Wednesday’s meeting of the Oireachtas joint enterprise committee to discuss the retail sector had some of the usual to-ing and fro-ing between employers and workers’ groups. But then a noticeable thing happened. By the end of the meeting, both sides had effectively joined hands to conclude that the State is the only actor with the power and resources to lead the sector out of crisis.
It is obvious by this stage in the pandemic that with almost-unrestrained public spending to ward off disaster, Big Government is back in business. But it is also now back for business. Whole sections of the market economy, such as retail and hospitality, are wobbling like drunks on stilts and politicians look like the only people who can intervene to restore some semblance of stability.
Whether or not you believe that heavy-handed political intervention may have caused some of the current difficulties in the first place, all sides seem to be onboard, for now, with the return of Big Government for the economy. Like it or not, it is here to stay for the foreseeable future.
Typically there is a Punch and Judy element whenever you put representatives of workers (virtually) into a room with the lobbyists for the businesses that employ them. Pay us more. We can’t afford it. Oh yes you can. Oh no we can’t. And there was some of that when the Irish Congress of Trade Unions and Mandate appeared at the committee with employers’ group, Retail Excellence.
The issue of how to save urban centres from sliding into a pit of degeneration is too complex, with too many moving parts, for local authorities to handle
But then a convergence happened. As he implored the State for a "dig out" to help the industry recover from Covid and cope with the shift to online shopping, Ecco Shoes retailer, Keith Rogers, told the committee that he had paid all of his staff fully throughout the State's anti-virus closure periods.
As a result, Rogers said, there is now a togetherness between his employees and the company, and Ecco has benefitted upon reopening as a result.
Gerry Light, the veteran Mandate official who has crossed swords with numerous retailers over the decades, was akin to a preacher who had lived to see the non-believers finally bathed in light. If you treat workers well, it is good for business, he said. "We have always known that."
And so all sides signalled joint support for a centralised stakeholders forum, overseen by the State, to chart a way forward for a sector where workers complain of low pay, but which has also been battered by anti-virus trading restrictions. This has occurred against the backdrop of even more insidious turmoil, wrought by the relentless march of giant web retailers such as Amazon.
Those trends have laid waste to many shopping streets and the long-term commercial viability of some town and city centres is now clearly under threat. The market isn’t going to save them. Arguably, at least in the case of the shift to online, the market has caused the problem.
The industry is riddled with insolvent businesses that are being kept undead on Government money
The issue of how to save urban centres from sliding into a pit of degeneration is too complex, with too many moving parts, for local authorities to handle. Only a centralised Government policy framework stands any chance of success.
At Wednesday’s committee hearing, retailers also implored the Government to step in with landlords who refuse to give shop owners discounts on rent for the State-mandated closure periods in the first four months of the year. That intervention may prove legally difficult to plot through the thickets of contract law. But the message from Retail Excellence was that the State is the only hope.
The masses of the hospitality and tourism sector are also huddled around the entrance to the State’s tent of plenty. Tourists cannot travel in or out of the country because of Government rules. Customers soon won’t be able to have a meal or a drink indoors without a Government pass. The industry is riddled with insolvent businesses that are being kept undead on Government money.
The blizzard of trading restrictions on tourism and hospitality businesses to address public health priorities are all, effectively, credit entries in the sector’s ledger. They will have to be balanced out with debt entries – transfusions of public cash in ever-more creative ways – for years to come.
That is the unavoidable price of the restrictions, unless a political decision is made in future to let some operations slide into insolvency to ameliorate it. Tourism and hospitality businesses will not be able to simply “trade their way out” of the difficulties the restrictions have created. Like it or not, the entire industry is now one big semi-State operation for the next five years at least.
Issues such as climate change and, latterly, the pandemic seem to have shredded certain orthodoxies around how the economy should be run, for now
Related to this, the aviation sector is another part of the economy that will require a State viceroy for years to come. The stampede in coming years to tempt back airlines and routes with public subsidies will test the boundaries of State aid rules.
In the medium-term, businesses operating in the housing and land markets will feel the effects of further Government intervention. For myriad reasons, the market has failed to deliver on a basic public requirement so the Government will pick up the slack.
Looking even further beyond the pandemic, other public priorities such as the fight against climate change will, over time, spur even greater State intervention in the everyday operations of businesses.
That statement is meant neither as a call to arms nor as a complaint. Merely, it is a statement of fact, a prediction of what is coming, rolling over the hills like weather. There is no point shaking your fist at it. Businesses must, and will, learn how to live with that kind of ongoing Government intervention.
Issues such as climate change and, latterly, the pandemic seem to have shredded certain orthodoxies around how the economy should be run, for now. This trend was apparent even before the current crisis.
I attended a conference run by the employers’ lobby, Ibec, last February and took note when its chief executive, Danny McCoy, made the case for greater State intervention in the economy to address the issues of the age. It went almost unremarked upon at the time, but it seemed to me a watershed.
Pendulums swing from one side to the other, and it currently seems to be on the side of greater Government shepherding of businesses and the economy.
But there were also good reasons why the State retreated from much of the economy between the 1980s and the noughties. It had begun to get in the way of innovation and improvement. That may be a lesson that we have to learn all over again sometime in the future, whenever the pendulum swings back.
But until then, Big Government in the economy is back in fashion. Everybody had better get used to it.
