Government must take firm stand on wages

That was in 2007; nine Budgets later, everyone in the country has felt the pain. And just as we were set to turn the corner we slam into the humpback bridge of Brexit. With sterling falling to its lowest in 31 years, and tipped for parity with the euro by next year, the real as opposed to the theoretical threats of Brexit are now apparent.

Yesterday the International Monetary Fund cut its growth forecast for our economy for 2016 by 0.1pc to 4. 9pc, and by 0.4pc to 3.2pc for 2017. In the latest update of its predictably bleak World Economic Outlook, it forecast weak global growth and warned that further stagnation will fuel more populist sentiment against trade and immigration. The Department of Finance has also downgraded growth projections to allow for the risk associated with Brexit. These challenges and risks must be met head on.

As sterling plummets yielding any further competitive advantage by an upwards pay spiral could be ruinous. Wage pressures building up within the public sector have to be contained and the Government has no choice but to stand firm. A week out from the Budget and under threat of strike the Association of Garda Sergeants and Inspectors is lodging an official pay claim requesting pay restoration amounting to 16.5pc. Yielding to cheap populism in the short-term could cause long-term damage and reverse progress so painfully achieved. The Government must minimise the impact of risks and be nimble enough to avail of potential opportunities that may arise. The upside of Brexit is that there may be new investment opportunities, and there could also be a dividend in jobs should businesses relocate from the UK. But first we must ride out the storm. The tide of recovery that lifted expectations could also sink us if it is not managed. This means sitting down with the social partners and plotting out a strategy. Extraordinary circumstances can make for exceptional demands but these are better addressed through discussion than by decree.