Saturday 27 August 2016

Coalition must put iron in soul and deal with this scornful elite

Published 09/11/2012 | 17:00

WITH apologies to Winston Churchill, we could say "never was so much given by so many to so few".

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But we would also have to deviate into the vernacular to add: "And we've got little back for it -- except contempt." The story of the Irish taxpayer and the banks is perplexing and infuriating, and one which appears to ball up a series of injustices into one great bundle of chaotic inequity.

Labour leader Eamon Gilmore's renewed government signal yesterday that they are about to take the gloves off to bankers' pay, perks and pensions is welcomed, though it remains short on crucial detail.

And, based on previous experience, we are entitled to remain sceptical until we see tangible action.

The bankers' heady mix of greed and incompetence brought the Irish people unemployment, debt, emigration and other delights, and the Irish economy to its knees. At the same time, we found we had to bail those same banks out to the tune of €50bn.

And on top of that, we again found that, far from any question of gratitude or penitence, the bankers' arrogant assumption that the Earth was theirs -- evidenced by telephone-number salary packages, perks and pensions -- has persisted.

Based on what? We know not. The little detail that two of these banks -- the former Anglo Irish Bank and Allied Irish Banks -- are funded by the taxpayer appears to make just some small differences. True, there has been some modification in the case of both banks -- but an underlying haughtiness persists.

Even if they were good at what they did in times past -- which they very clearly were not -- we would have difficulty conceding that they were ever worth a salary package in excess of €500,000 per year. Pretty well everyone, except a small banking elite, will agree 100pc with those sentiments.

The real question is: what do we do now? Up to recent days, the Irish people's frustration was compounded by signals from Finance Minister Michael Noonan and other government figures that there was nothing much to be done beyond grin and bear it. These elite banking people, like many other Irish mortals, had contracts to guarantee them these extraordinary pay, perks and ultimately pensions.

The rest of us have no option when we are told that our entitlements are gone -- but for elite bankers it is apparently different.

The Irish Independent's revelation yesterday now appears to have shaken things -- or at the very least the revelation has coincided with new signs of some iron finally entering the Government's soul. News that six current executives of the former Anglo Irish Bank are on pay packages of more than €500,000, despite the Government's €500,000 cap on bankers' pay, might have hit home.

Mr Gilmore has added to other government signals to say it was not acceptable for bankers in Anglo or other banks bailed out by the State to be getting salaries or pensions of over €500,000.

He said this view was shared by Taoiseach Enda Kenny and Mr Noonan, who was currently looking at a "range of options".

The Labour leader said that there was the "political will" to deal with the issue.

We again understand that this is a signal that a super-tax on bankers' pay may be on the way in the Budget to be delivered on December 5.

There was little political wriggle-room in Mr Gilmore's statement. "I want to assure you that this issue is being dealt with and this issue will be dealt with," he said.

If he delivers, both Mr Gilmore and Labour are entitled to some kudos -- if not they must pay a political price. Perhaps it is a move to bill this issue as a Labour Budget idea.

Time will tell -- we need to hear the detail to judge.

The lawyers will tell us that any moves for 'a super tax' will face a legal challenge on grounds of unequal treatment of a specific grouping. That view is strongly held in Government and even Mr Gilmore's colleague, Brendan Howlin, was repeating it yesterday. That should make the Government's legal advisers think long and hard in framing this measure.

But in extremis let the response be: bring it on! And let the government lawyers consider all options open to it -- including a constitutional referendum.

These days, at all events, many of our new laws are assessed by lawyers on behalf of clients contemplating a constitutional, EU or other legal challenge.

One way or another, it is now well past time to deliver a strong and unambiguous message to the Irish banking elite.

Irish Independent

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