CAPITAL INVESTMENT is a “very expensive way to create jobs”, Minister for Transport Leo Varadkar has told the Dáil in a clear signal that the Dublin Metro North project will not go ahead.

Mr Varadkar declined to state directly when asked during Dáil questions about the status of the project. A decision on Metro North will be formally announced today when the funding allocation for all capital projects, including transport, will be published.

Last week the Minister for Finance announced that €750 million would be cut next year from the capital budget. Mr Varadkar said yesterday the primary deficit had to be addressed. They had to choose “between current spending cuts, capital cuts and tax increases”.

Fianna Fáil transport spokesman Timmy Dooley, who raised the issue, highlighted the Government’s commitment to create jobs. “One of the most obvious ways to do that is through State spending and the capacity to employ people through an effective capital programme,” he said.

The Minister said the Government wanted to honour its commitments not to increase taxes on work and not to cut social welfare rates as far as possible. This was the most effective way to maintain demand in the economy. “Capital investment is a very expensive way to create jobs,” he said, adding that probably the best way to sustain employment was to “try to keep wages up and taxes down and that is our priority”.

He also reiterated that the Government had made no decisions about additional tolls on the M50, the Jack Lynch tunnel in Cork and other places.