THE NAME of Ernest Blythe has been mentioned more than once recently as the Government tries to come to grips with the fallout from its plans to withdraw the medical card from some of the country's over-70s, writes Paul Daly
Blythe was the Cumann na nGaedhael finance minister who, in 1924, cut a shilling off the old-age pension - a move that haunted his party and its Fine Gael successor for a generation.
Although it will come as cold comfort to the current incumbent in Merrion Street, the comparisons between Blythe and Brian Lenihan are quite striking. Both were new to the department of finance, both faced a crisis in the public finances and both proposed that the nation's over-70s and the teachers had a part to play in the solution in their first budget.
Born in Co Antrim to a Protestant family, Blythe was active in the Gaelic League, the Irish Volunteers and the Irish Republican Brotherhood and served time in prison for his nationalist sympathies. An ardent supporter of the 1921 Treaty, he was appointed minister for finance by WT Cosgrave in September 1923.
The situation facing Blythe on taking up his new post was bleak. The Civil War had placed an enormous financial strain on the nascent Free State with public expenditure nearly doubling in the previous 12 months. Cosgrave's government was also faced with a mounting compensation bill for damage caused during the War of Independence. £430,000 alone was paid out the month Blythe became finance minister.
Blythe was confronted with a projected budget deficit of more than £18 million for the coming year when the national debt already stood at £6 million. In November 1923, just eight weeks after he was appointed, the new finance minister informed the Dáil of the perilous state of the Free State's finances and of his retrenchment proposals. Tax increases were ruled out and instead Blythe focused on expenditure reductions, specifically the old-age pension.
At the time pensions were paid to those over 70 years of age at the rate of 10 shillings a week. The payment accounted for an enormous 13 per cent of all government expenditure and in Blythe's words "the fact must be recognised that the resources of the country are not equal to the present burden of the old-age pension charge". He cut a shilling off the old age pension and also took steps to tighten the means test for the payment, creating a saving of some £350,000. It wasn't the only spending cut that the finance minister announced. National teachers' salaries were earmarked for a 10 per cent cut, but Blythe's decision to cut the pension proved notorious.
The Labour Party, then the main opposition party in the Dáil due to the boycott by anti-treaty TDs, opposed the move, with its leader Thomas Johnson declaring to little avail that "we ought not to oblige the aged and the poor to pay for the faults and waste, and if you like, the criminality of the youth during the last few years". Despite Labour's protests the pension changes were approved by the Dáil in April 1924.
The cut in the old age pension undermined the popularity of Cosgrave's government and contributed in no small measure to the success at the polls of the newly formed Fianna Fáil party when it contested its first election in June 1927. De Valera's new party won 26 per cent of the vote, just a couple of percentage points less than Cumann na nGaedhael.
When it entered Dáil Éireann after the election Fianna Fáil was intent on broadening its appeal beyond its core republican base and lambasting Cosgrave's government over its pension cut was one of the strongest weapons in its armoury. In March 1930 the party proposed a private members' Bill that would reverse some of the means test criteria introduced by Blythe. The move attracted the support of the Labour Party together with some Independents and despite Cumann na nGaedhael protests at the financial implications, the measure passed second stage. Cosgrave resigned as president of the executive council in the wake of the parliamentary defeat.
However, the unity of purpose between the "slightly constitutional" republicans in Fianna Fáil and the Labour benches was short-lived. While the parties could find common cause in agitating for pension improvements, Fianna Fáil's qualified acceptance of the authority of the Dáil was a bridge too far for Labour which refused to support de Valera's nomination for president, a move that resulted in Seán Lemass declaring "the members of that party desire to be respectable above everything else. So long as they cannot be accused of being even pale pink in politics they seem to think they have fulfilled their function towards the Irish people". Cosgrave was comfortably re-elected president of the executive council and would lead the government until the 1932 election. But time was running out for the founders of the Free State. The by now notorious cut in the old-age pension, a deteriorating economic situation and the government's continued reliance on emergency security legislation only served to alienate voters as the election approached.
In a desperate attempt to hold on to power, Cumann na nGaedhael ran probably the most vicious negative advertising campaign seen in Irish politics during the 1932 election. Newspaper adverts declared that the "communists and gunmen" were voting for Fianna Fáil and claimed that the choice before the people was one of "sanity or suicide". The strategy failed. When the devil you know was notorious for cutting a shilling off the old-age pension, many voters decided to take a chance with the devil they didn't know, or at least didn't know that well.
Fianna Fáil won 44 per cent of the vote and de Valera was elected president of the executive council with Labour support, marking the start of 16 years of uninterrupted power.
In 2004, eighty years after the 1924 budget, Enda Kenny told the Dáil: "the late Ernest Blythe took a shilling from old-age pensioners and the repercussions, in political terms, against Cumann na Gaedhael and the Fine Gael Party lasted for 60 years".
As Brian Lenihan contemplates the current anger of our older people he would do well to take on board at least one thing the Fine Gael leader has said.