Tough line on Ansbacher lasted 30 minutes

You may have forgotten our leaders' heroic struggle at the famous meeting of EU heads of government in Nice

You may have forgotten our leaders' heroic struggle at the famous meeting of EU heads of government in Nice. And, if you haven't forgotten, you may still be under the impression that the row was about neutrality or even enlargement.

Not so. What Bertie Ahern and Charlie McCreevy fought tooth and nail to prevent was tax harmonisation which, they feared, would force Ireland to follow an EU line and lose the freedom to order its own tax affairs.

But, as the debate on Ansbacher-Cayman has confirmed, while Ahern and McCreevy believe we should run our own system at all costs, they're not convinced that it should apply equally to everyone in the State.

Nor are they in a hurry to ensure that the system should be not only fair but efficient. Otherwise we wouldn't still have to wade through speculation about what - if anything - is to happen to the evaders on Mary Harney's infamous list.

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It was their "systematic, planned denial of taxes" that amounted - in Harney's book - to "a denial of the sovereignty of the State." It subverted "the right of each citizen to live in a fair society" and undermined the State's ability to provide vital public services.

None of this would have been possible without professional help and official neglect. Harney's view was that there had been significant regulatory failure by the Revenue Commissioners, the Central Bank, statutory auditors and the Department of Enterprise, Trade and Employment.

Her tough talk was impressive. She sounded genuinely angry, both when the Ansbacher Report was published and in the Dáil, which seemed to augur well for action by the authorities.

But on the day of publication the hope survived for a full 30 minutes - until the Minister for Justice, of all people, stepped in with an understanding line.

Michael McDowell took it upon himself, as he said, to "dampen expectations" of action against the evaders; indeed, with his talk of high taxes, to make excuses for the culprits.

We heard it before, Michael. And we're still listening to something similar from your camp followers in the media It was a long time ago and the issues were arcane - they never really gripped the attention of the electorate. And, besides, some of the conspirators are dead.

In the Dáil, too, McCreevy defended the Central Bank for the way in which it had performed its prudential role and protected the depositors' funds. Even if its inspectors had asked more questions (of Des Traynor or Guinness and Mahon) it was not clear that the proper information would have been forthcoming.

Richard Bruton and his Fine Gael colleague Phil Hogan pointed out in exasperation that in Central Bank reports on Guinness and Mahon, "evasion" had been changed to "avoidance" and that a director of the Central Bank had had a back-to-back loan.

Tommy Broughan of Labour demanded that the governor amd directors of the Central Bank and the directors of CRH, from whose offices Traynor ran his illegal bank, be called to account by the Public Accounts Committee of the Dáil. Except that the present Dáil doesn't have a Public Accounts Committee - maybe in October.

As for the excuse that the taxes were too high in the 1970s, it is - as Pat Rabbitte declares - an insult to the people on whom the heaviest tax burden fell in the 1970s and continues to fall: those on fixed incomes and the poorly paid who were on PAYE.

And let no one persuade the young in 2002 that the PAYE sector of the 1970s and 1980s was a minority. The biggest demonstrations in opposition to high tax rates were organised by the trade unions. Ministers watched nervously from windows along the route as one million workers marched past.

These were the people who'd been told five years earlier that the modest capital taxes introduced by Richie Ryan in 1974 marked the end of the world as they knew it. The flight of capital which, they were told, had already begun, would lead to bankruptcy and loss of jobs, left, right and centre.

In fact, they were told, any attempt to use the tax system as it ought to be used - to redistribute resources for the benefit of the community as a whole - would end in disaster.

For trying to reform the system, however modestly, Richie Ryan came to be mocked as Red Richie and Richie Ruin, while most Labour ministers of the day stood by.

Now some of the left's warnings against unwise dependence on global corporations are beginning to be echoed by those who watch developments in the United States with an increasing sense of alarm. There was a time when such warnings were denounced as simplistic and far-fetched.

Now they are likely to be prefaced by J.K. Galbraith's aphorism: "Recessions catch what the accountants miss."