TAOISEACH BRIAN Cowen ruled out a reduction in taxes to stimulate the economy.

“In addressing the public finance position, we must protect our taxation base,” he said.

“In fact, all the advice for the coming months concerns the need to broaden the tax base, rather than narrowing it.”

He said that the reduction of VAT in Northern Ireland had not had a buoyancy effect because the demand was the problem.

“As regards stamp duty, we are seeing real reductions in the price of housing, which is determining a small pick-up in terms of sales over the past month or so,” he added.

“One would have to be tentative in making any comment about that, however. We are not suggesting that we are seeing a resurgence in house prices.” Mr Cowen said that the idea that a reduction in stamp duty would provide a return to normality was not borne out by the facts.

He said that the Government was open to implementing schemes in any way that would convert income support into support for job retention and employment.

“The fundamental context in which all that must happen is to improve the competitiveness of the economy, something that is being done in many ways,” he added.

Fine Gael leader Enda Kenny said that last weekend he had read the comments by the chief executive officers of most of the bigger firms in the country, particularly in the communications, digital information and IT sector.

“All of them, without exception, said that if the country does not deal with digital information and broadband, we are kidding ourselves,” he added.

“We have been messing around with this for the past 15 years.”