Bertie Ahern: The Man Who Blew the Boom: Power & Money (24 page)

Quinn said the effect of the budget was to completely change direction. The Government had inherited a budget surplus, a robust economy and a partnership agreement that envisaged how the fruits of the boom would be distributed in society in the years to 2000. The effect of the budget was to change matters so that the more you earned the more you got.

In particular, Quinn criticised the decision to reduce the capital gains tax rate by half, to 20 per cent. ‘So much for the work ethic . . . The budget sends out a message that people should switch from work and enterprise, for which they will pay 46 per cent at the margin, to trading and dealing in property, for which they will pay a mere 20 per cent in tax and no
PRSI
or levies.’ The measure would reorient the country in the direction of ‘traders and hucksters instead of promoting wealth, enterprise and employment.’ The new rate ‘sends a signal to investors to intensify the purchase of property where the greatest gain can be maximised. This will cause further asset fluctuation and drive out the ordinary house-buyers,’ Quinn said. ‘It is scandalous, stupid, brazen and unnecessary.’

Quinn also raised the fact that the state was embarking on ‘the important but hazardous entry into economic and monetary union.’ He argued that the Government needed to generate large surpluses, since it was going through the high period of the economic cycle, but was instead introducing tax measures that disproportionately favoured the better off. ‘It is the poor and the weak who will have to pay when the party comes to an end.’ The country, he said, had to have a debate about the discipline needed to accommodate being in Economic and Monetary Union so that the citizenry could understand what was required. (Later analysis of what went wrong during the boom years would identify this as a critical, if not
the
critical, challenge the Ahern Governments had faced.)

For Quinn, the budget indicated a decision not to use the positive economic circumstances the Government found itself operating in to seriously redress inequity and social exclusion. ‘I am deeply, passionately angry,’ he said.

Ahern saw matters differently. ‘This is probably the most remarkable budget of modern times.’ It was ‘historic for many reasons,’ he said. The ‘amount we have been able to do’ was a reflection of the economic growth of the past ten years. The broad budget balance meant that the state would not be borrowing to add to the national debt. ‘I did not think I would ever see that.’ The Government, he said, had delivered on its social partnership commitments by agreeing by the second year what was to be given over three years, and it had fulfilled its promise to the electorate by announcing one-third of the tax reliefs promised over five years.

The budget gave a huge boost to the economy and to the growing feeling among the work force that the era when the Irish could be depicted by the international media as the ‘poorest of the rich’ was now firmly in the past. The widespread feelings of optimism were added to by the renewed good relations between the Irish government and the republican movement, boosting hopes of an eventual solution to the North’s problems.

During its early period, the Government, and Fianna Fáil in particular, was buffeted by a series of scandals involving the Haughey legacy, Ray Burke, planning corruption and other matters. But as the economy continued to improve it was difficult for the opposition to make inroads into the Government’s ratings. Ahern and his party were also buoyed up by the election near the end of 1997 of its presidential candidate, Mary McAleese. In the wake of the poor performance of the Labour Party’s candidate, Adi Roche, Dick Spring resigned as party leader. Quinn took over the role and by the end of the year had negotiated the merger of his party with Proinsias de Rossa’s Democratic Left.

When Pádraig Flynn had to resign from the European Commission because of inquiries by the planning tribunal into a payment made to him, he was replaced by David Byrne. Ahern then invited Michael McDowell, who had just finished chairing a report for the Government on new structures for financial regulation, to take on the position of Attorney-General. McDowell went to Government Buildings to meet Ahern and emerged to tell reporters that he had accepted the position. He had not yet rejoined the
PD
s, but he was inching back towards a political career. His move into the centre of power no doubt added to the influence of the political outlook of the
PD
s on the Ahern Government.

The appointment meant that McDowell, who had a deep interest in Irish history and politics, was centre stage for some truly historic developments. The efforts of the Irish and British Governments to bring about a resolution of the conflict in the North had deep roots. From the point of view of nationalism, the process began with contacts between John Hume of the
SDLP
and Gerry Adams of Sinn Féin in the mid-to-late 1980s. The two sides became involved in a debate over the future direction of nationalist effort, and papers swapped between them featured heavily in Sinn Féin publications and internal party debate. What Adams had in mind when he entered the talks cannot be known, but it is certainly the case that much of Hume’s criticism of republicanism became internalised within the Provisional movement. By the late 1980s discreet contacts with the Irish Government had opened, and when Reynolds became Taoiseach he took the process and ran with it. He had an excellent relationship with the British Prime Minister, John Major, and won the trust of the republicans. Reynolds, a wealthy businessman with a penchant for risk-taking, threw everything into winning the prize of peace.

The engagement with the republicans was a fraught one for a democratic Government, as the Provisionals continued to run an illegal and murderous militia. Ahern’s extraordinary ability to project feelings of sympathy and understanding stood him in good stead, as did his legendary patience. As Ruairí Quinn noted, ‘he has this skill to be able to spend so much time on people and to accommodate them and to take so much boredom. I mean, God knows, to have spent so much time listening to Gerry Adams for all those years.’

Ahern’s interest in, and feeling for, republicanism helped him get on with the Provisionals, and no doubt his father’s history and political outlook played a role in this. In his memoirs Ahern said he had gone to the British embassy on the night it was burned down after the Bloody Sunday killings in Derry in January 1972. He said some of his friends had joined the
IRA
after the killings, and he obviously intended to give the impression that he sympathised with their decision.

When Ahern became Taoiseach he immediately immersed himself in the effort to conclude a deal in Northern Ireland. He had met the British Prime Minister, Tony Blair, during the former’s period as leader of the opposition, and they had hit it off. Rabbitte noted the close relationship that developed between Ahern and Blair.

It was extraordinary that he met a similar character in Blair. Blair was the quintessential Englishman, albeit born in Scotland. He too was an exhibitionist, a performer above all else. An exceptional performer. But as Robin Cook [former British Cabinet member] said to me—we had breakfast here [in the Dáil] one morning after he spoke to our [Labour Party] conference—and I asked him, ‘What is Blair like?’ and he said, ‘Well, the first thing you have to recall is, he is not one of us.’ Meaning he was not a Labour politician, in the sense that Robin Cook or Gordon Brown or Michael Foot, or so on was. He was a tremendous public performer, and he had this smiling affability, and he and Bertie took to each other as soul brothers.

In the first weekend of April 1998 Ahern returned from an Asia-Europe summit in England, raced to a constituency Mass in Cabra and went on to bed. The next morning he went to St Luke’s and from there to Government Buildings for a meeting with a delegation from the
SDLP
. It was while there that he got a call to say that his mother, Julia, had suffered a heart attack and had been rushed to the Mater. He spent time at her bedside before she died on the Monday morning without having regained consciousness.

Julia Ahern was buried in the republican plot in Glasnevin Cemetery, beside her husband, Con. The graveside service was nearing its end when Ahern had to leave to travel to Belfast to attend the talks in Hillsborough Castle. When he arrived the waiting journalists put down their microphones and cameras and expressed their sympathies. The atmosphere inside the building was intense, with side meetings going on here, there and everywhere and with the participants including some of the most unsavoury people on the island. At one point, according to Ahern, he was in a room with some loyalists and republicans when one of the former turned to him and said they had worked out that he was the only person in the room who hadn’t killed anyone.

Agreement was eventually reached on Friday 10 April. It was Good Friday, and the news was greeted with elation throughout Ireland and was reported around the globe. Ahern signed ‘the Belfast Agreement signed on Good Friday’ wearing a black tie. On his way back in from Dublin Airport his car drove past Church Avenue just as it had a week earlier when his mother had still been alive. He subsequently appeared on ‘The Late Late Show’, where he spoke about the difficult negotiations leading up to the agreement and of his having to persist with the effort in the midst of grieving for his mother.

His ratings in an opinion poll in the
Irish Times
later that month were the highest he was ever to achieve and the highest achieved by any Taoiseach in recent times. The survey found that he had a satisfaction rating of 84 per cent. This was well ahead of the best scores ever recorded for Haughey (67 per cent), FitzGerald (63 per cent) and Reynolds (63 per cent). Fine Gael and Labour Party supporters were more behind Ahern than the population as a whole had ever been behind those former Taoisigh. Three-quarters of the respondents from both parties said they were satisfied with Ahern’s performance. The historic breakthrough in the North was the main factor behind this unprecedented level of support, coupled as it was with—as Ahern was to put it in a later context—the fact that the Irish boom was ‘getting boomier’.

According to Joan Burton, Ahern’s success in the North added to his power.

He gained, understandably and deservedly, massive international respect and massive national respect out of the whole Good Friday thing. He had, then, vastly enhanced powers. As he was held in enormous respect, he could do more. It added a vast new dimension to his power. Once he had done that, then he was dealing on an equal basis with Blair and with Bill Clinton, and that added hugely to his aura. I don’t know if that emboldened him then to move further away from the public interest and feel much more powerful in responding to vested interests. I suspect it did.

Rabbitte believed that people such as the Northern loyalists must have been very impressed by Ahern’s informality and apparent willingness to treat them with respect. Politicians such as Dick Spring and John Bruton could not be imagined treating the loyalists with the sort of informal affability that is ‘the essence of Ahernism’, Rabbitte said. The ending of the violence and the achievement of a political accord ‘lifted a huge pall of gloom that had been over the island for almost four decades and fed into the optimism concerning Ireland’s economic future. Bertie saw that.’

As the 1990s came to a close, few could remember the doubts that people had had a few years earlier about Ahern’s suitability for high office. Concerns about his ability were buried by his success in the North, by photo-calls and reported phone calls with his friends Tony Blair and Bill Clinton and, most of all, by the ubiquitous signs of increasing national wealth. As the economy grew, house prices rose steadily and became a staple of media reporting and general conversation. Those who owned property were buoyed up by thoughts of the increase in their nominal wealth. The number of unemployed was rapidly decreasing, emigration by young people in search of employment was coming to an end, and former emigrants were beginning to return. The international press and economic monitoring agencies were writing about Ireland and its transformation from ‘the poorest of the rich’ to being at the top of the European economic league table. A great sense of confidence spread through the country, and the Government made every effort to claim the credit. Ahern maintained a very high profile in the media but at the same time tightly controlled his exposure. He was a master of delivering sound-bites as he entered or left a building for an official function, which would then be used to top news reports on whatever the story of the day was. He rarely gave extended media interviews. His Dáil performances continued to be workmanlike, and he organised it so that he had to spend less time there than previous Taoisigh.

His great political achievement was to create the impression that he and his Government had delivered economic prosperity. For Richard Bruton, Ahern was lucky in his political career and lucky in the timing of his first appointment to the position of Taoiseach. The tax cuts introduced in 1998 and subsequent years boosted an already growing economy and the increasing amount of money available for personal expenditure. Given the long lead-in to the conditions of the boom it was self-evident that the tax cuts were not the reason for the economic prosperity; yet, by constant references to tax cuts, increases in public expenditure and economic statistics, the Government and Ahern in particular managed to associate themselves in the public mind with the country’s evident good fortune. To claim responsibility for positive developments, and to disown unwanted developments, is a constant of politics; but the creation by Ahern and his Government of an association between the tax cuts and the boom was to prove a particularly important one.

Ahern worked hard at capitalising on the hugely positive economic conditions within which his Government was operating. Arguably the Government was poor at anything for which it had direct responsibility—reform of the public service, upgrading water-delivery systems, urban planning, transport, health—but it successfully trumped all these failings by assuming responsibility for economic growth. Ahern, according to Richard Bruton, simply avoided difficult questions when they were put to him in the Dáil.