Fine Gael & Labour to form next Government

Sunday 06 March 2011 22.12
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Enda Kenny & Eamon Gilmore - New Coalition Government
Enda Kenny & Eamon Gilmore - New Coalition Government
Enda Kenny - Arrives for the Fine Gael Parliamentary Party meeting in Dublin
Enda Kenny - Arrives for the Fine Gael Parliamentary Party meeting in Dublin
Eamon Gilmore - Addresses Labour Party delegates
Eamon Gilmore - Addresses Labour Party delegates

Fine Gael and the Labour Party will form the next Government following six days of negotiations between the parties.

Read the Programme for National Government here

Delegates at a Labour Party conference this evening voted to enter government with Fine Gael.

Separately the Fine Gael parliamentary party unanimously endorsed the proposed programme for Government, which was agreed by the party leaders last night.

Speaking after his party gave its full support to the deal at a Dublin city hotel Enda Kenny said the party members were very happy with the agreement.

Both leaders said urgent issues that need to be dealt with will be addressed immediately by their Government.

Mr Gilmore said there would be no honeymoon period and both parties would be down to business straight away, while Mr Kenny said there is no room for what went on in the past.

He said his Government would lead by example and the people would be given the truth by the new Government.

Mr Kenny said Fine Gael and Labour will work to rebuild Ireland's relationship with other countries.

He said structures on the how the Government operates as a ‘full partnership’ have already been agreed and he said that would happen in the interests of the country and its people.

Mr Gilmore told delegates in UCD this afternoon, that the programme for Government was not a continuation of the policies being pursued by the outgoing Government, but was a ‘clear departure’.

Mr Gilmore said there would be difficult days in Government and that the stakes were high, but he said if he did not believe Labour could succeed he would not ask delegates to support the party entering Government.

Mr Gilmore told the conference that it was 'no ordinary time and no ordinary conference'.

He said the programme was not the Labour manifesto but was driven or moderated by Labour thinking, and he said it was not the Fine Gael manifesto either.

Mr Gilmore said it was the formation of a national Government, which was being formed because of the enormous economic difficulties facing Ireland.

The Labour leader said that no incoming Government in the history of the State was facing the challenges the new Government was.

He said he understands the risk for the party and how Labour will emerge from a Government.

Sinn Féin President Gerry Adams said new programme for Government would be bad for low and middle income families.

He said the continuation of an austerity approach would mean further depressing the economy and Sinn Féin would hold the Government to account.

Fianna Fáil TD for Limerick West Niall Collins said the Coalition partners provided little detail and had fudged the issue of the €9 billion adjustment required under the EU-IMF rescue package.

Joe Higgins of the United Left Alliance described the plan as reactionary and said it was more of the same attacks on living standards.

Coalition deal splits Dept of Finance in two

Fine Gael negotiator Phil Hogan has confirmed that the programme for Government will see the Department of Finance split into two ministries.

Speaking on RTÉ's This Week, Mr Hogan said the Minister for Finance will be responsible for all public finances, budgetary, taxation and banking matters.

He said a second minister will oversee public expenditure and public sector reform.

Labour will occupy one of those departments and Fine Gael the other, with Labour tipped for public service reform.

Mr Hogan said the document sticks to the parameters agreed with the EU and the IMF and enshrines the principle of reducing the deficit to 3% of GDP by 2015.

The new 2015 target represents a compromise and is midway between the Labour and Fine Gael positions.

Also on This Week, Labour negotiator Brendan Howlin said there would be an economic council within the Cabinet.

It would contain two members from each party who will make recommendations and take key decisions, particularly on economic policy.

Mr Howlin also said there is no proposal in the agreed document to cut child benefit.

He said that the issue of third level funding will be examined without impact on accessibility and that the issue of graduate tax was not agreed.

The 64-page programme proposes to establish an economic council within Cabinet that it would take key decisions, in particular on economic policy.

The abolition of the Seanad is pushed out but the move will be put to the people in a referendum and a Constitutional Convention is to be set up consider a number of issues, including Dáil electoral reform.

The programme commits to maintaining income tax rates and bands and credits. Options for a site valuation tax are to be 'considered'.

The new Government will review the Universal Social Charge.

There is a commitment to install water metres in every home in the country and to introduce a charging system for water under a newly established water utility company.

The programme proposes a deferral of recapitalisation of banks until solvency stress tests are complete.

The Health Service Executive will cease to exist over time and its functions will return to the Department of Health. Universal Health Insurance will be introduced.

There is a commitment to the establishment of a jobs fund which it claims would provide resources for an additional 15,000 places in training, work experience and education for those out of work, but up to 25,000 public sector jobs will go.

Under the programme the cut in the minimum wage will be reversed.