Raising the grant for new houses will benefit the builder but not the house buyer, according to the Minister for Finance, Mr McCreevy. Successive Governments had made this mistake, he said, in answer to questions raised by Mr Jimmy Deenihan (FG, Kerry North) and Mr Bernard Durkan (FG, Kildare North) who asked if he would introduce measures to assist people on salaries of £35,000 to buy their own homes.

Mr McCreevy said the rapid escalation in house prices over the past few years had presented difficulties even for those buyers who would normally be regarded as having good incomes.

He said however: "I do not believe that increasing the new house grant will do anything at all to alleviate the burden on first-time house purchasers.

"Past experience reveals that such money ends up in increased profits for the builder-developer. That is certain. That has been the case with grants, particularly housing grants."

The Minister claimed this had been his view for a long time: "The deputy's party may have made suggestions in that regard during the recent election campaign, but I did not agree with it then, nor did I agree with it in the past."

This was a "blunt answer" he said, and he was certain that his view was not shared by all members of the House, by all members of his party, or possibly by all members of the Government.