THERE WERE heated exchanges on the economy between the Taoiseach and Labour leader Eamon Gilmore in the Dáil yesterday.

Mr Gilmore said the people’s hard-earned money was being paid over to the banks, and billions would be taken out of people’s pockets in the Budget.

This, he added, was because Brian Cowen “and his party, and their developer and banker friends, have ruined this economy”.

Mr Gilmore said money from the National Pensions Reserve Fund was being paid over to fund the banks because the Government, for the past 10 years, fuelled a property bubble and stood over irresponsible lending and borrowing, without proper regulation.

“We are now in a situation where the banks are in trouble and the Government has to beggar ordinary people in order to pay for the economy.”

Accusing the Labour leader of engaging in “political rhetoric”, Brian Cowen said: “The revisionism that is taking place is pretty predictable. Every developed country in the world faces a large and difficult economic and financial crisis.”

The Taoiseach said the Government had made an adjustment of over €8 billion in gross terms this year through tax and changes in expenditure in order to bring public finances under control.

The purpose of the Budget, he said, was to stabilise the deficit and create the necessary confidence within the country; and, externally, it would show Ireland could manage its affairs and sustain public services.

“We have a divided Opposition which, on the one hand, wants no cuts in services or welfare . . . no cuts here or there, but, on the other, suggests that we will tax our way out of this problem by making further impositions on labour and companies.

“That would not maintain jobs; it would destroy them,” said the Taoiseach.