A challenging 2018 - and 2019 will be no easier

Housing, braodband, health, Brexit, the future of the EU - 2018's challenges will only get bigger in 2019

An Taoiseach Leo Varadkar.

An Taoiseach Leo Varadkar.

With the Christmas festivities getting under way and 2018 drawing to a close, now is a good time to review an eventful political year. While the anticipated general election did not materialise, 2018 did see trips to the ballot box with a keenly contested referendum on abortion as well as a presidential election that, while low-key, threw up a number of interesting questions.

On the domestic front the economy continued to tick over, but issues such as health, homelessness, and broadband provision continued to be a headache for the Government. The global political scene remained rocky with the status quo under threat and Brexit dominating the headlines.

Domestic stability

This time last year, most observers felt a general election was inevitable in 2018. Having narrowly averted the horror of a Christmas election following the resignation of Tánaiste Frances Fitzgerald, the breakdown in trust between FF and FG meant both parties were preparing for a trip to the polls. Insider however remarked at the time that unless an election was called in the very early part of the year, then events – the abortion referendum and Brexit talks chief among them – would mean the opportunity to do so would pass.

It soon became apparent that those in Leinster House were very focused on those key issues, initially putting a lot of work into preparing for the abortion referendum, and then, in the second half of the year, in exuding an air of stability as the Brexit talks reached their crunch phase. This latter point is seen as being of particular importance, partly as it presents a sharp contrast to the division and chaos in Britain, but also as any hint of division will be pounced on by UK negotiators.

Pressure points


Even the dramatic resignation of the communications minister Dennis Naughten did not derail the Government, although it did bring to the fore one of the issues on which the Leo Varadkar's administration is under pressure - the provision of rural broadband.

The issue is problematic on several fronts. On a practical level it greatly hinders the ability of businesses and other organisations to function in certain parts of the country, thereby hindering economic growth in those areas. In turn, this threatens to exacerbate regional imbalances, leaving some parts bereft of growth, and people and the big urban centres struggling to manage an increased population. This feeds into the feeling that parts of the State are becoming detached or are being ‘left behind’ which, if not addressed, can morph into alienation and an ugly backlash at the ballot box as we have seen in many other countries in recent years.

Another issue the Government continues to struggle with is housing. As Insider has remarked previously, while much of the headlines focus on homelessness, there is a much wider problem - young people struggling to get on the housing ladder. The scourge of increasing rents means one cohort are still living with their parents, while those who are renting struggle to save the deposit that would enable them to buy a home. There is a growing sense of a generation being ‘locked out’ of home ownership. A feeling that this is an unattainable aspiration can have significant political consequences - something we have seen manifest itself in Britain in recent years.

The years following the economic crash in 2008 saw plunging house prices, but also saw a great curb in supply, both in terms of second hand homes coming onto the market, and more particularly, a lack of new homes being built. As a result, there is a backlog in the system which, despite various Government initiatives, is taking time to clear.

In addition, the new rules around mortgage lending, introduced with the intent of avoiding a repeat of the lending binge that partly led to the crash, have made it more difficult for people to finance the purchase of a property. This has forced more people to rent, thereby pushing up rents and making it more difficult to put together a deposit. It is a vicious circle but one the Government must break. This, along with the perennial issue of the health service is the main domestic issue for the political system.

Referendum success

The Government got a boost in May with the successful campaign to amend the Eighth Amendment, the Constitutional ban on abortion. As Insider has previously commented, FG emerged as the big winner from that campaign but it could also be seen as something of a success for the often-criticised ‘new politics’. This was a thorny issue and was dealt with very carefully by the Oireachtas, the all-party committee going through the matter and issuing detailed recommendations, which the Government then incorporated in draft legislation before a very well-planned referendum process got under way.

Much has been written about what that particular campaign shows and Insider will not go through it all again other than to say it indicates that the people may be ahead of the politicians when it comes to change. Of course, that can be taken as a warning sign for politicians too who must be aware that this mood can also extend itself to a willingness to change politicians!

One criticism that may be levelled at the Government however is that they have become very attached to making symbolic changes through the referendum process, and less capable of taking practical actions at ministerial level. For instance, it has been noted that the success of the abortion referendum has not been matched by any great advancement in addressing the woes of the health system.

Electoral boost

FG has enjoyed a good year in the opinion polls. Since the end of 2017 it has opened up a steady lead over FF in most polls, notably in two exit polls in May and October. It currently looks well placed to retain its position as the biggest party and be in pole position to form the next government. Nevertheless, FF is maintaining, and in most polls running slightly ahead, of its support levels from the last general election. SF will hope for a boost from new leader Mary Lou McDonald, although the presidential election did not go so well for the party. We can therefore expect a competitive race, whenever the starting gun is fired.

An interesting question is whether FG and FF will, as they claim, make gains at the expense of independents and smaller parties as the tide goes out for them. There is some evidence for this hypothesis, but Insider would caution that the unexpectedly strong showing of Peter Casey [pictured above] in the presidential election may indicate there is a sizable cohort of the population disillusioned with the main parties, and certain Independents, particularly those of a traditional hue or from what might be termed the ‘FF/FG gene pool’, may be do well again next time.

Brexit endgame

The biggest issue of all of course has been Brexit. After two years of going around in circles, the endgame seems to finally be upon us with Westminster voting on the draft withdrawal agreement next week. Unfortunately, we seem to be no nearer to resolving the uncertainty, with parliament almost certain to reject the deal and no clear indication of what comes next.

From an Irish perspective the deal is probably as good as it gets in the circumstances, not only providing the mechanism to avoid a hard border in Ireland but also keeping the entire UK locked into a customs arrangement pending negotiation of a comprehensive trade deal. The difficulty is however that this might all count for nothing if it is rejected in the House of Commons.

From a British perspective, the deal is not very appealing to either side of the debate but ultimately Insider feels it will come down to whether Brexiteers are prepared to compromise in order to get the exit from the EU across the line and not jeopardise Brexit entirely. A key issue here is that, while unlike the wider public, Brexiteers are in a minority in Parliament, and the MPs in that camp tend to be the ‘true believers’ and want a purer Brexit than the public at large. In truth, nobody knows how this will play out as once parliament formally rejects the deal next week myriad wildly differing possibilities come into play.

Global threats

As Insider has previously remarked, the focus on Brexit has meant other developments across the EU have not got the attention they perhaps should. This year has seen the rise of populist and far-right movements continue, with a big win for Victor Orban in Hungary and the coming to power in Italy of a coalition of populists and former separatists. Last weekend saw the unexpected breakthrough of a far-right party in regional elections in Spain.

All of this creates significant challenges for the EU but Insider has no sense the Eurocrats are actually listening. In fact, talk in some quarters (Emmanuel Macron ) of further integration and of initiatives such as European armies indicate the opposite is the case. Next year’s European elections may offer another rude wakeup call.

From an Irish perspective, the future of the EU, in particular without the presence of the UK, is something that should loom large and will likely provide challenges for governments in the coming years. Insider is not sure we are ready to embrace some of the proposals being talked about.

In 2019, the twin issues of Brexit and the EU are likely to be much in focus as will local and European elections and perhaps even a general election. With a busy year ahead, Insider advises politicians to rest well over the festive period.



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