Cutting the top rate of tax will be met with demands for wealth and property taxes, a senior SIPTU official has warned. Speaking at the pre-Budget seminar of the Foundation for Fiscal Studies, Ms Rosheen Callender warned that any cuts in the top 48 per cent rate by the Minister for Finance next Wednesday will be seen as depriving the poor for the rich and will be met with demands for other forms of wealth and property tax.

At the same seminar, Dr Dan McLaughlin, chief economist at Riada Stockbrokers, said Government surpluses will be so sustained and substantial over the coming years that we should now be talking about exchequer debt repayments rather than the borrowing requirement.

He added that the Minister for Finance, Mr McCreevy, will have £250 million for tax cuts before he can count in increases in excise duties as well as the so-called "tax buoyancy". This would give him up to £425 million to spend in 1998 on cutting taxes.

Ms Callender, a former adviser to the last Government, insisted that almost all the money should be devoted to increasing personal allowances.

According to Ms Callender, if personal allowances are raised by £1,000 for a single person, no PAYE workers would pay tax on less than £90 a week or £165 a week if married.

The cost would be £308 million in 1998 or £525 million in a full year, she said.

If the standard rate band were also increased by £1,000, only 31 per cent of people would be left paying at the top rate. This would cost £79 million or £134 million in a full year. The combined cost would be £380 million in 1998 or £450 million if a 1 percentage point cut is also made in the standard rate of tax, she added.