to access.

With the exception of those undertaking caring responsibilities, the majority of those on social welfare payments want to work. They would welcome a system of accessible services which addresses their needs and supports them to access a decent job, so allowing them and their families a decent income. The implementation of a single working age payment in a considered way, with all the elements being developed together, allied with a job creation strategy, has the potential to make a key contribution to this. However, in the current climate, with cuts to essential services and little if any work opportunities, now is not the time. Cutting social welfare supports and imposing even greater conditions on people to engage with the system when there are so few opportunities will only have negative consequences for people and undermine the Department’s own goal of ensuring that all people of working age have sufficient income and opportunity to participate as fully as possible in economic and social life.

The Government must re-engage in real consultation and not continue to press forward with changes at a time when such changes will only result in greater poverty for the groups involved making it even more difficult for them to take up work and training opportunities.

Membership of the EAPN Ireland Europe 2020 Working Group includes Age Action Ireland, Congress Centres Network, Disability Federation of Ireland, Dublin Employment Pact, EAPN Ireland, Irish National Organisation of the Unemployed, Irish Traveller Movement, Migrant Rights Centre Ireland, National Adult Literacy Agency, National Youth Council of Ireland, National Women’s Council of Ireland, One Family, OPEN and SIPTU.

Fresh Perspectives: New TDs on the development of a more social Europe – Mick Wallace TD

This is one of a series blogs by new TDs to encourage an active debate between political representatives, EAPN Ireland members, and the broader public on the future of the European Social Agenda, and the role of the new Dáil in debate on Europe.

Mick Wallace is an Independent TD for Wexford. He was elected for the first time to the Dáil in 2011 and is a member of the Technical Group.

With a population of 4.6 million and a GDP of €150 billion, Ireland is a relatively small player in Europe (the EuroZone countries alone have a combined population of 330 million and a GDP of €9,200bn), so it can be difficult for us to make our voice heard – however, it is important that we play our part and as a member of the Oireachtas Joint Committee of European Union Affairs. I hope to make a constructive contribution by scrutinising legislation and proposals emanating from the EU as well as making sure the government is held to account in its dealings with Europe.

Today, one in five people in the European Union is at risk of poverty or social exclusion and 40 million people are living in a condition of severe deprivation. Although the media discourse about Europe is primarily concerned with banks and bondholders, the devastating social consequences (felt across Europe) of bowing to the interests of financial institutions and private speculators is what makes the financial crisis a reality for ordinary European citizens. Cuts to social welfare, education, and health in conjunction with tax increases and rising unemployment are the hallmarks of a European response to the crisis that is not only failing but making things worse. Here at home almost 100,000 children live in consistent poverty and nearly 230,000 live in relative poverty. Despite these shocking figures, the Fine Gael/Labour coalition is committed to implementing the policies of its predecessor which specifically target those who are already vulnerable. In education the cuts coming into effect in September 2011 will have a devastating impact on children with special needs and learning difficulties, Traveller pupils and the children of non-nationals as well as having a knock-on effect across the education system.

In working towards a more social Europe it is important that our focus is on protecting the interests of ordinary European citizens as opposed to those of banks or private companies. In this regard, a key area of concern is the proposed reforms to the Common Fisheries Policy. In Ireland alone the Seafood Industry contributes about €700 million annually to national income and employs somewhere in the region of 11,000 people – it is also a valuable industry for many of our European neighbours providing jobs not only on fishing vessels but in processing operations, in distributing and marketing seafood as well as other areas. In its proposals the European Commission has called for the introduction of a system of transferable fish quotas – this is worrying as it may lead to a situation where multinational companies acquire an unfair proportion of quotas resulting in an effective privatisation of the quota system with the knock-on effect of job losses in fishery-dependent communities. Coastal communities across Europe must not be sacrificed for the profits of multinational companies.

I welcome the acknowledgement a few weeks ago by IMF deputy director Ajai Chopra that the problems that Ireland faces are not just an Irish problem but a shared European problem. And whilst Minister Noonan jokes about ordering t-shirts with the words “Ireland is not Greece” printed on them, many of us outside government circles realise the importance of promoting solidarity between Irish citizens and our European counterparts. This is not about pitting Irish people against Greek or Portuguese citizens, just as domestic debate should not be stifled by creating an artificial divide between public sector and private sector workers. This kind of discourse is initiated and nurtured by governments in conjunction with a complicit media with the aim of dividing citizens and conquering dissent against austerity measures and socially unjust policies.

We were informed in the past that the European Union was supposed to be a family of nations and that we would all look after each other. The EU was founded on the principle of solidarity between the nation states of Europe, and their citizens. These ideals have fallen to the wayside as austerity gains a deeper foothold. It is our task as European citizens to restore our shared values of equality, solidarity and fairness to the centre of the European project and ensure that these principles are not consigned to the pages of history as elements of a bygone era.

Mick Wallace TD

Fresh Perspectives: New TDs on the development of a more social Europe – Simon Harris TD

This is one of a series blogs by new TDs to encourage an active debate between political representatives, EAPN Ireland members, and the broader public on the future of the European Social Agenda, and the role of the new Dáil in debate on Europe.

Simon Harris is a Fine Gael TD for Wicklow and was elected to the Dail for the first time in 2011

My generation of young Irish people have seen many benefits from our country’s membership of the European Union. The freedom to travel anywhere across our continent, to experience new cultures, to see investment in many infrastructure projects in towns up and down the length and breadth of the country and even tackling mobile phone roaming charges – these are just a few of the tangible, simple benefits we have seen from Europe. However, it is clear that as a people we all too often feel removed from the European project. Issues concerning us are discussed many, many miles from here yet how engaged with this process are we as a people? As a new TD, I have come to the Dáil full of energy, enthusiasm and a desire to play my part in reforming and rebuilding our country. It is clear that an important part of this reforming exercise will be examining how we interact with our European neighbours.

This year in the Dáil we held the first ever special sitting to mark Europe Day. We heard from our MEPs, from the European Commissioner, from the Taoiseach and from other party leaders about Europe, Ireland and our relationship. This was a worthwhile first step but needs to progressed and developed further.

When one reads a newspaper these days, our relationship with Europe seems dominated by talk of banks, bailouts and bonds and whilst there is no doubt these are vital and topical issues, our relationship with Europe must go beyond that. I want to see more discussion, debate and exchange of ideas about social issues. I want us to learn from each other on how we can best tackle social challenges. We need to be exchanging ideas on best practice in education, in health, in disability and on the environment.

Recently in the Dáil I highlighted the fact that at a European level it had been agreed to have a pan-European helpline for missing children yet years later we have yet to put this in place in Ireland. This is just an example of where we need to seek much greater follow through on what is agreed at a European level being delivered on in our own country.

There is an onus on those of us in the Oireachtas to keep abreast of what is happening in the EU, the European Parliament and the European Commission. We need to constantly look at new ways to make this scrutiny of European issues more seamless. But there is also an onus of all of us – on every Irish citizen – to get involved. If the European project is to be a success in what it strives to achieve, it needs not just bureaucrats, institutions or directives but rather it needs citizens of Europe onboard and in tune.

The commitments in the Programme for Government are welcome and I think we’ve gotten off to a good start on this but a huge body of work remains to be done and I look forward to playing my part.

Europe was never meant to be just about banks – it is about so much more than that. We must all strive to redress this imbalance!
Simon Harris TD


Fresh Perspectives: New TDs on the development of a more social Europe – Pádraig Mac Lochlainn TD

This is one of a series blogs by new TDs to encourage an active debate between political representatives, EAPN Ireland members, and the broader public on the future of the European Social Agenda, and the role of the new Dáil in debate on Europe.

Pádraig Mac Lochlainn is a Sinn Féin TD for Donegal North East. He was elected to the Dáil for the first time in 2011 and is the Sinn Féin spokesperson on European Affairs, Foreign Affairs and Trade

Current EU economic strategies are driving more and more people within the European Union into poverty. It is estimated that eight per cent of working European citizens are now at risk.  The privatisation of public services, the free market and de-regulation have all contributed to bringing Europeto the edge.
The European project is being undermined by right-wing policies which are impoverishing more and more people.  Wages are being driven down. Job security is being undermined and welfare and social benefits are being attacked.

The debt problem is pan-European and requires a European response. The impact of deep austerity combined with the lack of a major investment plan will clearly negatively impact on growth across Europe. 
Sinn Féin advocates a policy of critical but constructive engagement with Europe. However, because the EU has become a dominant force in the political, economic and social life of this State, we must support or oppose each of the EU’s complex developments on its own merit.   
We have consistently supported EU measures that promote and enhance human rights, equality and the all-Ireland agenda. These measures are an example of the EU at its best. But we have also never been afraid to stand up against EU measures that damage Irish interests.
Now, more than ever, is the time to stand up for these ideals.
We want to build a Europe of Equals – a true partnership of equal sovereign states that co-operate in the social and economic development of Europe and beyond. We want an EU that promotes peace, demilitarisation and nuclear disarmament.  We want a Europe that seeks a just resolution of conflicts under the leadership of a reformed, renewed and democratised United Nations. Ultimately, we want a United Ireland that will take its rightful place and play an active role in such a reformed EU.
Consistent with our republican agenda at home, Sinn Féin’s Agenda for Change at EU level involves actively campaigning for:
– an independent Ireland of Equals in an EU of Equals
– an EU that respects and promotes national, collective and individual rights (including human, political, social, cultural and economic rights)
– an economically and socially just EU, not an EU that is merely another economic superpower
– a demilitarised and nuclear-free EU
– a globally responsible, fair-trading EU that leads the way on reaching the Millennium Development Goals for halving global poverty by 2015.
Unfortunately, in the name of fiscal restraint, the EU has adopted economic policies that now threaten the European social model, the democratic power of national parliaments, and the bond of mutual respect that must endure among member states. They are imposing severe austerity on weaker member states such as Ireland, Portugal and Greece which will push even more families into poverty and block any chance of economic recovery.
Worse than this our European partners will profit as much as €10 billion as a result of a 3% surcharge on their loans toIreland under the terms of the  EU/IMF austerity programme. Not only does this surcharge contribute to what is an already unsustainable debt level, but will starve the Irish government of much needed resources for job creation, public service provision and anti-poverty programmes.

These are not the actions of partners acting in solidarity with one another.
The EU mandarins appear to have learned little from the defeat of the proposed EU constitution in referenda across Europe only a few years back. And they ignore the wishes of their people at great risk. People across Europe are becoming increasingly disillusioned with the nature of a project that is being carried out against their wishes.  They, like Sinn Fein, want to see a Europe of Equals that is grounded in mutual respect.

We have always been told that the foundation of the European project is solidarity. The lesson from the recent austerity programmes in Greece, Ireland and Portugal is that solidarity amongst the EU “partners” is now in short supply. Unless real solidarity and partnership soon replaces harsh and punishing austerity, the damage to the European project may be irreparable.

Pádraig Mac Lochlainn, TD

Widening the Boundaries

Most commentators agree that the economic situation we find ourselves in will bring decades of debt and unthinkable social misery.  EAPN Ireland member Aiden Lloyd says we will remain where we are unless we widen the boundaries of discussion and analysis.

It is quite difficult to comprehend the credibility granted to the economic establishment in terms of defining the options that we can adopt to address our economic problems. This is all the more extraordinary when considered against what can only be described as the worst reputational performance by any set of associated professions in history. Over a period of a decade or more the combined wisdom and skill-sets of accountants, financial managers, regulators, economists, ministers and specialist departmental personnel failed to manage, predict, regulate or successfully remedy the crash of the national economy. Yet, these are the very same people now defining the parameters of rational discussion and acceptable comment. According to this conventional viewpoint all options must involve the socialising of speculation-incurred debt; the rejection of default options; remaining within the Euro zone; viewing personal indebtedness as a problem for families not the state; and subjecting all sovereign decision-making to EU/ECB/IMF direction.

What is truly disturbing is the level of stricture applied within the media, even by those facilitators whom one would consider liberal in terms of widening the boundaries of debate or admired for their ability to draw out alternative perspectives. Offering non-establishment options immediately brings a wall of ridicule and an aggressive pursuit of chapter and verse solutions – ignoring the fact that definitive solutions have been as scarce as hen’s teeth on the conventional side. So, those who advocate even limited default are faced with responses that paint a picture of desolation and breakdown – empty ATM machines, collapsed public services, no credit for business, irretrievable reputational damage etc. But these things might happen anyway if we maintain our present course of action, and perhaps the only chink of light that might compel us into some sort of realistic consideration is the growing consensus that sovereign default is now more likely given the sheer scale of the debt burden that has accumulated. Undoubtedly, there is no easy way out of the mess but a constructed solution is preferable to one eventually imposed by circumstance, and it is high time that we began to bend our brains to this end.

Even though Ireland is a particular and extreme case, the difficulties introduced by laissez faire capitalism are relatively universal. For some decades now the unfettering of global capital has resulted in a flow towards speculative investment rather than investment in production, because of the greater return (assisted by generous tax breaks) this afforded. To some degree, this is an outcome arising from the sheer efficiency of capitalism in increasing the output of goods, resulting in market saturation, over competitiveness and declining profits. What should have followed, in the developed world in any case, was a steering of capital towards technological development (especially green energy development) and growing the services sector, particularly leisure, learning, healthcare, child/elder care and personal development – a natural pathway for advanced societies, whose material needs have largely been met by existing production capability. However, this is not the time to begin an analysis of capitalism, even though it will undoubtedly have to be scrutinised for its applicability and relevance in an era of climate change and declining carbon energy resources. However, before returning to national problems let us contemplate some historical wisdom that emerged from the last great economic downturn that began with the Wall Street Crash in 1929.

John Maynard Keynes was the economist who described a normal functioning economy as a circular flow of money driven by worker’s consumption – basically one person’s wages contributes to the employment of others by virtue of their purchasing of goods and services. When this circulation gets interrupted through unemployment, hoarding of savings and declining demand – as happened with the collapse of the housing bubble in Ireland – then artificial means have to put in play to restore the flow, either by increasing the money supply or by intervening in the market to stimulate spending. In a recession private sector capability is much reduced, therefore this stimulus must be provided by the state. If the stimulus is focused on poorer people, through investment in employment-creating projects then the effect is more direct, since poorer people spend a greater proportion of their income on basic items such as food, clothing, heat etc. This is the strategy being employed in the USA by President Obama. Unfortunately, economic policy in the European theatre is driven by a different belief system.

Neo-liberal economists have an unshakable belief in market forces, the so called ‘invisible hand’, which they believe always ensures that the natural laws of supply and demand will right any aberration in the market. Neo-liberals do not like state intervention. Thus they advocate addressing spending deficits arising from a reduced tax take (because of unemployment and less spending) through austerity measures – cutting public services and selling off publically owned utilities. But they are perfectly happy for the state to capitalise busted banks at the expense of its citizens, and they justify this socialisation of private debt on the basis that the state has a duty to create the conditions for market forces to operate – a moot point, but there you are. You will have gathered at this point that the European Central Bank head Jean Claude Trichet is no Keynesian, neither is the EU (in its various forms) nor the International Monetary Fund.

It is a double misfortune that we as a country, having been driven to ruin by a reckless government, are now subject to the direction of neo-liberal ideologues. The ECB-EU-IMF is determined that Ireland will refloat its banking system even if it impoverishes its citizenry in the process. Paul Krugman writing in the Irish Times last week (29/3/11) lays out the outcomes of this process to those US cheerleaders who urged a similar strategy in 2009 to the Irish one – bond yields topping 10% for the first time, unemployment at 14.7%, a doubling of interest rates on debt and an unsustainable debt burden. Dan O’Brien writing in the same paper (2/4/11) outlines a worst case scenario that may involve stress testing Ireland Incorporated, creating a banking panic. All of this is set against a backdrop of negative growth and no real signs of recovery.

It is pretty apparent that European imposed solutions do not have our interests at heart. Whatever about the noble ambitions of Jacques Delors to create a unified, mutually dependent and collective Europe it is abundantly clear that that project has long since been colonised and diverted by fiscal conservatives and big business. Despite having engineered the biggest economic meltdown since the Great Depression neo-liberals continue to dominate the policy stage. Only this week Morgan Stanley listed Ireland as ‘good for investment’ because it is a fully liberalised and deregulated economy, making it apparent that bankrupting Irish citizens is secondary to maintaining a liberal market model.

So what sort of options other than ruinous loan repayments should be given space and consideration? Well, we could default – and may anyway, if we read the subtext of previously cautious commentators. How disastrous would that be? Despite the howls of horror and quivering fingers pointing to Argentina, an Irish default would be quite different, being confined to the private debt assumed quite rashly by the previous government. True sovereign debt would not be defaulted upon, so there would be every opportunity to convince the markets that we remain honour-bound to meet our sovereign obligations.

What of the banks? Well we did manage without banks for six months in the early 1970s, and while it was a bit awkward at first, commercial life carried on as normal. Nonetheless we would need to re-establish a banking system, and to this purpose we could invite in foreign banks or bolster the few existing clean institutions to carry out this function. Since our existing contaminated banks have no capacity to provide credit to businesses they are of little commercial use anyway, so why bother resuscitating them. Admittedly, this would add to job losses, but there will be a massive reduction in staff numbers anyway, as these banks are forced to reduce the scale of their operations under the EU/ECB/IMF agreement.

One other option would involve retaining the commitment to recapitalising the banks at the expense of generations of tax payers, but with repayments stretched over a reparation-type timeframe, say twenty or thirty years, perhaps even longer. This would allow the restoration of a normal economy alongside a debt repayment regime – something post war Germany was able to achieve with considerable success. Alternatively, we could simply write down the personal debt, which is the next big hurdle we will meet – fairly soon too, if the ECB persists with its intention to impose a gradual rise in interest rates to prevent inflation (conservative economists tend to be paranoid about inflation even though it has not been a critical factor since the 1980s). This would as a matter of course also require us to seek a write-down of state assumed debt.

Now for the crunch question, and perhaps the greatest inhibitor to a widening of discussion and the onset of lateral thinking: how, if we abandon the EU/ECB/IMF package, do we meet the day to day costs of services and salaries? Well, in the normal run of events, the straight answer is through taxation, like any other prudent state. Unfortunately the Progressive Democrat-Fianna Fail illusion that the provision of quality public services is compatible with a low tax regime means that an immediate restoration of responsible levels of taxation would be a tremendous burden for families, coming on the back of increasing debt repayments, ad hoc levies and increasing unemployment. In addition, the size of the deficit, €19 billion, is too big to plug with taxation alone. Difficult as it is to swallow there will have to be savings in public expenditure, which probably means a reduction in the public service wage bill.

Although it is an evolving situation, subject to wider political agendas and perhaps the very future of the European monetary project, it is becoming fairly clear that there are no ‘one stroke’ solutions to the problems we face. A combination of debt restructuring, burden sharing with bondholders and fiscal consolidation together with a targeted investment programme to stimulate growth is the most likely package to succeed.

Trying to deal with the debt problem while restoring growth is a difficult one, but we still have some €4.9 billion in the National Pension Reserve Fund and €9 billion in cash reserves. There are also high levels of personal savings, perhaps €100 billion, a portion of which could be elicited through a national bond issue – something akin to war bonds, which could be promoted as an investment in ourselves as a nation.

These are only some of the options that might be considered, but undoubtedly there are others that debate and discussion could throw up, if it was permitted.

Finally, while a debt burden of the magnitude that Ireland has accumulated may seem insurmountable experience shows that once growth returns and employment increases significant inroads can be made into the debts that a nation carries. As things stand we are in a very bad situation and are understandably over-focused on banks, debts and indebtedness. We need to concentrate on creating jobs, facilitating entrepreneurship and resourcing public enterprise, which will in turn bring a degree of confidence and a flow of spending – which brings us right back to John Maynard Keynes and the restoration of the money circle.

Aiden Lloyd is an independent researcher and consultant. He previously worked with the European Anti-poverty Network Ireland, was national community development & equality coordinator with Pobal and is a member of the board of the Society of Cooperative Development Studies Ireland (CDSI). He has been involved in a range of community development, local development and regeneration initiatives both in Ireland and Europe.



The Arts, Who Benefits? A New Pact Conversation on the Arts, Inclusion, Equality and Human Rights.

The following piece was written by Ed Carroll, a Director of Blue Drum and Project Leader who works with others in an imaginary space where culture, politics and community collide. He was part of the Civil Arts Inquiry team established by City Arts, Dublin (2003-2007) and Chair of Kaunas Biennial (2009). In 2010 he received a Lithuanian National Research Award and is currently studying culture and politics of the Baltic Region at the Department of Social and Political Theory. He lives between Kaunas and Dublin.

There are now conversations going on about how to reset Ireland during this time of troubles.  Many take place out there among ordinary people who don’t make history but who have to suffer it.  What good is culture and art here?  What role and responsibility can culture and art play there?

Our intention is to exchange experiences and tactics to help us work through these questions and other indissoluble problems facing us.  A New Pact Conversation #1 begins in Limerick on Tuesday, April 19th at Thomond Park and is inserted into the creative showcase of Family Resource Centres from Limerick and Clare.

Our idea is to create open conversations with others who have parallel pursuits and for this to take place in-between ordinary public life.  Our starting point is to invite ‘proximity exchanges’ among colleagues across the spectrum of rights, equality, youth work community development and the arts.  We are looking to push ourselves away from a reclusion in the political and policy corridors towards a counter-cultural discourse with individuals and groups working in different ways to re-set Ireland.

An analysis, supported by Declan McGonagle and John Holden speaking recently about Ireland and the UK respectively, is that the consensus that drives public support for culture has broken down and has to be remade.  In Europe and the United States, as observed by Martha Rosler and Maria Lind, the position of culture is arrested and being redefined and reset.  At a physical level, the pressure arises from the global financial crisis.   At a deeper level, the breakdown is linked to a more serious disconnect between ordinary people and govern-mentality. What we face today is a broken circuitry between people, culture and the political process.  Therefore we have to find ways to re-set the public value of the arts as a contributor to greater solidarity and equality in families and communities in Ireland.  The scale of the problem when it comes to the arts is not insignificant and is an open secret.

(1) Who pays for the Arts?
In 2010, the Arts Council received €68 million of which just over €65 million came from the National Lottery. The Lotto revenue is gathered disproportionately from lower socio economic groups like unskilled workers, unemployed and low education qualifications. From the available data it is almost certain that the substantial public money spent on the arts is regressive meaning it is a transfer of resources from the less well off to the better well off.

References: NESF 2007, pp. 63-64  // Arts Council, 1987, Section 1.3.1

(2) People with lower educational attainment, social class and income are many times less likely to attend a range of arts events. And if you are over 45 you are much more likely to attend no arts events at all.

References: ESRI, 2008, pp. 8, 13, 58n.

(3) At a local level, the awareness of Local Authority arts officers and local arts centres is heavily skewed towards those in more advantaged groups. Furthermore, none of the mainstream arts organisations are required by any national policy to prioritise cultural inclusion.

References: ESRI, 2008, p. 58 // NESF, 2007,  p.108

In advance of Thomond Park, we programmed a 20-minute audio piece to frame the initiative and which you can listen to now at A New Pact Conversation.  Our agenda for the discussion is how communities can best be supported to participate in their own expressive life and access their own practices of making sense of Ireland today.  We also think that we have to advocate for the introduction of a positive duty for the State’s spending in culture to have due regard to equality and human rights while carrying out its functions and to implement positive action measures to make real equality in the arts and cultural service provision.


Arts Council of Ireland (2010) Arts Council Strategic Overview 2011-2013 is available to download online at

Arts Council of England (2010) Achieving Great Art for Everyone is available to download online at

D. McGonagle’s Passive to Active Citizenship – A role for the Arts was a paper delivered to the Bologna in Context Conference, 14 October, 2010 is available to download at

J. Holden’s “Class and  Culture is available to download online at

J. Vogl’s “De-totalized Forms of Encounter was published in An Architektur 10: Community Spaces and is available to download online at

P. Lunn (2007) Fair Play? Sports and Social Disadvantage in Ireland. Dublin: ESRI Series 190.

P. Lunn and E.Kelly (2008) In the Frame or Out of the Picture? A Statistical Analysis of Public Involvement in the Arts, ERSI report on arts participation in Ireland is available to view online at

M. Lind & R. Minichbauer (2005) European Cultural Policies 2015 – A Report with Scenarios on the Future of Public Funding for Contemporary Art in Europe. London: Frieze Projects.

M. Rosler, Culture Class: Art, Creativity and Urbanism is available to download online at and also

NESF (2006) The Arts, Cultural Inclusion and Social Cohesion. NESF:  Dublin.

Z. Baumann, Selves as Objects of Consumption,  a public talk in Vilnius, Lithuania in September 2010 and is available to view online at

The Establishment of a High Pay Commission

By Aine Walsh, Communications Worker with EAPN Ireland

Recent studies (Wilkinson and Pickett, 2009) have highlighted the negative effects of unequal societies on both our health and psychological welfare: the wider the gap between high and low earners the greater the prevalence of social unrest and disenchantment in a society.  The net result of that unrest and disenchantment is profound and disturbing: mental illness, the rate of imprisonment, levels of obesity and murder rates are all five times higher in the most unequal societies when compared to the least unequal. As Irish levels of income inequality are incrementally increasing it is important that we take a comprehensive look into this issue, with a view to suggesting workable solutions.

One hundred years ago, business guru JP Morgan stated that the difference between high and low pay should be no greater than 10%. He argued that such a differential is enough to create motivation for advancement.

A 2009 Behaviour and Attitudes Poll commissioned by TASC found that 85% of adults believe the government should take steps to reduce income inequality.[1] Income inequality in Ireland is in fact increasing, for example the richest group faced lower prices in June 2009 than July 2007, whilst the poorest and median group faced higher prices, as deflation is commodity specific.[2]

A recent survey in the UK highlighted the lack of informed knowledge that many people have surrounding this area; firstly, 79% of the population place themselves as middle income earners, thus indicating that the average income is a figure which most people are not aware of, with many high and low income earners placing themselves misguidedly in this bracket. Secondly, this falsehood was also shared by the wealthy (those earning over £100,000) who believed the average UK wage to be double the actual figure.[3] The creation of a High Pay Commission could help alleviate these misconceptions and address the dearth of information.

One solution that has generated considerable international debate is the mooted introduction of a High Pay Commission, which would be tasked with carrying out an in-depth analysis of income inequality in the Irish private and public sector. The rationale for creating a High Pay Commission is twofold; to increase public knowledge about inequality and to propose workable remedies to income inequality and its effects.

In effect the idea is to put a ceiling on what people can earn; a maximum wage. The concept of such a body is not entirely without precedent. Indeed the Irish government established a similar, albeit on a smaller scale, initiative to investigate and provide recommendations on how to reduce the levels of high remuneration prevalent in the Public Sector. Various actors in the UK have also been debating the possibility of a High Pay Commission and the proposal did attract some attention at the outset of the last general election campaign (Lawson 2010). Ultimately a High Pay Commission would propose a comprehensive set of joined-up regulations to tackle excessive pay.

How the Commission would work

The task before a High Pay Commission would be to investigate possible reductions in the top earners only in order to create more income equality.  The establishment of a High Pay Commission would also address the dearth of information on income inequality and its negative effects on our society. Without better information on high pay we can’t tell its effects on, for example, Ireland’s competitiveness. The High Pay Commission could also look into the possibility of tax reforms which would create further redistribution of wealth from those on a high income to the lower earners.

It is important firstly to ensure that the composition and structure of any Commission itself is sound in order to ensure viability and effectiveness. The UK organisation Compass, which is the force and catalyst behind a demand for the establishment of a High Pay Commission in the UK, has outlined the basic structure that such a body might adopt. This includes the creation of balanced Commission, led by a Director, under the instruction of a Chair and a small number of Commissioners, backed up by an expert panel of independent advisers. The High Pay commission should also be furnished with a detailed and accurate account of the economy and our economic outlook, which should be contributed to by the Department of Finance but also other expert bodies and academics in order to receive a balanced and broad perspective. The Commissioners should be broadly representative of civil society, including from the financial and business sector, organised labour, a relevant academic or economist, a journalist and a community and voluntary sector representative. The task of the High Pay Commission would be to examine existing data, commission new research, conduct hearings and test the resulting recommendations with interested parties. Their overall aim would be how best to reduce excessive risk and rewards in the medium to long-term.

TASC has argued that there are two available methods to reducing the wage gap; firstly through progressive taxation on income and wealth as is used in Sweden, the second is to have smaller differentials in income and wealth before taxes which means there is less need for redistribution, as is availed of in Japan.[4] This report also notes that preventing excessively high incomes and wealth at the top is just as important as raising incomes at the bottom.

International practice

An example of how such a structure of more equal pay could be introduced into the Irish system is demonstrated by Sweden, a similarly small economy which has successfully introduced a more equal and non-market orientated wage structure.[5] In Sweden this has resulted from an egalitarian wage structure, promoted by the Trade Unions over the past fifty years. This is a good example of the positive welfare effects of more equal distribution as chosen by workers. Government social transfers account for a much higher percentage of GDP in Sweden and Denmark than countries such as the US and Ireland. Nordic countries also tax the benefits paid out more extensively than other countries, a policy which hurts the poor very little as the tax rate tends to increase with household income.[6]

The Australian government’s Productivity Commission published a report in January 2010 entitled “Executive Remuneration in Australia; Inquiry report”. The aim of this was to examine the trends in remuneration in Australia and internationally, the types of remuneration being paid, to whom, and the relationship between remuneration and corporate performance.[7] This report also sought to; assess the effectiveness of the current framework for the oversight and transparency of remuneration, consider any mechanisms for aligning better the interests of boards and executives with shareholders and the wider community, examining the effectiveness of international responses to this issue in light of the financial crisis, and finally, providing recommendations on how the existing Australian framework governing remuneration could be strengthened.

The US has also undertaken steps in pursuit of a more equal and stable society. For instance Barack Obama has introduced individual salary caps of around $345,000 per year for those working in institutions which have received government support.[8]

A motion brought before the UK Parliament in November last year succinctly highlights why the creation of a High Pay Commission is essential;[9]

That this House believes that the Government should establish a High Pay Commission to examine the effects of high pay on the economy and society; acknowledges that over the last 30 years median earners have seen incomes increase at less than the average while the super-rich including UK chief executive officers have seen their pay increase to 76 times that of the average worker; notes three main concerns over the effect of high pay in Britain: the link between excessive pay and the financial crash, the questionable link between economic performance and high pay and the social effects of inequality due to the increase of wealth concentrated at the top of society; and calls for a public inquiry to bring all of the facts, evidence and arguments into the public domain.”


A myriad of possibilities for reform therefore exist, simply waiting to be explored and tested by an investigative body such as a High Pay Commission. Although the form, structure and reliability of the High Pay Commission is important, what is most essential is that some form of review is undertaken into this issue and presented to the public and our representatives in government.

Overall, an Irish High Pay Commission should aim to; encourage the retainment, recruitment and motivation of high calibre people whilst remunerating them more appropriately; increase the public’s knowledge on inequality through the publication of a regular report; investigate and relay best practices from other jurisdictions; investigate the feasibility of creating a more Nordic style system of redistribution in Ireland; the creation of legislation on this issue; and list recommendations for the reduction of excessive remuneration.

It is therefore to be concluded that a High Pay Commission is necessary. It is recommended that such an investigative body be created; charged with reviewing our high pay culture, the effect this has on society and what steps can be taken to create more positive changes. This is an issue which is adversely impacting upon the lives of every Irish citizen and thus requires the utmost attention.

[1] McDonough, T., “Hierarchy of Earnings, Attributes and Privilege Analysis”, TASC, 2009, p.2, available at, accessed July 2010.

[2] Jennings, A., Lyons, S and R.S.J. Tol, “Price Inflation and Income Distribution”, ESRI Working Papers No. 308, August 2009, p. 3, available at accessed June 2010.

[3] Aoronovitch, D., “Spare a Thought for the Undeserving Poor”, Times Online, August 2009, available at , accessed June 2010.

[4] McDonough, T., “Hierarchy of Earnings, Attributes and Privilege Analysis”, TASC, 2009, p.2, available at, accessed July 2010.

[7] Australian Government Productivity Commission, “Executive Remuneration in Australia; Inquiry Report”, available at , accessed July 2010.

[8] Compass, “Never Again”, Direction for the Democratic Left Limited, p.9, available at , accessed July 2010.

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