VAT on footwear debacle is well remembered, writes Mark Hennessy
Children's shoes hold a major place in Irish politics and offer a lesson to any Minister for Finance in search of tax revenues that there are certain things that should be left well alone.
The blunt response from the Department of Finance last night to the latest moves by the European Commission to bring about creeping harmonisation of EU taxes shows the lessons have been well learned.
In January 1982, the then Minister for Finance, Mr John Bruton, brought down Dr Garret FitzGerald's first government when he tried to put 18 per cent VAT on children's shoes and clothing.
To roars of outrage from the Opposition benches, the Taoiseach promptly made the matter worse by suggesting the measure was necessary because women with small feet could get away with wearing children's shoes.
After the Fine Gael/Labour coalition was brought down over the issue amid ill-tempered scenes in the Dáil, after just six months in office, Fine Gael promptly abandoned that aspect of the budget. In his budget day speech, Mr Bruton said the measure was justified because VAT exemptions had been granted to clothing and footwear at a time when half of them were made in Ireland.
"Clothing and footwear are undeniably necessities of life. Yet this category covers everything from the most simple garments to the most expensive and ephemeral creations of fashion," he declared.
"Substantial expenditure on high-cost clothes should not be allowed to continue untaxed," he went on, though all of his arguments were lost in the revolt over shoes.