Maybe Richie was right after all
COLOUR television swept into Irish homes a year before Richie Ryan became finance minister in the Fine Gael-Labour coalition of 1973, taking over the job when the country’s newly confirmed entry into the EEC made the future as rainbow bright as the programmes broadcast daily from Montrose.
Yet when Ryan became fodder for one of RTÉ’s most famous creations, Hall’s Pictorial Weekly, the segments were aired in black and white. “For reasons of economy,” the tongue-in-cheek message at the bottom of the screen read while Ryan’s alter ego, Richie Ruin, Minister for Hardship, sat shirtless by a candle, lecturing the public on their luck at having leaders so skilled in the art of austerity.
By the end of Ryan’s inaugural year in charge of the country’s finances, the first international oil crisis — caused when the oil producing Arab countries cut off supplies in protest at the West’s support of Israel — had thrown the world economy into disarray.
At home inflation rocketed, tax revenues plummeted and “national debt” was about to become as common and detested a phrase as “credit crunch” is today.
Difficult times called for drastic measures and Ryan became infamous for tough policies and harsh decisions in the four budgets — three scheduled and one emergency — over which he presided.
As Brian Lenihan prepares to deliver his own crisis budget next Tuesday amid equally grim predictions about what he’s planning, he can take comfort that his predecessor not only survived the bruising times he endured in the hot seat, but can even look back and smile.
Now 79, retired and living with his wife, Máiréad, in Clonskeagh in south Dublin, Ryan says he was aware of the criticisms his actions attracted but never let it get to him. In fact, he never even saw the tv show that so mercilessly lampooned him. “I was too busy. I was working morning, noon and night. But my colleagues in the cabinet used to be furious. It was raised, not as formal cabinet business, but in discussion generally.”
He did, however, hear a radio show, Get An Earful Of This, on Sundays, which revelled in sending up Ryan and his Taoiseach, Liam Cosgrave.
“I used to be embarrassed. I was put forward as being a wise old owl being consulted by a Taoiseach who didn’t know anything. This was my boss they were talking about — the man I had to deal with the next day. But he took it like me — as a joke.”
The jokes extended into live entertainment as well. “We always took the children to the Christmas pantomimes and there’d be sketches about me. Maureen Potter said I was a good sport because I never took offence.”
But criticism, he says, is an occupational hazard for a minister for finance when finances are stretched. “It is very personalised against the holder of the office but there’s no point in complaining then or now.
“If you don’t like the heat, you don’t go into the kitchen. Once you’re there, you must do your job.”
What Ryan did made history. He introduced capital gains tax, gift tax and wealth tax, although the wealth tax was later reversed by Fianna Fáil.
It also made him enemies — not least when he broke the unwritten rule that you always keep the price rise on the working man’s pint below that of the rich man’s whiskey.
He was also tough on motorists, slapping heavy increases on petrol and car tax, and he raised VAT on a wide range of household goods.
In the short-run, the measures cost Ryan and the coalition popularity. In the long-term, they began a pattern of borrowing to fund services that, when perpetuated by Fianna Fáil, was to spell disaster in the 1980s.
Ryan has no regrets about starting the trend, however. “We borrowed correctly. We had received a loan at advantageous terms through the EU, but it was on condition that we reduce our borrowing requirements in the following years.
“I gave that undertaking on Ireland’s behalf and by 1977, we had the economy growing at 5% — higher than any other country in Europe. But when the government changed in 1977, the undertaking was ignored and borrowing continued and that brought on the crisis in the 1980s.”
Needless to say, his advice to Brian Lenihan next Tuesday is to not repeat the mistakes of the past. “If the Government decide that they must borrow more than they would normally, they must be prudent and they must pull back as soon as the crisis here appears to be evaporating. They must not build up an unmanageable debt.”
He stresses that whatever is done on Tuesday will be a Government decision, even if only one man delivers it. “What people generally do not realise is that the minister for finance does not make all the decisions. He is only one of a Cabinet of 15 and he can be outvoted.”
That happened when Ryan opposed a suggestion that he almost double betting tax — a move he says brought unpopularity in inverse proportion to the extra revenue it raised.
Tensions around the Cabinet table were inevitable when Ryan sought spending cuts. “Naturally my colleagues were perturbed. They went away and every man returned and said why this should not apply to his department. They were told it had to apply and they went away again and came back with proposals for reductions which were either impossible to achieve or else were so unpopular and so conflicting with the needs of maintaining the economy that they knew it wouldn’t be accepted. This went on for some considerable time.”
However, it was, and still is, up to the minister to bring the package to the public. “There’s a tradition that it is better to have all the bad news out on one day so you let the minister for finance do it and the individual ministers escape to the sidelines,” Ryan laughs.
Despite the background of a global economic crisis, Ryan believes much of Ireland’s current difficulties could have been avoided and is critical of the way his old rivals, Fianna Fáil, have managed the economy.
“Even if there had never been the words “credit restriction”, it wasn’t wise to be relying upon the speculative property market for government revenues.
“There was an understandable readiness on the part of the banks to lend money to developers who were building properties that people wanted to buy even at extraordinary high prices but nobody looked to the inevitable day when these irrational expectations came home to roost.”
Ryan was removed from the front bench after the election loss to Fianna Fáil in 1977, but he went on to serve two terms in the European Parliament before working with the World Bank, the International Monetary Fund and the European Court of Auditors.
While his professional career was fulfilling, he believes Garret FitzGerald, who took over as party leader from Cosgrave, read the public mood wrong by banishing him to the back benches.
“He said I had done the right thing as minister, but that I was unpopular. But on the two occasions when I stood for the European Parliament, I was first to be elected in the Dublin constituency.
“I wasn’t responsible for the 1979 campaign slogan “Richie was Right” but I liked it,” he laughs. “I must make sure to get it put on my tombstone.”
