Seán Sherlock (Cork East, Labour)

The Minister states that the €1.3 billion reduction - he calls it an adjustment - envisaged will be offset by the 6.6% decrease by which prices have fallen. The import of this is that a reduction of €1.3 billion in the public sector pay bill has no effect in real terms because prices have been reduced effectively by the same amount. If one takes the 6.6% and the 7% levy, that is over 13%, and if one takes the potential for an increase in interest rates which is inevitable against a backdrop where there are no adequate supports for those people who will inevitably fall into arrears on their mortgages, then the Minister is creating a major problem for those people who are on middle to low incomes. I ask the Minister to address the question of the inevitable rise in interest rates in real terms and the effect that will have for those people who will be affected as a result of such an increase.

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