Irish coalition offers agenda for social change

Decriminalisation of homosexuality, a divorce referendum next year and a cabinet minister for equality are among commitments in the programme of Ireland's Fianna Fail-Labour coalition published yesterday.

But the alliance must be given the approval of a Labour Party delegates' conference this weekend before it can receive Dail approval. Fianna Fail MPs yesterday gave their negotiators authority to conclude a coalition deal without further recourse to their parliamentary party.

The announcement came as the Irish central bank doubled its overnight interest rate to 100 per cent in the hope of making speculation against the punt prohibitively expensive. But most economists believe that the German Bundesbank's failure to cut key interest rates yesterday means devaluation is inevitable.

They expect a new government would call a meeting of the EC's monetary committee the weekend after next to agree a realignment, but that the currency will not be able to hold out that long.

The two parties have 101 MPs between them, ensuring a comfortable majority in the Dail, where 83 votes ensure a majority. The coalition will be officially sworn in early next week, with Albert Reynolds, the Fianna Fail leader, continuing as Taoiseach.

It appears Labour has quietly dropped its initial demand that the position be rotated between the parties.

The 58-page coalition document also features radical measures to reduce unemployment, including raising to Ir pounds 80 ( pounds 86) the weekly subsidy for taking on one of the long-term unemployed. Child benefits will rise, while the value of social welfare payments will be maintained.

Public sector house building will rise to 3,500 this year, almost four times last year's level, while Dublin traffic congestion will be eased by the construction of a light rail network.

The health service will receive extra funds to reduce waiting lists. Primary school class sizes will be reduced and more funding sought, possibly from Brussels, for higher education. Labour's election aim of a new banking force to sharpen competition will be realised, with a network built from the post office and state banks.

Three new government departments will be formed: equality and law reform, employment and enterprise, and tourism and foreign trade. The last two will replace the departments of Labour, and Industry and Commerce.

Other measures to reduce dole queues include a county enterprise scheme to create 30,000 jobs a year, a Ir pounds 250m ( pounds 269m) central job creation fund, and a national voluntary work-sharing scheme. This is aimed at generating more vacancies through tax incentives.

In measures to 'broaden democracy', registration of large political donations will be required; some limited state funding for political parties will be introduced, alongside a register of members' interests for the Dail and Seanad (upper house). This measure will feature in an Ethics in Government Bill to go before the Dail next month. There will also be moves to limit spending in election campaigns.

This initiative, promised in Labour's manifesto, has been dubbed the 'ethical cleansing of Fianna Fail'. Though still the Dail's largest party, it slumped badly in November's election after being tarnished by financial scandals.

Dick Spring, the Labour leader, has warned that the coalition deal could be delayed if allegations of a leak to Fianna Fail of confidential documents prepared for the former industry minister, Des O'Malley, relating to his testimony to the Dublin beef industry tribunal, are not cleared up.

Mr O'Malley is leader of the Progressive Democrats, which quit the last coalition and precipitated November's election after a bitter conflict over his evidence to the tribunal, which Mr Reynolds, called 'dishonest, reckless and

irresponsible'.