Time for a New Social Compact

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Danny McCoy (Ibec) outlined a strategy for a new social compact and issues to be addressed through a new social dialogue framework at our Social Policy Conference 2020.  Below is an extract from his paper.

Earlier this year, Ibec, Ireland’s largest business representative organisation, launched a Reboot & Reimagine campaign to set out this strategy and a blueprint for a better Ireland.

The campaign aims to galvanise all stakeholders on a set of actions and aspirations to create a sustainable future for Ireland. In effect the mechanism we envisaged to deliver this is a new Social Dialogue model with the potential to deliver a new Social Compact within that. What this Compact might contain is an open question but the compact I would contend in the former Social Partnership agreements in their initiation in the late 1980s was moderate wage growth, with reduction in personal taxation alongside industrial stability to enhance productivity. 

This previous compact was directed at the individual to facilitate the opportunity to not just remain in Ireland but to thrive and prosper here, to build a career and begin household formation reversing the economic necessity to emigrate. A new compact would need to address the challenges of the Ireland of today and into the future.  The standout issues of today are not merely standards of living issues but quality of life factors. Ibec sees these as better lives, better business addressing the need for better planning, better infrastructure and housing and doing these sustainably. The future of work will bring other challenges from automation, remote working and the absence of income continuance factors which even if coverage is nominally high, adequacy however might be low particularly when dealing with unforeseen shocks giving rise to precariousness.

The Developmental Welfare State work of the National Economic and Social Council may have another opportunity as the global trends are swinging towards social democratic inclinations after the half century swing towards conservative liberalism and focus on individualism.

Social Dialogue

Ibec advocates for the establishment of a more extensive social dialogue model as we specifically call on Government to reset Ireland’s engagement with employers and other stakeholders in a more structured consultation and engagement model which can support recovery, address Ireland’s long-term societal issues with inclusive and sustainable outcomes.

Social dialogue is a mechanism through which business and key societal stakeholders are engaged and consulted on the major challenges facing society to influence meaningful outcomes.  It is a structure and process involving all actors in society for involved and influential discussion on policy outcomes. The backdrop for a new social dialogue model is both international and domestic. The international backdrop includes:

1. Rising populism, polarized societies leading to extreme collectivism and political outcomes, civil unrest and instability
2. Rapid acceleration of change and disruption impacting globally
3. Ensuring the recovery from the pandemic crisis doesn’t create greater inequality and marginalization
4. Creation of longer-term value for stakeholders as well as shareholders by business
5. Established tradition of social dialogue and insurance models within Europe

The domestic backdrop includes:

1. Major challenges facing Irish society requiring consensus, resources and mechanisms to find solutions
2. The wealth that is held privately has dwarfed the public sector and finances
3. Election trends giving rise to greater political fragmentation
4. Sequence of political crises eroding trust and confidence in public policy
5. Stakeholder communications and engagement structures are siloed and ineffectual
6. Need to Reset Government engagement with employers and employees for a contemporary economic context.  Given trade unions represent 15% of the private sector workforce how are employees best represented in a contemporary context for instance?
7. Private wealth out of kilter with public sector investment
8. Quality of life greatly compromised due the legacy of the financial crisis and subsequent underinvestment in infrastructure and services
9.  Ireland an outlier in Europe with no social insurance model

There are many examples internationally of social dialogue models and the OECD provides a comprehensive overview but given our traditions in Ireland we can surely bespoke a framework to suit our competencies and stakeholder formations.

What challenges can be addressed by social dialogue

1. Climate change and a Just Transition to low carbon future
2. The impact of a post Brexit political and economic order
3. The future of work
4. Globalisation and digitization
5. Covid and a Just Recovery from social and economic scarring
6. Leveraging private wealth for public good
7. Underinvestment and quality of life constraints
8. Future demographics – both rising and aging population
9. Political fragmentation as well as populist and extremist trends.

What can be achieved through stakeholder dialogue?

A social model reflective of today’s socio-economic circumstances where there can be mediation of policy outcomes to deal with the big challenges we face. Consensus on a Just Transition can be formed towards they allocation of resources and leveraging the private wealth accumulated in the last half decade. A mechanism to help the country progress through effective policymaking by breaking the cycle of making the same mistakes once more. It would offer the timely and meaningful discussion and scrutiny of policy options.

The key policy priorities for stakeholder dialogue would include:

1. Fiscal and budgetary policy, including coordination of work from Commission Taxation and Social Welfare.
2. Capital investment priorities including housing and public private partnerships
3. Social policy including childcare, pensions, social welfare and the wider social model including the social security system
4. Low carbon transition and climate challenge
5. Education and skills, to include investment in higher education and upskilling and reskilling initiatives
6. Policies to support the Shared Island agenda and the all-island economy
7. Labour market regulation and legislation
8. Diversity and gender balancing
9. Work/life balance
10. Employment rights and employee responsibilities.

The full paper is available to download here.