Bertie Ahern (Dublin Central, Fianna Fail)

The Tánaiste and Minister for Finance had already agreed and stated what he intends to do on mortgage interest relief in the next budget. The ICTU has put forward its case that this increase in assistance from the next budget, on top of what was done last year, will not fully mitigate the eight interest rate increases that have already been imposed and those likely in the next 12 months. I am of the view there will be at least two further increases, reading between Jean-Claude Trichet's lines. The Tánaiste said he could not make any changes at this stage but would look at the ICTU's submission in his preparatory rounds for the next budget.

There was no debate on the VAT issue. Deputy Rabbitte is aware of my view on this in that I have not been a supporter of VAT reductions. VAT is a broad tax and a good means of ensuring everybody pays. It is not my priority in trying to alleviate these issues to implement VAT reductions. Deputy Rabbitte referred to the plight of those individuals who suffer most from rising inflation. There are ways of more directly targeting resources to assist such persons through tax credits or other means, rather than through a reduction in the VAT rate.

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