Tánaiste Leo Varadkar TD: Pursuing the pandemic dividend

In the relative tranquillity which descends during the Dáil summer recess, removed from the commotion of the chamber, Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, sits down with Ciarán Galway to discuss government support for business and workers, Brexit, Irish unity, and Fine Gael ideology.

Located at the end of a ground floor corridor lined with artwork, framed sports jerseys and photography, the Tánaiste’s Government Buildings office appears comparatively austere when compared with his erstwhile base in the Taoiseach’s office above. That wood-clad room is inhabited, paradoxically, by a political opponent and government partner. For now.

Following the February 2020 general election, Leo Varadkar was returned by the electorate of Dublin West for a fourth consecutive stint in the Dáil. Twelve of his Fine Gael colleagues were not as fortunate as the party slipped to 35 seats on his watch. Though his party was beaten into third place, Varadkar remained in situ as leader, and it appeared that he would deliver his party into Opposition rather than coalition.

Ultimately, that scenario would not come to pass. Instead, following lengthy government formation negotiations, strung out over several months and hindered by the Covid-19 pandemic, a once unlikely coalition government of Fianna Fáil, Fine Gael and the Green Party emerged in late June 2020. Under the terms of the coalition, it was agreed Fianna Fáil leader Micheál Martin would assume leadership as Taoiseach alongside Varadkar as Tánaiste until December 2022, after which point the two leaders will reverse roles.

Pandemic

In the intervening period, having steered the country through the onset of the pandemic, Varadkar’s sojourn as caretaker Taoiseach yielded an advantageous rebound in his party’s fortunes. As such, Fine Gael embarked upon its third consecutive term in government – a party record – with its leader buoyed by ‘pandemic politics’.

The following month, at the launch of the Government’s €7.4 billion July Jobs Stimulus, the Tánaiste signalled: “Today, this new government is backing businesses and workers.” The objective was straightforward: assist businesses in protecting and creating jobs and support workers without jobs.

Varadkar is assured in his analysis that the coalition government subsequently matched this rhetoric with adequate action. Referencing the Wage Subsidy Scheme, the Pandemic Unemployment Payment, and the Covid Restrictions Support Scheme, he outlines: “If you compare us to almost any other developed country, the amount of money that we have invested in saving jobs and businesses would compare very favourably.”

Having peaked at 481,000 recipients in February 2021, the figure for PUP recipients fell to just over 192,000 by the end of July. The number of recipients is now at its lowest level since the introduction of the emergency measure in March 2020, with the overall bill totalling €8.3 billion.

As Minister for Enterprise, Trade and Employment, his central priority has been to “save as many businesses and jobs as possible”. However, while asserting that feedback from business indicates that “they have been very impressed with the scale of financial supports”, he qualifies this by saying: “The downside is, of course, our national debt will grow too because it is largely borrowed money.” Indeed, addressing the National Economic Dialogue, Minister for Finance Paschal Donohoe TD warned that Irish public sector debt will total almost €250 billion by the end of 2021.

Essential workers

Recognising that the archetype of an ‘essential’ worker has evolved since the onset of the pandemic, the Tánaiste notes: “I think all of us now have a much broader definition of an essential worker and it includes people who work in supermarkets and retail, people who work in transport and distribution, and people who work in security and cleaning.”

Recognition of those traditional essential workers in the health sector, however, is something that is currently under consideration by the Government. Though any recognition, the Tánaiste insists, must be fair and affordable.

“Obviously, the public side of the health sector is covered by the Public Service Pay Agreement, so there are several, albeit modest, pay increases that healthcare workers will benefit from and have benefitted from throughout the pandemic,” he says.

Equally, suggesting that it would be unfair to limit recognition to the health sector, he emphasises the work of staff in his own department, as well as in Revenue and the Department of Social Protection.

“We are giving some consideration as to how we can recognise people who went beyond the call of duty throughout the pandemic, and there are a lot of them. But they weren’t all in the health sector, they were in other sectors too.

“It is hard to get it right and I think we need a meaningful engagement with the unions about that because it would need to be fair and affordable. You could probably do it around extra hours worked,” he suggests, adding: “The right time to do it is when the pandemic is over.”

Remote working

In January 2021, amid virtually unrecognisable working conditions experienced by many, Varadkar’s department published Making Remote Work, Ireland’s National Remote Work Strategy, with the aim of ensuring that remote working becomes a permanent feature in the Irish workplace “in a way that maximises economic, social and environmental benefits”.

Conceding that “if we tried to plan the shift to remote working and home working, we probably would have spent 10 years doing it,” the Tánaiste observes that the pandemic has provoked a “pretty extraordinary” pivot.

Highlighting the distinction between remote working and the experience of emergency homeworking during the pandemic, he emphasises: “At the moment, it is not a choice. People are being told that they have to work from home if at all possible and not to come into the workplace unless it is absolutely necessary. I would like to get to the point over the next few months – with every adult vaccinated and with the pandemic hopefully behind us – where it does become a choice, where people have the choice to work from home, to work from the office, or to go for blended working options, which is what most people seem to want.”

Suggesting that a balance must be struck to ensure business needs are met and public services are delivered, Varadkar indicates that much of the strategy’s actions are already complete. “The code of practice around the right to disconnect is done. The right to remote working legislation is in train. There is a lot of investment now going into connected hubs and enterprise hubs around the country,” he specifies.

“A rising tide never lifts all boats or doesn’t lift them equally, which is why government intervention is important…”

Ideally, he adds, the Government will have legislated for a right to request remote working by the end of 2021. “That is not a right to demand remote working, but it is a right to make the request to your employer, to have it seriously considered and then, if your employer does not allow you to remote work or work from home, you would then be able to challenge that,” he explains.

While recognising the significant opportunity remote working poses for rural Ireland, and noting recent tech company expansions in Nenagh, County Tipperary and Mountrath, County Laois, the Tánaiste has considered the law of unintended consequences. Associated risks include ensuring adequate work/life balance, the attraction and retention of talent in Ireland, avoiding isolation and sustaining vibrant cities.

“A rising tide never lifts all boats or doesn’t lift them equally, which is why government intervention is important. Certainly, some of the impacts in the city centres could be negative and that does require us to do what we have talked about doing for a very long time, but maybe have not done enough of; thinking of cities, not as places that people commute in and out of, but as places where people actually want to live. That means making them more liveable, more family friendly and more people friendly.”

Better terms and conditions

While not mutually exclusive, simultaneous support for business and enhanced workers’ rights is a tightrope. Asked whether the Government has struck the right balance, Varadkar believes that the most important workers’ right is the right to work.

“Anything that you do, you have to bear in mind that you want to make sure that it does not have negative sequelae. You do not want to end up doing things that cause people to lose their jobs or have their hours cut. That is something that we bear in mind all the time. I think we have got the balance right.

“The minimum wage is up about 25 per cent on where it was only seven or eight years ago; it has gone up much faster than the cost of living has – although people facing high rents would probably argue otherwise – but if you take the cost of living in the round, [minimum wage] has gone up faster than that. It is the sixth highest now in the OECD.”

Exploring the concept of “the pandemic dividend”, Varadkar indicates that post-Covid, there is an opportunity to deliver better terms and conditions for all workers. “The three areas that I focus on are: sick pay, to have that in place for the start of next year; the move to the living wage during 2022; and, finally, starting auto-enrolment, which is the system that has been promised for a very long time whereby everyone has the opportunity to pay into an occupational pension,” he explains.

While consciously focusing on better terms and conditions for workers, the Tánaiste is also aware of the headwinds faced by business, including Brexit and the pandemic. Downplaying the prospect of alienating his party’s business voter base, he asserts: “I think our voter base has always been broader than business; we wouldn’t be getting between 20 and 30 per cent of the vote in most elections if it was just business,” adding: “It is something that we have to bear in mind. When I do meet businesses, I do remind them, politely, that the arguments that were made against the minimum wage were some of the same ones that are now made against sick pay. We did manage to bring in a minimum wage and increase it every year without reducing the number of people at work. We had 2.3 million people at work before the pandemic hit.

“But it is something that we have to be wise to and sensitive to, because there are people who will always demand higher pay, better terms and conditions, and more workers’ rights and they actually will not care if people lose their jobs, if businesses close, or if people get their hours reduced; they will blame the Government for that or they will blame business for that. That is actually pretty disingenuous.”

Similarly, Varadkar rejects the critique levelled by Opposition counterparts that the economy must be rebalanced between indigenous SMEs and foreign-owned MNEs. While acknowledging that SMEs struggle to compete with MNE salaries, he regards the perceived imbalance as “a false dichotomy”.

“What we know is that multinationals which invest in Ireland create a lot of employment and spend a lot of money on supplies, procurement and outsourcing of Irish products and services. Among the biggest customers for SMEs are the multinationals. If the multinationals weren’t here, Irish SMEs would have a lot less business,” he responds.

Brexit and the Protocol

Meanwhile, framed by the unrelenting Brexit fallout, during his opening address at the Shared Island Dialogue in June 2021, Varadkar referenced “unease within the unionist community” caused by the Northern Ireland Protocol and acknowledged, “I am associated with it too”. Indeed, alongside cabinet colleagues Simon Coveney TD and Micheál Martin TD, the Tánaiste has become a lightning rod for anti-EU and anti-Irish sentiment among loyalists in the North.

“I understand it, why it has come about and why they feel that way. I certainly understand that. Some unionists feel that one of the consequences of the Protocol is that there is going to be less trade with Britain — certainly, imports from Britain face checks that they did not before — and more trade between north and south. But I don’t think I’m to blame for that. I think this is a consequence of Brexit.

“I think that there are maybe some people in the unionist and loyalist community who don’t want to admit what was actually obvious to a lot of people before the referendum occurred, that Brexit itself could undermine the union,” he reflects, before reiterating: “I never wanted Brexit. It is not part of any nationalist or Irish Government plot to weaken the union. It is a decision that was made by the people of the UK, and it has had consequences.

“I don’t want to see any trade barriers between Northern Ireland and Britain, or between Ireland and Britain, or between north and south. I’m a free trader…”

“Our efforts, all along, have been to minimise the impact of Brexit. I don’t want to see any trade barriers between Northern Ireland and Britain, or between Ireland and Britain, or between north and south. I’m a free trader, I don’t like this at all, but this is a consequence of the fact that Brexit happened and our priority, of course, is to avoid a hard border between north and south and to make sure that our position in the single market is not undermined.”

Emphasising the significant upturn in north-south trade, Varadkar makes clear his ambitions for the all-island economy and contextualises the current economic terrain on the island. “I think partition was bad for Ireland economically and still affects the north-west region where Derry was cut off from its natural hinterland in population terms. Partition really meant that probably one of the most industrially advanced parts of the island, which is the Belfast area, remained in the UK. That’s the reality of things,” he observes.

“I think there are real advantages for Northern Ireland in the Protocol. This is the only part of the world that has unrestricted access for exports to both the EU and Britain. If we could deal with some of the more practical problems that have arisen from the Protocol, it might be easier to make the case that there is an economic benefit here, potentially, for Northern Ireland.”

Recognising the “genuine difficulties” identified by major supermarkets as well as other challenges, such as those relating to pets and soil, the Tánaiste maintains that resolution is entirely possible “if the British Government is willing to make the kind of concessions that the EU has”.

Taking a swipe at the British media’s framing of the current impasse, he suggests: “Maybe there isn’t enough of an understanding that the real inflexibility has been from London and [its] unwillingness to honour an agreement that was signed and an unwillingness to make the concessions that could make it much more workable.”

Irish unity

On the opening night of Fine Gael’s 80th Ard Fheis, also in June, the North featured as “the topic of the evening”. Significantly, during the Fine Gael president’s opening speech, he told delegates, “I believe in the unification of our island, and I believe it can happen in my lifetime.”

In the fullness of time, however, Varadkar hopes that the most significant line of that particular speech will be his assertion that “unification must not be the annexation of Northern Ireland”.

Deliberately demarcating his position as the antithesis of Margaret Thatcher’s parliamentary speech in which she avowed that, “Northern Ireland is part of the United Kingdom; as much as my constituency is,” the Tánaiste states: “I don’t think Belfast is the same as Kerry or Banbridge is the same as Wexford and I don’t think that unification has to mean annexation.”

Citing different models that could be explored in relation to Irish unity, he contends that “some things could continue to be different”. “We could still have Stormont. We could still have an autonomous area and some things might be aligned and harmonised and other things might not be. Northern Ireland may decide that it wants to retain its own education system or its own legal system. I think we should be open to that… I think we need to be open to this idea that a 32-county socialist republic is not the only potential vision for unification,” Varadkar submits.

Perceptive enough to admit that he would not engage in conversation or participate in a forum around the reunification of Britain and Ireland, the Tánaiste can understand the reticence among most unionists in relation to unity debate. However, he also understands the irreversible structural change in northern politics posed by unionism’s lost majority.

“What has fundamentally changed in Northern Ireland – and has happened before my eyes, only in the period in which I have been in politics – is there is no majority anymore, for either community, [amid] the growth of the middle ground. That creates the potential to build a majority for something different. But I would want it to be more than 50 per cent plus one,” he contends.

Ideology

Closing the Ard Fheis, Varadkar contemplated Fine Gael’s ideological vision, reasserting that alongside a market economy, “we need a strong state to achieve our social objectives, an active state, a state that cares”.

Summarising the role of the State in his party’s paradigm, the leader explains: “The vision that we have or the ideology that my party has is very much rooted in the mainstream Christian-democratic, centre-right view of how countries should be run. That is what we call the social market economy. That is not a phrase that I have invented, it’s a phrase that Konrad Adenauer would have used. Our thesis is that the best way to generate wealth is through a market economy.

“But we don’t believe that it is the best way to distribute wealth, because the market does not work that way. That is where the role of government comes in. That is the provision of good public services, the provision of public infrastructure and it is also the provision of opportunities – so that people can actually benefit from a market economy – in and around skills and education.”

While this is not a fresh or radical break with its political tradition, the Fine Gael leader accepts his party has neglected to fully articulate it. “I am going to try to improve on that,” he says, elaborating: “We sometimes allow people to pigeonhole us into this false dichotomy that we are only interested in the economy, or only interested in business, or only interested in money.”

In the same address, the Tánaiste advocated for the creation of a new “Just Society”, hinting that he had been persuaded to buy into the ideals of Declan Costello’s Towards a Just Society. While this could be interpreted as a signal that Fine Gael is, once again, set to flirt with a left-wing policy framework, Varadkar demurs: “I wouldn’t frame it in that way. The way I see it is embracing and trying to better advocate for what we have always tried to do, which is to build that idea of a social market economy.”

Ambitions to December 2022

Looking ahead to his remaining 16 months as Tánaiste, Varadkar exhibits a focus on his current portfolio as Minister for Enterprise, Trade and Employment. “The main thing that I need to do is get to the point where the jobs that were lost [during the pandemic] are either restored or we create new jobs to replace them, that we get the businesses that were closed open again or find new businesses that can replace them,” he says.

Re-emphasising his desire to restore Ireland to full employment, with better terms and conditions and more flexibility, the youngest person to ever hold the office once again has his eyes on the role of Taoiseach. “If I can get to that point by the end of 2022, maybe at that point I deserve another stint at the bigger job,” Varadkar concludes cannily.