The Taoiseach began both his replies to Deputy Bruton with the words "I do not accept".

That is the problem.

He did not accept it last week either when the IMF told us that the bank bailout in this State would be more expensive for Irish taxpayers than for those anywhere else. The Taoiseach told us in so many words that the IMF had its figures wrong. The IMF later clarified the position and stood over its figures. Today we have an ESRI report telling us that the economic recession in Ireland is the worst for any developed country since the Great Depression of the 1930s. We are told that by the end of next year, almost one out of five people in the workforce will be out of work. The Taoiseach tells us this morning that there are now 384,000 people on the live register. How many will be on the live register by the end of next year, according to these ESRI figures? How many more people will lose their jobs before the Taoiseach loses his?

Does the Taoiseach believe that what is happening to our economy does not have anything to do with the way in which Fianna Fáil has mismanaged it in recent years? Does he still hold to that view? Does he still believe it has nothing to do with him and that it is something which has appeared like the Mexican swine flu, out of the blue and having nothing to do with the way the Government puffed the property bubble and did not face up to the problems in the economy? The Taoiseach tells us again today that he will not accept what the Opposition is saying. He would not accept it this time last year when we told him that an economic problem was coming. He would not accept it before last summer when we told him there was a problem in the banks. It took a long time for the penny to drop with the Taoiseach that people were losing their jobs and that businesses were going to the wall. Even as recently as last month, the Taoiseach would not accept in the House a Labour Party set of proposals to find work or meaningful activity such as education and training to deal now with the immediate problems of people who are losing their jobs.

The Taoiseach simply does not accept this reality. He seems to be in absolute denial that outside the walls and gates of this parliamentary area, people are losing their jobs and businesses are going to the wall. Those who are or were self-employed are telling us repeatedly that when they turn around, there is no help available to them. They cannot turn to anybody in a State agency and they cannot get credit from banks to keep their businesses going and retain their employees. We are now facing into the prospect, according to the Taoiseach's own admission, of 500,000 people idle and without a job to go to in the morning. He keeps looking across the Chamber at the Opposition parties and asking what we are proposing. We have repeatedly put forward proposals but the Taoiseach has paid only lip service to them. He certainly paid lip service to some of the Labour Party proposals in his Ard-Fheis speech. However, nothing is happening.

The Taoiseach must get it into his head that the key to solving our economic difficulties is protecting jobs and getting people back to work. The Government will not solve the problems in the public finances, the banks or the general economy without people going back to work. The ESRI report today and the live register figures provided by the Taoiseach are confirmation that every day, week by week and month by month, more and more people are losing their jobs and more and more businesses are going to the wall while the Taoiseach and his Government are stuck like the proverbial rabbit in the headlights, absolutely frozen and unable to act.

Deputy Gilmore can make all the contentions he like, even if the facts are different. As Taoiseach of this country, I accept fully and am acutely aware that people are losing jobs. Of course I am aware of that.

Does the Taoiseach accept it is the Government's fault?

The Government is taking the action that is necessary in the short term to ensure we can return the economy to growth. How does the Deputy expect jobs to come back into the economy without growth in the economy? The Deputy has referred to the ESRI report. The ESRI accepts that the balanced corrective action we are taking is the right thing to do despite, unfortunately, its very severe short-term effects. In an economy which is contracting by 8% this year unemployment is, of course, growing. We have factored in a projected 15% or 16% unemployment rate for this year and next year. Is that complacency on my part? Of course it is not. It is a fact with which we must deal. The ESRI is saying that unless this action is taken the prospects for growth will not reappear.

If one is to create and maintain jobs, one must bring back growth into the economy. The problem for a small open economy like ours, dependent for our standard of living on global demand, is that there is a global recession. Singapore, Korea and all the famous Asian tiger economies are contracting by anything from 8% to more than 10% this year. This is no comfort to us in Ireland but it is an indication of the global nature of the crisis and of the fact that the only way we can return to growth is by being more competitive and taking down our costs.

On 1 May, gas prices will come down by 12% and electricity prices by 10%.

Why not 30%?

Those facts are clear. The ESRI has budgeted for a steeper drop in the cost of living this year than the Government has done. We budgeted for a drop of 4% and it says the figure will be 4.6%.

It says the Taoiseach is wrong.

It suggests that next year will not be as difficult as we think it will be. We have been open, honest and transparent in out budgetary policy and have outlined to the people that the steps we are taking are necessary.

Where is the employment strategy in all of this?

I do not enjoy taking these steps but they are necessary to get the country back to growth so that we will be ready when the upturn comes. Is it the Opposition's contention that we should continue with public spending on an unsustainable path? If that is Deputy Bruton's view there is no prospect of growth returning to the economy.

The Taoiseach should admit he caused all of this.

The ESRI, which Deputy Bruton quotes this morning, speaks about the importance of maintaining as many jobs as possible. Thankfully, even in the current situation, we have 80% more in employment than 10 or 15 years ago. There are more than 380,000 unemployed, and every one is one too many as far as I am concerned, but there are also 1,800,000 people at work and we must try to maintain those jobs.

The Taoiseach is in denial.

We must help, to the greatest possible extent, those who are losing jobs or who cannot find work. That is what we are doing and will continue to do.

We are in discussions with the social partners about developing and evolving programmes, as we did in the 1990s when many schemes were developed. However, we must be straight with the people. We cannot grow jobs without taking whatever decisions are necessary to return to growth in the mid term. That is not possible and will not happen. We must take the necessary decisions now. We learned the lesson that deferring difficult decisions on public finance merely prolongs the problem.

That is a fine bit of theory. Of course getting people back to work depends on economic growth but the Taoiseach's strategy is not designed to grow the economy.

It is.

It will shrink the economy and take more money out of it. The dithering approach of the Government, with one policy this week and another in two weeks' time, is adding to the decline in confidence in the Irish economy, both domestically and internationally.

People are losing their jobs, businesses are declining and there is a huge drop in consumer activity. Much of this is due to the lack of confidence in our economy. People need hope that there is a way through the economic recession and that we will get out of it. Unfortunately, it is difficult for people to have such hope when the Government does not appear to know what it is doing. All the signals the Government is sending out are affecting the confidence of people, both in their spending and in their hopes for employment.

The Government does not have a pro-employment strategy.

Social economy.

Nothing in the budget will generate employment, support employment activity or encourage employers to take on new employees. There are no measures in place. The State agencies have not been re-geared to deal with the immediate problems facing people who are losing employment or are self-employed and cannot get assistance. In some cases, self-employed people cannot even get income continuance because they were not in the social insurance system. Those people are not getting help from the Government.

The Government does not have a jobs-centred strategy.

Hear, hear.

The Taoiseach can talk all he likes or as loudly as he likes but that is the reality. The proof is in the declining employment figures we see month after month. There are now almost 400,000 people unemployed and the ESRI report states the unemployment rate will reach 17%, almost one in five people, by the end of next year. That is a disgraceful record. It is not good enough. It is no longer acceptable that the Government washes its hands of this problem and pretends it has nothing to do with it. Every report from the ESRI and the International Monetary Fund and all international commentary now state that the worst performing economy in the developed world, in terms of employment and banking, is the Irish economy. The Taoiseach and the Government are responsible for that. They have dug a big hole for the Irish people by the way they mismanaged the economy in recent years and Irish working people are paying for that. They are losing their jobs, their businesses are going to the wall and their pay-packets are being plundered in order to bail out banks, developers and others who are the realcause célèbre on the Government side of the House.

I am defending my position. It is not a question of being loud or otherwise but of answering with the same gusto as the Opposition use in attacking me. I hope Deputy Gilmore does not mind me doing that. I am as entitled to defend myself, as he is to attack me.

A bit of modesty would be appreciated.

I do not accept Deputy Gilmore's contention that it is possible to have a pro-jobs strategy on the basis of unsustainable public finances.

No one said that.

This is clever lawyer's talk.

Deputy Burton is a clever accountant, as she never tires of telling us.

The Opposition claims that the Government does not have a strategy or policy. In the past 12 months, through changes in income tax and expenditure, the Government took approximately €8 billion out of the emerging deficit. We were heading for a 15% deficit in gross national product.

Every one of those policies was opposed by the Opposition and yet it talks about the need to take corrective action to get the show back on the road. It opposed everything. It opposed our attempt to deal with the bank situation and to provide credit for Irish businesses.

We were right.

It now suggests we can have a thriving economy on the basis of an unstable banking system.

Why did the Government not create a credit flow for small businesses?

I did not interrupt while Deputy Gilmore made many charges against me. I never do. However, the moment I stand up to speak I am interrupted. Deputies may feel that is the way to debate but people see through that.

We are taking whatever steps are necessary to get us through this problem, and that is creating real hardship for people. Like everyone in this House, I am aware of that. We take these policy positions because there is not an alternative if we are to get our public finances back in order.

There is an alternative.

There must be a sustainable public finance position. Former Ministers for Finance know that. There is no point in playing around with that matter. We must take these decisions.

Of course we will provide hope, but on the basis of taking necessary decisions now and next year. The country will be then in a position to take off again when the international demand improves, as is predicted by international commentators. There is not an easy way through this. There is only a difficult way. We will take whatever steps we can to help people who find themselves in difficulties. The prerequisite for economic recovery is to get our public finances in order and that means making cuts in spending and raising taxes. It has meant examining other areas where we must consider taxation and where we will have to cut further spending. It will involve further reforms. We need the agreement of many people working in the public sector and other sectors to help us get through this problem. That is why we are talking to the social partners at present. We have to manage our way through this crisis, but each time the Labour Party, particularly, or the Fine Gael Party come forward with proposals there is always an easier and a handier way out.

There is a better way.

Unfortunately, there is not an easier way given the scale and magnitude of the problem we are facing. We will continue to do whatever we can to help the people through this problem.

The Taoiseach should talk to Deputy John McGuinness.

Perhaps the Taoiseach should listen to our way.

There will be plenty of people and plenty of opportunities on the Opposition benches to suggest there is a handier way out.

There is a better way.

The fact of the matter is that there is not a handier way.

Failure, failure and more failure.

We will continue with this consistent policy approach in the interests of making sure that we will have a return to growth and jobs and that we will help those who lose them in the meantime.