Cowen hints that pensioners will be spared

The Taoiseach, Brian Cowen, has given a strong indication that pensioners will escape the brunt of cutbacks in the Budget in three weeks' time.

In a speech in Dublin this evening, Mr Cowen said he was proud of the provision made for pensioners during the good years, and it was not his objective to undo all of that good work now.

Mr Cowen told the European Pension Funds Awards presentation in the RDS that Budgets are not simply about balancing books, as important as that is.

He said they are also about acknowledging what we all see as important in society.

Last year, over €4 billion was spent on contributory and non-contributory State pensions, representing around 25% of all social security spending.

Earlier, the head of the body known as An Bord Snip Nua, Colm McCarthy, said that living standards must drop back to those in the years 2004 or 2005.

The Group on Public Service Numbers and Expenditure was addressing the Oireachtas Committee on Finance and the Public Service.

Senator Fergal Quinn had asked, if the Government achieved cuts of €4 billion in the Budget, how much of a drop in living standards that would involve.

Mr McCarthy said we had to get back to a standard of living that was sustainable, which was probably at the level of 2004 or 2005.

He said the public reaction to the downward adjustment was extraordinary and was not helped by the perception that the banks had played a part in bringing all this about - and that there was a lack of contrition by them.

He said the adjustment needed would simply knock us back to what, at the time, was regarded as a pretty good place to be.