Leo Varadkar: Ireland’s new leader

Following his election as Leader of the Fine Gael Party at the start of June, Leo Varadkar has been voted in as the youngest taoiseach (prime minister) in Irish history, taking charge of the country at one of the most turbulent times in recent political history.

The 38-year old Social Protection Minister – who is known to have had long-nurtured leadership hopes – was afforded an opportunity to lead, following the near-disastrous result in the 2016 general election, where Enda Kenny was forced to turn to Fianna Fáil, the main opposition party, to prop up the minority government.

Now taoiseach, Leo Varadkar ‘the impressive political campaigner’ will have to give way to Leo Varadkar ‘the statesman’, a leader with the task of putting ideas into practice and keeping a particularly delicate government together.

While the office of the taoiseach is extremely powerful by international standards, the reality for Leo Varadkar is somewhat more complex than usual, as he is heavily hamstrung by the terms and conditions of the Confidence and Supply Arrangement agreed between Fine Gael and Fianna Fáil in May 2016, under Enda Kenny.

 

THE CHALLENGES AHEAD

Confidence and supply: Within this agreement, Fianna Fáil agreed to support the minority government by abstaining from voting on the election of the taoiseach and the nomination of ministers, and any subsequent reshuffles, while agreeing to facilitate the passing of budgets and money bills, once they were consistent with a set of policy principles agreed between the two parties.

As one would expect, this arrangement has had a profound effect on how the government works, with only 13 pieces of legislation making their way through the Dáil so far in 2017.
This will have a specific bearing on the actions of Leo Varadkar as taoiseach, who will have to be far more considered and conservative in what he decides to put to the Dáil, wishing to avoid too many battles or parliamentary defeats, particularly in the early days of his premiership.

How Leo Varadkar manages this arrangement with Fianna Fáil, particularly given his uneasy working relationship with Fianna Fáil leader, Micheál Martin, will be crucial to both him and his government’s success.

Policies: A keen proponent of evidence-based policy, Varadkar has been publicly developing policies since his time in Young Fine Gael. So, what are the policy priorities that the taoiseach has outlined?

Brexit: A key challenge that will test his political mettle, Varadkar will immediately have to lead Ireland’s Brexit negotiations. His appointment as taoiseach is unlikely to significantly alter Ireland’s Brexit strategy, as the substance of Ireland’s stance will remain the same, however, as a new European leader, he must assert himself on the stage.
Expect Leo Varadkar to take Brexit very seriously, not necessarily because of its risk but rather for its opportunity in financial services, inward investment, trade and the relocating of European agencies.

His views on tax and infrastructure development are centred around Ireland being attractive for both people and organisations residing here, and for those considering Ireland as a location. Recent political developments in the UK may ultimately present an opportunity for Ireland and Northern Ireland, with Varadkar commenting last week that the results of the UK election “indicated that there is no strong mandate to proceed with a hard Brexit”.

As for Northern Ireland, Varadkar has said that another priority is the early restoration of the Stormont Executive, commenting that “there is now a strong opportunity for the parties in Northern Ireland to re-engage in discussions to form an executive”.

 

LOOKING AFTER ‘THE PEOPLE WHO GET UP EARLY IN THE MORNING’

Varadkar understands the importance of Ireland’s corporate tax rate in attracting jobs and investment, and Brexit means this won’t even be up for discussion.

But it is likely inspiration will be taken from this simplicity and stability when personal tax does come up for discussion. In particular, our high marginal rate will be tackled with a view to both retain and attract skilled workers, as well as looking to appease some of the squeezed middle, bringing us closer to our competitors on the world stage.

The Universal Social Charge has never been a popular addition to pay slips and while it is a long running policy for Fine Gael to abolish it, Varadkar has stated that his objective will be an amalgamation between USC and PRSI charges, with a new Social Insurance payment.

 

REACTIONS

VARADKAR’S POLICIES

Housing: Housing will continue to be a challenging issue for the Varadkar-led government. Simon Coveney’s Rebuilding Ireland Action Plan isn’t even a year old and Varadkar has stated the Government will continue to implement the activities set out in the Plan, but Varadkar will certainly seek to put his own mark on the sector – with a firm emphasis again on equality.

The First-Time Buyer Scheme is a likely casualty should its review be less than complimentary, while Varadkar’s pro-business stance will effectively rule out any large-scale State intervention for social housing, particularly given that developers and the general construction sector have been calling for improved infrastructure to make the most of potential development sites.

Energy: Both Varadkar and Minister for Finance Paschal Donohoe TD share similar views on making Ireland a world leader in climate change, and the seniority and partnership of the two is likely to have a strong influence on Minister Naughten’s agenda.

Linked to the ideas for regional development will be investment in the production of renewable energy and green-tech.

Varadkar’s pro-business outlook is extended to this industry as well, with a likely extension of REFIT tariffs and supports for bus and rail companies to move away from diesel as a fuel.

Fixing the health service: Varadkar is, of course, no stranger to the health sector, having spent several years as a junior doctor in Dublin, before qualifying as a General Practitioner in 2010.  Appointed to the position of Minister for Health from 2014 until his move to Social Protection in May 2016, he oversaw the extension of free GP care to 270,000 children under the age of six, and free GP visits for an extra 36,000 people over 69, both of which can be considered successes.

James Reilly had plans to end the two-tier health system and replace it with a universal health insurance, but Leo Varadkar, while Minister for Health, essentially shut down that plan as unrealistic, and points towards the continuation of a two-tier system under his reign as taoiseach. Much of the healthcare policy we will see will be drawn from the recently released Future of Healthcare report, which he has stated in policy ideas paper needs to be promptly considered by the government. Costing these recommendations will be a further challenge for the new taoiseach.

More spending on infrastructure: Infrastructure will be an area which this Leo Varadkar-led government will look to substantially improve, bringing Ireland in line with our global competitors in light of Brexit. A new ten-year National Development Plan is mooted for improvements in housing, roads and public transport, broadband, healthcare, water, ICT, schools and further education.

Paschal Donohoe’s work with the European Investment Bank will be a key driver for major projects with Dublin Metro, the M20 between Cork and Limerick and improved motorway access to the West and North West being highlighted in Varadkar’s initial policy ideas paper.

The importance of regional development has not been lost on Varadkar, and a New Spatial Strategy for Ireland will likely be prepared in line with a new National Development Plan, and an increase in capital spending with a central focus on ensuring that most population growth occurs outside of the greater dublin area.

 

WHAT NEXT?

While his wider political appeal is, as yet, untested, it is possible that Varadkar will not have to face a general election until 2019, as outlined in the Confidence and Supply agreement with Fianna Fáil. However, there are a number of factors at play which may force an election sooner than that.

If Varadkar chooses to seek a fresh mandate – something he has seemingly ruled out currently, particularly in light of the results of the UK general election last week, or is prevented from implementing key policy objectives – this may lead to a collapse in the agreement.
At the same time, and in attempt to rebuild its own support base and inflict political damage on Fine Gael in advance of the next general election, Fianna Fáil could seek to capitalise on any exposed weakness within this government and Varadkar’s leadership, and seek an opportunistic moment to withdraw its support,  thus forcing an election.

These weaknesses are hard to predict. However, ongoing and widespread challenges surrounding public sector pay disputes – Brexit negotiations; and a likely referendum on the Repeal of the 8th Amendment to the Irish Constitution (which governs Ireland’s laws on abortion) – will all further complicate the political landscape, posing a real threat to the stability and longevity of government.
In the meantime, the reality remains that this government will be hamstrung and conservative in what issues they will ‘take on’, consulting and temperature-gauging with opposition (Fianna Fáil primarily) before almost every move.

While the early period of Varadkar’s leadership in Government Buildings may be dominated by Brexit, he will be keen for it not to purely define his time in office, echoed by his promised programme of pro-business and pro-enterprise reforms.
But with a slender parliamentary minority, and an unenviable set of long negotiations ahead with his EU counterparts, Varadkar will face as tough a task – some say even tougher, than any of his recent predecessors in Merrion Street.

 

LEO’S CABINET