FF, Labour clash in Dáil over pensions levy

Fianna Fáil and Labour have accused each other of driving a wedge between the public and private sectors in a row about the pension levy.

Minister of State for Children Barry Andrews claimed that the Labour Party blamed everyone else but it was Labour "which was creating the mood music" to divide public sector workers and those in the private sector.

Ms Burton in turn accused Fianna Fáil of attempting to drive a wedge between the two sectors. "We reject your vision of a divided Ireland where public and private sector workers will fight each other," she said.

They were speaking in the Dáil during the second evening of debate on the Labour Party motion calling on the Government to scrap the levy.

The Government defeated the motion by 77 to 67 votes and will introduce the legislation on the levy in the Dail tomorrow.

Earlier during Question Time, Minister for Finance Brian Lenihan indicated that he was prepared to consider changes in the pension levy, so long as the targeted saving is achieved.

"I would not rule out consideration of other banding options that may be introduced once the savings are equivalent, he said. "But the savings must be equivalent. That is fundamental to the operation of the levy."

During last night's debate on the Labour motion Minister Andrews said the pension levy was the right way to go and claimed that "if the Labour party ever gets into Government it will have to resile from every single one of its rhetoric and blandishment of public service unions."

He said "at the very first hint of criticism the Labour party panicked and produced a document last Saturday that was back of the envelope stuff" and they were "too windy" to take part in the solution.

Ms Burton called on the Government to "withdraw" the Bill and "redraw" it "based on the principle of fairness and a fair deal for public servants".

She thanked all Government speakers on the debate who at least "had something to say - unlike the missing 100 or so who have gone off to the legions of the rearguard and have gone off hiding in the bar until the vote is called".

Ms Burton described the Government approach to economic policy as being "like children blowing bubbles. They blew the bubbles bigger and bigger until they finally burst."

Minister of State Martin Mansergh said: "De Valera at the time of the great depression famously said that no man was worth more than €1,000. If that were to be generously updated no one paid for or supported by the State would be worth more than €500,000 a year."