THE HAGUE, 02/12/05 - The Lower House is continuing to press for tax cuts despite the improved purchasing power forecasts released by the Central Planning Bureau (CPB) yesterday. The cabinet appears divided, but decided yesterday to ignore the wish of the House for now.

The cabinet is not yet taking any extra measures to improve purchasing power next year. The ministers want to assess the necessity for this again in the spring, taking into account the sharply fluctuating oil prices, said Social Affairs Minister Aart Jan de Geus yesterday after a meeting between the four ministers most involved.

Vice-Premier Gerrit Zalm, also the Finance Minister, had already said in the morning that the latest CPB figures gave no reason for tax reductions. De Geus grumbled that Zalm had spoken out of turn, but did not repeat this remark after the meeting with Zalm, Premier Jan Peter Balkenende and Economic Affairs Minister Laurens-Jan Brinkhorst.

The Lower House, led by Christian democratic (CDA) party leader Maxime Verhagen, earlier urged tax cuts if oil prices remained high. The cabinet wants to link such compensation not just to the energy prices but to the development of purchasing power as a whole. This is projected to grow by one quarter-point more in 2006 than expected earlier, the CPB announced yesterday.

CDA still considers the latest figures justify extra measures to improve purchasing power. The centre-left D66 also wants this. "I assume that the cabinet will accede," predicted D66 MP Bakker. Because the opposition Labour (PvdA) party is taking the same line, there is a clear parliamentary majority. The CDA may put forward a proposal next week during a discussion in the Lower House, according to a CDA spokesman.