Just Mary (34 page)

In hindsight, there were many reasons the shine wore off us and of course it is crucial to try to identify and analyse some of these. Yet I felt and continue to feel that an important element in
our defeat was the fact that we were simply too long in government. The fact is that the people and the media just got fed up of us. In simple terms, we had been around for too long and people were
tired of our faces, weary of our voices and they just wanted a change. As I have said earlier, I always felt that the General Election of 2007 was the one for us to lose and for Enda Kenny to win
— and of course he very nearly did. I continue to believe too that, even if the last General Election had been held in late September 2010, rather than February 2011, the Fianna Fáil
Party could still have salvaged something. We would have been saved the bailout in November 2010 and the Troika coming in. Yes, we would still have lost the election, but we would not have suffered
the virtual wipe-out at the hands of an angry electorate that February 2011 brought us.

There was the question too of how much better we might have fared, had we gone to the polls with Brian Lenihan as our leader. I spoke to Brian several times in the weeks after Election Day,
following his own win in Dublin West: he was the only Fianna Fáil deputy elected in Dublin. He was much preoccupied with the question of whether he should have gone for the leadership, as
many had been pressing him to do. But as I have said, his loyalty would not allow him to do it, and so we will never know what a Brian Lenihan leadership of Fianna Fáil might have achieved.
It must be said of course that Micheál Martin, who took over as leader just before the election, fought a valiant fight for our party.

All of this aside, there were many other key factors which led to the decline in our political fortunes. The biggest of these was the terrible blight of the global recession which hit us with
full force in 2008. I have talked about the bailout of the Irish banks which was first put into force that September, and many have seen this as a pivotal moment in Ireland’s downward
decline. It was a very stark choice which faced Brian Cowen and Brian Lenihan that night, and it will always be my belief that they made the right decision for the people of Ireland at that time.
Financial turmoil was sweeping the world on a massive scale — the
US
, Europe, the
UK
and so many other countries were beginning to feel its
effects too. We were hardly going to be left out of that dreadful global experience. The debate will rage for a long time yet, as to why Brian Cowen as Minister for Finance for the four years
previously had not been more attuned to the problems which were in the offing. It appears that the Central Bank and the Financial Regulator had had little inkling either, beyond issuing a few bland
speculations that there was to be a downturn in the Irish economy, but which could be negotiated without too much difficulty; that there would be a soft landing for us. Soft landing, indeed!

Of course, the troubles in the Irish banks arose because everyone wanted to copy Anglo Irish Bank. They were giving out stupendous business loans and 100 per cent mortgages to anyone who asked,
and so the other banks began to grumble and wonder why they couldn’t do the same. We saw the echoes of that in the 2011 Presidential debates, when Mary Davis was castigated — unfairly,
I thought — for being on the board of the Bank of Ireland’s
ICS
Building Society, which was granting

‘100 per cent plus’ mortgages. Anglo Irish was of course engaged in very dodgy dealings, lending massive amounts of money to speculators and to property gobbler-uppers. Yet for so
many at the time, it seemed that this bank and Seán FitzPatrick were doing wonderful things. I remember being at a function some years prior to 2008, and somebody saying to me, ‘Do you
want to meet Seánie? He’s the real man of the moment!’ I can recall replying, ‘No, not particularly: I don’t want to meet him.’ FitzPatrick was like a god whose
toga people wanted to touch and clutch onto. But he turned out to be a false god and the emulation by fawners of what he represented was destined to contribute to our downfall.

The prices of houses rose and rose. Young people queued for hours to put down a deposit on a very ordinary semi-detached house which they now regarded as nirvana. The price of a property which
might have previously been going for about €200,000 was now creeping up to €500,000 and the banks were starting to grant these ‘100 per cent plus’ mortgages. At the end of the
day, of course, the banks can be blamed for the speculation in which they engaged, but at the same time they were responding to demands from the people themselves. It is the people who pressed for
such financial facilities. Everyone wanted the bigger house, the next holiday, the private school for their offspring, and so it went on and on. There was just no end to it, and we were all living
in a bubble. I remember very clearly the words of Brian Lenihan, in an interview on
Prime Time
in November 2010 — for which he would later be greatly reproached by some: ‘I
accept that there were failures in the system. I accept that I, as a member of the governing party during that period, have to take responsibility for what happened. But let’s be fair about
it — we all partied.’ And he was right — we did all party, and for too long. And in many senses, Brian Lenihan merely inherited the legacy of what had already been happening for
some years.

Regulation of the banks — or the lack of it — is where so many of our difficulties lay. When I was at the Cabinet table between 1997 and 2002, I remember a huge ongoing debate on
this subject — the general consensus was that the lighter the touch a government could have in terms of financial regulation, the better. But that was utterly wrong. And once the Central Bank
and the Financial Regulator realised that those in political authority were not keen on ‘nanny’ regulation, they too went soft on regulatory standards and guidelines. For all the time
leading up to the disintegration of the banks, the Central Bank kept saying we were headed for an easy time and that we would get out of any troubles which arose without too much hassle. And houses
were still being built and the construction taxes continued to flow in, and everything seemed well. Shortly into his term as Minister for Finance, Brian Lenihan appointed Matthew Elderfield to be
the new Financial Regulator and he was regarded far and wide as an excellent appointment, and as somebody who held out great promise for us. But in a sense by that stage, much of the damage
occasioned by a lack of stringency for so long had already been done.

In my view, the whole idea of loose regulation goes back to a key tenet of the Progressive Democrat philosophy. I am not saying this in the hope of somehow exculpating Fianna Fáil from
our share of the blame — far from it — but certainly in the earlier days, particularly during the time I was in Cabinet from 1997 to 2002, and could observe all that was going on, there
was a great sense of mutual understanding and collaboration between Mary Harney and Charlie McCreevy. Now it was very naturally the case that these two Ministers should operate well together, given
their points of confluence in terms of political values and outlook, their long years of working together, and the fact that in the past they had been comrades-in-arms against Charlie Haughey. In
fact, when the
PDS
first formed their party in 1986, it had been expected that Charlie McCreevy would become one of their number. But he had stayed put and I often think it
was because of his love and remembrance of his dear mother, who was an avowed and everlasting Fianna Fáiler.

Despite never joining the
PDS
, Charlie McCreevy remained a neoliberal at heart and therefore, during the time they worked in Cabinet together, he and Mary Harney were
essentially the nexus of much that happened there. It was always my strong impression that it was in essence they who decided budgetary policy, and that they would only allow the Taoiseach in at
the end of such deliberations, so to speak. It often seemed, to me in any case, that coming up to Budget and Estimates time, the parameters and the small print of the Budget and Estimates were
often worked out between Charlie McCreevy and Mary Harney, and that Bertie was sometimes peripheral to the fine detail of such things. This is not in any way an attempt to incriminate Mary Harney
— far from it — she was and is a very fine person, but her mantra and the mantra of the
PDS
was always to cut taxes as much as possible. But of course, you
can’t continue to cut taxes all the time and still keep education and health services intact. It just wasn’t feasible, but every year it seemed more and more that the Holy Grail was to
get as many people as possible out of the tax net.

Some of our policies on tax would ultimately work to compound the problems associated with the construction boom. An initiative which was introduced during Albert Reynolds’s time as
Minister for Finance was to be continued with gusto by Charlie McCreevy, as parts of Ireland were carved out, in which tax rebates would be made available for any developers who came in. One of
these was the upper Shannon area, where all around County Leitrim, tax rebates were given and this led to the building on a large scale of estates of holiday houses ‘on spec’ —
these would become the ghost estates which haunt our countryside today. Soon the demand arose for similar measures to be put in place for those of us living in the mid-Shannon area as well and in
other parts of the country. We all wanted the same thing, so it is a pointless exercise to actually blame any one particular person. We all thirsted for these tax benefits and the cry became, a tax
rebate for this, a tax rebate for that. But such tax breaks meant a corresponding depletion in the resources of the Exchequer in the long run, and that was a dangerous thing.

As well as this, one of the key sources of our subsequent difficulties was, as I have said earlier, the construction boom in itself. Bertie Ahern loved the construction ‘buzz’. I
remember one day, as I was coming out of the lift on the fifth floor of Leinster House with him, he drew me to a window and said, ‘Look at the number of building cranes there are out
there,’ — there were perhaps 20 or so on the horizon — ‘Isn’t it wonderful?’ Yes, of course it was — it meant almost full employment and, as the
construction taxes kept coming in, much of the consequent spending was
good
social spending. But the difficulty was that at a crucial point, no one shouted ‘stop’ on
construction, and spending got out of control and policies became increasingly wayward.

If I were to pick out one other key governmental transgression of the years preceding the downturn, it would be the policy of decentralisation. In a way it is easy for me to explain what this
policy meant in practical terms, because Athlone had been a benign focus for decentralisation long before it ever became known as that. Decades ago, in the late 1960s, when Brian Lenihan Snr was
Minister for Education and Charlie Haughey was Minister for Finance, the then government took a decision that they would relocate sections of some Departments to rural areas. In this move towards
decentralisation, Athlone became the new base for a huge section of the Department of Education. A few other urban centres also benefited from such an initiative. This, however, was the selective
decentralisation of very specific parts of Departments — those which could be easily detached and operated as separate entities from their main units.

Some years later, when we came in under Charlie Haughey in 1987, he and Ray MacSharry proposed a further wave of decentralisation. Again, this concerned the operation of carefully chosen areas
of certain Departments being transferred to towns where there had already been some decentralisation. For example, Social Welfare went to Longford and Sligo, while Athlone became the new base for
another tranche of the Department of Education. For Athlone, this move to decentralisation would represent an important economic boon, because we now had up to 600 civil servants whose lives were
based in our area. Of course, there were those who commuted from Roscommon, Longford and Offaly every day, but in the main, most of the civil service workers who came to Athlone made their homes
and reared their families there, sending their children to school and then college and so on, in our area. As with towns such as Sligo and Longford, Athlone was a fine area to which to bring
decentralisation, because it had a good transport structure, great secondary schools and a third-level educational institution. All in all, Athlone was well able to successfully accommodate such
initiatives.

The programme for wholesale decentralisation set out by Charlie McCreevy at the end of 2003 was a very different proposition altogether. Firstly, Charlie unfolded his proposal in a budget
speech, without having first run it past the civil servants in his Department. In one sense, I can understand why he followed this policy of non-disclosure in relation to his own Department
colleagues — he probably wanted to make sure the public did not hear of it until he was fully ready; he also wanted to cut off any incipient refusals from his civil service staff. But the
announcement had no place in a budget speech: it was not a budgetary measure, after all. Yet Charlie knew that he would make the maximum impact if he announced it as part of his budget and so this
is what he did.

Charlie McCreevy’s plan was wholesale decentralisation, in that complete Departments would be moved to rural towns and some relatively remote areas. He saw the advantage in this as being
— and there was a grain of truth in this — that such decentralisation would bring an economic boost to the areas in question through the presence of so many civil servants now basing
their lives there. He also believed that such an initiative would inevitably shake up the various Departments and enable their revitalisation and reorganisation in a positive sense. This I can
fully understand.

There were some successes in the Charlie McCreevy decentralisation, of that there is no doubt. The Pensions branch of the Department of Finance was transferred to Tullamore, and that certainly
seems to be operating well. The relocation of another branch of Education, the School Building branch, was similarly relocated to Tullamore and seems to be very successful too. But by and large,
the whole escapade was ill-judged. The result was widespread uproar from many quarters. In terms of the public and political response, there was absolute delight on the part of those whose town or
area was mooted, and absolute fury from those whose town or constituency was not being considered. There was a never-ending series of delegations from Opposition deputies and from government
deputies too, who lost no time in beating down the doors of Charlie McCreevy and the Taoiseach to make known their determination to get decentralisation at any cost. Because Athlone had already
been an important focus for this policy, I did not get involved as such myself but I could understand in some senses how people felt. And so there was a veritable mayhem of desire and uproar, as
the cry resounded throughout the country: ‘We want to get a portion of decentralisation too!’ That is how foolish we all were.