Bertie Ahern (Dublin Central, Fianna Fail)

That was just one aspect of what I said, that incomes policy was a large part of the agreement. We must keep our incomes at rates we can afford. I opposed the idea of trying to chase the secondary costs that would come from some aspects of energy, although perhaps they will not be as bad as I thought at the time. Social partnership should not just become a race on incomes, which is what happened before in some cases, as that would not get us anywhere. I also said that the resources were no longer available to give the kind of cuts that had been given over the years. Effectively, €5 billion has been given in tax cuts.

Although it was not reported at the time, and one national newspaper dropped the second part of what I said entirely, which always happens, I went on to point out that I was not talking about areas of indexation, I was talking about cuts. Indexation is something which the partnership process considers should be implemented. I was talking about cuts in rates, as distinct from the aim of trying to get 80% of people paying standard rate tax. Cutting down any more on tax from where we are now is neither necessary nor likely. We had high rates of tax but we decreased them. As I stated, there is now a demand to build up our services. At a 30% rate of tax, we are now eight points lower than anywhere else in Europe. There is no pressure to do any more in that regard.

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