Wednesday 28 September 2016

Fianna Fail should take a swipe at the Government's glass jaw

If the Banking Inquiry told us anything last week, it's that the politicians from all sides let us down

Published 26/07/2015 | 02:30

MAKING HIS POINT: A voice of protest outside the Banking Inquiry. Photo: Tom Burke
MAKING HIS POINT: A voice of protest outside the Banking Inquiry. Photo: Tom Burke
MESSAGE TO BE TAKEN: Micheal Martin should show his troops the footage of the Banking Inquiry, including the testimony of Pat Rabbitte and Joan Burton
Tanaiste Joan Burton
Pat Rabbitte

Enda Kenny was on the back foot and talking economics. Generally, that's a bad combination for this Taoiseach. Thursday morning at the Banking Inquiry was no exception.

  • Go To

Pearse Doherty was posing the questions. Given Kenny's trenchant criticism of the Fianna Fail government's fiscal policy and its over-concentration on the construction sector, how had Fine Gael proposed to broaden the tax base, to provide more stable revenues, in its 2007 general election manifesto?

Kenny wriggled and waffled about "sound public finances" and a "unrelenting focus on national competitiveness".

A frustrated Doherty interjected with the reminder FG had promised to cut taxes for everybody in 2007 which would have narrowed the tax base further.

Cue more vacillation from Kenny... "I just want to make the point here... export-led model... public finances in surplus... Stability and Growth pact... growth forecasts... consistent with the projections... Department of Finance and the ESRI... waste on public spending". Yada, yada.

Despite a plea from Doherty to "answer my question", and a pointed interjection by the committee chair, it went on in that vein for several excruciating minutes.

"We were, as an Opposition party," the Taoiseach gravely intoned, "entirely consistent in accepting the projections from the ESRI and from the Department of Finance in respect of their growth figures, but that that should be based on the element of competition and the tax position that we set out".

At that point, understandably, Doherty finally threw in the towel on the question, declaring himself "none the wiser". The same held for everybody in the room, not least Enda Kenny.

Fast forward a couple of hours. It's the Tanaiste Joan Burton in the hot seat and Michael McGrath asking the questions. Different witness, different inquisitor, same old obfuscation and nonsense.

McGrath had asked, given Labour's opposition to the bank guarantee, what it would have done to shore up the crisis-hit banks in 2008?

Labour has proclaimed from the rooftops over the past seven years its prescience in voting against the guarantee. You'd have thought this was a golden opportunity for Burton to restate the case. You'd have been wrong.

The rambling exchange went on for what seemed like an age, with the Tanaiste going all around the houses. "Northern Rock... increasingly alarmed... the ending of tax breaks... wearing the green jerseys," she blustered. "And", asked an increasingly exasperated McGrath, "your proposal was?"

Eventually, following an explosion of anger from McGrath and a couple of interventions from the chair, Burton finally answered that the banks most exposed should have been either allowed fail or nationalised. She didn't seem convinced, and nor was she particularly forthcoming as to who would have been burned in that scenario. It took Pat Rabbitte, sitting less than cosily beside his colleague, to make the point that Labour didn't have a refined alternative and "it's ridiculous to suggest we would have".

It's routine now, even in junior football, for mangers to show video footage of opponents to their teams. Micheal Martin should get the tape from Thursday's sessions for his parliamentary party. After seven years of Fianna Fáil lying on the ropes taking the blows, the VT - as coaches like to term it - would show his TDs their opponents have glass jaws and maybe it's time FF started swinging a few punches itself.

Kenny, Richard Bruton, Burton and Rabbitte were excellent at pointing out the failures of the government between 2000 and 2007. Their assessment of an uncompetitive, bloated, over-borrowed and distorted Irish economy left at the mercy of subsequent international events is inarguable.

But Martin can show his troops that when the spotlight was turned on FG and Labour, and their actions during that time, they struggled woefully.

They were rightly very critical of the erosion of the tax base during the boom and the way property bubble receipts were used to ramp up spending by a reckless €23bn between 2002 and 2007. However, pressed to come up with what specific spending increases they had opposed during that time, they drew a blank.

Bruton and Kenny rightly name checked benchmarking. But, after that, it was barrel-scrapping time - the PPARS project, port tunnel cost overruns, "general looseness of public expenditure". Ditto for Burton: "PPARS, the Bertie Bowl, the big shed in Punchestown and the M50 Westlink" were all she could come up with. Nothing from current spending. Frankly, it was embarrassing.

If the Banking Inquiry was indeed set up to shaft Fianna Fail, it's not working. Because a more nuanced narrative has emerged from the evidence than had been the case. Rabbitte made probably the best observation so far at the Banking Inquiry when he said: "I think the substantial conclusion that I would like to see this inquiry draw... is that we have classic case here of regulatory capture. I think we set up a regulator and I think, before you could say 'Jack Robinson', he was doing the biddings of the banks rather than the other way around. And I think that's the genesis of the tragedy that has befallen us".

That's not to excuse or exonerate Fianna Fail. They were in government at a time the property sector and the economy went out of control. This was a home-grown crisis (admittedly made worse by a catastrophic international crash). For that, it must be held to account. But the charge that Fianna Fail bankrupted the country has been exposed in recent weeks as far too simplistic. Nobody else, including the opposition, shouted stop. Other factors were at play - notably regulation, or lack thereof.

Rabbitte, no fan of Fianna Fail, put it well when he told the inquiry: "Now, I would be critical of the minister [Brian Lenihan] of the day in that I'm not sure, you know, what he was doing driving around south Dublin and eating garlic late after midnight shortly before the collapse. I would have thought that, ever since Northern Rock, there was time there to sit down and say: 'What's going on in our own banks and what measures can we take?' And I presume he was being told that everything is hunky-dory.

"And as far as I can see, there are some people - I don't think they were dishonest - I think there are some people at the top of the banks themselves who were behaving recklessly but who didn't even know the depth of the crisis themselves. And I think to ask a member of Dail Eireann whether he or she should have been able to divine what was going on… I don't think is the way the real world operates."

Rabbitte was answering the criticism that the Oireachtas had failed to hold institutions to account, but the same point holds for the government, though of course they should have been more questioning.

The reality of course is that many voters, and quite a few in the media, won't see it like that. They'll continue to hold FF wholly responsible and that's their right. But Michaal Martin needs to forget about them and throw off the shackles to woo those who don't regard FF as forever toxic.

Martin is hugely cautious, but he needs to realise the time for self-flagellation and tip-toeing is over. If it's going to do more than just tread water, Fianna Fail needs to take on Kenny & co's efforts to load all the blame on them for the crash.

The message should be: 'Even though it was the regulator's job to micromanage the banks, we certainly made mistakes, big mistakes (although the opposition also backed those mistakes at the time). But we've faced up to those mistakes; we have learned from them. Which is more than can be said for the Government which is going down the road we foolishly went down between 2000-01 and 04-07 by eroding the tax base and cranking up spending and generally promising all things to all people. We promise not to make that mistake again.'

There's a gap in the market for a political party who'll lead from the front and tell people what they need to be told, rather than what they want to hear. None of FG, Labour, SF, the Social Democrats or the various Independents are going to do that. They're all involved in auction politics.

There's an opportunity for FF to present themselves differently, as the party of reality. The party that says 'no' to tax cuts and election promises. It won't wash with everyone. Many voters still want to be told everything in the garden is rosy. Others see the Soldiers of Destiny as beyond redemption. But Fianna Fail only need 24-25pc of the vote to be a success.

Martin needs to start taking the fight his party's opponents and last Thursday's evidence at the Banking Inquiry should be his line in the sand. Get the VT out Micheal.

Shane Coleman presents the Sunday Show on at 10am

Sunday Independent

Read More