Flt Lt Mac,
The passport scheme doesn't have to degrade the level of cover at the end of the day, it just dictates how that cover might be exercised and what it might mean to an individual saver. The Irish g'ment stepped in before we did and raised cover which changed everything anyway.
With regards to Anglo Irish, for subordinated debt, Anglo-Irish is rated by Moody's/S&P etc as 'A's across the board (stable outlook) but if they went bust, yes - you might wait to get your money back. As it stands though, over here too, the FSA and the Financial Services Compensation Scheme would quote you that sort of time scale for UK holdings anyway.
But in terms of the principle, placing money into a higher interest account and paying tax on it can be more advantageous than investing into an ISA account which does have a tax exempt wrapper. Thats the point I was trying to make. How each saver interprets that principle with his/her own circumstances might change and would need to be considered on an individual basis.