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The bonus culture here isn't dead, it's just having a rest asdfad

The Government's humiliating climbdown on the Irish Water bonuses shows that when voters get sufficiently angry, ministers will find a way to overcome what had previously been thought of as insurmountable "contractual difficulties".

Yesterday the Cabinet capitulated to mounting public fury and announced that there would be no bonuses - sorry, "performance-related awards" - for Irish Water staff this year. In truth, Environment Minister Alan Kelly and Irish Water boss John Tierney (below) had little choice in the matter.

With hundreds of thousands of people having taken to the streets to protest against water charges, which have become a lightning rod for public anger and frustration after seven years of austerity, the urgent political imperative was to find a way to take some of the heat out of the crisis. Scrapping the Irish Water bonuses - which would have seen Mr Tierney and other senior staff at the troubled utility being paid top-ups of up to 19pc on top of their already handsome basic salaries - was the absolute minimum that the Government could do.

The move represents yet another humiliation for Mr Tierney, who has been dumped upon yet again by the Environment Minister. However, Mr Tierney is still clinging grimly to his job.

Cast your mind back just four weeks, when the bonuses first became public knowledge, and Irish Water vigorously defended them. Mr Tierney spoke of the "fantastic" job being done by Irish Water staff. You could have fooled me, John.

So "fantastic" is the job being done by Mr Tierney at Irish Water that the Environment Minister has felt the need to completely sideline him in recent weeks. In truth, all of the decisions about Irish Water are now being made at cabinet level by Mr Kelly and his colleagues as they desperately seek to regain control of the situation.

And these guys were expecting to receive a bonus!

While the Government's rapid U-turn on the Irish Water bonuses was hardly a surprise, does it have a wider significance? How many times in recent years have an enraged public been fobbed off by ministers who claimed that "contractual difficulties" made it impossible for them to scrap the bonus of some banker or public sector fat cat.

Yes, we share your pain, but the legal eagles have told us that there is nothing we can do about it. Sorry about that, old chap.


Now that "contractual difficulties" have suddenly proved to be a paper tiger, will the Government take a harder line with the bonus culture elsewhere in the public sector? After all, if there is anything to be learned from the Irish Water bonus fiasco it is that, when push comes to shove, political considerations will always win out over legal niceties.

It would be nice to think, now that it has faced down the Irish Water bosses, that the Government will suddenly grow a spine and be similarly robust in its dealings with bonuses elsewhere in the public sector.

To which I have only two words: Dream on.

Yesterday, on the very same day that Mr Kelly and the rest of the Cabinet were facing down the Irish Water bosses, Bank of Ireland announced that it had reached a pay deal with the IBOA trade union under which bank staff will receive a 3.75pc pay increase and a guaranteed 5pc bonus this year.

While I don't begrudge rank-and-file bank staff a pay increase, one would have to be very naive not to suspect that the pay deal will be used as an excuse by the Bank of Ireland board to award a massive bonus to its chief executive, Richie "Banker" Boucher.

This is the same Mr Boucher who was a senior member of the Bank of Ireland management team that doubled the size of its loan book in just four years, leaving Ireland's oldest lender in need of a €4.7bn taxpayer-funded bailout.

Will the Government, which retains a 14pc stake in Bank of Ireland, vote its shares against any bonus package for Mr Boucher? Will it what. The best that we can probably hope for is that the Government will abstain on any such vote.

So while the Government's move to scrap the Irish Water bonuses is welcome, it was almost certainly a once-off. Don't be too surprised if "contractual difficulties" reappear the next time there is a political controversy over public sector bonuses.

The bonus culture isn't dead, it's only resting.