Monday 22 December 2014

Discontented ministers suppress fury

Anger grows at concealment of tax changes from Cabinet members until hour of Budget

Published 26/10/2008 | 00:00

Taoiseach Brian Cowen, who last week admitted his authority had been damaged by the unravelling of the Budget, is now facing barely concealed disaffection from within his Cabinet.

The Sunday Independent has been informed that a majority of the Cabinet did not know what taxation changes were contained in the Budget until an hour before they were publicly announced by Finance Minister Brian Lenihan.

This extraordinary situation arose even though the Cabinet had held several meetings, some lasting up to six hours, to discuss the Budget before it was delivered by Mr Lenihan two weeks ago.

On September 3, the Government announced its decision to move the Budget forward to October 14 in the face of the deteriorating economic situation.

Cabinet ministers were told to go back to their departments to secure about €2bn in savings. "But they were never given the totality of the picture," an informed source said.

Ministers were, it is said, shown only one side of the balance sheet, but were told "you can't see the other, because it's not appropriate". A senior political source said: "The Budget was an accident waiting to happen."

The Sunday Independent understands that only Mr Cowen, Mr Lenihan and Tanaiste Mary Coughlan, with senior civil servants, were

See Analysis Pages 3, 4, 5, 22, 24, 25, 26, 27 & 36

privy to crucial elements of the Budget relating to taxation, until a very late stage.

It was notable last week that most Fianna Fail members of the Cabinet did not publicly come to the defence of the Government at a time when the Budget was unravelling.

While the Government announced u-turns in relation to the medical card controversy and the one per cent income levy, senior ministers kept a low profile, leaving the Taoiseach and his finance minister to take the flak. Ms Coughlan's political stock has also dramatically declined in recent weeks.

The Government will remain under sustained pressure this week to reverse other contentious aspects of the Budget, with the focus on education cuts in particular.

There seems to be no alternative for the Government but to hold the line on the class size changes, notwithstanding the furore likely to break this week on that issue. The feeling at the moment is that if the Government were to back down on this, the entire Budget would unravel, making a General Election almost inevitable.

Mr Cowen, when he returns from China, will be anxious that his senior ministers display a more united front. However, informed sources have told the Sunday Independent that at least four members of the Cabinet are disaffected beneath a surface loyalty to the Taoiseach.

Some are said not to have liked the way in which Mr Cowen came to be anointed the leader of Fianna Fail, and then for him to immediately set up Mr Lenihan as his possible successor. Others are said to be unhappy that Mr Cowen is perceived to have demoted them on his election as Taoiseach.

Many in the Cabinet are said to resent the manner in which Mr Cowen concentrates power in the hands of the triumvirate of himself, Mr Lenihan and Ms Coughlan.

Members of the Government are said to feel "excluded and sore" at the way this was done from day one of Mr Cowen's new government.

The Sunday Independent reported the first rumblings of discontent at Mr Cowen's leadership style shortly after he was elected Taoiseach in May. Unhappiness within the parliamentary party has now reached the Cabinet, and is likely to be publicly confirmed unless Mr Cowen changes his approach.

Pressure on him to adopt a more embracing leadership style will increase after the Budget debacle. A supplementary Budget, possibly early in the New Year, is now anticipated.

Many in Fianna Fail are fearful that the party will face electoral disaster at the local and European elections in June.

With the stability of the Government also under threat following events last week, Mr Cowen's leadership will come up for more open discussion within the party.

An informed source said: "If ministers had been given the full picture in the weeks leading up to the Budget, it is likely the disaster that was this Budget would not have occurred."

He added: "The medical card changes and changes in class sizes would have saved the Exchequer about €200m. A half of a per cent increase in VAT, to 21.5 per cent, raised an extra €247m.

"If VAT had been increased from 21 to 22 per cent, it would have raised double that amount in extra revenue, more than the medical card changes and the class size changes saved when put together."

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