FF attacks Rabbitte pledge on €1,000 baby fund

The Labour Party leader, Mr Pat Rabbitte, has promised to establish a trust fund to pay every newborn baby €1,000 if his party is elected.

Speaking at the Labour annual conference in Dublin last night, Mr Rabbitte said a Labour government would set up an account for each new baby and deposit the money in it. The €1,000 would be doubled for children with disabilities.

He said this National Treasury Management Agency will manage the investment and the interest will accumulate until the child reaches 18 years of age.

He estimated the initial cost of the trust to be around ten per cent of the current State subsidy to the holders of Special Savings Investment Accounts each year.

"We will also top up the accounts of children who are brought up in care so that, unlike at present, the State does not simply wash its hands of them when they turn 18 but gives them some endowment with which to start their adult lives," he said.

However, Mr John McGuinness, Fianna Fail TD for Carlow-Kilkenny, today dismissed the proposal as a "gimmick that would cost the country so much more than it appears".

"Even if the Bond Scheme bore interest which was enough to cover an inflation rate of say 4 per cent, it would end up costing the taxpayer 50 per cent more at the end of such a scheme than it would at the beginning", he added.

"And of course that does not even begin to take into account the inflationary and high tax policies of the Labour Party, which are likely to make it even harder to put a cap on the eventual cost of such a bond scheme."