The Tánaiste Joan Burton is insisting there is no major difference between Fine Gael and Labour over tax. She has warned there is an agreement between her and the Taoiseach Enda Kennyon the issue.

Ms Burton is adamant that tax cuts next year must be geared towards those on modest incomes and focus on the Universal Social Charge (USC) and tax bands.

But Mr Kenny is expected to spell out later that he wants a further cut in the top rate of tax.

Speaking in Dublin this morning, Ms Burton said there is no major dispute.

Yesterday, Jobs Minister Richard Bruton also rejected claims of any difficulties within the government over the USC.

According to Red C research commissioned by Labour, voters want the USC drastically cut or Labour will be annihilated at the election next year.

But last week on the Pat Kenny Show, Finance Minister Michael Noonan said the charge is not likely to be abolished because it takes in too much cash.

The charge brings in over €4.5bn a year, which Mr Noonan says Ireland cannot afford to give up.