MINISTER OF State for Finance Dr Martin Mansergh criticised the medical profession as he defended the Government on the medical card controversy.

"The medical card was introduced a few years ago for the over-70s, but it faced palpable reluctance from the medical profession, then led by an Irish Medical Organisation president who is now Fine Gael health spokesperson, insisting on disproportionate compensation," said Dr Mansergh.

Phil Hogan (FG, Carlow-Kilkenny) said that the IMO had received the fees sought from the Government at the time.

Dr Mansergh said the IMO had obtained the fees, but "that does not mean it was the right decision''.

He added that he had favoured the introduction of the scheme, mainly on the grounds of the reassurance it would give to people whose medical problems, on average, increased with age.

"Going back to the 1940s and the 1950s, the medical profession mostly opposed, with success, the introduction of a universal health-care system here, such as the national health service across the water," he added.

"As parliamentary secretary, Dr Ward was responsible for pioneering the health service here from 1932 to 1946, but he was brought down by a so-called scandal induced by medical interests."

A few years later, said Dr Mansergh, Dr Noel Browne "was also effectively brought down by the same profession that earned, and still does earn, a very comfortable income from the better-off members of the community''.

Speaking during the resumed Budget debate, Dr Mansergh said he believed, in hindsight, that the medical card scheme for the over-70s was a mistake.

"It is not simply a question of the €100 million which will be saved this year, but the prospect of escalating costs in future years,'' he added. "It is important that those who left VHI schemes should be able to return without delay and minimum difficulty."

Fine Gael enterprise and employment spokesman Dr Leo Varadkar said that instead of introducing the "Lenihan levy'', the Government should have increased the higher rate of income tax. "It would have focused on money which would, potentially, have been spent on products such as foreign holidays, cars or luxuries,'' he added.

Martin Ferris (SF, Kerry North) suggested that the State could take an actual stake in the Irish banks which, in combination with a levy on their turnover or profits, would ensure that it was adequately compensated for its provision of such a vital service to the private banking sector.

"The notion of bailing out banks is far from popular with many people who have been supporting the banks most generously for a number of years through mortgage and loan repayments, not to mention random and regular increases in alleged service charges,'' he added.