The immediate political setting was the fall of Garret FitzGerald’s Fine Gael–Labour coalition. On 20 January, Labour ministers would not support the government’s proposed budget, particularly its projected cuts in health and social welfare. The Dáil was dissolved the following day. This was the fourth general election of the 1980s, a frequency which conveyed the fragility of government in a decade defined by recession, debt and emigration.
The Fine Gael–Labour coalition led by Taoiseach Garret FitzGerald entered 1986 struggling to reconcile reforming ambitions with a harsh fiscal environment. Public debt, heavy interest payments, unemployment and renewed emigration constrained policy and fostered a sense that the country’s difficulties were structural rather than temporary. An Economic and Social Research Institute study published in November, The National Debt and Economic Policy in the Medium Term, captured the central preoccupation: debt was not merely an accounting problem but a limit on the State’s room for manoeuvre.
The Agreement’s central political fact was carefully framed. Britain confirmed that Northern Ireland’s constitutional position would not change without the consent of a majority of its people. Ireland, in return, gained a permanent channel through which to express views on political, legal, security and cross-border matters. An Anglo-Irish Intergovernmental Conference, supported by a secretariat based at Maryfield near Belfast, was to meet regularly. In areas where Northern Ireland lacked devolved government, Dublin could make proposals and put forward its concerns, especially on policies affecting the nationalist minority.
The year’s central constitutional development came on 2 May, when the New Ireland Forum issued its report. Convened by Taoiseach Garret FitzGerald, the Forum had brought together Fine Gael, Labour, Fianna Fáil and the SDLP to consider how lasting peace and stability might be achieved democratically. Unionist parties had declined to participate, an absence that set clear limits on its reach; nevertheless, the report represented an unusual degree of agreement among constitutional nationalists north and south of the border.
The most enduring constitutional event of the year was the referendum held on 7 September. The proposal had originated under the previous Fianna Fáil administration but was carried through the Oireachtas during FitzGerald’s coalition government after months of contentious debate. The wording inserted Article 40.3.3 into the Constitution, acknowledging the right to life of the unborn while having due regard to the equal right to life of the mother. The referendum passed by a large majority. More than 840,000 people voted in favour, and the amendment became part of the Constitution.
The year began with the end of Garret FitzGerald’s Fine Gael–Labour coalition. On 27 January, the Government lost its Budget vote by 82 votes to 81. The immediate controversy concerned a proposed extension of VAT to children’s shoes, but the defeat exposed a more fundamental problem: the coalition did not command a secure majority in the Dáil. President Patrick Hillery dissolved the Twenty-second Dáil that day, and the electorate returned to the polls on 18 February.
Charles J. Haughey remained Taoiseach during the first half of the year, leading Fianna Fáil as it confronted a difficult economic and political environment. Ireland had entered the 1980s with high inflation, rising unemployment and strained public finances. An OECD survey published early in 1981 noted that unemployment had risen sharply during 1980, especially among younger people, while consumer prices had increased by more than 18 per cent in that year. These were conditions inherited by 1981 rather than figures that describe the whole calendar year, but they explain the intensity of debate over taxation, public spending and jobs.
In 1977, political life on the island moved in sharply different directions. In the Republic, the general election of 16 June gave Fianna Fáil and its leader, Jack Lynch, an emphatic democratic mandate. In Northern Ireland, still governed directly from Westminster, an attempted loyalist general strike demonstrated both the continuing capacity for disruption and the limits of a strategy that had succeeded only three years earlier. Violence, prison protest and profound communal division remained facts of daily life in the North; south of the Border, voters rewarded promises of relief from taxation and a more confident response to economic difficulty.
