No evidence yet that policy will change

The musicians will change but will the song remain the same? asks Mark Brennock , Chief Political Correspondent

The musicians will change but will the song remain the same? asks Mark Brennock, Chief Political Correspondent

Charlie McCreevy's departure from the Government would be easy to portray as the first step in a substantial recasting of the Coalition's image. Mr McCreevy has been at the core of a powerful axis that has dominated the Government's economic outlook since 1997. Now many backbenchers are calling for what has been described as a "loosening of the purse strings", Mr McCreevy is moving out and the Taoiseach can have a substantial reshuffle of his Cabinet in late-September.

Although the personnel will change, there is no evidence yet that policy will. The most likely successor to Mr McCreevy is the Minister for Foreign Affairs, Mr Cowen. He is not known as a man who favours loose purse strings: within Government he is seen as having a similar economic outlook to that of Mr McCreevy.

Some things may change: a new minister could slither out of the growing quagmire of the decentralisation programme, while with tax revenues pouring in again, more spending could be found for health and other unsatisfactory public services.

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The complaints from backbenchers that the party was too "right wing" and that an "alien" PD philosophy was dominating the Government came long before the recent poor election performances. However, for so long as the economy was booming and the voters appeared happy, such complaints received little airing. But now there is speculation that the Taoiseach has decided the "right-wing" tag must be shed. Just last week he made a disparaging public remark about "right-wing economists" and their alleged lack of knowledge of the real world in which people live.

Some of those around the Taoiseach argued strongly that the departure of Mr McCreevy was an absolute requirement if a shift in the public perception of the party was to be orchestrated. Mr McCreevy insisted last night that the Taoiseach had put him under no pressure to take the Brussels job, and that he believed had he said no, he would have remained as Minister for Finance for the next couple of years.

Those who wanted change won't care about this now, and they will see the autumn reshuffle as an opportunity. There will be a new minister for finance, almost certainly a new minister for foreign affairs. The Tánaiste will change jobs, there will probably be at least three new ministers as well as a few other changes. The Government will look quite different in three months' time.

But the legacy of the McCreevy era is that a core economic outlook, once seen as right wing and somewhat extreme, has become accepted as the mainstream approach. With the support of the Progressive Democrats and a few like-minded Ministers within Fianna Fáil, they have driven a tax-cutting, pro-privatisation deregulating regime.

They have successfully convinced the public that their arrival in Government led to the boom, although the economy was powering ahead from 1994, while the first FF/PD tax cuts only took effect in 1998. In addition it was a Labour Party minister for finance, Ruairí Quinn, who successfully argued with the European Commission to agree the 12.5 per cent Corporation Tax rate, which the McCreevy/PD axis says is at the heart of its distinctive outlook.

While public spending was allowed to soar in the 18 months before the 2002 general election, Mr McCreevy's most impressive - albeit unpopular - achievement was the reining in of spending post-2002.

Through all this the Taoiseach has protested that he is left of centre. But in Europe, the Government is accepted as a right of centre neo-liberal one. Indeed, the only reason why Mr Ahern was such a serious contender for the European Commission presidency was because it was the turn of the centre-right to hold the post. The Government's record ensured that he, like Mr Jose Manuel Durao Barroso who was eventually appointed, was a candidate of the centre-right.

Now it remains to be seen whether there will be a significant attempt within Fianna Fáil to adopt a more populist, higher-spending approach. If there is such an attempt, serious tensions over policy would be likely to emerge between Fianna Fáil and the PDs for the first time since 1997.