Inflation will fall over the next year, the Minister of State for Finance, Mr Martin Cullen, predicted during the resumed debate on the Finance Bill.

He said the inflation rate was being pushed up by a number of factors. "The euro has been extremely weak since its launch and has fallen by about 15 per cent against the dollar. In addition, crude oil prices have gone from $11 per barrel last spring to about $28 at present.

"Combining these two factors crude oil prices have increased by close to 180 per cent in Irish pound terms. This has fed through into higher petrol and home heating oil prices and, in total, it has added over 1 per cent to headline inflation.

"The increase in excise duties on tobacco products resulting from the budget is another factor behind the recent rise in inflation. However, I am sure that all deputies agree with me that this is an important and necessary health promotion measure. In the short term, this measure has added about 0.75 per cent to the headline rate. If these exceptional items are excluded, inflation is closer to 2 per cent."

Mr Pat Rabbitte (Labour, Dublin South West) accused the Minister for Finance, Mr McCreevy, of being responsible for "the most savagely ideological budget ever introduced by an Irish finance minister". It was viciously anti poor people, as distinct from antipoverty. It had risked fuelling inflation to transfer huge benefits to the well off.

"The budget has now undergone so much renovation as to be unrecognisable. The disparity in our society between rich and poor has deliberately been given further impetus."

Mr David Stanton (FG, Cork East) said Mr McCreevy had made a mess of introducing individualisation. He said because individualisation was so unfair and inequitable, the Minister had to grant a £3,000 allowance to carers at home.